Relentless Healthcare Value

Exploring the Complexities of Pharma Rebates with Ann Lewandowski

In this Summer Short episode of Relentless Health Value, host Stacey Richter converses again with Ann Lewandowski about the intricate dynamics of pharmaceutical rebates, or as Lewandowski prefers, post-sale concessions.

The discussion delves into the nuances of these rebates, the impact they have on drug costs, and the hidden consequences for patients and plan sponsors.

They highlight articles and insights by Austin Chelko and Peter Hayes, touching on how rebates can disadvantage the pursuit of lower-cost generics and biosimilars, and can obstruct pharmacogenetic testing that ensures drug efficacy and safety.

The conversation also critiques the opacity of rebates, deemed trade secrets by pharma and PBM companies, and underscores the ethical and financial dilemmas posed by the current rebate-driven system.

=== LINKS === 🔗 Show Notes with all mentioned links: https://cc-lnk.com/EP480

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07:24 What is a pharmaceutical rebate?

08:15 Why are pharma rebates so opaque?

09:52 Texas lawsuit on insulin pricing.

10:18 Why is focusing on a singular type of concession difficult with current pharma rebate structures?

10:50 EP397 with Paul Holmes.

13:55 EP353 with Pramod John, PhD.

14:29 How does pharma genomics testing affect pharma rebates?

14:52 EP465 with Chris Crawford.

15:52 EP426 with Nina Lathia, RPh, MSc, PhD.

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In this second discussion with Andreas Mang and Jon Camire of Blackstone, Stacey Richter has an advanced discussion on the intricacies of stop-loss reinsurance for high-cost claimants.

This show today, for sure, it’s for plan sponsors and anyone on or about plan sponsors; but also listen if you are serving high-cost claimants some other way. Because what you’ll learn here today is some insights relative to how plan sponsors go about making sure that they can pay you—like if you work for, for example, some clinical organization.

There’s a, I don’t know, 101 starting point of this conversation if you need it on stop-loss, which is episode 478 from a couple of weeks ago. This show is the, let’s say, 201-level conversation that I’m having with Andreas Mang and Jon Camire about, as I said, stop-loss insurance and stop-loss insurance considerations.

Emphasizing the importance of eligibility audits and aggregating buying power, the guests highlight best practices to avoid overpaying for coverage and ensuring comprehensive risk management.

This episode is sponsored by Havarti Risk, which I am so thankful for. The show, Relentless Health Value, actually does cost an unexpectedly large sum of money to create and produce; so I always appreciate when somebody offers to sponsor a show or help sponsor a show.

=== LINKS ===

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07:47 What are the best practices for plan sponsors to use for stop-loss coverage?

10:11 What are the “unknown unknowns” within stop-loss coverage?

15:25 What are some policy provisions that plan sponsors should be aware of?

19:02 Why is it so important to do eligibility audits?

20:41 What are some common mistakes made with stop-loss coverage among the self-insured?

23:21 What’s a panel approach, and why is it important for negotiating stop-loss coverage?

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Stacey Richter has a second take on the original episode 433 since it is so relevant right now. Stacey engages in a compelling conversation with Justin Leader, CEO of BenefitsDNA, about the opaque practices of third-party administrators (TPAs) and their impact on healthcare costs.

They discuss the hidden fees tucked into weekly claims wires, including shared savings fees, prior authorization fees, prepayment integrity fees, pay and chase fees, and TPA adjudication fees.

The episode emphasizes the need for transparency, understanding hidden costs, and ensuring fiduciary responsibility for self-funded employers. Additionally, Leader shares insights from a Health Affairs article and mentions ongoing legal cases that highlight the financial discrepancies in TPA practices.

=== LINKS ===

🔗 Show Notes with all mentioned links:

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06:32 EP457 with Cynthia Fisher.

06:56 How is the claims wire typically explained to a plan sponsor?

10:49 What is the whole point of self-funding?

10:58 Why is it so vital to understand what you’re paying for?

11:53 What are the five “buried” items that wind up in these claims wires?

12:12 What is a shared savings fee?

16:14 “Rates are important, but so are your rights.”

20:13 What’s going on with prior auth fees?

22:44 What is prepayment integrity?

27:29 What is pay and chase?

28:46 EP428 with Julie Selesnick.

30:58 What is a TPA claim review?

33:21 EP285 with Dawn Cornelis.

34:16 EP379 with AJ Loiacono.

34:45 Is there medical claim spread pricing?

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Host Stacey Richter discusses the intricacies of stop-loss coverage with Andreas Mang and Jon Camire from Blackstone. The episode focuses on defining stop-loss insurance and exploring its critical role in protecting self-insured employers from catastrophic financial losses.

The conversation delves into the nuances of individual and aggregate stop-loss policies, laser claims, and the importance of selecting an experienced consultant to navigate this complex landscape. The episode is essential listening for those managing high-cost claimants and exploring self-insurance options.

This is a two part show. The second show will cover major fails, mistakes that happen with stop-loss when somebody doesn’t understand or do everything that we talk about. So, tune back in for the next part of this conversation, in two weeks.

Thank you to Havarti Risk for sponsoring this weeks episode. Havarti Risk empowers healthcare leaders like you to make smarter decisions that increase quality and lower cost of care. https://havarti-risk.com/

=== LINKS ===

🔗 Show Notes with all mentioned links:

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07:24 What is stop-loss?

08:27 What is reinsurance?

09:57 EP420 with Ge Bai, PhD, CPA.

10:10 Why has stop-loss been a barrier for smaller companies going self-insured?

13:55 Why self-insurance needs to be a joint decision between finance and HR.

15:38 What is aggregate versus individual within stop-loss?

19:51 Why is it important for companies to choose the right level of stop-loss coverage?

21:29 What is a laser claim?

29:28 Why is it important to know what your brokers are getting paid on your stop-loss policies?

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In this episode, Stacey Richter explores the impact of trust on healthcare outcomes, drawing from listener contributions and prior episodes of Relentless Health Value.

The discussion underscores how trust or the lack thereof affects patients, clinicians, and healthcare systems. Key points include the importance of building trusted relationships, the detrimental effects of antitrust behaviors, and the broader implications for healthcare delivery.

Stacey also highlights a bonus show featuring Charles Green on earning and maintaining trust. The episode concludes with an uplifting message about the collaborative and giving nature of the Relentless Health Value community.

=== LINKS ===

🔗 Show Notes with all mentioned links: https://cc-lnk.com/EP477

🔗 Bonus Show - Show Notes https://cc-lnk.com/Bonus477:

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00:47 What is the new, emerging through line becoming apparent in healthcare?

01:54 Bonus Episode with Charles Green.

02:52 What is the impact of trust in healthcare?

02:55 EP475 with Peter Hayes.

03:11 EP473 with Kenny Cole, MD.

05:31 EP295 with Rebecca Etz, PhD.

06:07 EP326 with Rishi Wadhera, MD, MPP.

07:06 Why does trust grow through proximity, and why do providers need to integrate this into care models?

07:59 Why antitrust is so prevalent in healthcare.

10:00 What are two main contributors to the lack of primary care doctors?

13:27 Why collaboration builds trust.

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In this bonus add-on to episode 477 of Relentless Health Value, host Stacey Richter revisits a decade-old conversation with trust expert Charles Green, founder of Trusted Advisor Associates. Green discusses the intricacies of building and maintaining trust in healthcare, emphasizing four key trust principles: client focus, collaboration, long-term relationships, and transparency.

The discussion highlights the challenges within the healthcare industry, compounded by conflicts of interest and transactional dynamics. Green underscores the importance of individual actions and leadership in fostering trust, advocating for empathetic listening and genuine curiosity about others as foundational behaviors.

=== LINKS ===

🔗 Show Notes with all mentioned links: https://relentlesshealthvalue.com/episodes

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🎤 Listen on Apple Podcastshttps://podcasts.apple.com/us/podcast/feed/id892082003?ls=1

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01:45 Four trust principles that can help you earn your clients trust and come off as more trustworthy from first impressions onward.

04:31 Charles’s words of wisdom for rebuilding lost trust.

05:46 Where does trusted leadership start?

06:38 Why trust in leadership is about embodying trust in actions, not words.

07:26 Why does personality have an outsized impact in leadership and trust?

08:21 “If we want to improve our trust, we just simply need to work on ourselves.”

08:56 Why listening with a sense of curiosity and respect drives reciprocal behavior and improves trust.

09:14 What is the best technique to immediately improve your trust relationship?

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In this episode, host Stacey Richter speaks with Ann Lewandowski about whistleblowing in the healthcare industry, focusing on a significant case involving a whistleblower at an employee benefit consultant (EBC) firm. This EBC allegedly pocketed their clients' pharma rebates, violating the Consolidated Appropriations Act of 2021.

The discussion highlights the nuances of being a whistleblower, the ethical dilemmas faced, compliance challenges, and the significant financial implications for companies and individuals involved in illegal activities.

Ann Lewandowski provides insights into documenting and protecting oneself legally and discusses the broader context of trust and transparency in the healthcare sector.

Click through to the show notes below to access all of the mentioned links and prior episodes mentioned.

=== LINKS ===

🔗 Show Notes with all mentioned links: https://relentlesshealthvalue.com/episodes

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🎤 Listen on Apple Podcasts https://podcasts.apple.com/us/podcast/feed/id892082003?ls=1

🎤 Listen on Spotify https://open.spotify.com/show/6UjgzI7bScDrWvZEk2f46b

📺 Subscribe to our YouTube channel https://www.youtube.com/@RelentlessHealthValue

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08:10 What does it mean to be a whistleblower?

09:05 What’s happening in the current whistleblower case about pharma rebates?

14:24 What are the disclosure requirements, and how does this affect contracts in healthcare?

15:05 EP379 with AJ Loiacono.

15:11 The 5500 form.

15:36 EP397 with Paul Holmes.

16:46 Why having a “defensive health plan” is important.

17:31 Matt Ohrt’s post about healthcare’s soul.

17:42 Michelle Bernabe’s post about how healthcare has lost its heart.

18:15 Why “trust and verify” is important when building contracts and relationships in healthcare.

18:42 Quote by W. Edwards Deming.

21:35 How has this case moved from state to federal court?

23:30 Whistleblower case on generic drug collusion.

24:01 What is a qui tam lawsuit?

28:08 What is an Upjohn warning and the issue of corporate Miranda rights?

30:01 What is Ann’s advice to employees who might be whistleblowers?

31:41 EP438 with John Lee, MD.

33:31 What are some red flags that employees should look for to understand what kind of company they work for?

View Details

In this episode of Relentless Health Value, host Stacey Richter sits down with Peter Hayes to discuss the major forces driving change in the healthcare industry. Hayes outlines three critical factors: changing public opinion, heightened transparency, and new regulations such as the Consolidated Appropriations Act.

He emphasizes the unprecedented convergence of these elements, creating a pivotal moment for healthcare transformation. The discussion delves into the erosion of trust within the healthcare system and the growing public unrest over high costs and inefficiencies.

Hayes also highlights the role of state-level initiatives as experimental laboratories for potential national solutions. The episode concludes with a call to focus on root causes and collaborative approaches to restore trust and improve healthcare affordability and quality.

=== LINKS === 🔗 Show Notes with all mentioned links: https://relentlesshealthvalue.com/episodes

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📺 Subscribe to our YouTube channel https://www.youtube.com/@RelentlessHealthValue

05:28 What things are adding to the urgency in this moment of healthcare?

05:55 The three things that have brought us to a tipping point in healthcare.

07:05 Why is now the real moment for this tipping point?

10:35 EP458 with Komal Bajaj, MD.

13:01 Article by (and tribute to) Uwe Reinhardt.

13:27 Hospital ratings by The Leapfrog Group.

14:08 EP358 with Wayne Jenkins, MD.

15:07 EP474 with Yashaswini Singh, PhD.

16:29 How is regulation changing in healthcare?

21:48 How the “trifecta” of change is working together to create this movement of change in healthcare.

23:54 What do we need to look at to address the problems pushing this change in healthcare?

25:44 EP465 with Chris Crawford.

30:04 Why is federal and state collaboration going to be important to this healthcare change?

31:51 EP455 with Beau Raymond, MD.

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In Episode 474 of 'Relentless Health Value', host Stacey Richter interviews Dr. Yashaswini Singh, an economist and assistant professor at Brown University, about the growing influence of private equity (PE) in healthcare.

The conversation delves into the corporate transformation of medicine, highlighting the potential misalignment between business interests and patient care. Dr. Singh discusses the diverse strategies PE firms use to drive profitability, such as increasing negotiated prices, consolidating market share, employing real estate leasebacks, and emphasizing performance metrics that may not align with patient benefits.

The episode also examines the significant impacts these strategies have on physicians, including increased turnover and changes in practice patterns, as well as the broader implications for patients and communities. Dr. Singh stresses the importance of informed leadership, education, policy enforcement, and transparency to ensure that private investments ultimately benefit healthcare systems without compromising patient care.

=== LINKS === 🔗 Show Notes with all mentioned links: https://cc-lnk.com/EP474

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05:53 What is the tension between business and medicine?

07:05 What is the impact of private equity on healthcare?

08:46 How does healthcare change when private equity invests in medical facilities?

10:54 What are the intuitive impacts of private equity in healthcare?

12:28 What are the less intuitive effects of private equity on healthcare?

13:36 EP472 with Eric Bricker, MD.

14:15 What are the misconceptions about private equity investors acquiring healthcare facilities?

16:17 The Steward saga.

16:24 The death of Hahnemann Hospital in Philadelphia.

19:27 Are there any positive outcomes to private equity investment in healthcare?

21:17 EP445 with Tom X. Lee, MD.

22:45 EP420 with Ge Bai, PhD, CPA.

22:47 EP465 with Chris Crawford.

22:49 EP460 with Rushika Fernandopulle, MD.

22:55 Is there ever a need for private investment in healthcare?

25:40 How do the changes private equity firms create affect patients?

27:20 Study in Health Affairs on physician turnover rates following private equity acquisitions.

29:30 How can private equity disrupt physician employment as well?

34:13 What remedies might there be for consolidation in healthcare and private equity investing in medicine?

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This episode of Relentless Health Value features Dr. Kenny Cole from Ochsner Health System. The discussion emphasizes the critical role of trusted relationships and excellent primary care teams in keeping patients out of the emergency room, thus reducing healthcare costs.

Stacey Richter revisits this conversation to highlight the importance of care teams building trust with patients and the concept of primary care as an investment in health and wellness. The episode outlines four key points for delivering great primary care, including accountability for outcomes, belief in clinical goals, standardized care flows, and building patient trust.

Dr. Cole also discusses the real-world challenges and strategies for achieving clinical and financial success in primary care. The episode serves as a guide for plan sponsors, clinicians, and healthcare executives looking to improve primary care delivery and align it with financial viability. The discussion is further enriched with insights on digitizing care pathways and the importance of measuring and sharing best practices to achieve high standards of care.I

Stacey revisits, in a take two, this episode with Dr. Kenny Cole because she's listening to it this time with a new focus. That focus is the theme that keeps coming up over and over and over again on Relentless Health Value these past few months.

=== LINKS === 🔗 Show Notes with all mentioned links: https://cc-lnk.com/EP473

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07:35 Is there an optimal care pathway where there might be a lot of treatment variability?

10:52 EP412 with Robert Pearl, MD.

12:32 Why is it important to start with the end in mind?

15:44 How do you scale clinical excellence?

18:18 EP315 with Bob Matthews.

19:12 EP242 with Marty Makary, MD.

21:29 Why is it important simply to demonstrate what’s possible for better health outcomes?

22:33 EP427 with Rik Renard.

23:18 How do we reinvent the business model of healthcare?

24:51 EP466 with Vivian Ho, PhD.

25:06 EP415 with Rob Andrews.

26:51 EP391 with Scott Conard, MD.

30:14 EP455 with Beau Raymond, MD.

34:22 Dr. Cole is published in various healthcare journals; check out his most recent article.

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In Episode 472, Stacey Richter speaks with Dr. Eric Bricker about the impactful strategies hospital systems use to maximize revenue from high-cost patients. They explore the financial complexities and contracting tactics that enable hospitals to profit significantly from a small percentage of high-cost claimants.

Key points include the negotiation of provider stop-loss contract provisions, strategic adjustment of charge masters, and the intentional steerage of patients to high-revenue service lines. This episode highlights the intricacies of hospital finance and the hidden mechanisms that drive healthcare costs for self-insured employers and other plan sponsors.

We could have 0.5% to 1% of total plan members costing upwards of 40% of total plan dollars. And I bring this up just to highlight the magnitude of the money here. In that show from last week, we take the issue of high-cost claimants from the standpoint of the plan sponsor.

Today, however, we’re gonna be looking at this from the standpoint of the hospital system. If we were to come up with a motto for the show today with Dr. Eric Bricker, it’s that all costs are somebody else’s revenue. And when it’s revenue and profit of the magnitude that we’re talking about with many high-cost claimants, it starts to be less of an accidental “Oh, wow! How did that CABG patient wind up in our clinic? What are the odds?” and more of a “Whoever is not steering patients is letting someone else with a big profit incentive lock down that steerage in deeply embedded ways.”

=== LINKS === 🔗 Show Notes with all mentioned links: https://cc-lnk.com/EP472

📺 Dr. Bricker's AhealthcareZ Channel www.youtube.com/@ahealthcarez

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05:06 From a hospital revenue perspective, where do high-cost claimants fall?

08:45 How do hospitals structure their stop-loss provisions so that they ensure they’re always maximizing their revenue?

12:15 How hospitals acquire providers to steer as many patients as possible through specific service lines.

20:21 Why do carriers let hospitals get away with these rates and stop-loss negotiations?

21:06 How do Medicare Advantage and Medicare rates play into all of this?

22:00 What should a benefit consultant be doing here?

23:37 What are the keys to direct contracting?

27:21 Why is it important to get trusted relationships set up ahead of time?

28:04 The Company That Solved Health Care by John Torinus Jr.

29:23 What needs to be the clinical consideration for specialists?

30:46 What is the advantage that employers have in all of this?

33:06 Dr. Bricker’s video on 32 examples of healthcare deception.

View Details

Recently on Relentless Health Value, we’ve been tinkering around with a few recurring themes—recurring through lines—that are just true about American healthcare these days.

In this episode of Relentless Health Value, host Stacey Richter speaks with Dr. Christine Hale about high cost claimants and the implications for healthcare plans in 2025 and beyond. They discuss the importance of trust in patient care, the financial incentives behind patient steering, and the critical role of timely and comprehensive data analysis.

Dr. Hale emphasizes the need for an integrated approach to medical and pharmacy claims data to avoid expensive consequences and improve patient outcomes. She also shares strategies for plan sponsors to effectively manage high cost claimants through evidence-based care, appropriate treatment settings, and creative problem-solving, while underlining the importance of patient engagement and satisfaction.

Don't miss next week's episode with Dr. Eric Bricker for a deeper dive into these topics.

=== LINKS ===

🔗 Show Notes with all mentioned links:

https://relentlesshealthvalue.com/episodes

✉️ Enjoy this podcast? Subscribe to the free weekly newsletter:

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🎤 Listen on Apple Podcasts https://podcasts.apple.com/us/podcast/feed/id892082003?ls=1

🎤 Listen on Spotify https://open.spotify.com/show/6UjgzI7bScDrWvZEk2f46b

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=== CONNECT WITH THE RHV TEAM ===

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05:22 What is a high-cost claimant, and how is the definition changing?

07:42 Why buy-and-bill pharmaceuticals can be so costly for plan sponsors.

10:19 What are plan sponsors getting wrong about this situation?

11:28 What do you need as an employer to understand your plan data fully?

13:41 EP462 with Scott Conard, MD.

17:35 What are plan sponsors currently doing that they should not being doing?

19:54 Why starting small is important.

23:02 EP468 with Matt McQuide.

25:37 What are the steps employers should take to improve their high-cost claimant spend?

31:02 EP371 with Erik Davis and Autumn Yongchu.

33:46 EP467 with Stacey.

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Nikki King, James Gelfand (Part 2), James Gelfand (Part 1), Matt McQuide, Stacey Richter (EP467), Vivian Ho, Chris Crawford (EP465), Al Lewis, Betsy Seals, Wendell Potter (Encore! EP384), Dr Scott Conard

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In this episode, host Stacey Richter revisits a conversation with Nikki King, CEO of Alliance Health Centers, discussing the critical issues facing rural hospitals and healthcare systems. They delve into the impacts of Medicaid cuts, the financial struggles of rural hospitals reliant on commercial insurance, and potential solutions like freestanding emergency rooms, telehealth, and the expanded roles of nurse practitioners.

The conversation also covers the complexities of maternity care and mental health services in rural areas, emphasizing the urgent need for systemic reforms to ensure equitable access to healthcare.

=== LINKS === 🔗 Show Notes with all mentioned links: https://cc-lnk.com/EP470

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08:14 How dire is the rural hospital situation right now?

08:33 How could freestanding ERs be a potential solution for rural hospitals?

09:56 Advice from CHQPR: Rural hospitals should not be forced to eliminate inpatient care.

11:22 Why is broadband a roadblock to telehealth as a solution for rural health access?

14:52 What are other potential rural health access solutions?

15:37 The “hot potato” of nurse practitioners in the healthcare world.

16:34 “The number of residencies for physicians each year is not increasing, but the population … is increasing.”

20:28 EP312 with Douglas Eby, MD, MPH, CPE, of the Nuka System of Care.

22:00 What’s the issue with maternity care in rural America?

24:09 “As healthcare becomes more and more specialized, [the] ability to treat high-risk cases is better, but access gets worse.”

27:57 How is mental health care affected in rural communities?

28:29 “Rural communities are trying very hard to hang on to what they have.”

29:52 “When you look at the one market plan that’s available in a rural community, you probably can’t afford it.”

31:37 What’s the single biggest challenge to moving to a model that incentivizes keeping people healthy?

32:32 “The easiest low-hanging fruit … is having national Medicaid and have that put under the same hood as Medicare.”

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In part 2 of episode 469, host Stacey Richter discusses the implications of Medicare site neutral payments and Health Savings Account (HSA) reforms with James Gelfand, president and CEO of the ERISA Industry Committee (ERIC).

The episode details how plan sponsors should adapt to Medicare's site neutral payment policies aimed at curbing hospital consolidation and inflated prices through facility fees and markups. Gelfand provides insights into how HSA reforms currently in Congress could expand the scope of preventive care covered before deductibles are met, benefitting both employers and employees.

The conversation also touches on the challenges high deductible health plans pose and the potential benefits of codifying recent IRS guidance to allow greater flexibility in pre-deductible coverage. The discussion underscores the importance of plan sponsors staying ahead of Medicare policies to avoid higher costs.

=== LINKS ===

🔗 Show Notes with all mentioned links: https://relentlesshealthvalue.com/episodes

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05:42 What does Medicare site-neutral payments mean?

08:59 How do markups play into the dynamics here?

09:52 Upcoming episode with Christine Hale, MD, MBA.

10:36 What does the “narrow” start for these changes mean?

11:42 What action steps should plan sponsors be taking?

13:01 What options do plan sponsors have in highly consolidated markets?

14:27 EP371 with Erik Davis and Autumn Yongchu.

14:53 EP448 (Part 1 and Part 2) with Shawn Gremminger.

15:46 Will this bill potentially make changes to HSA plans?

17:40 Why has the thinking behind healthcare usage changed since the inception of HSAs?

18:42 INBW41 with Stacey.

23:24 How are preventive care and first-dollar coverage connected within the context of HSAs?

25:48 Why would it be difficult to completely get rid of a high-deductible health plan and offer HSAs without them?

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In part 1 of this two part episode, Stacey Richter speaks with James Gelfand, President and CEO of the ERISA Industry Committee (ERIC), about the potential effects of proposed Medicaid cuts on plan sponsors and their members.

They explore ways plan sponsors can prepare for the changes, including Medicaid's four major areas of possible cuts: reducing waste, fraud, and abuse; implementing work requirements; reeling in provider taxes; and addressing the 'Cornhusker Kickback' from the ACA.

The conversation also delves into how state governments and hospitals might respond to these cuts and suggests actions for plan sponsors to mitigate potential impacts. The episode is part one of a two-part series, with the second episode covering Medicare site neutral payments and HSA reforms.

=== LINKS ===

🔗 Show Notes with all mentioned links: https://relentlesshealthvalue.com/episodes

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05:22 What’s happening with Medicaid cuts?

06:47 What are the four main things congress is actually looking at in cutting Medicaid?

09:12 What is the Cornhusker Kickback?

16:46 What should plan sponsors be doing right now to prepare for these potential Medicaid cuts?

20:04 What’s going to happen to hospitals with these proposed Medicaid cuts?

20:48 EP464 with Al Lewis.

23:41 How does hospital consolidation affect the potential future with these Medicaid cuts?

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In Episode 468, host Stacey Richter engages in a conversation with Matt McQuide, CEO of Synergy Healthcare. This episode delves into the critical assumptions surrounding member engagement within the healthcare industry.

Key points discussed include the role of employers in steering plan members, the importance of member engagement for navigating the healthcare marketplace, and Matt’s three major misconceptions about health plan membership.

Matt also presents real-life examples of how engagement significantly impacts health outcomes, emphasizing that relationships and trust are paramount. The episode concludes with practical strategies for employers to enhance engagement and manage employee health effectively.

=== LINKS ===

🔗 Show Notes with all mentioned links: https://cc-lnk.com/EP468

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You can learn more at Synergy Healthcare and by following Matt on LinkedIn.

Matt McQuide is the founder and CEO of Synergy Healthcare, a role he has held since launching the company in 2012. Under his leadership, Synergy has made significant strides in improving member health, enhancing the health insurance experience and the financial integrity of health plans.

06:28 What are Matt’s three common assumptions that employers make about member engagement?

07:08 “Health is actually hard.”

08:19 Why is it important to meet people when their need for healthcare sparks their interest in their health?

11:29 “It didn’t take much … it just takes time.”

13:53 Why are relationships and trust more important today for employee health and member engagement?

16:04 Do people actually want optimal health?

17:44 Why is it important to meet people where they are today?

22:38 “Employers don’t want to fix healthcare.”

24:10 Why it’s important to remember that claims are real people.

24:38 Quote from Steve Schutzer, MD, about EP463 with Betsy Seals.

26:44 How do you solve the “middle way”?

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In this solo episode of 'Relentless Health Value,' host Stacey Richter dives into the intricate relationship between increased emergency room (ER) visits and the lack of access to effective primary care. Discussing insights from recent episodes featuring experts like Matt McQuide, Dr. Christine Hale, and others, Stacey explores how inadequate primary care leads to skyrocketing ER costs, which now account for 6% of total healthcare spending.

Key points include the systemic issues driving this trend, the incentives misalignments within hospitals and insurance carriers, and the importance of establishing trust and relationships in primary care. The episode also discusses perspectives from healthcare professionals and thought leaders on potential solutions to realign healthcare incentives and improve patient outcomes.

=== LINKS ===

🔗 Show Notes with all mentioned links: https://cc-lnk.com/EP467

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02:16 Connecting the dots between the last six shows.

05:34 EP466 with Vivian Ho, PhD.

05:53 EP463 with Betsy Seals.

05:56 EP384 with Wendell Potter.

14:38 Where does the primary care through line connect to carriers?

17:13 Health Affairs study showing ER cost increases.

19:19 Kevin O’Leary’s Health Tech Nerds newsletter.

19:40 EP407 with Vivek Garg, MD, MBA.

20:47 How are hospital board directors affecting hospital price increases and why?

21:49 Upcoming episode with Matt McQuide. Also mentioned in this episode are Matt McQuide; Christine Hale, MD, MBA; Kenny Cole, MD; Al Lewis; John Lee, MD; Rushika Fernandopulle, MD; Scott Conard, MD; Vivian Ho, PhD; Betsy Seals; Wendell Potter; Tim Denman; François de Brantes, MBA; Jeff Charles Goldsmith, PhD; Mick Connors, MD; Primary Care for All Americans; Rob Andrews; Alex Sommers, MD, ABEM, DipABLM; Ann Lewandowski; Steve Schutzer, MD; Sergei Polevikov, ABD, MBA, MS, MA 🇮🇱🇺🇦; Kevin O’Leary; Health Tech Nerds; Vivek Garg, MD, MBA; Suhas Gondi, MD, MBA;

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Healthcare costs keep rising, but what’s driving those increases? In this episode, Stacey Richter speaks with Dr. Vivian Ho, a health economist at Rice University and Baylor College of Medicine, to break down the real reasons behind skyrocketing commercial insurance premiums.

Are insurance premiums rising faster than wages—and why does it matter?
What’s the biggest driver of premium increases? (Spoiler: It’s hospital prices.)
Are hospital price hikes justified by rising costs—or is something else at play?

Dr. Ho shares data-backed insights on hospital consolidation, executive incentives, and how health system pricing impacts self-insured employers and plan sponsors. If you’re a healthcare executive or a jumbo employer managing benefits, this episode is a must-listen.

=== LINKS ===

🔗 Show Notes with all mentioned links:https://relentlesshealthvalue.com/episodes

✉️ Enjoy this podcast? Subscribe to the free weekly newsletter:https://relentlesshealthvalue.com/join-the-relentless-tribe

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🎤 Listen on Apple Podcastshttps://podcasts.apple.com/us/podcast/feed/id892082003?ls=1

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05:12 Are insurance premiums going up?05:59 What is the disparity between cost of insurance and wage increases?06:21 LinkedIn post by Byron Hugley.06:25 Article by Michael Strain.06:46 How much have insurance premiums gone up for employers versus employees?09:06 Chart showing the cost to insure populations of employees and families.10:17 What is causing hospital prices and insurance premiums to go up so exponentially?12:53 Article by (and tribute to) Uwe Reinhardt.13:49 EP450 with Marilyn Bartlett, CPA, CGMA, CMA, CFM.15:28 Are razor-thin operating margins for hospitals causing these rising hospital prices?16:56 Collaboration with Marilyn Bartlett and the NASHP Hospital Cost Tool.19:47 What is the explanation that hospitals give for justifying these profits?23:16 How do these hospital cost increases actually happen?27:06 Study by Zack Cooper, PhD.27:50 Who typically makes up a hospital board, and why do these motivations incentivize hospital price increases?30:12 EP418 with Mark Cuban and Ferrin Williams, PharmD, MBA.33:17 Why is it vital that change start at the board level?

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The Hidden Costs of PBMs: How Aggregate Discount Guarantees Inflate Drug Prices. In episode 465 of Relentlessly Seeking Value, host Stacey Richter interviews Chris Crawford, CEO of RxSaveCard, about the inflated costs within the pharmacy benefits industry.

The discussion centers around a lawsuit involving J&J, highlighting how large PBMs can significantly overcharge for drugs that are available much cheaper through cash-pay options like Mark Cuban's Cost Plus Drugs.

Crawford explains how Aggregate Discount Guarantees, a common contracting mechanism, often fail to control spread pricing effectively and instead may lead to higher costs for plan sponsors and employees. The episode also covers how RxSaveCard can help employers and employees access these lower cash prices, circumventing the inflated costs from traditional PBMs.

=== LINKS ===

🔗 Show Notes with all mentioned links: https://cc-lnk.com/EP465

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=== CONNECT WITH THE RHV TEAM ===

07:12 EP365 with Scott Haas.

07:17 EP397 with Paul Holmes.

07:19 EP439 with Luke Slindee, PharmD.

07:20 EP379 with AJ Loiacono.

07:44 What is the Aggregate Discount Guarantee?

13:49 Why do the divergent list prices and the perverse incentives prevent the Aggregate Discount Guarantee from really limiting cost spread?

17:55 Why is it important for plan sponsors to check these drug cost prices, and how can employers check them?

23:56 What drives cost lower, and why does it change everything?

25:09 How does RxSaveCard work?

25:44 EP461 with Chris Crawford.

30:01 Do you need a PBM’s permission to use RxSaveCard?

30:37 How does it look for employers/employees to use the RxSaveCard?

32:39 EP356 with Ge Bai, PhD, CPA.

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Emergency room costs now make up 6% of total healthcare plan spending—why? In this episode, host Stacey Richter welcomes Al Lewis to break down the data behind rising ER expenses, separating fact from fiction.

They discuss whether increased patient acuity or widespread upcoding is driving costs, the impact of the No Surprises Act, and why plan sponsors struggle to negotiate fair ER rates. Plus, Al shares actionable strategies for employers to push back against inflated charges.

If you want to understand the hidden forces behind escalating ER bills, this is a must-listen.

You can find the charts and links mentioned in the show notes in the link below.

=== LINKS ===

🔗 Show Notes with all mentioned links: https://cc-lnk.com/EP464

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🫙 Support the podcast with a small donation to the Tip Jar: https://relentlesshealthvalue.com/join-the-relentless-tribe

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🎤 Listen on Apple Podcasts https://podcasts.apple.com/us/podcast/feed/id892082003?ls=1

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00:00 Introduction

08:32 What is going on in ER visits, and how big of a deal is the total spend?

10:16 Why is the price of ER visits going up when it should be going down?

11:59 What is the major source of unexpected medical debt?

13:27 What is code creep, and why is it happening?

16:26 Why are plan sponsors unable to negotiate emergency room services?

19:22 EP415 with Rob Andrews.

25:53 Why is it important not to agree to consent when you go in to visit the ER?

27:47 EP386 with Al Lewis.

31:28 What steps can plan sponsors take to be proactive about limiting ER spending for their employees?

You can learn more at quizzify.com and by emailing al@quizzify.com. You can also follow Al on LinkedIn.

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Betsy Seals, Wendell Potter (Encore! EP384), Dr Scott Conard, Stacey Richter (INBW42), Chris Crawford, Dr Rushika Fernandopulle, Bill Sarraille, Stacey Richter (INBW41), Andreas Mang (Encore! EP419), Dr Komal Bajaj

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In this episode of Relentless Health Value, host Stacey Richter engages with Betsy Seals, CEO and co-founder of Rebellis Group, to analyze the future of key Medicare Advantage policies amidst a changing political landscape. They delve into four critical areas:

Medicare Advantage Stars Program: Examining potential changes due to recent lawsuits and the new administration’s stance on quality measures.
Risk Adjustment and Government Oversight: Discussing the focus on recouping improper payments and how oversight might evolve.
Use of Artificial Intelligence: Considering appropriate oversight for AI applications in prior authorization processes and ensuring they benefit patient care.
Agent and Broker Oversight: Exploring increased scrutiny over marketing practices and the dissemination of accurate information to beneficiaries.

Betsy emphasizes the importance for Medicare Advantage plans to prioritize patient value, maintain compliance, and proactively utilize data to navigate these evolving policies. This discussion provides valuable insights for stakeholders aiming to understand the future of Medicare Advantage.

=== LINKS ===

🔗 Show Notes with all mentioned links:

https://cc-lnk.com/EP463

✉️ Enjoy this podcast? Subscribe to the free weekly newsletter:

https://relentlesshealthvalue.com/join-the-relentless-tribe

🫙 Support the podcast with a small donation to the Tip Jar:

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05:09 Will the Star Ratings program stay in this new administration?

08:08 How will the lawsuits against CMS policies play out with this new administration?

10:24 Why is it hard for Medicare Advantage plans to survive, let alone thrive?

16:22 How does AI directly impact beneficiary lives?

21:38 What’s going on now with the override payments?

27:08 How is non-collaboration going to impact Medicare beneficiaries moving forward?

31:45 Why is it important to become more technologically savvy in compliance?

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In this episode, Stacey Richter explores how the demands of shareholders influence the actions of publicly traded health insurance companies with guest Wendell Potter. Drawing from Milton Friedman’s assertion that a business’s primary responsibility is to its shareholders, we examine the implications of this philosophy in the healthcare sector. The discussion highlights concerns about fraud allegations among major insurers and the lack of open competition due to market consolidation.

We delve into the concept of the “medical loss ratio,” a key metric for investors, and how it pressures insurers to prioritize profits, often at the expense of patient care. Our guest, Wendell Potter, a former health insurance executive turned advocate for healthcare reform, provides insider insights into these dynamics. He discusses the challenges insurers face in controlling costs, the impact of rising premiums, and the broader consequences for patients and the healthcare system. This episode offers a critical look at the intersection of corporate interests and patient care, shedding light on the systemic issues that arise when profit motives drive healthcare decisions.

All mentioned links can be found in the show notes.

=== LINKS ===

🔗 Show Notes with all mentioned links: https://cc-lnk.com/Encore384

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08:31 What is the medical loss metric?

11:33 “The reality is, insurers have been jacking up premiums … for a long time.”

12:48 “It’s a short-term game.”

15:39 “You’re seeing that these companies are not doing a very good job … of controlling costs because they don’t have the incentive.”

20:19 EP366 with Kevin Schulman, MD.

22:45 How do payers ensure that they’re controlling utilization?

25:53 “It’s death by a thousand cuts.”

31:51 “Just like independent practice physicians are endangered, so are community pharmacists.”

33:17 Who runs our healthcare system?

View Details

This podcast today is with Dr. Scott Conard, founder of Converging Health. You might remember him from the earlier episode (EP391). First of all, I enjoyed how it came to be. Brian Uhlig, an employee benefit consultant of some acclaim, came to me and offered to sponsor a show for someone else. Not himself. I gotta say, it’s stuff like this that warms my heart. It’s this village that we have here, this tribe of Relentless folks trying so hard to stand up for and help patients. So, thanks again to Brian Uhlig.

Right now, Dr. Conard is doing a bunch of work with Mike Adams from 7-Eleven, helping their plan members. A lot of this work is centered on and about a few pretty striking but very common insights that many plan sponsors will find in their own data. It turns out about 70%, give or take, of people who wind up costing the plan whatever the high-cost threshold is in any given plan year.

These higher-cost claimants didn’t fall out of the sky unexpectedly, 70% of them. They were actually high risk but low cost in prior years. So, the trick is to find these individuals and help them not fall into the high-risk and high-cost part of the graph. If the goal is how to best manage a population of members, a lot of that is, again, identifying high-risk patients who are currently in the low-cost zone, who, any given plan year, are gonna go out of that zone and get into the high-cost area.

So, if we’re thinking about best practices to avoid this, I’m gonna run through Dr. Conard’s list that we mostly run through in the show that follows.

Lastly, we touch a little bit in the show today on community-run primary care. This is a community paying for primary care for community members, just like they pay the fire department and the police department. There’s a town in Rhode Island doing this that Dr. Conard talks about today. In fact, Michael Fine, MD, is part of this effort in Rhode Island.

=== LINKS ===

🔗 Show Notes with all mentioned links and articles: https://cc-lnk.com/EP462

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=== CONNECT WITH THE RHV TEAM ===

07:10 How do we think about data wrongly, and how does that affect our healthcare spend in regard to population health?

09:43 What needs to be done with population health data once it’s collected.

14:48 Community in Rhode Island doing effective proactive care.

16:09 EP449 with Marty Makary, MD, MPH.

16:44 A real, successful case study.

24:08 How do we define high-cost patients?

24:14 What do we know about high-cost patients in regard to population health spend?

29:02 Why avoiding prevention in primary care only harms yourself in the future.

View Details

In this inbetweenisode Stacey Richter dives into the complexities of benefit design in American healthcare. Highlighting insights from recent episodes with Bill Sarraille (EP459) and upcoming episode with Scott Conard, MD, Richter explores the impact of cost containment measures and the moral hazard of insurance, emphasizing the importance of creating balanced and efficient benefit plans that align with plan values and avoid unintended consequences.

She discusses the challenges and implications of high deductible health plans and copay maximizers/accumulators, urging plan sponsors to strive for pareto optimality and practical solutions. This episode is a call to carefully consider patient behavior, healthcare utilization, and the broader impacts of financial incentives in healthcare.

Going black and white or over-indexing to prevent outlier kind of stuff is probably not gonna end well. Not seeking a middle way can easily result in a solution that is possibly worse than the problem.

Moral hazard is actually a thing. There are lots of implications to patients not being able to distinguish high-value and low-value care. But if we know this, then, philosophically at least, how do we conceptualize a solve? What should we be doing? If we’re not doing black and white, what does the gray in the middle look like?

=== LINKS === 🔗 Show Notes with all mentioned links: https://cc-lnk.com/INBW42

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00:00 Introduction to the Rabbit Hole

04:05 Where did Stacey’s rabbit hole spiral start?

05:40 What is the moral hazard of insurance?

09:31 EP358 with Wayne Jenkins, MD.

12:49 Why isn’t moral hazard mitigated in insurance?

18:16 EP459 with Bill Sarraille.

20:51 “How do we conceptualize a solve?”

22:24 Why should we be striving for Pareto optimality?

25:20 What is the theory of second best?

View Details

This episode with Chris Crawford, CEO of RxSaveCard, is not about the when, why, or how of GLP-1s for weight loss or best-practice prescribing. This episode very, very specifically is about the how and why of the pickle plan sponsors get themselves into often enough where if they impose formulary restrictions to limit the volume of meds that they are paying for, then unit prices go up, which is a thing for GLP-1s.

And this is critical just given how the costs associated with GLP-1s for weight loss contribute to some pretty significant increases in pharmacy trend for plan sponsors who choose to cover the GLP-1s for weight loss.

Chris Crawford and Stacey Richter discuss the challenges plan sponsors face with the rising costs of GLP-1 medications for weight loss. They explore how plan sponsors’ efforts to manage pharmacy trends often result in a tradeoff: lowering unit costs by increasing volume or vice versa. Chris also introduces a potential solution leveraging the growing cash marketplace, where employers can bypass traditional PBM contracts to achieve cost savings. Tune in for actionable insights into the perverse incentives in the pharmacy supply chain and innovative ways to navigate them. (Continued below the links)

=== LINKS === 🔗 Show Notes with all mentioned links: hhttps://cc-lnk.com/EP461

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Bottom line, there are some really impactful and not frequently delved into perverse incentives at play here. And we’re gonna talk about these today. And these are really key for anybody on or about the pharmacy supply chain in the U.S. to know about. This is very actionable insight.

So, again, there’s an unfortunate tradeoff, as it stands right now, for many plan sponsors. Lower your volume and raise the unit price or vice versa.

This episode is sponsored by RxSaveCard, and a big thanks for that. I really appreciate RxSaveCard for its financial support because this episode covers a really important topic that we probably would have covered anyway over here at Relentless Health Value.

And so, RxSaveCard standing up and offering their financial support to cover it was a really nice thing to do. And I thank them for their generosity.

07:57 What are the two pieces going on with GLP-1 PBM prices and rebates for employers?

10:00 Is the cash price for these name brand drugs currently less than the rebated PBM price?

11:49 Why does the rebate for GLP-1s disappear if employers try to put restrictions on who can receive access to these drugs?

15:07 Where does RxSaveCard come in to play here?

19:55 “We exist to save people money.”

20:45 EP456 with Brian Reid.

21:16 EP356 with Ge Bai, PhD, CPA.

21:37 EP439 with Luke Slindee, PharmD.

View Details

In this Relentless Health Value episode, Dr. Rushika Fernandopulle discusses with Stacey Richter his four-prong theory of change for transforming the American healthcare system. Key topics include the necessity of new payment models, process innovation, employing a relational technology infrastructure, shifting the cultural mindset towards team-based care, and emphasizing the importance of long-term partnerships. The conversation underscores the urgent need to move away from the current status quo to ensure better health outcomes and affordable care for all Americans.

This is one of those episodes where we consider top-line strategic imperatives and key drivers. There was no better person to do this with than Rushika Fernandopulle, MD, who, in case you were unaware, was the founder of Iora Health, an advanced primary care group that was sold to One Medical and then to Amazon.

They discusses his four-prong theory and as Stacey says, "I can’t leave well enough alone, so I plucked one more prong from our conversation and stuck it on the end." For a summary of this 5 prong approach, visit the show notes page where we also list all of the links mentioned in the episode.

=== LINKS === 🔗 Show Notes with all mentioned links: https://cc-lnk.com/EP460

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🎤 Listen on Apple Podcasts https://podcasts.apple.com/us/podcast/feed/id892082003?ls=1

🎤 Listen on Spotify https://open.spotify.com/show/6UjgzI7bScDrWvZEk2f46b

📺 Subscribe to our YouTube channel https://www.youtube.com/@RelentlessHealthValue

06:39 How Dr. Rushika Fernandopulle found himself where he is now.

08:06 Dr. Fernandopulle’s conversation with Kenny Cole, MD.

10:33 Why is it important to have new payment models?

12:21 EP453 with Claire Brockbank.

14:50 EP455 with Beau Raymond, MD.

16:19 Why it makes sense to change as quickly as possible.

19:55 How to be proactive and not be reactive and achieve value-based reimbursement for good care.

21:41 Why team-based care is so important for change.

23:37 Why is it important to have a different set of technology tools?

24:38 EP391 with Scott Conard, MD.

25:24 Why changing the culture is important.

27:01 “Getting doctors to do things they don’t like is a waste of time.”

33:22 “Healthcare is local.”

35:31 EP364 with David Muhlestein, PhD, JD.

35:43 Study by Zack Cooper, PhD.

36:53 EP404 with Suhas Gondi, MD, MBA.

39:04 Why long-term partnerships are the only way to make things better.

View Details

In Episode 459, host Stacey Richter speaks with healthcare attorney Bill Sarraille about co-pay maximizers and accumulators, mechanisms designed to extract maximum co-pay support dollars from pharmaceutical companies.

They discuss the financial implications for patients, plan sponsors, and pharmacy benefit managers (PBMs), emphasizing the legal and ethical issues and potential patient harm due to high out-of-pocket costs and surprise expenses.

Sarraille provides five key pieces of advice for plan sponsors and highlights the importance of transparency and proper utilization management to minimize patient access problems and legal risks. Listen or read the show notes on our site for the full list.

(continued below the links)

=== LINKS ===

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Co-pay maximizers and accumulators are programs designed to capture maximum co-pay assistance from phara. Maximizers spread pharma co-pay support evenly throughout the year, ensuring plan sponsors benefit while, in theory, patients face minimal costs. More on how that can go wrong in the episode.

Accumulators, however, design their plan to deplete pharma dollar support quickly, surprising patients with significant out-of-pocket expenses mid-year when they go visit the pharmacy.

These programs usually exclude pharma assistance dollars from deductibles, potentially causing financial hardship because when pharma is paying your co-pay, those payments don't count against your deductible.

09:31 What should plan sponsors be aware of right now?

14:01 What is the justification for maximizers, and why is this at odds with the purpose of insurance?

18:05 Where does the issue of “fairness” land within cost containment?

20:00 Brian Reid’s LinkedIn post on insurance company access challenges.

21:30 What are the real legal issues presented by some of these co-pay maximizers and co-pay accumulator programs?

27:06 How are these programs creating perverse incentives?

29:28 EP450 with Marilyn Bartlett, CPA, CGMA, CMA, CFM.

32:16 “If you’re covered by the ACA, I think this is unlawful.”

32:57 What advice does Bill have in regard to these programs?

33:49 What potential litigations does Bill see coming in the near future in regard to these co-pay maximizers and co-pay accumulator programs?

View Details

In this Inbetweenisode titled 'End of Year Wrap Up and My Personal Charter Encore,' Stacey Richter extends heartfelt thanks to listeners and healthcare workers for their dedication.

She reflects on the challenges of maintaining personal integrity in a profit-driven healthcare system and introduces her personal charter. This charter, focused on ensuring net positive outcomes for patients, acknowledges that achieving transformational change in healthcare requires a collective effort.

Stacey discusses the complexities of balancing ethical decisions, financial constraints, and the broader impact on patient care, urging others to reflect on their own guiding principles.

Here's her manifesto which she is now calling her Personal Charter below which she breaks down in this podcast episode:

"If the thing results in a net positive for patients, then I will do it. The timeframe is short-term or medium-term. And the assumption is that it will take a village and I am not alone in my efforts to transform healthcare or do right by patients."

=== LINKS ===

🔗 Show Notes with all mentioned links: https://cc-lnk.com/INBW41

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06:52 “It’s a zero-sum game.”

07:02 Is the amount of profit fair?

07:13 What is an inescapable fact of the healthcare industry?

07:30 What does the financialization of healthcare mean?

07:55 Why does the self-interest in healthcare matter?

09:54 “It’s basically up to us as individuals to do the right thing.”

13:39 What is the first part of Stacey’s personal charter?

13:54 How does Stacey calculate the net positive of an impact?

14:17 What are two major upsides/downsides that Stacey contemplates?

17:08 Why are incremental change and disruptive change not mutually exclusive?

21:16 “I always try to keep in mind that it will take a village.”

22:55 Why finger pointing is killing innovation in healthcare.

View Details

Are you on the board of directors of a company? Or are you a shareholder of a publicly traded company? Or are you a CEO or a CFO or in-house counsel who reports to a board of directors or these shareholders? Well, this show is for you.

And it’s about how the healthcare industry has become financialized at the same time that providing health benefits has become the second-biggest line item after payroll for most companies. We talked about that in a recent encore with Mark Cuban (EP418) also, as well as the show with Cora Opsahl (EP452) and Claire Brockbank (EP453) from 32BJ.

In this encore episode of 'Relentless Health Value,' Stacey Richter interviews Andreas Mang from Blackstone about the financialization of health benefits for boards of directors and C-suites of self-insured employers.

They discuss the unseen financial layers in healthcare benefits and how companies can save significantly while improving employee satisfaction and health.

=== LINKS ===

🔗 Show Notes with all mentioned links: https://cc-lnk.com/EP458

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=== CONNECT WITH THE RHV TEAM ===

04:55 Why Andreas starts every conversation with the question, “How’s your healthcare company?”

07:38 Why is it important, as a self-insured employer, to treat your business as a small healthcare company?

09:16 Why is it unnatural for companies to be providing health insurance?

10:47 What can be achieved when there is alignment between employers and insurers?

12:41 What things can a company do to reduce spend by 10%?

14:14 Why is it better to have CFO engagement in the benefits plan throughout the year?

16:25 Why does self-insurance save 5% to 9% for companies automatically?

18:14 “The funding isn’t a healthcare thing; it’s a CFO thing.”

18:27 Why is it vital to have a reliable, trustworthy broker?

25:12 When is the last time your company has RFP’d their health plan?

27:39 Why does changing a health plan feel scary but is necessary?

28:31 What is a dependent eligibility audit?

31:20 Why are employers better together?

34:34 How do employers truly get a flat-fee model with brokers?

View Details

In Episode 458 of Relentless Health Value, host Stacey Richter speaks with Dr. Komal Bajaj about innovative strategies for addressing staffing shortages in the healthcare sector. They explore the importance of cultural alignment within organizations, emphasizing trust and shared values to retain staff.

Dr. Bajaj shares surprising findings from surveys indicating that healthcare workers are motivated by the goal of providing high-quality, planet-friendly care. The discussion highlights the interconnectedness of environmental sustainability and healthcare quality, presenting tangible ways to engage and empower healthcare workers while addressing both local community health and broader environmental concerns.

The episode underscores the strategic importance of aligning organizational goals with the aspirations of the workforce to foster trust and mitigate staffing shortages.

Stacey's guest today is Dr. Komal Bajaj. Dr. Bajaj is an ob-gyn who serves as the chief quality officer for a couple of hospitals in the Bronx, New York, that are part of the municipal health system of New York. She also now serves as medical director of sustainability for the municipal health system NYC Health + Hospitals.

=== LINKS ===

🔗 Show Notes with all mentioned links: https://cc-lnk.com/EP458

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08:20 How do we quantify the issue of staffing shortages?

11:18 Why do we need to look at the root cause of the shortages?

11:51 Deloitte survey on staffing shortages.

11:54 Why is trust one of the core problems when it comes to staffing shortages?

13:59 “Healthcare workers have choice.”

15:34 What are the strongest correlations that influence healthcare workers’ desire to stay?

18:17 What things give healthcare workers the most pause?

19:36 The U.S. Department of Health and Human Services Health Sector climate pledge.

20:20 The Commonwealth Fund survey on what health systems can do to address climate change.

22:29 What do we do about sustainable, climate-friendly healthcare being a driving factor in staffing?

27:28 How do you meet the desires of healthcare workers where they’re at?

View Details

In this episode of 'Relentlessly Seeking Value,' host Stacey Richter is joined by healthcare entrepreneur Cynthia Fisher to discuss the crucial issue of medical spread pricing and the need for contract transparency.

Fisher explains how hidden fees and spread pricing by middlemen are leading to substantial overcharges for employers and patients in the U.S. healthcare system. The conversation delves into recent lawsuits that highlight these practices, the legislative strides made to enforce price transparency, and how transparency can potentially transform the industry.

Look, this is a thing now, medical spread. And similar to how PBM spreads adds up to millions, billions of dollars, medical spread is not change in the couch cushions. Did you see the lawsuit against Cigna? Cynthia Fisher mentions it in the conversation that follows. Spoiler alert, here’s the numbers: Self-insured employer paid $4 million for a claim.

There’s a slide on this Cynthia Fisher gave me, by the way, if you want to see all this written out. So, the employer pays $4 million. The provider was paid—drumroll, please—$876,000. I’m pausing so that sinks in: $4 million paid by the employer; $876,000 of that makes it across the trench to the provider.

To view the meme we created for how carriers are learning to do spread pricing from the PBMs, visit our show notes page below. (continued after the links below)

=== LINKS === 🔗 Show Notes with all mentioned links: https://cc-lnk.com/EP457

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Fisher emphasizes the importance of employers and unions demanding accountability, using existing laws to unveil true pricing, and advocates for a revolution in healthcare to ensure fair, equitable, and transparent billing. Insights are also shared from industry experts who were previous guests including Chris Deacon, Justin Leader, and Andreas Mang. You can find the links in the show notes on our site.

09:03 What is the goal of PatientRightsAdvocate.org?

10:28 Is American competitiveness being affected by healthcare spend?

13:47 Why is transparency a root cause to healthcare costs?

15:11 What’s going on across the country to empower transparency in healthcare?

19:31 “I think people are fed up.”

21:22 The Cigna lawsuit in California.

26:36 How do employers navigate contracts against anti-steering?

28:54 EP419 with Andreas Mang.

29:33 EP452 with Cora Opsahl and EP453 with Claire Brockbank.

29:45 EP433 with Justin Leader.

You can learn more at PatientRightsAdvocate.org.

View Details

In this special Thanksgiving episode of Relentlessly Seeking Value, Stacey Richter discusses the significance of being 'givers' in healthcare, advocating for collaboration over transactional relationships to deliver real value to patients.

She touches on the challenges and necessary shifts in healthcare market dynamics, emphasizing that true value is determined through bi-directional conversations between providers and end-users, like patients and plan sponsors. Stacey concludes with a call to action for listeners to reflect on their support networks and consider supporting valuable media and publications.

To read the show notes with the mentioned links visit the epsiode page.

If you enjoy this podcast, be sure to subscribe to the free weekly newsletter to be a member of the Relentless Tribe.

I want to drop a thank you right here to those who have left a tip in our tip jar and/or offer up a monthly contribution. From the bottom of my heart, thanks for the support. Thank you to Dr. Scott Tromanhauser, Marilyn Bartlett, Ann Kempski, Dr. Matthew Bunte. Also, thank you to Brian Uhlig, Dr. William Gailmard, Dr. John Lee, Dr. Paula Muto, and Linda Krebs.

Plus everyone else who left a lesser amount. You guys are my village, and this matters because, as it’s been said by me and others a million times, it will take a village to transform healthcare. So, if you haven’t already done so, because … yeah, Thanksgiving, consider who is on your own list of villagers to thank right about now in your world.

So, yeah, long story long, all the more thanks to everyone who has donated to our tip jar, who has written a nice review on Apple Podcasts or Spotify, or who interacts with our posts on LinkedIn. Thank you.

This is how pods like this and any of the publications that you like are able to continue. It’s also, if you want to get really “why do givers succeed” about it, it’s through these interactions that like 99% of guests I’d estimate who get invited on a podcast, probably any podcasts, come from, or who likely get their name in any publication come from. As I said, this is true for this pod at least. But I would say that who are most hosts or most reporters going to reach out to when they need information or insight and are looking to quote somebody?

It’s gonna be somebody that they know. It’s gonna be somebody that they like.

So, giving, the healthcare industry. This is the actual point I wanted to make before I completely distracted myself. And I talked about this at length actually at a recent thINc360 panel about delivering better patient outcomes.

So, collaborate, give. And thank you to all of you who do both of these things every day, despite the cognitive dissonance and corporate forces and the lack of time and resources that may plague your efforts. I appreciate you very, very much. And it is this gang—the Relentless Tribe, that listens to this show—it is you who will transform healthcare. It’s really you. And again, from the bottom of my heart, I thank you.

01:33 How do you calculate the number of people you’ve helped?

02:46 Why is giving so important within healthcare?

03:16 Interview with Adam Grant.

05:47 How can you be a better giver?

07:50 Who is in charge of the bidirectional conversation of value?

11:35 Why is collaboration so important to value and being a giver?

12:58 Why is it important that plan sponsors are a part of all this giving and collaboration?

13:22 Encore! EP415 with Rob Andrews.

14:34 Summer Shorts 8 with Larry Bauer, MSW, MEd.

15:08 INBW39 with Stacey on the narcissism of small differences.

15:12 EP399 and EP400 with Stacey.

View Details

In this encore episode, Mark Cuban discusses his insights and experiences on disrupting the healthcare and pharmacy benefits landscape with Stacey Richter. This show from last year was one of the most popular episodes of the past year. And it’s also extremely relevant right now, given all of the PBM (pharmacy benefit manager) goings-on, as well as ongoing litigation like the J&J lawsuit, etc. Listen to the show with Julie Selesnick (EP428) for more on that one.

You can find the show notes with all links mentioned and a transcript on our episode page.

If you enjoy this podcast, be sure to subscribe to the free weekly newsletter to be a member of the Relentless Tribe.

Joined by Ferrin Williams from Scripta, Cuban stresses the importance for CEOs and CFOs of self-insured companies to get actively involved in their healthcare plans to avoid overpaying. The conversation tackles the opaque practices of PBMs, the financialized nature of the healthcare industry, and introduces Mark Cuban's Cost Plus Drugs model which aims for transparency and cost reduction.

Key topics also include the potential legal implications for employers, the importance of trust in healthcare transactions, and the real-world savings and benefits achievable with greater involvement and transparency in healthcare management.

What do all of these numbers have in common: $140,000, $3 million, $35 million, and $3 billion?

These are all actual examples of how much employers, unions, and some public entities saved on healthcare benefits for themselves and their employees. The roadmap to saving 25% on pharmacy spend and/or 15% on total cost of care in ways that improve employee health and satisfaction always begins when one thing happens. There’s one vital first step.

That first step is CEOs and/or CFOs or their equivalents roll up their sleeves and get involved in healthcare benefits.

Read the full article/show notes with all the mentioned links here: https://cc-lnk.com/Encore418

06:29 What was Mark Cuban’s own journey as a self-insured employer with Cost Plus Drug Company?

07:44 What did Mark find when he decided to go through and look through his company’s benefit program?

09:12 “When you think it through, you start to realize that money is being spent primarily by your sickest employees.” —Mark

10:02 How do you get CEOs and CFOs of self-insured employers to realize that their sickest employees are the ones subsidizing their checks?

13:00 What is the role of insurance in healthcare?

14:30 “If you can’t convince them, confuse them and hide it.” —Mark

15:24 The reality behind getting a rebate check.

16:21 Why are rebates going away, and why isn’t that changing PBM earnings?

19:05 How do you get CEOs and CFOs to dig into their benefits plan?

20:59 Does morally abhorrent move the needle?

21:33 “What we’re trying to do is just simplify the [healthcare] industry.” —Mark

24:19 What’s been changing in consumer behavior?

25:04 “Transparency is a huge part of building that trust.” —Ferrin

25:19 Why CEOs and CFOs really have the power to change healthcare.

32:29 What are Cost Plus Drugs’ plans to expand?

39:21 Where is the future of the prescription drug market going?

42:09 What will happen to the prescription drug market in 10 to 20 years?

48:40 The wake-up call self-insured employers should be acknowledging now.

52:02 Where is the real change in the healthcare industry going to come from?

View Details

This encore is very relevant after the shows with Cora Opsahl (EP452), Claire Brockbank (EP453), and Marilyn Bartlett (EP450). Getting better health for the 160 million Americans covered by commercial insurance is all about rates, rights, and power.

For a full transcript of this episode, click here.

If you enjoy this podcast, be sure to subscribe to the free weekly newsletter to be a member of the Relentless Tribe.

So, for sure, go back and listen to those shows if you haven’t already. They are very revealing. And if you listened to this particular episode, 415, last year when it first came out, you might want to listen to it again because in the context of those earlier shows, there’s points of contemplation that might become clear.

By the way, also, the show with Ann Kempski (EP444) is relevant to this end (ie, sometimes government intervention doesn’t achieve the stated goal). This is a very nuanced world that we live in, and those nuances impact Americans both clinically and also very much financially. I’m saying this partially because maternal and newborn outcomes and costs are part of this conversation.

Now, in this conversation, maternity care and outcomes gets brought up mainly because a lot of employers, for a lot of them, maternity constitutes one of the highest areas of spend for both the employer and then also employees. It costs a lot to have a baby in this country. Strategy 101 does, in fact, suggest that if you look at your data and you discover outsized problems and costs in any one area, fixing those problems and costs is going to have an outsized impact on employee health and plan spend.

And this is even more of a strategic consideration just given everything going on with maternal health and rising infant and mom death rates in this country.

So, with that, here’s Rob Andrews, who is the CEO of the HTA, the Health Transformation Alliance, which is a group made up of jumbo employers. I had wanted to get Rob on the show ever since I heard him say at the thINc360 conference in DC. He said, “Morally abhorrent doesn’t move the needle. What moves the needle is financial implications.”

This interview was my chance to ask Rob Andrews, what are these financial implications of which you speak that move needles? What kinds of financial implications are we talking about? And when that needle moves, what happens?

But let me focus on the direct bucks out of pocket right now because … yeah, study after study shows that, for self-insured employers, if you pay for the right things and you steer to the right providers in the right care settings, a self-insured employer and the member do a whole lot better than if the employer kind of laissez-faire pays for any manner of things provided by anybody who can manage to submit a billing code—even if that billing code comes with a too-good-to-be-true discount.

Rob talks about how the HTA has data to suggest that if you, as a self-insured employer, lean in on paying for the right things, readmissions go down 29%. Total cost of care is 15% lower. Drugs cost 25% less. So, none of this is theoretical, as we talk about how employers can create a win-win—better health, lower costs. There are jumbo employers in the HTA right now who are doing this.

I love how Will Shrank, MD, has put it; and I’m paraphrasing, but it’s a point that keeps getting reiterated in episode after episode here on Relentless Health Value: There’s a difference between paying for what you want and just negotiating allegedly cheaper prices.

Buying things is not a strategy. And that is true no matter what price you think you’re paying. Also not a strategy is buying things and then cost shifting to plan members, by the way. Strategy means addressing root causes. It’s a considered plan of action to achieve an optimized ambition.

Here is the strategic stepwise that Rob offers on this:

Discern the difference between rumor and data. Get your data and get it objectively analyzed by an objective third party, self-insured employers. Then you have what you need to figure out the delta between the worst performers and the best performers on a risk-adjusted basis.
Now that you know what normal is and what good looks like, gang up and negotiate contracts that hold intermediaries accountable for outcomes and with performance guarantees. Address root causes and the excess and wasteful spend, in other words. Listen to the show with Dr. Will Shrank (EP413) for more on wasteful spend.
Be transparent with consumers/employers about relative quality. Educate them. You may also want to reward members who go to see those high-quality docs and/or make it expensive for them to go to the worst performers. There are lots of win-win case studies here on how well this works.

Rob Andrews and I talk a bunch using maternal outcomes as a case study for lots of the points made, and this was done for several reasons.

One is that, for some employers, maternity is a large chunk of their healthcare spend. As a case study, it is undeniably superb. Avoidably bad outcomes for moms and babies here is not only scandalous, as Rob Andrews puts it, in a country as wealthy as ours but also really costly—and many times avoidably so. Keeping even one mom and/or one baby out of the ICU or NICU can save hundreds of thousands of dollars. I said this already, and it’s a brutal number worth repeating.

It’s really interesting how employers in a geography wind up footing (indirectly) a rather shockingly large bill for babies and uninsured or underinsured moms or moms on Medicaid avoidably going to the ICU and the NICU, which the hospitals tally up as hundreds of thousands of dollars in billed charges. The term million-dollar baby is a term, after all.

Listen to the episode that follows for more on these indirect costs and how they happen. But the good news is that there are really cost-effective pathways that actually work to keep moms and babies out of the most expensive care settings money can buy. Jodilyn Owen (EP421) talks about one of them in detail: how her maternal health clinic, which serves ZIP codes with, let’s just say, a lot of social determinants of health going on, moms in her clinic have a lower rate of NICU admissions than even the fancy ZIP codes nearby. So, this can be done. Purchasers of healthcare just have to demand that it happens and pay for it to happen. Rob Andrews talks about this, and he also talks about why it is quite unlikely that payer or provider organizations themselves are gonna pick up this torch and make this happen unilaterally of their own volition. Now, he offers some nuance, and you should listen to that nuance.

Also mentioned in this episode are Health Transformation Alliance; Cora Opsahl; Claire Brockbank; Marilyn Bartlett; Ann Kempski; William Shrank, MD; Jodilyn Owen; and Tom Nash.

You can learn more by emailing Rob at randrews@htahealth.com.

Robert E. Andrews is the chief executive officer (CEO) of the Health Transformation Alliance (HTA), an original author of the Affordable Care Act, and a former member of Congress. As CEO of the HTA, Robert oversees the strategic direction of approximately 70+ major corporations that have come together in an alliance to do one thing: fix our broken healthcare system. Formed by four founding members in September 2015, the HTA member companies collectively are responsible for more than 8 million employees, dependents, and retirees with an annual healthcare spend of $30+ billion.

Through Robert’s leadership, the HTA has launched value-driven solutions specifically designed to improve patient care and economic value through world-class data and analytics, pathbreaking pharmaceutical solutions, high-quality medical networks, and robust consumer engagement initiatives. To date, the cooperative has saved its member companies well over $2 billion in healthcare costs. Robert’s leadership has been equally important in the HTA developing programs addressing racial and ethnic disparities in healthcare, mental health issues, and safe return-to-work programs following the pandemic.

Robert served as a member of the United States House of Representatives for nearly 24 years. Upon his departure from Congress, President Barack Obama praised Robert’s service as “an original author of the Affordable Care Act … and a vital partner in its passage and implementation.”

07:34 How did Rob get to his current role?

09:08 The problem of maternal health and mortality rate, and how self-insured employers wind up directly and indirectly paying for this.

10:27 Why economic consequences move the needle, and why sometimes they don’t.

12:26 Why the best way to address costs isn’t to re-shift costs but to address them directly.

13:22 Why compensation that isn’t dependent on outcomes is a problem.

16:23 “Strategy’s not what people say; it’s what they do.”

18:21 How do you operationalize saving money with better outcomes?

26:26 How do employers turn conflict into collaboration?

28:20 What is the win-win-win structure among employers, payers, and providers in Rob’s eyes?

30:53 To whom should the task of risk adjustment fall?

34:43 “Better contracts do improve outcomes.”

You can learn more by emailing Rob at randrews@htahealth.com.

Rob Andrews of HTA Health discusses how jumbo employers can save money and get better #healthcareoutcomes on our #healthcarepodcast. #podcast #digitalhealth #valuebasedcare #healthcare

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Brian Reid, Dr Beau Raymond, Brendan Keeler, Claire Brockbank, Cora Opsahl, Dan Nardi, Dr Spencer Dorn (EP451), Marilyn Bartlett, Dr Marty Makary, Shawn Gremminger (Part 2), Shawn Gremminger (Part 1)

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In this comprehensive episode host Stacey Richter sits down with Brian Reid to discuss pivotal aspects for the pharmaceutical industry. Key topics include understanding product value from the perspectives of plan sponsors, patients, and society, and the significance of benefit design in improving patient affordability.

For the show notes with all links mentinoed, visit the episode page.

If you enjoy this podcast, be sure to subscribe to the free weekly newsletter to be a member of the Relentless Tribe.

The discussion delves into the complexities of drug pricing, the roles of Pharmacy Benefit Managers (PBMs) and brokers, and the impact of healthcare consolidation on costs. Reid emphasizes the importance of transparent communication among stakeholders, the detrimental effects of cost containment strategies, and the necessity of considering policy and reputational impacts.

Throughout the conversation, examples such as the Hepatitis C drug illustrate the broader implications on drug access and affordability. Listeners are provided with critical insights into how pharmaceutical companies can better engage with ultimate purchasers to ensure patients receive necessary, cost-effective medications while navigating a changing healthcare landscape.

For the show notes with all links mentinoed, visit the episode page.

08:29 Why is it important to understand the term “value” in respect to medicine?

10:07 Why is it important to consider all the players affected by the idea of this “value”?

11:06 Who are the ultimate purchasers in Pharma?

12:23 Findings of the Kaiser Employer Health Benefits Survey.

14:52 Why does it matter that we consider what value looks like to all players affected by Pharma?

16:46 EP300 with Bruce Rector, MD.

18:38 EP448 (Part 1) with Shawn Gremminger.

20:04 What does Pharma need to do to showcase their value when PBMs are often “locked in” at the moment?

23:11 Why Brian is celebrating companies that put their prices in their press releases.

32:31 Why does Pharma have an obligation to explain their value?

33:16 EP426 with Nina Lathia, RPh, MSc, PhD.

33:39 Why is it important for Pharma to keep an eye on hospital monopoly behavior?

35:55 EP370 with Erik Davis and Autumn Yongchu.

37:44 Why Pharma needs to capitalize on alignment.

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In this conversation, Stacey Richter engages with healthcare leader Dr. Beau Raymond from Ochsner Health Network to explore the blueprint for better patient care through enlightened leadership, data-driven strategies, and localized health initiatives.

The discussion covers shifting from 'sick care' to preventative healthcare, integrating technology and data tools like glucometers for health coaching, and addressing health equity through accurate data and regional strategies.

To Read the Show Notes with Mentioned Links and a Full Transcript, Visit the Episode Page.

If you enjoy this podcast, be sure to subscribe to the free weekly newsletter to be a member of the Relentless Tribe.

The conversation explains the importance of stakeholder engagement, setting clear goals, financial incentives aligned with patient care, and continuous improvement through feedback loops. Practical steps such as weekly huddles for primary care teams and the role of digital health in managing chronic conditions like diabetes and hypertension are also highlighted to improve healthcare outcomes and operational excellence.

A rate critical to attain better care for patients, I’m gonna say, is enlightened leadership—maybe dyad leadership—at a clinical organization. I am saying this because without enlightened leaders, it’d be harder to build from the blueprint that Beau Raymond, MD, talks about today on the show.

10:44 Why is it important to be flexible while keeping your goals in sight?

11:48 Dr. Eboni Price-Haywood’s article on disparities in COVID.

12:29 How is equity a data point to achieving overall care improvement?

15:01 “If you can’t measure it … accurately, you’re not going to be able to do anything differently.”

20:52 What strategies have been successful in using data to improve healthcare outcomes?

23:17 Why did Ochsner Health avoid looking at the individual physician standpoint in regard to an equity standpoint?

30:40 Why engaging patients in their healthcare actually improved patient visits and did not necessarily reduce patient visits.

34:49 “It’s really about engaging with the patient.”

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In this episode, host Stacey Richter and guest Brendan Keeler dive deep into the significant legal clash between Epic and Particle over electronic health record (EHR) data access and market competition.

To Read the Show Notes with Mentioned Links and a Full Transcript, Visit the Episode Page.

This episode examines the broader repercussions on healthcare data exchange, including antitrust concerns, data liquidity, and the ethical considerations around secondary use of treatment data. The discussion brings to light how the outcome of such lawsuits could influence data transparency, interoperability, and the rules governing data sharing among plan sponsors, employers, and healthcare providers.

Notable points include the shift to a judicial era impacting health tech companies and the potential for regulatory and judicial actions to improve data access and efficiency within healthcare networks. The episode emphasizes the critical need for clear pathways, accountability, and structured regulations to enhance patient care and reduce fraud in the healthcare data ecosystem.

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07:21 Who can gain access to EHR data?

10:31 Are there limits to how EHR data can be used secondarily?

11:36 Can EHR data be shared secondarily?

15:47 Part one and part two of Brendan’s comprehensive account of the Epic/Particle dustup.

15:57 What was the dispute that started Epic v Particle?

18:21 What are the two viewpoints in this dispute with Epic’s actions?

26:16 What progress has been seen since this lawsuit began?

28:00 Who else will be impacted by the likely rule cementing from this lawsuit?

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In this episode, host Stacey Richter delves into the complexities of the Third Party Administrator (TPA) Request for Proposal (RFP) process with guest Claire Brockbank from 32BJUnion.

The discussion highlights the critical role of contracts in managing health plans effectively and the potential pitfalls of accepting contracts crafted by TPAs without thorough review. Drawing from Claire's experience, they explore tactics like starting with your own contract paper in RFP processes to gain negotiation leverage, and the benefits of employer coalitions in navigating health care complexities.

To Read the full article which includes mentioned links visit the episode page.

If you enjoy this podcast, be sure to subscribe to the free weekly newsletter to become a member of the Relentless Tribe.

Real-world examples underscore the financial impacts of poorly negotiated contracts and highlight successful strategies for health plan sponsors to optimize costs and services. The episode aims to empower employers with tools and insights to negotiate effectively and ensure their health plan contracts align with their strategic goals, ultimately paving the way for better population health management and cost-effective care delivery.

As but one example—and Cora Opshal spoke about this last week and Claire talked about this today—it’s about how allowing upside-down payments, for example, that are in a lot of ASO contracts, this allowing of upside-down payments. I mean, it turns out that 32BJ spent around $10 million paying more than the bill was for one year. If somebody signs that contract as handed to them by the carrier, then the plan is now contractually obligating themselves to pay more than the price the clinical practice was charging. So, doc sends bill for $100, and the carrier pays that practice $200 on behalf of the plan sponsor.

So now the plan sponsor is paying $200 for a $100 bill. Is this conflict of interest? Is it imprudent? Is it not reasonable? Said another way, is that a bit of a fiduciary breach on the plan sponsor?

So it's understandable why the team at 32BJ pushed back and pushed back hard. We all can see why the leading edge of plan sponsors and more and more C-suites are hotfooting it into conference rooms to plan their RFP process and doing it in the way that Claire Brockbank talks about today.

For an open-source contract and some other free tools, please do head over to the 32BJ Insights Web site.

05:36 How does the initial contract writing affect how events in your healthcare plan will go?

06:56 What happens if a plan sponsor or employer doesn’t do the contracting right?

10:42 How much could be saved by doing contracting right?

11:01 EP433 with Justin Leader.

12:22 How do you start an RFP process with your own contract?

14:06 What Claire Brockbank recommends doing to do a TPA RFP process in a way that’s best for you.

19:46 What factors do carriers need to get an ASO or TPA to respond to using your contract?

21:11 Open-source contract available from 32BJ.

21:57 Why it’s important to really probe brokers, despite loyalty to your broker/consultant.

24:30 Who are the reliable agents and experts when carriers are looking to start this process?

26:24 EP428 with Julie Selesnick.

27:56 What’s the silver lining to this effort?

29:17 Why is it important to make it clear why you’re doing what you’re doing for your lawyers and any other support team you need?

31:39 What does “good” look like in this process?

34:15 Why is it important to continue to hold your ASO accountable?

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In this episode I interview Cora Opsahl from the 32BJ Health Fund to examine the intricate dynamics between fiduciary duties and the entrenched status quo in healthcare. The discussion focuses on the challenges employers face when dealing with anti-competitive contracts and their responsibility to ensure plan expenses are reasonable. Cora Opsahl, my guest today, is the director of the 32BJ Health Fund, serving over 200,000 folks. Their ability to kick NewYork-Presbyterian, a big, consolidated, very expensive hospital, out of their network in 2018 enabled them to offer maternity benefits for $40 in total out-of-pocket for members. And also, employees got their biggest raise ever; employers got a premium holiday and a 3% rate increase for a bunch of years after that; and yeah … this is where we start the conversation today. Furthermore, you will find links to a template health savings calculator for plan sponsors and also a template contract (again for plan sponsors) that 32BJ has made available, in our show notes. To Read the Full Show Notes with the Mentioned Links Visit the Episode Page.

If you enjoy this podcast, be sure to subscribe to the free weekly newsletter to be a member of the Relentless Tribe.

06:16 Why is it imperative for employers to do something differently when it comes to being plan sponsors?

09:22 How analyzing claims data allowed 32BJ Health Fund to reshape their benefit design.

12:09 What anticompetitive rights did 32BJ run into that limited 32BJ Health Fund from managing their benefit design?

14:12 How do these anticompetitive rights have quality implications as well as cost implications?

18:43 How did 32BJ Health Fund remove NewYork-Presbyterian from their network, and how much did it save 32BJ Health Fund per year?

19:46 What did the healthcare savings allow the unions and employers to do?

20:46 Study by Zack Cooper, PhD.

21:26 Why rising healthcare costs has pushed 32BJ Health Fund to move beyond benefit design to manage healthcare spend.

24:15 Why 32BJ Health Fund wants to control the contracting process.

26:00 EP419 with Andreas Mang.

27:18 What are 32BJ Health Fund’s four non-negotiables?

33:17 Wall Street Journal article on health insurance contract.

35:30 Upcoming episode with Claire Brockbank.

36:14 What is the challenge that exists in our current healthcare environment?

37:43 Cora’s advice on how to get high-quality healthcare at an affordable price.

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In this Spotlight Episode host Stacey Richter discusses the management of oncology side effects with Dan Nardi, CEO of Reimagine Care. Highlighting the challenges cancer patients face, especially following chemotherapy which often leads to nausea and readmissions, the conversation delves into how Reimagine Care facilitates at-home integrative cancer care. Their services focus on proactive and reactive support via AI-driven tools like 'Remy' to assist patients outside of clinical environments. This approach aims to reduce emergency visits and improve patient outcomes while easing the workload on healthcare providers. The discussion underscores the role of patient reported outcomes and the integration of technology with human care to improve the quality of oncology treatment pathways. To Read the Full Article Notes with Mentioned Links, Visit Our Episode Page .

If you enjoy this podcast, be sure to subscribe to the free weekly newsletter to be a member of the Relentless Tribe.

Note from Stacey Richter: Pulling off a show like this one is not cheap, and my Aventria business partner Dave Dierk and I are happy to fund the vast majority of it. But yeah, breath of fresh air, and thanks much to the team over at Reimagine Care for their sponsorship. My one disclaimer is that I have not personally vetted the solution, but there is a white paper available where you will also find some insights from Reimagine Care’s work with Memorial Hermann Health System.

03:38 Why is it really important to keep track of oncology patients and their side effects?

04:27 Why is cancer treatment such a complex care journey?

05:57 Are there outcome and financial issues that compound when an oncology patient is left to navigate their care journey on their own?

08:53 What is difficult in navigating cancer treatment care pathways, and what does Reimagine Care tackle within that?

09:55 EP157 with Ethan Basch, MD.

10:17 How does Reimagine Care proactively check in with oncology patients to help them navigate their care pathways?

12:41 How does Reimagine Care measure their performance, and how did their work affect patient outcomes?

13:28 The Reimagine Care white paper.

14:57 How do providers feel about Reimagine Care services?

17:37 Where can technology really make a difference in cancer care?

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In Episode 451 of Relentless Health Value, host Stacey Richter converses with Dr. Spencer Dorn about the implications of AI in healthcare, referencing lessons learned from EHR implementations.

They discuss Kranzberg's first law of technology, which advises against labeling a technology as inherently good, bad, or neutral, emphasizing instead the importance of its application, configuration, and the human decisions surrounding its use. Dorn and Richter explore both the potential benefits and drawbacks of AI, drawing parallels with past experiences in healthcare digitization.

To read the full article with links mentioned or to sign up to the newsletter, visit our episode page.

The first takeaway from this short show focused on artificial intelligence is gonna be the same, really, as it was in episode 446 about EHRs. Do not ascribe any given technology a label of, as good, bad, or even neutral. That is Kranzberg’s First Law of Technology; and it applies here, too.

Second major takeaway—and again, this is the same as in that earlier show about EHRs, but today we’re talking about AI—if you’re thinking about the ultimate impact of the people and the processes that have some technology in their midst (technology, again, such as AI, artificial intelligence), the ultimate impact will not be a black-and-white binary.

We talk about some of these nuanced not binaries in the 10 minutes that follow, but for more, I’ve put some links in the show notes on our epsiode page for some newsletters et cetera to check out.

05:23 What could happen with AI in healthcare if we aren’t thinking about how we’re deploying it?

05:58 How could the lessons from digitizing healthcare help us with employing AI?

08:25 How could artificial intelligence make things better and simultaneously worse?

10:55 Why is it important to look beyond the hype and pessimism and make a clear-eyed assessment?

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In Episode 450 I speak with Marilyn Bartlett, a renowned CPA in the healthcare field, about her remarkable achievement of transforming the state of Montana’s employee health plan from $9 million in debt to a surplus of $112 million within three years.

You can read the full show notes with mentioned links on the epsiode page.

If you enjoy this podcast, be sure to subscribe to the free weekly newsletter to be a member of the Relentless Tribe.

Marilyn discusses the steps she took, including identifying financial inefficiencies, targeting high-cost areas, and implementing data-driven strategies to produce quick wins and sustainable results. The conversation delves into the importance of having the right team, communicating effectively with stakeholders, and staying focused amidst challenges. Listeners will gain valuable insights into strategic change management and actionable advice for improving healthcare plans.

Yeah, I made a meme for the show with Marilyn Bartlett. My very first meme ever. In this meme, I picture that Olympic silver medalist shooter from Turkey who showed up in a T-shirt and his hand in his pocket versus the others with all their fancy equipment that, turns out, may or may not be necessary, regardless of who might swear up and down that complexity requires even more complexity and plenty of expensive gear to shoot straight.

Point being, it’s amazing what a dedicated CPA with a spreadsheet and their eye on the target can accomplish in the real world when they just do their thing and follow the dollar.

And with that, Marilyn Bartlett has entered the chat. Marilyn Bartlett isn’t called the “Queen of Healthcare” for no good reason, and nobody is joking when they say this. She was probably the first person (or one of the first, at a minimum) to truly identify the amount of money getting sucked out of the wallets of taxpayers and employers and plan members and into the pockets of the healthcare and insurance and consulting industries. She is a through and through numbers person but also deeply cares. She is truly a senior stateswoman in our field.

To read the full article with mentioned links or the transcript, visit our epsiode page.

06:45 What gave Marilyn the confidence to fix Montana’s state health plan?

08:11 Why Marilyn knew she would have enough power to make the changes needed in Montana’s state health plan.

09:11 What Marilyn achieved in her time as the administrator of the Montana State Employee Health Plan.

10:38 What were the “quick wins” Marilyn was able to achieve when she first took over as administrator?

17:33 Stay tuned for an upcoming episode that covers RFP in detail.

17:50 How Marilyn structured her plan for the Montana State Employee Health Plan.

21:21 What’s the key to setting yourself up for success when doing what Marilyn was able to achieve?

25:02 Why putting together your own team is so important.

29:07 What happened when Marilyn left the Montana State Employee Health Plan?

31:08 Have the costs of the plan gone up since Marilyn’s time working on it?

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So, I had a chance to read Dr. Marty Makary’s new book, which is called Blind Spots; and here’s why I wanted to get him to come back on Relentless Health Value and talk to you, people of the healthcare industry. It’s because of something that he said on page 127 and which I’ve been mulling over for probably years, actually.

To Read The Full Article Including Links Mentioned, click here.

If you enjoy this podcast, be sure to subscribe to the free weekly newsletter to be a member of the Relentless Tribe.

It’s this idea of what is appropriate care and how good are we at ensuring that patients/members get said appropriate care. Lots of people are of the same minds because appropriate care has come up in the show with Ben Schwartz, MD, MBA (EP434); John Lee, MD (EP438); Spencer Dorn, MD, MPH, MHA (EP446); Tom Lee, MD (EP445).

I mean, an estimated 21% of all medical care is potentially unnecessary. And unnecessary is, of course, one category of things that are not appropriate. This is according to a national survey of physicians: 25% of diagnostic tests, 22% of all medications, and 11% of all procedures are unnecessary/inappropriate. This is billions of wasted dollars doing stuff that shouldn’t be done, and it’s not appropriate care.

But think about this: How many visions for how to fix healthcare and how to reduce waste depend upon a broad-stroke assumption that we will materially ensure that patients are getting best-practice (ie, appropriate) care? That we cut down on over-medicalization and surgeries on the back end and add appropriate preventative stuff and optimal medical therapy to the front end?

Dr. Makary and I delve into the challenges of ensuring patients receive appropriate care, touching on medical dogma, financial, business, and legal incentives, and the importance of measuring practice patterns. Dr. Makary provides practical advice for clinical leaders, payers, and plan sponsors on promoting transparency, improving health literacy, and steering members towards higher performing providers.

To Read The Full Article Including Links Mentioned, click here.

07:32 What is appropriate care?

10:19 Why what we think might be appropriate care might not be appropriate care.

10:34 Why is medical dogma damaging to appropriate care?

12:45 Why we need less absolutism in medical practice.

13:37 How is groupthink prevalent in medicine?

14:02 Why do we resist new ideas?

17:43 How do providers figure out what to believe and what not to believe?

20:59 “If you leave it to the medical profession to fix itself … so far, it’s not going well.”

22:33 How does supporting health literacy affect appropriate care?

30:23 “People need to find their care based on quality and price.”

34:28 What proportion of medical care is deemed unnecessary right now?

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First of all, we got two really nice reviews lately. One is from Doug Geinzer. Hi, Doug! Doug wrote, “[Relentless Health Value is] a must listen. There are just a few podcasts that I listen to religiously [and] Relentless Health Value is one of those.” He goes on to say we have a knack for “finding the brightest of the bright and asking the right questions to unpack the reason healthcare is where it is and explore the real solutions of what we need to do to fix it.”

For a full transcript of this episode, click here.

If you enjoy this podcast, be sure to subscribe to the free weekly newsletter to be a member of the Relentless Tribe.

Second review we got this month is from Mike33754, who kept it short and sweet. He said, “Great stuff. Thank you for your work!” Thank you for listening, Mike33754.

As you may have heard already, because you are in the know and/or you read the email I sent because you (ahem) have chosen to subscribe to our weekly emails. That was a subliminal suggestion for those of you who aren’t subscribed to our weekly emails, by the way.

Or maybe you’re in the know because you listened to Part 1 of this conversation with Shawn Gremminger. But no worries, because here’s the scoop: The scoop is, after some pondering, I decided to release this 340B extravaganza of a conversation with Shawn Gremminger in two parts. So, listen to one, listen to both, pick your poison.

These shows aren’t particularly sequential. You are currently tuned in to Part 2, and you can, for sure, start here.

Right now, we are going to talk about how 340B impacts employers and commercial plans and other plan sponsors. So, if all you want to hear about is the why—as in, Why do employers care about what amounts to a program that is or was supposed to be for low-income Americans and Medicaid?—you are in the right place.

As just one example of the why should employers care if you are teetering on the edge of proceeding, did you know that if an employee or a member of a commercial plan gets a drug at a contract pharmacy participating in 340B, the employer does not get the rebate? The employer is gonna pay the list price for that med.

Wait, what? Yeah, details follow because Shawn Gremminger is gonna get into this and many other reasons why employers or anyone in the commercial market (or taxpayers, really) should care about this, as some may call it, Medicaid program. The fact is, 340B is currently so gargantuan that it creates market distortions that bleed into the prices and possibly the quality of healthcare for everybody, all Americans. And that could really matter to employer or Taft-Hartley plan sponsors.

If you have really zero idea of what 340B is beyond some program that was supposed to be safety-net hospitals buying drugs low and selling them high and then taking the dollars in the middle and using them to support underserved patient populations, that might actually be sufficient. You got the gist of it.

But after you listen to this show, if you want to drill in a little deeper on the “what the what” and the history of 340B, head back and take in Part 1 of this episode 448. Shawn Gremminger gives the skinny on how the program morphed over the years into a $53 billion juggernaut and is credited (or blamed) for all kinds of healthcare market consolidation and many other weird and unusual consequences that make me admire some of the folks who are truly gold medal winners in the sport of financial engineering.

Before we kick in to this fast-moving convo, I just want to point out a few interesting 340B posts and Tweets and articles. The first one is from Anthony DiGiorgio, DO, MHA, talking about the recent announcement by one 340B covered entity hospital to stand up a film studio. I guess it could be deemed an educational endeavor that may or may not be considered charity. But yeah … I, too, have questions.

Then there is a new report out from Neal Masia, PhD, and Health Capital Group that found that state Medicaid spending increases as the number of 340B sites per capita rises, adding about $30 billion a year in excess costs when spread across the country. Shawn and I both mentioned the study in the conversation that follows.

Additionally, the Avalere/Community Oncology Alliance study has come out and that shows how closely tied PBM-affiliated pharmacies are to the 340B program.

And now I’m gonna quote Brian Reid, who wrote in his really great newsletter. He wrote, “My gut says that wherever you stand on 340B, you probably feel uncomfortable with the idea [that] the program [is] padding the bottom line of PBMs.”

So, look, probably the most damning 340B studies lately have been funded by Pharma; but again, I like how Brian Reid puts it: “Talking about 340B research sometimes feels like watching one of those true-crime shows where the circumstantial evidence is overwhelming, and yet, there’s no definitive answer to the whodunit. Sure, there’s a motive and an opportunity and a questionable alibi, but with no smoking gun, the case hangs in the balance. … [However,] given all … the other circumstantial evidence in the case, it sure seems like this is a problem, even without a smoking gun.”

And lastly, a link to some comments by Adam Fein, PhD, on 340B, which Shawn mentions in this episode. Also, a study by Zack Cooper, PhD.

I’d also mention that this episode, both Part 1 and Part 2, is kind of a companion to the recent episode 444 with Ann Kempski. Both could probably have the subheading “Welcome to Policy Surprise Valley: When Things Don’t Turn Out As You Thought They Would.”

Now, this said, policies always require some trial and error. We cannot forget that, especially in healthcare where gamesmanship has become a fine art and the spirit of the endeavor is often nowhere to be found in how organizations choose to extract financial incentives.

If you want a summary of the points Shawn makes for why employers should care, it is your lucky day, because here you go. Here’s the four distortions in the market that Shawn talks about which impact employers:

Distortion 1: 340B contributes an incentive for hospitals to consolidate, and consolidation is known to drive up prices that employers will pay for their healthcare.

Distortion 2: Turns out, 340B covered entities actually mark up drugs more than non-340B entities. Weird. So, 340B hospitals buy drugs cheaper, and they sell them for more.

Distortion 3: 340B hospitals have said, flat out at summits and elsewhere, they will do formulary machinations so as to ensure clinicians prescribe the most profitable drugs (ie, the ones with the best 340B discounts) so as to make the most money possible. This gets really interesting when you layer in the IRA (Inflation Reduction Act). Quiet part, literally said out loud at a recent summit, is that some 340B entities are busy cooking up ways to move patients off of the IRA drugs to get them on non-IRA drugs so that they can continue to make the same money off of 340B. (Sometimes I just close my eyes and slip slowly off my chair onto the floor.)

Distortion 4: When employees get drugs at a 340B contract pharmacy, the employer does not get the rebate; the hospital does. Oh, wow …

So, kind of taking it from the top here, the two really big takeaways for employers in this show (Part 2) here is, number one, this is not cost neutral for employers, this whole 340B thing.

And the last takeaway is that 340B is not this little thing that everybody pats on the head and chuckles about, like it’s some kind of reality TV where the PBMs and Pharma point fingers at each other and it’s just dramatic and hilarious. 340B is now so huge that it is sitting at the center of the drug pricing debate. It is not this tangential little side scuffle. It has a center of gravity that pulls 340B onto the main stage. And anybody trying to figure out drug pricing really has to be aware of what’s going on here.

Shawn Gremminger, my guest today, is the relatively newly installed president of the National Alliance of Healthcare Purchaser Coalitions. But rounding out the why, as in why did I ask Shawn to come on the show today and talk about what is or was supposed to be a program for low-income adults and children, Shawn started his career doing government relations for the Children’s Hospital Association. He spent nine years at America’s Essential Hospitals, which represents the big kind of urban safety-net public hospitals around the country. And since then, he has been in a number of different roles representing consumers and employers.

So, he’s seen this 340B juggernaut from many perspectives, I guess, is the main point. And it’s a big point because it was hard (with a capital H) to find a guest so situated.

Also mentioned in this episode are National Alliance of Healthcare Purchaser Coalitions; Doug Geinzer; Anthony DiGiorgio, DO, MHA; Neal Masia, PhD; Health Capital Group; Brian Reid; Adam Fein, PhD; Zack Cooper, PhD; Ann Kempski; Children’s Hospital Association; and America’s Essential Hospitals.

You can learn more at National Alliance of Healthcare Purchaser Coalitions and by connecting with Shawn on LinkedIn.

Shawn Gremminger, president and CEO of the National Alliance of Healthcare Purchaser Coalitions, is known for his wide-ranging policy expertise and government relations experience. He brings to the National Alliance a successful record of working with coalitions, employers, and other healthcare purchasers, policymakers, and industry stakeholders toward the mission of achieving high-quality, affordable, equitable healthcare.

Shawn was most recently senior vice president at Reservoir Communications Group, where he led communications and public affairs strategy and execution on a range of relevant issues, including 340B and the drug supply chain, employer-sponsored insurance regulations, and Medicare payment. He has a strong history of healthcare advocacy and public affairs with employers, plans, hospitals, and consumer organizations.

Shawn was previously director of health policy for the Purchaser Business Group on Health, a member of the National Alliance, where he ran efforts to improve quality and affordability for consumers and healthcare purchasers through federal policy. He has held senior leadership roles at Families USA and America’s Essential Hospitals.

Shawn began his career as a lobbyist for the Children’s Hospital Association. He achieved a Master of Public Policy from George Washington University in Washington and a bachelor of arts degree from the University of Mary Washington in Fredericksburg, Virginia.

09:11 Why do employers care about 340B, which is a Medicaid program?

11:30 Why do I care as an employer, even if I’m not Pharma?

12:44 Why is 340B causing employers to pay significantly more for healthcare?

14:36 Study by Zack Cooper, PhD.

15:06 Why are there distorted pricing models at 340B hospitals?

21:22 Why do employers need to stop playing the blame game?

You can learn more at National Alliance of Healthcare Purchaser Coalitions and by connecting with Shawn on LinkedIn.

@sgremminger discusses the #340B program on our #healthcarepodcast. #healthcare #podcast #digitalhealth #healthcareleadership #healthcaretransformation #healthcareinnovation #vbc

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Elizabeth Mitchell (Summer Shorts 9), Dr Will Shrank (Encore! EP413), Dr Amy Scanlan (Encore! EP402), Ashleigh Gunter, Dr Spencer Dorn, Dr Tom Lee, Paul Holmes (Encore! EP397), Ann Kempski, Marshall Allen (tribute), Andreas Mang

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So, after some pondering, I decided to release this conversation with Shawn Gremminger about 340B in two parts. So, listen to one, listen to both, pick your poison. Shawn Gremminger came up with three really important takeaways relative to 340B, which is a feat unto itself, considering how sprawling this conversation can be. So, if you came here for some concise and actionable takeaways, you have come to the right place.

For a full transcript of this episode, click here.

If you enjoy this podcast, be sure to subscribe to the free weekly newsletter to be a member of the Relentless Tribe.

This first part you are listening to right now zeros in on Shawn’s first takeaway: whether or not the original intent, or the presumed original intent, of the 340B program has actually been met.

Many do not realize that 340B began life as a caterpillar. It originally, actually, was conceived as a lowly bureaucratic fix. But over the past 15 years, it has gone into a chrysalis and emerged into a 500-pound gorilla that sits in the corner of a lot of rooms, actually—probably more than many people realize. All of that being said, when you’re done listening to this first part of the convo, you should be able to competently assess whether or not 340B does, in fact, adequately help underserved communities get better healthcare—because 340B is supposed to help safety-net healthcare providers stretch scarce resources.

The second part of the show, which is a separate episode called Part 2, is how all of this impacts employers and commercial plans. And there’s two more takeaways there.

So, if you already have the gist of how we got from the beginnings of 340B to where we are in 2024 already and all you want to hear about is why do employers care about what amounts to a low-income program or was purported to be a low-income program, feel free to zip over to the second show and cut to that chase.

If you’re still with me for this Part 1—and I hope you are, because … wow, it’s a wild and tangled journey—here’s an outline of where this first part of the discussion is headed. So, for the sake of posterity and having this introduction transcribed in your inbox, here you go. Here’s the outline.

First, Shawn describes how the program expanded over the years due to the rise of Medicaid enrollments and hospital consolidations, which leads to more hospitals that will qualify for 340B status. Hospitals and others that qualify, by the way, are called covered entities, or CEs. This expansion, and other goings-on (such as hospital systems linking many outpatient clinics to their 340B eligibility, and also for-profit contract pharmacies getting in on the game and exploiting weak patient definitions), all of this has contributed to widespread use, which some may consider misuse, of the 340B program, significantly altering the healthcare market.

Today, 340B is the second-biggest drug buying program in the country, after Medicare Part D, to the tune of $53 billion running through it.

After that, Shawn goes on to point out that there’s no statutory requirement for hospitals to reinvest 340B proceeds into charity care or community services.

So, the program is supposed to allow hospitals to arbitrage dollars and put those arbitrage dollars into charity care, but yeah … there’s no mechanism to track what they’re doing with the money, resulting in a lack of transparency and accountability regarding the financial benefits gained from this program.

And all of this wraps up with Shawn contending that while the original intent of the 340B program might have been well meaning, the current implementation raises serious questions about its effectiveness and fairness. So, significant reform is in order? Mentioned in this episode is Adam Fein, PhD, from the Drug Channels Institute, who has given some comments on 340B. And also a new report out from Neal Masia, PhD, and Health Capital Group.

So, he’s seen this 340B juggernaut from many perspectives, I guess, is the main point. And it’s a big point because it was hard (with a capital H) to find a guest so situated.

Also mentioned in this episode are National Alliance of Healthcare Purchaser Coalitions; Adam Fein, PhD; Drug Channels Institute; Neal Masia, PhD; Health Capital Group; Children’s Hospital Association; America’s Essential Hospitals; Health Resources and Services Administration (HRSA); Vikas Saini, MD; and Judith Garber, MPP.

Also mentioned during this show, the Pet Shop Boys—right, shout-out to Gen X!

You can learn more at National Alliance of Healthcare Purchaser Coalitions and by connecting with Shawn on LinkedIn.

05:25 Shawn’s three takeaways from the 340B program.

06:04 What is the intent of the 340B program?

08:22 Read the full 32-page report of the Energy and Commerce Committee.

09:17 Why does Medicaid have to get the best price?

13:26 Why was there a shift in how the 340B program looked starting in the mid-2000s?

15:11 Why do more than half of acute care hospitals now qualify for 340B?

18:18 How has hospital consolidation affected 340B?

20:37 What is the misalignment between how a hospital qualifies for 340B and how it benefits said hospitals?

24:11 How is a 340B designed for hospitals to make a profit?

28:45 Why isn’t there a real patient definition in 340B?

31:46 Why is 340B still popular among policymakers?

33:05 Are 340B dollars being used in underserved communities?

33:57 EP394 with Vikas Saini, MD, and Judith Garber, MPP.

You can learn more at National Alliance of Healthcare Purchaser Coalitions and by connecting with Shawn on LinkedIn.

@sgremminger discusses the #340B program on our #healthcarepodcast. #healthcare #podcast #digitalhealth #healthcareleadership #healthcaretransformation #healthcareinnovation #vbc

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Click a guest’s name for their latest RHV episode!

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In this Summer Short Episode of Relentlessly Seeking Value, host Stacey Richter discusses the hidden costs and inefficiencies of value-based care with Elizabeth Mitchell, President and CEO of the Purchaser Business Group on Health (PBGH).

To read the full article and show notes which include mentioned links, visit the episode page.

If you enjoy this podcast, be sure to subscribe to the free weekly newsletter to be a member of the Relentless Tribe.

They uncover how value-based care, often touted as the ideal system, can be manipulated by middlemen to extract more money from plan sponsors without delivering real value to patients.

Through a critical conversation involving examples and insights from various experts, they explore the disconnect between financial incentives and actual care quality in American healthcare.

Elizabeth argues for for-real alternative payment models that are transparent to the employer plan sponsors. She wants prospective payments or bundled payments, and she wants them with warranties that are measurable. She wants members to get integrated whole-person care in a measurable way, which most health plans (ie, middlemen) either cannot or will not administer.

Elizabeth says to achieve actual care that is of value, cooperation between employers, employees, and primary care providers is crucial (ie, direct contracts). She also says that this whole effort is really, really urgently needed given the affordability crisis affecting many Americans. There’s been just one article after another lately about how many billions and billions of dollars are getting siphoned off the top into the pockets of the middlemen and their shareholders.

These are dollars partially paid for by employees and plan members. We have 48% of Americans with commercial insurance delaying or forgoing care due to cost. If you’re a self-insured employer and you’re hearing this, don’t be thinking it doesn’t impact you because your employees are highly compensated.

As Deborah Williams wrote the other day, she wrote, “Co-pays have gotten high enough that even higher-income patients can’t afford them.” And she was referencing a study to that end.

To read the full article and show notes which include mentioned links, visit the episode page.

If you enjoy this podcast, be sure to subscribe to the free weekly newsletter to be a member of the Relentless Tribe.

So, yeah … with that, here is your Summer Short with Elizabeth Mitchell.

10:36 What are members and providers actually asking for in terms of value-based care?

10:56 Why won’t most health plans administer alternative payment models?

12:17 “We do not have value in the US healthcare system.”

12:57 Why you can’t do effective primary care on a fee-for-service model.

13:30 Why have we fragmented care out?

14:39 “No one makes money in a fee-for-service system if people are healthy.”

17:27 “If we think it is not at a crisis point, we are kidding ourselves.”

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Before we kick in to the show today, I just want to thank, first of all, ElkinsEcon, who is a state legislator who wrote in the review, “RHV is my single most valuable source of insights into ways to improve healthcare policy.” Thank you so much, ElkinsEcon.

For a full transcript of this episode, click here.

If you enjoy this podcast, be sure to subscribe to the free weekly newsletter to be a member of the Relentless Tribe.

I also want to thank Stockpikr, who, the title of this review is “Complexity Demystified.” And Stockpikr talks about how it’s appreciated that we talk about complex issues in a way that enables listeners to follow and understand. That’s really nice of you to say, Stockpikr. Thanks so much for writing that review.

And then lastly, Sergei at AI Health Uncut. Thank you so much, first of all, for your LinkedIn posts, which I really appreciate. But also, Sergei mentions, “If you … choose only one US healthcare system podcast, this should … be the one.”

I really appreciate that. And with that, here is your encore.

My conversation today is with Will Shrank, MD. Dr. Shrank led the evaluation group at CMMI (Center for Medicare and Medicaid Innovation). He has spent time in the private sector, first at CVS Health and UPMC (University of Pittsburgh Medical Center) as chief medical officer of the health plan in Pittsburgh, and then as the chief medical officer for Humana. Now he is a venture partner at Andreessen Horowitz and doing some consulting for CMMI.

We start out this conversation talking about waste in healthcare. In fact, Dr. Shrank was on a team who did a study about waste in the US healthcare system. (The article is, unfortunately, paywalled.) In that study, it says estimates suggest we have upwards of a trillion dollars of waste a year.

There’s two main groupings of said waste, turns out. The first is in administrative failures. There’s three subcategories here: fraud, waste, and abuse; administrative complexity; and pricing failures.

Then there’s the clinical failures side of the waste house. There’s three subcategories here as well, and they are failures in care coordination, failure in care delivery, and then low-value care. Dr. Shrank digs in a bit on each of these in the interview that follows, but I have to say, I go in fast for the now what. Great that we know where the waste is coming from, because gotta know the problems to solve for them.

But really, what’s the best way to solve for this waste? You know me by now, so I, of course, point out immediately that someone’s waste is someone else’s profit. So, that’s a wrinkle. And it’s a really rough wrinkle, because now you have groups lobbying to basically protect the waste. As just one example, what are pricing failures, after all, if not someone else’s margin?

Major spoiler alert here, but Dr. Shrank says one sort of broad-stroke solution is aligning incentives with higher-quality care, paying for the longitudinal patient journey, and paying for outcomes. If you do this, then at least the clinical failures side of the equation could improve.

The implication here is that if the incentive is to be accountable for value—which is, you know, numerator quality denominator cost—then the supply chain has an incentive to reduce its own waste because effectively, at that point, it’s coming out of their pocket as opposed to somebody else’s.

Will this resetting of the financial model happen overnight? That was a rhetorical question that we all know the answer to. Commercial payers are slow to change, and all but the best employers have been (historically, at least) busy making extremely lateral moves and going nowhere fast. Few seem super inclined to reward and pay for what they care about rather than just negotiating a price.

I sort of say this to Dr. Shrank, and he says, yeah, true enough. I’m paraphrasing with a lot of creative license right now, but he says, let’s reset our expectations with reality. We’ve actually come a pretty long way, baby, in not a particularly long time if you consider the whole value-based thing really only started not that long ago, relatively speaking.

So, there will be problems to overcome and bumps in the road. We should expect that, and we haven’t had the time to work them all out yet. I think a couple of other interesting insights for me, one was a little sidebar we go off on about the power that PCPs might find themselves wielding if they can gang up and harness it. And this is kind of starting. We’ll see if it goes anywhere.

I recently heard a story about a bunch of employed PCPs who went to their health system bosses and asked to stand up an APCP (advanced primary care practice) able to coordinate care, etc, do all the things that at this juncture we know are the right things to do for patients. Now, they got shot down—bam!—with the backhands from above. I hope those engaged and activated PCPs quit and start up their own thing. Maybe they will. PCPs getting together here could be a way to solve for waste if they can gang up and harness it.

And that’s actionable if you happen to be a PCP or are looking to continue to employ them moving forward. The potential rising power of PCPs might cause some health systems to rethink some of the choices they are making (ie, the choice to employ PCPs as RVU [relative value unit] referral machines). PCPs, better than anyone, can see the harm inflicted by the business model that forces a drive-by PCP level of care. Moral injury is at an all-time high, and in addition, I just saw that study recently that showed to do all the administrative work of a PCP these days, it would take longer than 24 hours in a day.

If you’re a self-insured employer, I’d also kind of take note of this because it also could be actionable for you. Someone who would know told me recently that if enough employers demanded some value-based accountability, some advanced primary care going on, even a dominant consolidated health system would listen. So there seems to be some alignment here between employers and PCPs if these groups can come together and collaborate.

In sum, we have a waste problem in this country. Aligning incentives might be one way to curb that waste.

Also mentioned in this episode are Andreessen Horowitz; Sergei Polevikov, ABD, MBA, MS, MA; David Scheinker, PhD; Robert Pearl, MD; Laurence Bauer, MSW, MEd; Dan O’Neill; and Scott Conard, MD.

You can learn more by connecting with Dr. Shrank on LinkedIn.

William H. Shrank, MD, MSHS, is serving as venture partner, bio and health, at Andreessen Horowitz. Previously, Dr. Shrank served as chief medical officer for Humana, where his responsibilities included implementing Humana’s integrated care delivery strategy, with an emphasis on advancing the company’s clinical capabilities and core objective of improving the health outcomes of its members. Dr. Shrank previously held the position of chief medical and corporate affairs officer, during which time he oversaw government affairs.

From 2016 to 2019, Dr. Shrank served as chief medical officer, insurance services division, at the University of Pittsburgh Medical Center. Previously, Dr. Shrank served as senior vice president, chief scientific officer, and chief medical officer of provider innovation at CVS Health. Prior to joining CVS Health, he served as director of the Research and Rapid-Cycle Evaluation Group for the Center for Medicare and Medicaid Innovation.

Dr. Shrank began his career as a practicing physician with Brigham and Women’s Hospital in Boston and as an assistant professor at Harvard Medical School. He has published more than 270 papers on improving the quality of prescribing and the use of chronic medications.

Dr. Shrank received his MD from Cornell University Medical College. He completed his residency in internal medicine at Georgetown University and his fellowship in health policy research at the University of California, Los Angeles. He also earned a master of science in health services from the University of California, Los Angeles, and a bachelor’s degree from Brown University.

06:54 Can we cut healthcare waste while improving patient care?

07:33 What does “healthcare waste” consist of?

07:46 What are the six categories of “healthcare waste”?

10:23 EP363 with David Scheinker, PhD.

10:37 How much money does Dr. Shrank estimate is wasted each year in healthcare?

13:09 Where is that healthcare waste going, and why does it happen?

20:07 Uncaring by Robert Pearl, MD.

21:18 “We’ve built a backbone of extraordinary waste on a fee-for-service chassis.”

22:16 EP409 with Larry Bauer, MSW, MEd.

24:24 EP359 with Dan O’Neill.

26:02 Dr. Shrank’s warning to providers out there.

30:03 Summer Shorts 2 with Scott Conard, MD.

31:41 Why there might be a generational shift among younger providers looking to work with different models.

You can learn more by connecting with Dr. Shrank on LinkedIn.

@WillShrank discusses #healthcarewaste, #vbc, and #PCPs on our #healthcarepodcast. #healthcare #podcast #digitalhealth #valuebasedcare #primarycare #patientoutcomes #healthcareinnovation

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Dr Amy Scanlan (Encore! EP402), Ashleigh Gunter, Dr Spencer Dorn, Dr Tom Lee, Paul Holmes (Encore! EP397), Ann Kempski, Marshall Allen (tribute), Andreas Mang, Abby Burns and Stacey Richter, David Muhlestein

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This encore episode is with Amy Scanlan, MD. It was, in fact, one of our most popular episodes of the past year. It is still just as relevant today in a slightly different way. It’s interesting how things which were said maybe a year ago have shades of meaning which become evident as time goes on. So, I liked this show a lot in the second listen with the advantage of time passing.

For a full transcript of this episode, click here.

If you enjoy this podcast, be sure to subscribe to the free weekly newsletter to be a member of the Relentless Tribe.

Also, since I can’t contain myself, I will take this opportunity to say, please subscribe to our newsletter that comes out on a weekly basis because you do get most of the intro of the show transcribed right in your inbox. Most consider that very handy. That’s the first thing.

The second thing, please leave a rating or a review on Apple Podcasts or Spotify. It’s super helpful. It really helps others find the show.

And lastly, if you go over to our Web site, there is a little microphone, lower right-hand corner. It’s orange. If you click on that button and leave us a voicemail message, there is a great likelihood that your message could be used to inspire or as part of an upcoming show. So, please do leave a message there.

If you do, by the way, just make sure you say your name. Start out saying, “This is [insert name here] from [insert company name here]” so that you’re not anonymous. Well, maybe you want to be anonymous. But if you don’t want to be anonymous, say your name, say your company name.

And without further ado, here’s your encore.

Complicating fact of current life, it’s becoming increasingly obvious that in order to stand up a practice that can take advantage of value-based care payments—payments where primary care docs mainly at this time can get paid more and likely more fairly to care for patients well—you need a lot of infrastructure. You need data, you need tech, you need a team. Translation: You need money, maybe a lot of money, to invest in all of this.

These are the external realities that hit anyone trying to do right by patients from every direction. But on the other hand (or maybe different fingers on the same hand), as Dr. Amy Scanlan says in this healthcare podcast, physicians are the backbone of this system. Dr. Scanlan talks in the interview today about the opportunity, and maybe the responsibility, that physicians have here for patients; but also the Eric Reinhart article comes up again about rampant physician moral injury (unpaywalled link with my compliments).

Right now might be a great time to read something from Denver Sallee, MD. He wrote to me, and he wrote, “Like many physicians, I did not have much understanding of the business side of medicine, as I mistakenly thought as long as I helped take great care of patients that I was doing my job. More recently, it became apparent to me that by ceding the management of medicine to nonclinical administrators and to companies interested primarily in value extraction for the benefit of shareholders that I needed more education in order to truly help patients.”

Today as aforementioned, I’m talking with Amy Scanlan, MD, who is chief medical officer of the clinically integrated network (CIN) that is the joint venture between Intermountain Health and UCHealth in Colorado.

We talk about what it’s like to be in the kind of messy middle of transformation to integrate care in a clinically integrated network, trying to figure out how to help physician practices and the CIN itself navigate the external environment in a way that empowers different kinds of practices at different points in their transformation journey that empowers physicians to be in charge, and considering clinical and financial outcomes (ie, the business of healthcare).

Dr. Scanlan brings up four main factors to consider when plotting strategy from here to there:

Give practices the tools that they need to succeed—not what you think they need but what you’ve discerned they actually need because you’ve listened to them.
Many times, these tools will consist of some combination of data, tech, and also offering the team behind the scenes to help doctors and other clinicians help patients through what Dr. Scanlan calls the “in-between spaces”—the times between appointments.
Medical culture really has to change, and in two ways: doctors learning how to be part of and/or leading functional teams and building functional teams. Because there are teams, and then there are teams. Well-functioning teams can produce great results. Nonfunctioning teams, however, are, as Dr. Scanlan puts it, just a series of handoffs. And don’t forget, handoffs are the most dangerous times for patients. The DNA of team-based care—real team-based care—for better or worse, are the relationships between team members, between physicians who work together, between doctors and patients, between clinicians and clinicians. So, fostering relationships, creating opportunities to collaborate and talk, is not to be underestimated. How do you re-create the doctors’ lounge in 2023?
Getting out from underneath the long shadow of fee-for-service incentives, specifically the paradigm that only patients who get mindshare are the ones in the exam room. Value-based care, integrated care is as much contemplating the patients who don’t show up as the ones who do. This is a really big mind shift, much bigger than many realize.

Also mentioned in this episode are Intermountain Health; UCHealth; Eric Reinhart, MD, PhD; Denver Sallee, MD, MMM; Vivek Garg, MD, MBA; and David Muhlestein, PhD, JD.

You can learn more at Trinsic and by reaching out to Dr. Scanlan on LinkedIn.

Amy Scanlan, MD, serves as chief medical officer for the joint venture CIN between UCHealth and Intermountain Health—a physician-led, clinically integrated network of more than 1000 primary care providers from UCHealth, Intermountain Health Peaks Region, the University of Colorado School of Medicine, and multiple independent practices along the Front Range.

Dr. Scanlan trained as a family practice physician and has continued to practice for the past 25 years. She has worked as a physician-owner in a small independent practice and has held multiple leadership positions as part of large health systems. She has served on numerous health system committees spanning quality, innovation, recruitment, and credentialing. She is very familiar with value-based care models, having been part of an accountable care organization (ACO) practice for the past 15 years, as well as participating on an ACO Practice Performance and Standards Committee and serving on a local ACO board.

She received a bachelor’s degree with honors from Wesleyan University in Connecticut. She obtained her medical degree from Case Western Reserve University in Cleveland, where she received the Kiwala Award for Research in Family Medicine. Her residency was completed at St. Anthony’s Family Medicine Residency program in Denver. She is currently board certified by the American Board of Family Medicine and NCQA (National Committee for Quality Assurance) certified in diabetes.

06:35 How is Dr. Scanlan thinking about the transformation process and the shift to value?

09:16 “It is really trying to think about, how do we help practices get there?”

11:48 “The hard part is the in-between spaces.”

13:21 EP407 with Vivek Garg, MD, MBA.

14:12 “Team-based care done badly is really just a series of handoffs.”

15:52 “We have to get to that point where the culture of collaboration is more pervasive.”

19:58 “How do we as healthcare providers step in and solve this problem?”

20:06 Why do providers have a responsibility to step in and try to fix the healthcare system?

20:22 Article (unpaywalled) by Eric Reinhart, MD, PhD.

21:51 Why do physicians need to be accountable for the cost of care as well as outcomes?

23:38 Why does physician burnout give Dr. Scanlan hope?

24:26 What is the solution to changing fee-for-service incentives?

25:43 What are some of the challenges facing changing incentives?

27:16 Why is data so important?

28:54 EP393 with David Muhlestein, PhD, JD.

30:13 “It’s important to understand that we are in the middle of this change.”

31:18 Dr. Scanlan’s advice for those trying to stand up a CIN.

You can learn more at Trinsic and by reaching out to Dr. Scanlan on LinkedIn.

Amy Scanlan, MD, of @uchealth discusses #clinicalintegration in the real world on our #healthcarepodcast. #healthcare #podcast #financialhealth #primarycare #patientoutcomes #healthcareinnovation

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Ashleigh Gunter, Dr Spencer Dorn, Dr Tom Lee, Paul Holmes (Encore! EP397), Ann Kempski, Marshall Allen (tribute), Andreas Mang, Abby Burns and Stacey Richter, David Muhlestein, Luke Slindee

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There was a study a few years ago that I was very enamored with. The study found doctors tended to ignore signs (ie, signs hanging on walls) asking them to wash their hands if the messaging on the sign wasn’t right.

For a full transcript of this episode, click here.

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You know what sign message worked the best? When docs were reminded that not washing hands put patients’ health at risk. Did you think I was going to tell you that doctors ignored signs unless they got paid to wash their hands or something to do with some incentive? Well, that’s not what I’m saying.

Whatever was going through the doctors’ minds, an appeal to patient well-being drove them to action much better than alternatives, including when the sign talked about their own personal safety. Soap use rose by over 45% when the sign message resonated with a “why” that many clinicians had, which was patient safety.

Why with this anecdote about handwashing, you may ask? It is so that I can say with evidence that if you want to transform something, anything in healthcare, if you want to get people in healthcare to do something, it is always gonna start with said people—and you have to figure out their “why,” keeping in mind other people’s “why” may or may not be the same as yours, no matter how intuitive you think the “why” is.

For example, “Hey, let’s do value-based care.” Or “Hey, how about we try to get direct contracts with self-insured employers?” Or even, “Hey, let’s make something ‘easy’ for all of our clinicians by sticking it in the EHR system.” These are just three examples I thought of off the top of my head that immediately come to mind where the “why” is not actually self-evident at all for why anybody should be on board for any of these rides.

Karen Simonton and Benjamin Schwartz, MD, MBA, wrote the other day, “It doesn’t matter what area of healthcare you come from, if you can’t see another’s viewpoint, it’s very difficult to motivate them to see yours. This is so true, even in the same tribe—ortho tribe, primary care tribe, payer tribe, [even the RHV tribe]. It is a process.”

So, let’s dig in, because this is really important, actually, to everybody trying to do or sell or transform almost anything in healthcare.

Here’s from Dr. Ben Schwartz. He wrote this on LinkedIn the other day, and I edited it for brevity. He wrote:

“I’m not a big fan of using corporate speak in medicine, but there’s one core theme that comes up over and over and over again when thinking about healthcare innovation: change management.

“The best tech tools, care models, and forward-thinking concepts do not matter if you cannot convince anyone to adopt them. Many great ideas die on the vine because of resistance to change. In healthcare, all it takes is one ounce of resistance in a complicated, multi-layer system to sabotage an entire effort. …

“I’m increasingly convinced that success of any innovative effort in healthcare, from health tech to [value-based care] and beyond, hinges on the ability to manage change.”

And then he writes, “Frontline care delivery experience is too often discounted here, [in my opinion].”

Hmmm … Having spent what amounts to my entire career basically working to change behavior within the healthcare space, I could not agree more with Dr. Ben Schwartz. And may I just say that this, from the nailing of the “why” to the rest of any change management endeavor, is so misunderstood. Like, if you’re from a company trying to change clinician behavior or close a care gap and you come to me as step one asking for an “EHR strategy” or, more usually, an Epic strategy—really dig in on this user experience as step one here—this is why I’m gonna squint at you. It’s like wanting to find new customers and you’re gonna start the new business strategy with a tight focus on credit card swipes.

So, look, frictionless Visa card swiping is gonna be something that, of course, we’d all want to do from an operational excellence standpoint; but it’s only relevant after users decide to buy.

First things first, and first, they gotta have a goal that the thing fulfills. And that goal is going to be some kind of Quadruple or Quintuple Aim kind of goal—a goal that aligns with the “why” of the people that we want to change the behavior of. This is why all change management includes, right up near the front, creating the case for change. What’s the goal? What’s the “why” there? Sidebar, but now my brain is spiraling.

I saw a bar chart by Phil Ballentine the other day in Nikhil Krishnan’s Out-Of-Pocket newsletter that showed, in the USA, in 2024, there are 18,982 live instances of Epic. Each one of those 18,982 live instances are all different: different workflows, separate data, different ways to do the same thing. So, even if having an “Epic strategy” actually was a complete master plan to change behavior in clinic, healthcare has no “nationwide, everywhere it’s all the same, so figure out your thing once and you’re good to go” thing going on.

There are 18,982 differences of opinion out there, but here’s the actual and big kahuna real reason why I’m leery. An Epic strategy is not equivalent to a change management strategy. That’s the real point that I want to make.

It’s necessary, very necessary even, but not sufficient. You want to make the way as easy as possible once the “why” goes down and the case for change is made, but even if it’s one click and not your usual 14 to 60 clicks, there’s no “why” there. There’s no automatic case for change that slithers out of anybody’s API like a spontaneous miracle.

I said this last week, too. Lots of things are really pretty easy. Lots of things are in Epic. Yet no one uses them. I mean, let’s talk about actually reading most of the best-practice alerts that pop up. How about consistent use of SmartSets in the majority of those 18,982 instances?

Anyway, I couldn’t be more pleased to have learned a thing or two from Ashleigh Gunter about change management and how to do this whole thing right. This conversation happened actually a while ago. It’s re-edited for 2024—call it a supercut—specifically considering change management at hospitals or physician organizations.

Ashleigh Gunther is president of Translucent Healthcare Consulting. She is also an expert in change management and how to align employees and staff so that an organization can move forward together.

One quick spoiler before we proceed: According to Ashleigh, there’s five steps to effective change management that will ensure success:

Having great leadership
Creating a case for change. This includes the whole “why” thing.
Finding champions—engaging people who have to change so that they can contribute and be supportive
Overcommunicating
Measuring how things are going and also celebrating small triumphs

If you continue to be interested in this topic, do go back and listen to the show with Karen Root (EP381) on shepherding innovation through a large company.

Before we kick in to the show today, let me remind you of a few things. First of all, have you signed up for the weekly newsletter? If you consider yourself part of the Relentless Health Value Tribe and you want to get invited to some of the roundtables that actually we are currently organizing, please sign up for the newsletter.

The other advantage to doing so is that it’s actually very efficient. In the emails are highlights and partial transcripts of the shows. So, if you ever are trying to remember where you heard something, you can just search your email.

Second reminder I want to toss in here, if you haven’t done so and you appreciate the show, could I ask you to please leave a rating and review on Apple Podcasts or Spotify? We haven’t had any of them this month, and it is important for the show to get found and for me and the team to stay motivated over here.

Third reminder, you will see a little orange microphone in the lower right corner. Click on that microphone and record yourself saying something like:

“Hi, this is Rob Marty. The Relentless Health Tribe has had a positive impact on my life since I first started listening two years ago. Support this tribe by leaving a review, subscribing to the newsletter, and, most importantly, inviting others to join the tribe by sharing the podcast with them.

“Go ahead! Forward it before you tackle that next project. Chances are the person you share it with will thank you.”

Thank you very much. With that, here is Ashleigh Gunter.

Also mentioned in this episode are Translucent Healthcare Consulting; Karen Simonton; Benjamin Schwartz, MD, MBA; Phil Ballentine; Nikhil Krishnan; Karen Root, MBA, CCXP; Rob Marty, DBA, MHA; Geoffrey Moore; and John Kotter.

You can learn more at translucenthc.com and by following Ashleigh on LinkedIn.

Ashleigh Gunter, president of Translucent Healthcare Consulting, combines her experience, an understanding of organizational culture, and a practical mindset to meet her clients’ needs. With over 30 years of management consulting experience, Ashleigh has deep expertise in advising in the dramatically changing healthcare market.

Ashleigh specializes in helping her clients drive change within their health plans, resulting in increased employee engagement, improved human resources experience, and reduced cost for both the employer and the employee. She believes in challenging the status quo by creating direct relationships between employers and providers.

Ashleigh has been a key contributor to several community-owned health plans in states from Washington to Virginia and has been credited with being key to employee participation and support of the plans.

In working for Andersen Consulting/Accenture, Deloitte Consulting, and The Gunter Group, Ashleigh has provided advice and consulting support to Fortune 100 C-suite executives over her career. She has an MBA with a focus in strategic management and organizational change from the University of Texas at Austin and a bachelor’s degree in business administration from the University of Denver with a concentration in finance.

09:22 How does change management go wrong in healthcare?

09:56 “Communication [of change] in and of itself isn’t change management.”

10:53 How does change management work on the provider organization side?

15:33 “You want to ensure you are educating the operational folks.”

16:35 What is change management?

17:36 What does great leadership look like in change management?

18:55 “Leadership sets the tone.”

19:04 What makes change management so hard?

19:31 “What’s the company reason to make this change happen?”

20:51 What are change champions, and why do you need to create them when changing your benefit plan?

21:57 Crossing the Chasm by Geoffrey A. Moore.

23:21 Why is it important to overcommunicate change?

26:47 Why is it important to measure your successes and communicate those after a change?

You can learn more at translucenthc.com and by following Ashleigh on LinkedIn.

Ashleigh Gunter of #TranslucentHealthcareConsulting discusses #changemanagement on our #healthcarepodcast. #healthcare #podcast #financialhealth #primarycare #patientoutcomes #healthcareinnovation

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Dr Spencer Dorn, Dr Tom Lee, Paul Holmes (Encore! EP397), Ann Kempski, Marshall Allen (tribute), Andreas Mang, Abby Burns and Stacey Richter, David Muhlestein, Luke Slindee, Dr John Lee

Crossing the Chasm, 3rd Edition: Marketing and Selling Disruptive Products to Mainstream Customers

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In Episode 446, "Hey, Let's Not Talk About EHRs," host Stacey Richter engages Dr. Spencer Dorn, vice chair and professor of medicine at the University of North Carolina, in a comprehensive discussion about the implications of healthcare technology, specifically electronic health records (EHRs).

Visit the Episode Page to read the show notes with mentioned links.

If you enjoy this podcast, be sure to subscribe to the free weekly newsletter to be a member of the Relentless Tribe.

The conversation emphasizes the necessity of understanding technology as a tool that neither possesses inherent goodness nor badness but delivers results based on its implementation and usage.

They discuss the paradoxical nature of technology in healthcare, highlighting how EHR systems can simultaneously empower and overwhelm healthcare practitioners.

Dr. Dorn and Stacey delve into the effects of digital technology on patient-doctor and clinician-clinician relationships, stressing the importance of proper deployment, operational excellence, and continuous improvement to optimize healthcare outcomes. In essence, the episode sheds light on the necessity of viewing technology as a means to an end rather than an end in itself.

06:15 Breaking down Kranzberg’s Laws of Technology.

08:16 How do EHRs go right?

12:49 “EHRs empower us with information, yet they also overwhelm us with information.”

16:00 How do EHRs bring healthcare workers closer together?

19:35 The Digital Doctor by Robert Wachter.

21:33 “The whole point of healthcare is to help people live healthier, happier lives.”

22:41 How the same EHR deployed in different places can be more or less efficient.

25:51 Why the problem is not necessarily the EHR but actually operational.

28:51 How technology has also changed our expectations on timing and value.

The Digital Doctor: Hope, Hype, and Harm at the Dawn of Medicine’s Computer Age

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I wanted to talk with Dr. Lee because so many RHV (Relentless Health Value) listeners are trying to figure out how to sustain primary care as a stand-alone entity when the most obvious and most common way to make enough money in primary care is to drive and maximize the dollars from downstream volume of high-priced service lines, which, if you think about it, undermines the entire point of primary care.

To read the full article, show notes as well as the links mentioned visit our episode page. While there, consider signing up for our free weekly newsletter.

In Episode 445 of Relentless Health Value, Stacey Richter interviews Dr. Tom Lee, founder of One Medical and Galileo, about the sustainability of standalone primary care practices in 2024. Dr. Lee also was a founder at Epocrates

They discuss the paradox of primary care, the economic challenges of running an independent practice, and the importance of enlightened leadership with a value-focused mindset.

Dr. Lee emphasizes innovative service operations, cutting hidden waste, and balancing human-centered care with efficient processes. The conversation explores various facets of primary care, including access, longitudinal patient care, and the role of technology.

Tune in to understand how primary care can thrive amidst economic and systemic challenges.

07:02 What is the paradox of primary care?

09:19 Why is it hard to run an independent primary care practice?

10:01 What are the barriers to running an independent primary care practice?

10:41 Can you have fee for service and value?

12:25 “Value is more about a mindset.”

13:22 What hidden waste is there in a primary care practice?

15:11 What do you need to have a value-focused mindset?

17:14 Why does access precede quality?

18:20 Why have retail clinics failed in being longitudinal primary care destinations?

20:29 What is a longitudinal primary care destination and why does it matter?

23:48 What are the nuances of a service business that make them challenging for managers?

24:35 How do you find the balance between fee for service and value?

31:17 EP438 with John Lee, MD.

32:14 How can you invest in quality without a value-based contract?

34:19 How do you address the trade-off between fee-for-service finances and investing in value-based care?

35:36 Where is the “productive middle”?

36:27 Dr. Tom Lee’s message to payers.

39:55 Dr. Tom Lee’s message for policymakers.

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Today is an encore because I am going on vacation next week. It always feels a little bit like a time warp because by the time this show will air, I will be back from vacation. This show with Paul Holmes was one of the most popular episodes of 2023 and definitely is just as relevant now. A lot of the things that Paul talks about are worth repeating or listening to again.

For a full transcript of this episode, click here.

Before we kick in, though, I’m gonna repeat something that Ge Bai, PhD, CPA, says a lot: There’s no angels and there’s no devils in the healthcare industry. But we are talking about for-profit entities. And if there’s one thing that’s generally true about a for-profit entity, especially one that is publicly traded, it’s gonna do whatever it can get away with. It becomes up to the customer to set expectations and using the purchasing discipline that they probably use everywhere else in the business because it basically is good business to have purchasing discipline.

Before we kick into the episode, just a couple of things. Thing one, if you haven’t, do subscribe to the weekly email that goes out describing the show. Here’s just one reason to do so. It’s really efficient because what is transcribed in that email is the whole beginning half (usually) of the introduction. So, if later on you are trying to remember which episode you heard something in, you can just search your email and find the show.

How you subscribe is go to relentlesshealthvalue.com, hang out for probably 15 seconds, and there will be a pop-up. And while you’re on the Web site, here’s something else you could do. Go to the lower right-hand corner of the Web site. You will notice a little button. It’s an orange button. There’s a microphone. Click on that; say something like your name, your company name, maybe a word or two about Relentless Health Value; and then encourage others to subscribe to the weekly email that goes out, similarly to what I just did. Then what our team will do is take that recording and potentially use it at the end of some of the shows so we can hear somebody else talk besides myself.

So, please do go over to the Web site, click on that little microphone, and record something that you might want to share with the other members of the Relentless Tribe.

And with that, here’s your encore.

If this were a video show, I would stare into the camera with steely eyeballs right now and say that I have a special message for employer CFOs. If you aren’t a CFO, pretend that you are so that you get the full effect here.

So, now that we’re all CFOs, let’s pull up the company P&L (Profit and Loss) statement. This is what keeps us all up at night, right? Making sure that the net profit line at the bottom looks good.

We could decide to lay off a few people. Reorg something or other. Beat up a vendor. We also could go over and have a strident conversation with sales leadership about what they can do to jack up their sales revenue. Top line begets bottom line and all that.

Or, here’s another idea: In this healthcare podcast, I am speaking with Paul Holmes, who is an ERISA (Employee Retirement Income Security Act) attorney with a specialty in PBM (pharmacy benefit manager) contracts, especially the PBM contracts from the big PBMs that get jammed in employer plan sponsor faces by whomever and which they are told look fine and that the employer plan sponsor should just go ahead and sign.

Now, if we, meaning all of us CFOs, sign that paper, or someone on our benefits team signs the paper … fun fact, our company just spent 30% to 40% over market for our pharmacy benefits. That contract we just signed contains all kinds of expensive little buried treasures—treasures accruing to the PBM and other parties, to be clear, and coming at our expense. There’s 17-ish very common treasures in your typical PBM contract, and none of us will ever spot them unless we know what we are looking for.

But let’s dig into this for a sec, especially for all of us newly minted CFOs because the real ones already did this math.

Say our company spends whatever—we’re a bigger company, and we spend $100 million a year on our drugs. That’s a minimum of $30 million that we got taken for … $30 million a year.

Because of the huge dollars at stake (30% to 40% of drug spend), it’s certainly the advice of almost anybody that you talk to who’s an expert in PBM contracts to have a third party—not your EBC (employee benefit consultant), which we’ll get into in a sec, but somebody else (a third party)—review every PBM contract.

I mean, what’s the worst that can happen for anybody considering having an independent third party review their PBM contract? It costs a couple grand in lawyer fees, and they give it a stamp of approval. Knowledge is power, and now we know.

But let’s just say this third-party review doesn’t happen. We all go with a “devil may care” about this whole PBM overcharging us by 30% to 40% possibility. And let’s say the PBM contract is, in fact, a ride on the Hot Mess Express but we don’t know it. Here’s two pretty bad downsides, especially now, this year, since the passage of the CAA (the Consolidated Appropriations Act).

Number one bad thing: Plan sponsors may get sued as per the CAA for ERISA violations. It’s not just the company paying that extra $30 million, or 30% to 40%, right? It’s also employees. This is risk exposure, bigly. Just like it was on the 401(k) side of the house, which Paul Holmes, my guest today, mentions later on in the interview. He talks about just how much those lawsuits cost and, yeah, exposure.

As I mentioned three times already, today I am speaking with Paul Holmes about PBM contracts in all their stealthy glory. The one thing I came to appreciate is that these things are works of art … if you’re into those paintings of pretty flowers where, if you look hard enough, you spot a skull tucked in the greenery (memento mori).

Paul is a longtime ERISA attorney. He has dedicated his career to helping plan sponsors in their negotiations with PBMs and trying to help them reduce drug spend, especially drug spend that isn’t actually paying for drugs.

Here’s a link to an article we discuss about how a school district in Florida is suing their longtime EBC for taking $2 million a year in alleged secret payments.

We also mention an episode with AJ Loiacono (EP379).

And along similar lines, Jeff Hogan mentioned on LinkedIn the other day, “It’s pretty amazing that just in the course of the [past few] weeks, I’m reading, seeing, and hearing about big new CAA breach of fiduciary duty cases.”

So, Paul Holmes says this more eloquently, but if you’re a plan sponsor, definitely get your PBM contract reviewed and maybe consider working with an EBC who’s happy to sign the disclosure statement that your lawyer has provided without disclaimers.

Also mentioned in this episode are Ge Bai, PhD, CPA; AJ Loiacono; and Jeffrey Hogan.

You can learn more by emailing Paul at pbh@williamsbarbermorel.com.

Paul B. Holmes, JD, is a seasoned ERISA lawyer with nearly 40 years of specialization in that field. Paul joined Williams Barber & Morel Ltd. recently, after 31 years with Nixon Peabody LLP and Ungaretti & Harris LLP. Paul is one of the few ERISA lawyers in the United States, concentrating his practice on PBM contracting and oversight. Paul represents large employers, Taft-Hartley welfare funds, and governmental units in their selection, contracting, auditing, and disputes with large pharmacy benefit managers (PBMs).

This work includes active oversight of the request for proposal (RFP) process for selecting a PBM, the negotiation and customization of PBM contracts, and legal audits of PBM compliance with their contracts.

Paul provides insightful guidance on the prudent selection of independent pharmacy benefit consulting firms (who do not receive indirect compensation from PBMs), which independence is expressly required under Section 202 of the Consolidated Appropriations Act of 2021 (CAA).

Recent efforts have focused on reducing wasteful drug spend promulgated by large PBMs in dozens of categories. These include the preference of Humira® biosimilars, reducing off-label utilization of GLP-1s, reducing huge markups on certain specialty generics, and customizing PBM formularies and clinical protocols to better control spend.

He was selected, through a peer-review survey, for inclusion in The Best Lawyers in America® (2020 and 2021) in the field of Employee Benefits (ERISA) Law.

Paul received his bachelor’s degree from Bradley University and his Juris Doctor degree from the University of Illinois College of Law.

07:41 What are Paul’s usual observations when a PBM contract crosses his desk?

08:34 “If you just sign … one of their model contracts …, you’re probably gonna pay 30% to 40% above market on your drug spend.”

12:11 What is a PBM lawyer? And why is it important to find an ERISA PBM lawyer?

17:12 EP379 with AJ Loiacono.

17:40 Who is on the hook for the cost of the PBM contracts?

21:05 What’s the problem with most ERISA lawyers today?

22:56 Lawsuit about PBM contract.

27:43 What’s Paul’s advice for benefits consultants?

31:40 How much might a plan sponsor be paying their consultant versus what a consultant might be making from a PBM?

You can learn more by emailing Paul at pbh@williamsbarbermorel.com.

Paul Holmes discusses #PBMContracts on our #healthcarepodcast. #healthcare #podcast #financialhealth #primarycare #patientoutcomes #healthcareinnovation

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Ann Kempski, Marshall Allen (tribute), Andreas Mang, Abby Burns and Stacey Richter, David Muhlestein, Luke Slindee, Dr John Lee, Brian Klepper, Elizabeth Mitchell, David Scheinker (Encore! EP363)

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For a full transcript of this episode, click here.

Unintended consequences is a thing. ERCowboy wrote on Twitter a while back, “In any complex system, the likelihood of unintended consequences vastly outweighs the predictability of intended ones.” In this healthcare podcast, we’re talking about two state laws where this is apropos: CON (Certificates of Need) laws and then COPA (Certificates of Public Advantage). Turns out, states actually have pretty much power to impact the competitive landscape in their state. They have a lot of levers they can pull. States really can make a difference in terms of improving real competition on value and on cost and quality. So, these two laws are, in a way, their attempt to do so.

Before we kick into what’s going on here, I think it is important to point out that these laws on their face aren’t an obviously and overtly terrible mistake. This isn’t like equivalent to accidentally putting ChapStick in the dryer.

There were good people who spied a problem and had an idea for how to fix it. I’m reminded of something I read by Nicholas Kristof on a totally different topic, but he wrote, “The central problem is not so much that the effort was unserious as it’s more focused on intentions than on oversight and outcomes.” And that pretty much sums up, I think, the gist of what’s going on here.

And I can say that because here we are in a position to Monday morning quarterback. So, I’ve invited Ann Kempski on the pod to point out what hindsight may reveal about these well-intentioned efforts, the CON and COPA laws.

First up, let’s talk about Certificate of Need laws, or the CONs. Currently, we have 35 states and Washington, DC, that operate CON programs with wide variations by state. The National Conference of State Legislatures has a good overview of each state’s laws. Why did these laws originally get put into effect? They got put into effect to cut down on supply-driven demand that was considered to potentially raise total cost of care—because in healthcare, unlike Econ 101, more supply doesn’t mean lower prices. In the real world, if you have more supply, volume goes up and total cost of care goes up, too.

So, it could be considered good thinking to limit the amount of supply. Except there’s four problems that wind up happening often enough, which is why some states are busy repealing these CON laws. We cover these four problems in the show that follows. Spoiler alert: What happens a lot of times is that the big get bigger. Consolidated entities have an upper hand, and we all know consolidated entities are generally not known for their competitive prices or their desire to rationalize volume.

So, yeah … we dig into this and parse it out into, as I said, four main problems; but this is most commonly where it all winds up (ie, total cost of care does not go down). I have included links that Ann Kempski shared with me, including a statement from the Federal Trade Commission (FTC) and Department of Justice detailing the anticompetitive effects of state CON laws.

There’s also a document written by a former FTC commissioner that highlights how state CON laws can inhibit competition. And then lastly, a systemic review of 90 studies that find the costs of CON laws exceed their benefits.

Okay, so let’s move on to our number two state law that often does not go as planned; and this is the Certificate of Public Advantage, or the COPA, laws. Approximately 19 states have them, and these laws attempt to immunize hospital mergers from antitrust laws by replacing competition with state oversight. The idea here is that a state tells the FTC to stand down and gives their seal of approval to a merger to stop it from getting scrutinized for antitrust violations.

So, like, a big dominant health system gets an okay to buy a rural hospital. Meanwhile, everybody realizes this will lead to a situation where there is a dominant health system and that dominant health system will reduce competition. But the state may choose to do this because … public advantage, as in the “PA” in COPA, Certificate of Public Advantage. But they’ll do this because the state has decided that the public advantage of allowing the possibly problematic anticompetitive merger to move forward, the public advantage is a bigger advantage than having competition. Hmmm … what could go wrong here?

Well, several things that Ann Kempski discusses in the show that follows. The Federal Trade Commission strongly advised the states against enacting these laws. Here is a link to this article that was on the FTC Web site.

I was so thrilled to get the chance to chat with Ann Kempski, who knows so much about these topics. Ann Kempski is an independent healthcare consultant with a background in the labor movement, advocating for healthcare workers and purchasers for many years. Ann Kempski collaborates with clients to strengthen primary care, enhance union health funds, and reduce commercial prices. She often partners with academics from Johns Hopkins to analyze hospital transparency data for insights into market trends.

Before we jump into the episode, we’ve had a loss in our community. We’ve had actually several, one of them being Marshall Allen, another one being Suzanne Delbanco. I know our guest today worked alongside of and really admired Suzanne.

Ann Kempski says: “Suzanne was a kindred spirit and a real inspiration for me and many others. She founded two very influential nonprofit organizations: first, The Leapfrog Group and then, second, Catalyst for Payment Reform, which is dedicated to empowering purchasers to be more effective purchasers in the healthcare marketplace.”

Additional Resources on State Laws and Policies That Promote Hospital Consolidation, Inhibit Competition

Certificate of Public Advantage (COPA) Laws

A recent story from Tennessee highlights the weak oversight and observed in COPA-related hospital mergers.

Competition and Antitrust in Healthcare

“Is There Too Little Antitrust Enforcement in the US Hospital Sector?” by Zarek Brot-Goldberg, Zack Cooper, Stuart Craig, and Lev Klarnet, April 2024

Catalyst for Payment Reform publications and white papers

The Great Reversal: How America Gave Up on Free Markets, by Thomas Philippon, 2019

Also mentioned in this episode are Nicholas Kristof; Marshall Allen; Suzanne Delbanco; Brian Klepper, PhD; and Gloria Sachdev, PharmD.

You can learn more by following Ann on LinkedIn.

Ann Kempski is an independent health policy consultant with 30 years of experience as an analyst, advocate, and strategist advancing health reforms related to coverage, quality, and payment in public programs and commercial insurance. She has served in leadership roles in several organizations, including Kaiser Permanente, SEIU (Service Employees International Union), and the State of Delaware.

Ann currently supports organizations and efforts to strengthen primary care payment and transition away from fee for service, promote competition in commercial healthcare prices and coverage, and expand access to evidence-based behavioral health services. Ann is especially grateful to collaborate with and learn from talented graduate students and faculty at Johns Hopkins Bloomberg School of Public Health on research and policy analysis to understand commercial market and price dynamics and provider behavior. She has an undergraduate degree in economics from the College of William & Mary and a master’s degree in industrial and labor relations from Cornell University.

06:20 Ann remembers Suzanne Delbanco.

06:55 EP224 with Suzanne Delbanco.

07:40 What are state Certificate of Need laws?

08:44 Why are states getting rid of these CON laws?

13:26 Why CON laws are created.

15:43 EP437 with Brian Klepper, PhD.

16:09 What are the conflicts of interest and problems that arise when CON laws are created?

20:55 What happens when states get rid of these CON laws?

24:10 How are Certificate of Public Advantage laws different from CON laws?

27:58 Why does the research show that COPAs don’t usually accomplish their goals?

31:34 What encouraging current events are happening in the realm of COPA laws?

32:08 Gloria Sachdev, PharmD, of Employers’ Forum of Indiana.

You can learn more by following Ann on LinkedIn.

@kempann discusses #COPA and #CON state #healthcarelaws on our #healthcarepodcast. #healthcare #podcast #financialhealth #primarycare #patientoutcomes #healthcareinnovation

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Marshall Allen (tribute), Andreas Mang, Abby Burns and Stacey Richter, David Muhlestein, Luke Slindee, Dr John Lee, Brian Klepper, Elizabeth Mitchell, David Scheinker (Encore! EP363), Dan Mendelson

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For a full transcript of this episode, click here.

The first time I figuratively, not actually, met Marshall Allen was the day he did not meet Dave Chase for lunch. Dave was in Manhattan, and he was supposed to meet up with Marshall. But something happened, and Marshall was unable to make said lunch. So, I filled in for Marshall, who I had never met at that point.

I zipped uptown to have lunch with Dave instead. We simply could not have Dave Chase eating lunch alone in my home city, I guess; and I was extremely pleased to ensure that that did not happen. Anyway, of course I met Marshall after that—I mean, being his standby and all. This was, I’m gonna say, 10 years ago or more.

So, when I saw the beautiful words that Dave Chase had written about Marshall after his death in May of this year, 2024, of course I asked Dave if he wouldn’t mind coming on Relentless Health Value and saying a few words about Marshall and his legacy.

After Dave talks, I have teed up an earlier interview with Marshall that originally came out on Relentless Health Value after his book launch. I am sure that listeners of this show have heard Marshall speak many times, but I’d encourage you to listen all the same because this is Marshall talking to the healthcare industry. By that, I mean he’s talking to us listeners of the show; and it was a little cathartic (for me at least) to actually revisit.

If anyone is interested in supporting Marshall’s legacy, please subscribe to the content available at Allen Health Academy and consider purchasing access for employees. This is likely the best way to honor his legacy and amplify his work as a catalyst for change and to empower patients.

And from all of us at Aventria Health Group, our hearts go out to Marshall’s family.

Dave Chase: I was honored to be asked by Stacey to share a few memories on our friend Marshall Allen. In my role as founder of Health Rosetta, I had the privilege of working with Marshall quite a lot on different reporting stories that he did, and I was honored to be able to join his family and friends at the celebration of his life.

It was certainly a sad day for all of us on Sunday, May 19th, when we lost Marshall. Let me just share what I think about Marshall. He was a dedicated journalist and also a former member of the clergy. He had an unwavering commitment to investigative journalism that really left an indelible mark on the healthcare industry.

He was really a relentless voice for the little guy. He shed light on price gouging, sloppy billing, fraud, conflicts of interest, insurance denials, and unnecessary treatments that preyed on Americans in our most vulnerable moments of our lives when we’re in the healthcare system.

Marshall had a passion for justice and transparency, and it wasn’t just a professional pursuit. It was really a personal mission. Marshall’s work was driven by a deep-seated desire to help individuals and employers understand and navigate the convoluted healthcare system and really about empowering them to overcome its many injustices and win in the process.

His impact went beyond just great reporting and fascinating stories. He had a huge impact on healthcare legislation. One of Marshall’s most significant contributions was his yearlong investigation into the health insurance brokerage industry, which culminated in the publication of a pivotal article in ProPublica.

That investigation caught the eye of Senator Lamar Alexander, who was leading the Senate HELP Committee at that point in time, as well as on the Democratic side, Senator Patty Murray. They were seeking areas of bipartisan agreement, and the insights from Marshall’s work played a crucial role in drafting and eventual passage of the Consolidated Appropriations Act of 2021 (really a key part of that), regarded by many as the most consequential employee healthcare legislation since 1943.

He didn’t stop there. He wrote a book. Never Pay the First Bill is a tremendous resource for patients navigating the complexities of the healthcare system. It equips families and employers with the knowledge and strategies to fight back against unjust medical bills and practices and promoting a sense of empowerment and advocacy in the process. He also edited two healthcare books by Marty Makary, MD. This further cemented his legacy as a thought leader and communications leader in the healthcare industry.

After the success of his book, Marshall founded the Allen Health Academy. This is a platform dedicated to educating and empowering individuals to take control of their healthcare experiences. This really reflects Marshall’s enduring commitment to making healthcare more accessible and fair for everyone, especially the most vulnerable.

And anybody who knew Marshall knew that he was really on a moral mission rooted in his faith. It played a significant role in shaping his character and his work. In his New York Times piece entitled “The Biblical Guide to Reporting,” he shared how his five years of Christian ministry enriched his journalistic practice, fostering a sense of compassion, integrity, and dedication to truth.

He wrote his years in ministry made him a better journalist because he was a Christian, not in spite of it, is how he put it. It soured him to see people “getting beaten down by the system.” Marshall Allen’s legacy is one of courage, integrity, and relentless pursuit of justice. His work has not only illuminated the dark corners of the healthcare industry but has also inspired countless individuals to stand up for their rights and demand better, not to mention many journalists following in his footsteps.

As we mourn his loss, let’s celebrate the remarkable impact he had on the world and take solace in the lasting changes he brought about. Marshall will be deeply missed, but his contributions will continue to resonate for many years.

One of the people that Marshall was closest to as a friend and as an editor was Dr. Makary, and I’d like to wrap up with what Marty shared in a post announcing Marshall’s passing. “In his final hours, this is what I told him: Marshall, we watched you fight tirelessly for the voiceless and become a fierce advocate for the defenseless—a fight many will continue. At every step along the way, you reminded many of us what’s really important. … Thank you, my friend, for being a role model to so many. … We will miss you dearly.”

I’d encourage you to bring some part of Marshall into your day every day, and it’ll be a much better day and you’ll have a huge impact on our nation. And once again, thank you for the opportunity to share a few thoughts on Marshall. Thank you.

Stacey: Today, I’m interviewing the incomparable Marshall Allen. His book, Never Pay the First Bill: And Other Ways to Fight the Health Care System and Win, a book with that title being on the New York Times best seller list, has implications to healthcare leaders. Marshall’s book is an instruction manual for patients on how to fight back against unfair and/or egregiously inaccurate bills.

This interview with Marshall Allen is different from others that you may be hearing. Because listeners of this show are healthcare executives, I wanted this interview to be relevant to you. What does this book mean for you? Doug Aldeen told me one time, unless something has a direct impact on the CEO or leadership team at a health system or insurance company, they’re just bored. Let me sum up this interview in one sentence: This is not boring.

If you want to skip to the exact examples of not boring, you can skip ahead to about the 28-minute mark. We go through the ways that health systems can and probably will be hurt by the financial toxicity that they create. Here’s the three-ish ways that Marshall and I talk about:

Doctors who no longer trust their employers (ie, the health systems they work for) leave, and then you have to recruit new doctors—#problematicandexpensiveonanumberoflevels, but I don’t need to tell you that.
Reputational damage. When the slogan on the door becomes a joke, that’s a problem.
Employers and taxpayers reading best-selling books like this one and Marty Makary’s (which also is or was just recently on the best seller list)

Marshall’s book, by the way, is available wherever books are sold.

Also mentioned in this episode are Dave Chase; Marty Makary, MD, MPH; and Doug Aldeen.

Additional links mentioned in this episode: Healthcare Dive, Kaiser’s Bill of the Month

You can learn more at Allen Health Academy and on Marshall’s site.

Marshall Allen spent more than 17 years investigating the healthcare system as a journalist. He is the founder of Allen Health Academy and the author of Never Pay the First Bill: And Other Ways to Fight the Health Care System and Win. His book and his health literacy videos, The Never Pay Pathway, are helping working Americans save hundreds and thousands of dollars—per healthcare encounter. Marshall is a two-time finalist for the Pulitzer Prize and winner of the Harvard Kennedy School’s Goldsmith Prize for Investigative Reporting and dozens of other journalism awards. For more information, visit allenhealthacademy.com.

09:28 What’s the point of view that Marshall is coming from with his investigative reporting?

09:57 “How does this affect the people who are paying for it and the people who are undergoing the care?”

10:49 “There’s a lot of good people working within this very messed up system.”

11:03 Why are patients considered outsiders in the healthcare system?

11:45 “What’s happened in healthcare is that the stakeholders treat each other more as the customer.”

13:45 What is upcoding?

17:18 “These are schemes that have been created within the industry to increase revenue.”

17:46 “This system is not set up for the benefit of the patient.”

18:13 “On the financial side, the industry is actually oppressing the American people.”

19:14 “We have been expected to pay whatever aggregate sum is thrown at us.”

20:21 Why have patients been so passive toward this crooked healthcare system so far?

22:05 What’s the difference between making a profit and profiteering?

29:45 What are the first-order and second-order consequences of what’s happening in health care right now, and which of these consequences will actually drive change?

30:45 “When you tell the truth about what’s going on … they become so ashamed … that they change their behavior.”

32:00 “The patient … is not their most important customer.”

32:50 “The sleeping giant is the employers.”

You can learn more at Allen Health Academy and on Marshall’s site.

Our host, Stacey Richter, and @chasedave pay tribute to @marshallallen on our #healthcarepodcast. #healthcare #podcast #financialhealth #primarycare #patientoutcomes #healthcareinnovation

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Andreas Mang, Abby Burns and Stacey Richter, David Muhlestein, Luke Slindee, Dr John Lee, Brian Klepper, Elizabeth Mitchell, David Scheinker (Encore! EP363), Dan Mendelson, Dr Benjamin Schwartz

Never Pay the First Bill: And Other Ways to Fight the Health Care System and Win

The Price We Pay: What Broke American Health Care--And How to Fix It

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In Episode 442 of 'Relentless Health Value,' host Stacey Richter shares an intriguing outtake from a previous episode featuring Andreas Mang, senior managing director at Blackstone, discussing the critical issue of cost management in oncology side effect treatment.

The conversation delves into the inefficiencies and patient harms caused by inadequate side effect management, particularly dehydration due to chemotherapy, and the resulting financial burdens on employers, taxpayers, and patients.

Stacey explores the importance of a value-based mindset in drug purchasing, integrating oncology care, and the potential financial and health benefits of better side effect management. She highlights various expert opinions and studies supporting these points, encouraging listeners to reconsider their approach to healthcare cost structures and patient care protocols.

If you enjoy this podcast, be sure to subscribe to the free weekly newsletter to be a member of the Relentless Tribe.

01:12 Andreas Mang on oncology medication side effect management.

03:12 Mark Lewis, MD’s Tweet.

03:39 Celena Latham’s response.

04:22 How integrative oncology can save money and what it looks like.

04:47 EP157 with Ethan Basch, MD.

06:20 Why PBMs saving money doesn’t necessarily mean savings for employers and payers.

07:36 EP435 with Dan Mendelson.

08:20 EP372 with Cora Opsahl.

08:40 EP331 with Al Lewis.

09:50 Stacey’s second rumination.

10:19 Why having a value mindset when purchasing is a thing.

10:42 Stacey’s third rumination.

12:03 EP370 with Erik Davis and Autumn Yongchu.

13:07 Why FFS does not pay or pay adequately for side effect management.

14:31 Stacey’s final rumination.

17:08 Summarizing Stacey’s four ruminations on this topic.

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For a full transcript of this episode, click here.

The show today is a recording of an earlier conversation between Abby Burns and myself. This original conversation happened during the Raising the Value Bar Summit, which was a summit all about value and the what, why, and how of it all.

Abby asks me questions like why did I start the podcast, which fits the value theme because this show is entitled Relentless Health Value, after all.

I get asked how I define value. Fair question. Also, trick question, because value is in the eye of the beholder. All any of us ever have is a capability, a capacity.

The sorcery by which any given capability transmogrifies into value happens when somebody else’s problem or pain or need or want is solved for by said capability. Oh, you thought that was the tricky part? No, not in the healthcare industry. That’s probably the easy part, which is saying something, because product market fit is never easy.

The tricky part here is that in healthcare, as I’ve often said and heard, healthcare is an industry where one person eats the dinner, somebody else orders the dinner, and a third person pays for it. So, the patient may see immense value in whatever it is that somebody’s doing. But if the orderer and the payer don’t, well, the capacity is going to remain a caterpillar that never turns into a butterfly, most likely.

Said another way, the tricky part in healthcare is if you don’t create win-wins across a bunch of different boards, value won’t be realized for patients. And the problem with that is the number of zero-sum games we have afoot around here in the healthcare industry, which make this really difficult.

Before we kick into this show, I just want to mention, because it comes up several times in the conversation that follows, there was a talk by Daniel Kuzmanovich, who is managing director and expert partner over at Advisory Board. Daniel had given a talk earlier during that same value summit, and during this talk, he mentioned the idea that when measuring value in healthcare, there’s four tensions.

And if different stakeholders (or different people, actually, even within one stakeholder) have different perspectives on how value is created in light of these tensions, yeah, that’s where spheres collide and value drains away, never to be realized. So, the four tensions are:

Value Tension 1—When: By when must the value be realized? And some say that there is a tension between short-term value creation and long-term value creation. So that’s the first tension, this tension between somebody trying to get something done quick in the short term or only concerned about the short term and then what then happens in the long term.

Value Tension 2—Value for Whom: We could define this a bunch of different ways, but how Daniel defines it is the tension between individuals who are thinking one patient at a time and those who are thinking in terms of populations—could be populations of an organization; it also could be nationwide populations. Like, if I’m a doctor, do I worry about patients singularly or individually versus somebody thinking more top down from the population level down?

Value Tension 3—Value Based on What: And this tension could be, Are we thinking about value of the output, or are we thinking about the value of the outcome? Again, you’re gonna go about things kind of different ways if you’re thinking about output value versus if you’re thinking about outcome value. And, for sure, there could be tension if there’s not alignment there.

Value Tension 4—Proven or Experimental: People who only want to do things that are proven to drive value versus those who might be up for some experimental stuff. So, there’s this kind of tension between offering proven value and focusing on only things that are proven and evidence based versus those who are looking to incorporate experimental things into what they’re doing.

So, the tensions are when, short term, long term; for whom, patients or populations; based on what; and then lastly, is it proven or experimental?

[Click to enlarge image]

Before we roll tape, I just want to thank Abby Burns, who is my interviewer today and a great one at that. She even managed to keep the likes of me mostly on track and on topic, which is no small feat. Thank you so much, Abby.

Abby Burns is an expert partner over at Advisory Board. She’s also a frequent host on the Radio Advisory podcast and a strategy lead.

Also mentioned in this episode are Abby Burns; Daniel Kuzmanovich; Scott Conard, MD; John Lee, MD; Mike Tuggy, MD; and Michael Leavitt.

For more information, go to Radio Advisory or Aventria Health Group.

Abby Burns is a researcher and facilitator with Advisory Board and serves as co-host of the Radio Advisory podcast. Through leading research and connecting with healthcare leaders both live and via Radio Advisory, Abby aims to provide meaningful thought partnership to help stakeholders across the industry to improve healthcare within and across their own domains. A self-avowed “healthcare generalist,” Abby’s research has a home base in health system strategy. She has previously led research on behavioral health, rural health, population health management (including primary care strategy and social determinants of health [SDOH]), and more.

Abby previously volunteered as an EMT in Prince George’s County, Maryland, where she regularly witnessed many of the challenges Advisory Board research aims to help members address. She earned her BA in public health from the University of Richmond.

Stacey Richter uses her voice and thought leadership to provide insights for healthcare industry decision makers trying to do the right thing each week on Relentless Health Value. Each show features expert guests who break down the twists and tricks in the medical field to help improve outcomes and lower costs across the care continuum. Relentless Health Value is a top 100 podcast on iTunes in the medicine category and reaches tens of thousands of engaged listeners across the healthcare industry.

In addition to hosting Relentless Health Value, Stacey is co-president of QC-Health, a benefit corporation finding cost-effective ways to improve the health of Americans. She is also co-president of Aventria Health Group, a consultancy working with clients who endeavor to form collaborations with payers, providers, Pharma, employer organizations, or patient advocacy groups.

03:33 Stacey’s journey and mission.

04:16 The story of Scott Conard, MD (EP391).

09:28 Why it’s important not just to drive change but to sustain it.

12:23 Heart Failure: A Case Study in Value.

14:13 EP438 with John Lee, MD.

15:07 Why patient positive value often fails instead of succeeds.

18:07 How financial toxicity has become clinical toxicity in healthcare.

19:44 How cultural norms have evolved into healthcare challenges.

23:38 The story of Mike Tuggy, MD, in Washington.

25:26 Looking at the four tensions in measuring value as continuums.

25:49 Why timeline is important in creative value in healthcare.

28:04 Finding Allies by Michael Leavitt.

28:44 What are the four ways to measure value in healthcare?

29:11 How do payers and providers collaborate to align on value metrics?

31:48 Why will proven versus experimental treatments become more important in the next few years?

35:06 Stacey’s manifesto (EP400) and values for personal integrity in healthcare.

39:07 Stacey’s parting advice.

For more information, go to Radio Advisory or Aventria Health Group.

Recent past interviews:

Click a guest’s name for their latest RHV episode!

David Muhlestein, Luke Slindee, Dr John Lee, Brian Klepper, Elizabeth Mitchell, David Scheinker (Encore! EP363), Dan Mendelson, Dr Benjamin Schwartz, Justin Leader, Dr Scott Conard (Encore! EP391)

Finding Allies, Building Alliances: 8 Elements that Bring--and Keep--People Together

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For a full transcript of this episode, click here.

Well, I reached out to David Muhlestein, PhD, JD, the other day to find out what he was up to since he left Leavitt Partners, which had been acquired by HMA, Health Management Associates. Answer: He’s building his own company in stealth mode. Stay tuned.

But during the ensuing conversation, David said something, and I immediately shanghaied him to come back on Relentless Health Value and discuss. David said the optimal size for a physician practice is 10 to 20 docs with obviously a team surrounding them.

This is big enough to get some economies of scale: 10 to 20 docs plus team can afford back-office functions and technology and other things that you can afford when you scale up. But this size is small enough that the practice can be of the local community, the practice team can be collegial and collaborative, and the practice’s actions can reflect the values and the ethics of said team who works there.

Now, it might be possible for this 10- to 20-doc practice team to be under a bigger tent within a larger organization but only insofar as they are autonomous to the level that what I just said still holds true—that their values can and do dictate their actions.

If the organization is big, structured, and acculturated in such a way that corporate policy is a steamroller, then yeah, this organization might be one that’s become probably too big to succeed—I mean, succeed when defining success as having anything to do with improving patient care, population, or community health.

David Muhlestein and I dig into this optimally-sized practice concept for the first part of the conversation that follows. Then things get even more interesting. We turn our attention from theoretical to the real world, and another problem surfaces.

The other problem we are taking up in this healthcare podcast as it relates to healthcare delivery organizations who have rolled up or consolidated and are led with centralized control is the Diversification Discount. The Diversification Discount is actually a Wall Street word, and it means that companies doing a whole bunch of different things might wind up with a lower stock price than companies who do one thing really well or only do things that have the same business model.

The Diversification Discount of non-healthcare businesses on the stock market is probably the child’s play of Diversification Discounts, though when you compare it to the diversification challenges plaguing big health systems who are fiduciarily responsible for both primary care and also specialists and not fiduciarily responsible for patients, which shouldn’t remain unsaid, so let me just say it.

But think about this. Primary care cannibalizes specialty care. We know this already. Good primary care reduces the need for specialty care. But if our healthcare system pays a lot for specialty care, which it does, thanks to the RUC (Relative Value Scale Update Committee) etc—listen to episode 437 with Brian Klepper, PhD—and if we’re thinking that the answer to funding primary care is to take money from specialty care to pay for primary care, which is how big health systems fund primary care, then we’re reducing the amount of revenue earned by specialty care with said primary care.

What we’re literally doing is asking the golden specialty care egg to make less money and also fund the making of the less money effort. How can a health system leader giveth and taketh and be a true leader for all in the face of these bare-knuckle facts?

I like how David Muhlestein puts it in the episode that follows. David said, it may very well be that some organizations really need to clarify their values that do not align with primary care or a value-based focus for treating patients.

I think that you could have a specialty-focused practice that is phenomenal because they are all about efficiency and optimizing specific procedures. That doesn’t align itself very well or very effectively with managing a population across the continuum of care. And I think, this is what David thinks, that where the board of directors or senior leadership really have to grapple and say, what are our values here?

You get the gist of this paradox of primary care, as I’m starting to call it. I could go off on a tangent right now about the decisions so many healthcare systems make to not prevent preventable heart failure readmissions right now, which is going on across the country; but I won’t. I would say, though, check the post by Stacy Mays reposted by Peter Hayes for more on that front.

But now let’s talk about a plan forward for when the delta gets big enough between what the big kahuna organization is doing and what those 10 to 20 docs would be doing if those 10 to 20 docs had the autonomy to do what they wanted to be doing and/or when things start to get really twisted and inefficient due to too much diversification discount contortioning, which, again, is going to result when the organization gets way bigger than the 10 to 20 docs and different business models start intersecting. Here are three ideas that David Muhlestein and I discuss in the show that follows.

Idea 1: You split up or organize into business units that all have aligned business models. Bifurcate primary care and population health–type, value-based stuff from specialty care.

Idea 2 (and these aren’t mutually exclusive): You restructure toward a more collaborative organizational model that is decentralized so that those 10 to 20 docs and their teams actually would have sufficient autonomy to align their actions to their values. David Muhlestein calls this phase of organizational evolution delegation, by the way.

Idea 3: Boards, especially boards of nonprofits. (Are you kidding me that we even need to say this out loud?) Boards of nonprofits could and really should take a cold hard look at exactly what their values are and how their organization’s value—in the real world, not in the marketing copy—align with those values and, if they don’t align, to reorganize. See Idea 1 or 2 accordingly.

Boards may want to consider the Diversification Discount impact if the organization includes primary care and specialty care. This probably warrants deep contemplation—like, go-up-to-a-cave-on-a-hill-level contemplation—to determine if Idea 1 or Idea 2 is in play here.

But also, and this is me talking now, here’s another non-rhetorical question to contemplate while up in the cave. Is organizational value derived mainly from market and political power? Or is organizational value a function of an ability to improve patient and community health?

How many hospital boards have engaged in any of these contemplations? I don’t know. Maybe some public hospitals actually, which turn out to be the only ones using 340B money to support community health needs in underserved patient populations. Oh, by the way, when I say public hospitals, I don’t mean just nonprofits in general, which is truly disappointing.

This conversation with David Muhlestein digs into all of this with far greater granularity, and he is much more eloquent than me.

Considering that the plurality of board members at big nonprofits tend to have backgrounds in finance, not medicine or public health, listen to the show with Suhas Gondi, MD, MBA (EP404) on hospital boards. Chris Deacon was talking recently about the “existing dumpster fire of unethical practices” and … yeah.

I like how Robert Sundelius, FACHE, put it in response to a post by Preston Alexander, MBA, and also “when we … maximize profit at the expense of public health, we are treading a fine line between business and ethics. There is only one critical outcome in healthcare: keeping people from becoming patients. There is only one essential vision: human flourishing. If we’re not pursuing these, we’re all still losing.”

Listen to the show with Scott Conard, MD (EP391) for a hard-core lesson on how definitions of a “flourishing community” may vary.

Also mentioned in this episode are Brian Klepper, PhD; Stacy Mays, MBA; Peter Hayes; Robert Pearl, MD; John Lee, MD; Kate Wolin, ScD; Jodilyn Owen; Hoangmai (Mai) Pham, MD; Ann Kempski; Kara Swisher; and Scott Galloway, MBA.

You can learn more by following David on LinkedIn.

David Muhlestein, PhD, JD, is a healthcare researcher and entrepreneur, committed to transforming healthcare payment and delivery systems. A self-identified data and policy nerd, he regularly speaks and publishes on value-based care, price transparency, and healthcare system evolution.

Additionally, David is a visiting policy fellow at the Margolis Institute for Health Policy at Duke University and adjunct assistant professor at The Ohio State University College of Public Health.

Previously, he was chief research and innovation officer for Health Management Associates and chief strategy and chief research officer for Leavitt Partners. He also served as adjunct assistant professor of The Dartmouth Institute (TDI) at Dartmouth College.

David earned his PhD in health services management and policy; JD, MHA, and MS from The Ohio State University; and a BA from Brigham Young University.

08:12 From a business and patient/better outcomes standpoint, what does an optimal provider practice look like?

11:48 EP412 with Robert Pearl, MD.

13:06 Why isn’t the current landscape what David considers optimal?

14:53 What leads to the “crisis of autonomy”?

15:13 How do medical practices get to the phase of delegation?

17:39 EP438 with John Lee, MD.

18:55 EP437 with Brian Klepper, PhD.

20:53 EP432 with Kate Wolin, ScD.

20:55 EP421 with Jodilyn Owen.

23:48 Medicare Meet-Up podcast with Mai Pham, MD.

24:45 What metrics should boards of directors also be held accountable for?

28:48 Why is an efficiency-focused business not necessarily the best at managing population care?

31:13 What is the “diversification discount”?

32:49 Pivot podcast with Kara Swisher and Scott Galloway, MBA.

35:53 What can primary care doctors do to optimize their practices?

36:48 Why do we need to shift the mindset from “bigger” and “more”?

You can learn more by following David on LinkedIn.

David Muhlestein discusses optimal size for #medicalpractices on our #healthcarepodcast. #healthcare #podcast #digitalhealth #healthcareleadership #healthcaretransformation #healthcareinnovation

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Luke Slindee, Dr John Lee, Brian Klepper, Elizabeth Mitchell, David Scheinker (Encore! EP363), Dan Mendelson, Dr Benjamin Schwartz, Justin Leader, Dr Scott Conard (Encore! EP391), Jerry Durham (Encore! EP297)

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For a full transcript of this episode, click here.

In the Ge Bai show (EP420), one solve was offered for helping patients pay the lowest possible price for generic drugs. In this healthcare podcast, Luke Slindee, PharmD, offers another solve. That’s where this conversation is going, but now let’s start from the beginning.

It’s a thing that traditional PBMs (pharmacy benefit managers) make billions of dollars on generic drugs these days when patients pay more at the pharmacy than what the PBM reimbursed the pharmacy for the drug for. And then the PBM and its shareholders clean up the difference there. PBMs have a unique opportunity to buy low and sell high, and they are certainly not averse to fully taking advantage of that opportunity. So, patients pay more, pharmacies get reimbursed less, and PBMs smile all the way to the bank by sucking out the cash that’s sloshing around in the middle there.

This can have serious patient and self-insured employer and plan sponsor implications, this whole thing. It’s a big reason why (as Ge Bai, PhD, CPA, talked about in episode 420) 79% of the time, if a patient is in their deductible phase, using GoodRx, a GoodRx coupon, or buying the drug on Mark Cuban or Amazon or from Blueberry or Freedom will be cheaper than using their insurance. Seventy-nine percent of the time is a lot of the time.

More than three out of four patients will pay less not using their insurance for a generic drug if they haven’t reached their deductible. And keep in mind, most don’t reach their deductible.

Benjamin Jolley, PharmD, in episode 422 put it that patients pay more to pay more, right? They pay for their insurance. And then they pay more at the pharmacy counter for a generic drug than they would if they, again, wandered in, not copping to having insurance and using a GoodRx card or going to one of the cash pay pharmacies.

I say all this to say, don’t forget, we have a weird, weird situation in this country where PBMs tell the pharmacist how much to charge the patient; but they also tell the pharmacy how much they’ll pay the pharmacy for the transaction. So, now let’s talk about how to fix this, I’m gonna call it, spread problem, generic spread problem.

In the Ge Bai episode, she talks about not letting PBMs get their mitts on generic drugs. I mean, why pool risk—which is kind of what insurance is—why pool risk on a generic that costs, like, 47 cents is how she put it? Pooling risk is an administrative burden, and it costs more to administer the pooling of risk than it costs to pay 47 cents for the drug.

They’re sort of two schools of thought that we talked about earlier in that earlier show. One is to just not cover generic drugs, which can get dicey because even if a generic drug, one of them costs 47 cents, sometimes people take a lot of these generic drugs, especially if they’re polychronic; and it can add up in ways that are not good for patient outcomes.

Another idea is to give patients HSAs (health savings accounts) or a wallet of some kind or a prepaid credit card and put money in that wallet or on that prepaid credit card, and then the patient can use that to go buy their generic drugs. So again, it’s not pooling the risk; but it’s giving them a way to purchase the drugs that is outside of the purview of a PBM.

There’s much more to that story, which you can hear all about in episode 420 with Ge Bai at your leisure, because today I am talking with Luke Slindee about another solve to the generic spread pricing problem. And this one involves making, I’m gonna say, a fairly minor adjustment relative to the so-called usual and customary prices for generic medications.

If you do not know what a usual and customary price is, never fear. That is the whole first part of this conversation with Luke Slindee today. We talk about what the usual and customary price is as a construct. We talk about the logical, behavioral, economic reasons behind how this usual and customary price has gotten wildly inflated and how that winds up getting us into the pickle that we are in now.

After you listen to this show, do go back and listen to the other episode with Luke Slindee (EP429), where we follow the dollar through the pharmacy supply chain, because that will fill in probably a few remaining gaps in your knowledge. Or the show with Steven Quimby, MD (EP344) for even more details about the profit machine that is a traditional PBM when it comes to generic drugs.

My guest today, Luke Slindee, is a second-generation pharmacist. His family owned a pharmacy in Minnesota when he was growing up. Now he is a senior pharmacy consultant for Myers and Stauffer, which is the firm that calculates the NADAC (National Average Drug Acquisition Cost) Price Benchmark, on behalf of CMS (Centers for Medicare & Medicaid Services) and the federal government.

Before we kick into the episode, I just want to thank VBC warrior for the super nice review. VBC warrior wrote, “A must listen to for VBC warriors … for anyone interested in transforming the delivery of healthcare in America. [Every guest] outlines a clear path forward that we only need the courage to start down. I can’t wait each week for the next episode, and I only wish there were more.”

Thank you so much. If you would like to support this show, please do leave us a review. I read them. They make me happy. And they also help other listeners find the show.

Another way to show your support is to sign up for our weekly email. Lots of advantages for doing so. One of them is that you can very efficiently find episodes to refer back to, since in the email you get most of the show introductions transcribed, meaning searchable.

Also, I have a new thought. I’m seeking someone else, besides me, to record something along the lines of what I just said about leaving a review and/or signing up for the email list because, you know, I get tired of hearing my own voice at the ends of episodes.

So, here’s my new thought. If you would like to be the one who gives listeners the down-low on the review thing or the sign-up for the email list thing, or even just a note about how you listen to Relentless Health Value and are part of the tribe, go over to our Web site (relentlesshealthvalue.com) and leave a voicemail message.

You will see the orange button bottom right to do so. Definitely start out with your name and company, though. You know, something like, “This is [insert your name here] from [insert your company here], and [insert something about you and Relentless Health Value here].”

On another note, I’m just ticking off housekeeping. People have asked me what the next conference I’m going to is, and, therefore, I am reporting that I’ll be at the Health RosettaFest in DC in September. I am looking forward to that.

Oh, lastly, lastly, we are hiring for a few roles over at my day job—the day job actually that pays to produce Relentless Health Value. I probably should mention this because it seems that many assume that RHV (Relentless Health Value) is some kind of profit-making endeavor. And I am here to tell you that no, it is not. It is an expensive endeavor, actually, which is funded by my aforementioned day job here at Relentless Health Value corporate headquarters. We haven’t even managed a nonprofit status or a negative-profit operation, which is why it always strikes me as somewhat jarring, I have to say, when people pitch us to come on the show not to talk about fixing healthcare, but they are kinda hell-bent to shamelessly pitch their for-profit entity.

Uh, no? Buy me lunch at least? This is probably TMI. Thanks for listening.

Anyway, I do have a day job that pays the bills. If you are a project manager who is familiar with data, tech, and consulting or a medical copywriter who knows how to reference your work when you make a medical claim, click here for more info.

Also mentioned in this episode are Ge Bai, PhD, CPA; Mark Cuban; Benjamin Jolley, PharmD; Steven Quimby, MD; Myers and Stauffer LC; and Brennan Bilberry.

You can learn more by following Luke on LinkedIn.

Luke Slindee, PharmD, is a second-generation pharmacist with a background in independent pharmacy, chain pharmacy, data analytics, and prescription drug pricing. He currently supports public drug pricing transparency benchmarks and is an advocate for pharmacy reimbursement reform and antitrust enforcement in healthcare.

08:12 Where do cash prices fall when pharmacies have contracts with PBMs?

08:39 What is a usual and customary price?

12:14 How is the usual and customary price affected by PBMs?

16:49 Should pharmacies be allowed to have two sets of cash prices?

17:14 Where does GoodRx fit into this because of the pharmacy/PBM dilemma?

19:06 What’s happening with Amazon and the anticompetitive contract lawsuit, and how does it relate back to pharmacy contracts with PBMs?

20:38 EP395 with Brennan Bilberry.

21:05 EP420 with Ge Bai, PhD, CPA.

23:27 Why is there a new wave of cash-only pharmacies?

24:02 EP418 with Mark Cuban and Ferrin Williams, PharmD, MBA, from Scripta.

25:41 What would allow the generic market to return to normal competitive pricing?

26:39 How does this dysfunction create a negative downstream effect?

You can learn more by following Luke on LinkedIn.

Luke Slindee, PharmD, discusses fixing #genericdrugpricing on our #healthcarepodcast. #healthcare #podcast #digitalhealth #healthcareleadership #healthcaretransformation #healthcareinnovation

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Dr John Lee, Brian Klepper, Elizabeth Mitchell, David Scheinker (Encore! EP363), Dan Mendelson, Dr Benjamin Schwartz, Justin Leader, Dr Scott Conard (Encore! EP391), Jerry Durham (Encore! EP297), Kate Wolin

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In this episode of Relentless Health Value we dive into the concept of Cognitive Dissonance in the healthcare industry with Dr. John Lee, an ER physician and chief medical information officer. We explore how healthcare professionals navigate the conflict between their beliefs and actions, especially in large healthcare organizations. Dr. Lee shares practical advice on celebrating small wins, incremental improvements, and fostering a supportive culture among colleagues.

This conversation sheds light on the challenges and solutions for those striving to deliver better patient care despite systemic obstacles.

To read the full article and show notes with links mentioned as well as a full transcript, click here.

Dr. John Lee is an ER (emergency room) doc by training, who is also an informaticist and chief medical information officer. I can tell you from personal experience that Dr. Lee is one of the most creative and pragmatic problem solvers that I have encountered. He says he’s dedicated to trying to help move the ball forward and changing our healthcare system using information technology and using our ability to be far more transparent with the things that we try to do in a positive way in healthcare.

Join us for an insightful discussion on balancing ideals and realities in modern healthcare.

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For a full transcript of this episode, click here.

“Anyone who isn’t confused really doesn’t understand the situation.” That’s a quote by Edward R. Murrow and very apropos. I started thinking about this conversation that I had had with Brian Klepper, PhD, because so much going on right now—so many discussions and dissections taking place about primary care financial struggles, about what is value in healthcare. And the RUC (Relative Value Scale Update Committee) is, at a minimum, an underlying factor; but yet it doesn’t come up. Almost ever. Merrill Goozner called the RUC the AMA’s (American Medical Association’s) “dark secret,” and I can see why.

Just one procedural note before I roll tape with Brian Klepper. We’re gonna go a little rogue today because you kind of got to understand what the RUC is before I can get into the two points I really want to make about it. So, here’s my outrageous plan, which will shake up our standard Relentless Health Value format.

Today, I’m gonna make the points I want to make after the interview, not before, like usual. I will, however, just mention the two points so you can keep them in mind as I talk with Brian. Here’s the first point, and it’s about the doomed financials of primary care. Why is it that primary care has a lot of times no business model unless part of the business model includes driving profitable downstream utilization? And when I say utilization, do I mean services with bigger RVUs (relative value units)? Why, yes, I think I do. We’ll dig into this later.

Here’s my second point, and it’s my view on the nature of any postulations that the “value of healthcare services” is equivalent to the prices that we pay for said services. Again, more on that later, but here is my original conversation with Brian Klepper.

Brian Klepper is a longtime healthcare analyst and former CEO of the National Business Coalition on Health.

Also mentioned in this episode are Merrill Goozner and Elizabeth Mitchell.

People who have written about primary care: Scott Conard, MD; Paul Buehrens, MD, FAAFP; Larry McNeely; Primary Care Collaborative; Nisha Mehta, MD; Dan Mendelson; Tony Lin, MD; Juliet Breeze, MD; Raymond Tsai, MD; Linda Brady; Guy Culpepper, MD; David Muhlestein, PhD, JD

You can learn more in this article and on the AMA Web site.

Brian Klepper, PhD, is principal of Worksite Health Advisors and a nationally prominent healthcare analyst and commentator. He speaks, writes, and advises extensively on the management of clinical and financial risk, on high-performance healthcare, and on realizing the potential of primary care.

His current focus is on high-performing healthcare organizations that consistently deliver better health outcomes at lower cost than usual approaches in high-value niches and how, integrated with advanced primary care, they can be configured into turnkey comprehensive high-value health plans that can disrupt the status quo.

02:29 What is the RUC?

06:26 Why is primary care not the “easy” specialty?

09:42 What are three low-value things per RUC?

10:33 EP436 with Elizabeth Mitchell.

10:38 What is a root cause of why primary care doesn’t get paid more?

12:50 Why doesn’t value equal money?

You can learn more in this article and on the AMA Web site.

@bklepper1 discusses #TPA and #primaryhealthcare and #mentalhealth on our #healthcarepodcast. #healthcare #podcast #digitalhealth #healthcareleadership #healthcaretransformation #healthcareinnovation

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Elizabeth Mitchell, David Scheinker (Encore! EP363), Dan Mendelson, Dr Benjamin Schwartz, Justin Leader, Dr Scott Conard (Encore! EP391), Jerry Durham (Encore! EP297), Kate Wolin, Dr Kenny Cole, Barbara Wachsman

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For a full transcript of this episode, . The episode today is somewhat of a follow-on to the show with Lauren Vela, which was about employer inertia. If we’re talking about inertia, though, we’d be remiss not to get a little circumspect about the whole affair and subject some other stakeholders to our microscope. One of these stakeholders is EBCs (employee benefit consultants), practice leads, and brokers, which AJ Loiacono talked about in to some extent; so we can check that box at least for now. That leaves TPAs (third-party administrators), ASOs (administrative services onlys), and health plans. And this hotbed of inertia is what I talk about today with Elizabeth Mitchell from PBGH, the Purchaser Business Group on Health. Similar to earlier shows, one disclaimer is that I am using the TPA and ASO terms sort of interchangeably here. Again, TPA is third-party administrator, and ASO is administrative services only, which is generally the term used when an insurance carrier offers services to a plan sponsor, like a self-insured employer. And these services don’t include insurance, because … self-insured. So, the services are administrative only. One point to make clear before we dive in, this conversation is not about these carriers/payers/health plans in general and what they may or may not be doing. This conversation is very specifically focused on how well are those entities helping jumbo employers deploy their health benefits. And first we talk about the role of a TPA or ASO, both in terms of what a jumbo employer might want them to be doing versus what they are often actually doing. Spoiler alert: What they are often actually doing is acting like a full-on health plan and charging as such, even if the health plan part is not what the self-insured employer wants or needs, especially when somebody figures out exactly how much additional is getting charged for those ancillary health plan services. Listen to the show with Justin Leader () for a bead on just a piece of the how much additional that gets baked into the weekly claims wires many self-insured employers get. Bottom line, right now, there’s a gap in the market. What is needed are indie TPAs who are effective and efficient and not owned by a health plan because, if history is any predictor of the future, the second the TPA gets owned by a health plan, the TPA sort of ceases to be a TPA and becomes a health plan—with all the attendant bells and whistles that, a lot of times, an employer can’t opt out of. And also, the whole not sharing data becomes a thing, both cost data and also quality data. Now, just because there’s a gap in the market, does that mean all jumbo employers are paralyzed into inertia? Well, it makes it harder, for sure. But it’s also a reason to start figuring out how to solve for a problem when it has as many zeros at the end of it as this problem has. Have you seen these lawsuits popping up all over the place and just the numbers that are involved? Aramark’s lawsuit against Aetna is just one example. Not to single out just this one, but in the interest of time, let’s talk about this one. Aramark, a big employer, alleged that since 2018, Aetna has taken more than $200 million from it to pay for medical services that should not have been paid out and retains millions of dollars in undisclosed fees. Mark Flores about this one the other day. Also, there was that Cigna lawsuit where an electrician’s union health plan was surprised to learn that the fees charged by Cigna had risen from around $550,000 in 2016 to $2.6 million in 2019. That was from a New York Times . For more on stuff like this, follow Doug Aldeen and/or Chris Deacon on LinkedIn. They’re a great resource. I’d also listen to the “Who’s Suing Who?” episode with Chris Deacon, which was . Because of all of this, the conversation today with Elizabeth Mitchell pretty quickly gets into the shift toward direct contracting between employers and providers to improve access quality and outcomes. If you can’t beat them, get ruthlessly practical is my takeaway. I have to say, I truly admire some of these HR folks and their leadership willing to do what it takes on behalf of protecting the people that work for them. Now, important side note: There are certainly some health plans at least trying here, so I don’t want to imply otherwise. There are some interesting initiatives that are afoot at, I’m gonna say, usually regional health plans. Elizabeth Mitchell has talked about some of these and made this clear also elsewhere. Lastly, if you aren’t familiar with the CAA, which comes up in the episode today, there’s a show () on the Consolidated Appropriations Act, which is what CAA stands for. Elizabeth Mitchell, my guest today, currently serves as the president and CEO of the Purchaser Business Group on Health. PBGH members are really focused on innovating and implementing change. We talk about some of this innovation and implementation on the show today, and it is very inspiring. Stay tuned on this topic, given just the absolute need for TPA services like we discuss in the show that follows, and given the smart, innovative, action-oriented people who are affected—1 plus 1 equals … yeah. Stay tuned. Very, very lastly, I just want to give a shout-out and thanks to Brad Brockbank for posing some great questions, which I pretty much turned around and asked Elizabeth Mitchell in this healthcare podcast. Also mentioned in this episode are ; ; ; ; ; ; ; ; ; ; ; ; ; ; and . You can learn more at and by connecting with Elizabeth on . You can also watch a on success with direct contracting. Elizabeth Mitchell, president and CEO of the Purchaser Business Group on Health (PBGH), supports the implementation of PBGH’s mission of high-quality, affordable, and equitable healthcare. She leads PBGH in mobilizing healthcare purchasers, elevating the role and impact of primary care, and creating functional healthcare markets to support high-quality affordable care, achieving measurable impacts. Elizabeth leverages her extensive experience in working with healthcare purchasers, providers, policymakers, and payers to improve healthcare quality and cost. She previously served as senior vice president for healthcare and community health transformation at Blue Shield of California, during which time she designed Blue Shield’s strategy for transforming practice, payment, and community health. Elizabeth also served as the president and CEO of the Network for Regional Healthcare Improvement (NRHI), a network of regional quality improvement and measurement organizations. She also served as CEO of Maine’s business coalition on health, worked within an integrated delivery system, and was elected to the Maine State Legislature, serving as a state representative and chair of the Health and Human Services Committee. Elizabeth served as vice chairperson of the US Department of Health and Human Services Physician-Focused Payment Model Technical Advisory Committee, board and executive committee member of the National Quality Forum (NQF), member of the National Academy of Medicine’s “Vital Signs” Study Committee on core metrics, and a Guiding Committee member for the Health Care Payment Learning & Action Network. She now serves as a board member of California’s Office of Healthcare Affordability. Elizabeth holds a degree in religion from Reed College and studied social policy at the London School of Economics. 06:48 What is the overarching context for health plans in healthcare purchasing? 09:00 with Olivia Webb. 11:44 Why is it important to reestablish a connection between the people paying for care and people providing care? 14:07 What are the needs of a self-insured employer when managing employee benefits? 19:41 Is it doable for employers to set their own contracts? 22:11 Is transparency presumed? 23:25 Will the new transparency upon us actually expose wasted expense? 27:45 “This is not about individual bad actors. … The systems … that is not aligned.” 29:32 Are there providers who want to work directly with employers? 32:46 Why is it important that incentives need to be aligned? 34:25 Why is the quality of care even more important than transparency? 36:29 with Rik Renard. 38:08 What’s missing from the conversation on changing health plans? You can learn more at and by connecting with Elizabeth on . You can also watch a on success with direct contracting. @lizzymitch2 of @PBGHealth discusses #TPA and #healthplan inertia on our #healthcarepodcast. #healthcare #podcast #digitalhealth #healthcareleadership #healthcaretransformation #healthcareinnovation Recent past interviews: Click a guest’s name for their latest RHV episode! , , , , , , , , ,

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For a full transcript of this episode, click here.

I’m gonna encore this episode with David Scheinker, PhD, for several reasons; but here’s a big one: Why are we as an industry not doing what David Scheinker suggests in this episode?

Why are we not doing, I don’t know, kinds of logical things to reduce admin burden in this country when everyone agrees admin burden is a problem?

But let me back up for a moment for context. Two things happened since this show originally aired. One is that I was invited to a fireside chat by the Advisory Board to talk with Abby Burns, one of the amazing hosts over at Radio Advisory; and we talked about value in the healthcare industry. And if you define value as benefit divided by costs, and you can cut costs—like cut admin burden costs in half—then you have created some really nice communal value, which we talked about at length during that aforementioned fireside chat.

Here’s the other thing that happened since this show originally aired. I read the book by Mike Leavitt, mainly because Steve Schutzer, MD, kept talking about it. The title of the book is Finding Allies, Building Alliances. Maybe I will do a book report about this at some point, but let me share a couple of key quotes just to get the party started here.

Mike Leavitt wrote, “A diverse alliance, well led and well managed, can bring resources to bear on a problem that no organization can match—even the largest of organizations. The synergy of resources—from financial to intellectual—can deal effectively with a wide range of issues confounding organizations today.”

I found that very interesting. Here’s the second quote, which deals with what the top reason is that such diverse alliances may wish to hook up. “[It’s] a common pain: A shared problem that motivates people and groups to work together in ways that could otherwise seem counterintuitive.” Hmm … so, back to administrative burden.

Let’s review the facts that David Scheinker, PhD, shares in the interview that follows. He says any given transaction will cost provider organizations 14% of the total transaction costs to manage to get paid. Yes, it costs 14% of a transaction merely to get paid for the transaction. This is a big reason why both Peter Hayes, in the episode with him (EP424), and also Marshall Allen (EP425) talk about for why cash prices can be a whole lot less than going through insurance prices because you can skip a lot of insurance burden.

Now, on the payer side, add to that 14% an additional 5% to 15% to pay said transaction. That 30% of healthcare is waste stat that keeps getting tossed around. Listen to the show with Will Shrank, MD (EP413) for more on that. But, yeah … here’s 20% to 30% of every transaction that is waste. And we haven’t even gotten into redundant care or inappropriate back surgery yet. Our industry spends up to 30% of our money just trying to get paid and pay.

Here’s a case study for you. You know who has already solved for this whole “it’s really hard to get paid and pay” dilemma? Derivative traders. It used to cost derivative traders $100,000 to do a contract, any given contract. And they worked together and got this down to $5000 by doing some of the stuff that David Scheinker talks about in the show. And, I don’t know, I feel like the healthcare industry could also do this, too, if they wanted to. But there are a whole bunch of reasons why our industry cannot seem to get together and be as ruthlessly practical as derivative traders—or banks, who have figured out how to work together to process credit cards to reduce their own common pain.

Here are but a few of the reasons, potentially, why the healthcare industry doesn’t get together to reduce administrative burden in some of the ways that Dr. Scheinker talks about.

Some organizations actually make a lot of money off of that transactional waste. As but one example—and not to just pick on one, but we don’t have all day—how about some RCM (revenue cycle management) companies who may or may not be owned by the same vertically integrated stacks as the payers themselves? As I have said any number of times, one person’s—or potentially an entire country’s, as the case may be—one party’s waste, is somebody else’s honeypot; and I am not sure if this is any exception.
Legacy technology and data systems and all the sunk costs therein
As Kaye Davis and Katrina Hubbard reminded me about the other day, there are some serious regulations in healthcare due to everybody being a vendor of CMS that adds a layer of regulatory complication to many collaborations. Also, state laws sometimes have an unintended side effect of making it tough to collaborate.

Now, are there any precedents for this type of collaboration in the healthcare industry? Yeah, actually Surescripts, which, don’t forget, was created by an alliance of PBMs (pharmacy benefit managers) who worked together because they all wanted to enable e-prescribing and needed a joint platform to do it.

Look, I could say a lot about this one, but nonetheless, so much of what gets talked about in the show today with Dr. David Scheinker is very, very actionable. Just want to note that since David Scheinker was on the show, he and his team have done some major research over the past few years into ways that contracts can be standardized. If enough of you reach out and say that you’re interested, we, for sure, can have David come back on the show and discuss.

David Scheinker, PhD, is a clinical professor of pediatrics. He’s the executive director of systems design and collaborative research at Stanford Children’s Health. He also founded and directs SURF Stanford Medicine.

And with that, here is your original episode.

Or consider what Dan O’Neill was talking about in episode 359. He was talking about IPAs (independent physician associations) and other managed care entities. As Dan mentions, contracting with some of these IPAs is like an “I love 1990” flashback. The contracting process transpires via mail. Not email, mind you. Mail. Like, stick-a-stamp-on-the-envelope mail.

So, in sum, there’s a lot of pretty well-founded complaining about administrative costs in this country. A lot of this administrative stuff is truly inefficient and a fantastical waste of time. So, here we are freaking out about staffing shortages, overlooking that doctors at the heights of their careers are spending some percentage of their time not counseling, treating, or diagnosing patients but twiddling their thumbs on hold with one insurance company or another slowly burning out by the inefficiency of it all. Or doing pajama time, and we all know that too much pajama time means also burnout on a silver platter.

So then, let’s get granular here. If we’re trying to quantify admin costs, how you do that is to quantify how much each transaction costs. How much does it cost to send a bill and get paid for it? How much does it cost to file an appeal and a denial of a prior auth? Add all those transactions together and you get the full cost of the administrative burden.

In this healthcare podcast, we’re digging into a paper about admin costs written by David Scheinker, PhD (my guest today); Barak Richman, PhD, JD; Arnold Milstein, MD, MPH; and Kevin Schulman, MD, MBA.

I have the pleasure of speaking with David Scheinker, PhD (as I mentioned), who is the lead author on this paper. Just to underline a major takeaway from this conversation with Dr. David Scheinker, he reiterates a recommendation to eliminate a big proportion of administrative costs.

I guess I should say spoiler alert here, but the major takeaway/recommendation is this: Standardize healthcare contracts between payers and providers. Every payer and every provider finds one contract template and uses it. I don’t mean one template per payer or per provider, although that probably would be a revelation in and of itself. But I mean that all payers use one basic provider contract.

A couple of specifics here: The template that I’m referring to (and that Dr. David Scheinker is referring to) consists of parameters. What do I mean when I say parameters? Consider what Airbnb does when you’re looking for a place to stay, as an example. How many bedrooms (that’s a parameter)? How many bathrooms (that’s a parameter)? How many amenities (that’s a parameter)?

After everybody picks their standard set of parameters, at that point, all parties can negotiate and come up with whatever they want for what is the price of an extra bedroom or whatever value you’re gonna assign to that parameter. Go nuts there, but from a data collection and analytic perspective and a getting paid perspective, it is way easier to do it that way—meaning it’s way easier to execute and report when all of the contracts use the same parameters. Also, you can build tech to do a lot of that because you don’t have to write algorithms with exponential variables.

Also mentioned in this episode are Abby Burns; Michael Leavitt; Steve Schutzer, MD; Peter Hayes; Marshall Allen; William Shrank, MD; Kaye Davis, MPH; Katrina Hubbard; Dan O’Neill; Barak Richman, PhD, JD; Arnold Milstein, MD, MPH; and Kevin Schulman, MD, MBA.

You can learn more by connecting with David on LinkedIn and following him on X (Twitter).

David Scheinker, PhD, started his career as a research mathematician and switched to healthcare operations to work on an interdisciplinary team and have a more immediate impact. He is a clinical professor of pediatrics, the executive director of systems design and collaborative research at Stanford Children’s Health, and a member of the Clinical Excellence Research Center (CERC) at Stanford University. He founded and directs SURF Stanford Medicine, which brings together students and faculty from the university with physicians, nurses, and administrators from the hospitals. He studies clinical care delivery, hospital operations, sensor-based and algorithm-enabled telemedicine, the socioeconomic factors that shape healthcare, and healthcare policy.

10:39 What’s the quantitative administrative cost in an average transaction?

11:05 What’s the quantitative administrative cost in a healthcare transaction?

11:58 What does the healthcare billing and administration cost add to the US’s overall healthcare spend?

12:53 Is it possible to cut billing and administrative costs in healthcare?

14:17 “In some ways, the problem for healthcare should be simpler.”

15:30 What does the complexity of the current system look like in a doctor’s office?

18:42 How did David go about studying healthcare administrative costs?

21:34 “It doesn’t have to be simple; it should be standardized.”

24:50 What would be the pushback on standardizing contracts in healthcare?

25:43 Why is it possible to gain more value by losing customization in contracts?

27:20 “Never let a good crisis go to waste.”

27:41 “It’s much easier in healthcare to build something new than to change something that exists.”

30:47 What benefits does telemedicine have to cutting administrative costs?

32:17 What is another significant benefit of using standardized contracts?

33:26 Why haven’t standardized contracts become a common thing in the current healthcare system?

You can learn more by connecting with David on LinkedIn and following him on X (Twitter).

@David_Scheinker of @SURFStanfordMed discusses administrative burden on our #healthcarepodcast. #healthcare #podcast #digitalhealth #healthcareleadership #healthcaretransformation #healthcareinnovation

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Dan Mendelson, Dr Benjamin Schwartz, Justin Leader, Dr Scott Conard (Encore! EP391), Jerry Durham (Encore! EP297), Kate Wolin, Dr Kenny Cole, Barbara Wachsman, Luke Slindee, Julie Selesnick

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For a full transcript of this episode, click here.

This conversation I am having with Dan Mendelson, my guest today, all started with a post that he had written on LinkedIn considering how pharmacy benefits can or should be optimized within the broader context of value-based care. Total cost of care, value-based medical care, and pharmacy benefits—these worlds have to collide. There is just so much intertwined into all of this, which is why I pretty much immediately invited him to come back on the pod to discuss in greater detail.

A few years ago, I heard a doctor say that practicing medicine without considering pharmacy is like getting to the 90 yard line, putting down the ball, and walking off the field. And, yeah … when a patient gets to a certain point in a whole lot of disease progressions, optimal medical therapy includes pharmacy. It’s a thing. Adherence is a thing.

In fact, I saw a stat the other day that patients not taking their meds costs an estimated $3874 PEPY (per employee per year). Also, half of all hospital admits are caused by nonadherence. Those two stats, by the way, are from a post on LinkedIn by Brian Bellware, who was recapping a video from Eric Bricker, MD.

But also, as Barbara Wachsman (EP430) said on the show, half, I think she said, of all ER visits are due to patients not taking their meds right. Olivia Webb (EP337) was on the pod, if you want to go back and listen to that one, talking about how she spends hours every month trying to figure out how to navigate access issues to manage to get her Crohn’s disease drug.

So, yeah … one underlying reason why a lot of this stuff happens is that pharmacy benefits are purchased and siloed a lot of times. In fact, I have yet to see, really, any mainstream contract wherein a PBM (pharmacy benefit manager) is held accountable in any way for downstream medical costs, which may be incurred because of suboptimal pharmacy benefit design, right? And there are so many examples of bad downstream medical impacts.

I really like how Mark Fendrick, MD, put it in episode 308. He said benefits, including pharmacy benefits, are like peanut butter and jelly relative to enabling high-quality care. You gotta have both working in concert, like CMS or a plan sponsor just paid a ton of money to get a patient an organ transplant, and then the patient can’t afford their transplant meds, which aren’t on formulary and are really expensive, and therefore there’s organ rejection. This happens.

Or a patient with uncontrolled diabetes with a huge co-pay for insulin. Doctor says, “Hey, you gotta take your insulin.” Patient says, “Can’t afford it.” Right? This makes no sense, and it’s shockingly common. I’m thinking right now of that young man who died in the Midwest because he could not get his asthma inhaler. It wasn’t on formulary.

So, here’s the game plan. I talk with Dan about the five kind of vital considerations he had brought up in that aforementioned LinkedIn post when considering how pharmacy benefits can or should be optimized within the broader context of value-based care. Dan’s advice for the pharma industry is woven in here as much as his advice for EBCs (employee benefit consultants) and employers.

I am sure that most of our listeners are going to be very familiar with Dan Mendelson, my guest today, and his work; but the quick background here is that he runs Morgan Health. The mission over there at Morgan Health is to drive innovation in employer-sponsored healthcare, and they do that by investing and working with their portfolio companies in the context of the 300,000 or so employees over at JPMorgan Chase. At the same time, Morgan Health also engages in policy discussions because, as Dan says, no one employer is going to control public policy.

As a footnote here, I just will say that I actively seek out opportunities to listen to Dan Mendelson’s thoughts. He has spoken a lot and really eloquently and with great insight about setting up the economic models for healthcare, not sick care. Recently, actually, he was on a panel at the Milken conference along with Natalie Davis; Yele Aluko, MD, MBA; and Henry Ting, MD. There are definitely insights to be gleaned.

Also mentioned in this episode are Brian Bellware, CIC, CHVP; Eric Bricker, MD; Barbara Wachsman; Olivia Webb; Mark Fendrick, MD; Natalie Davis; Yele Aluko, MD, MBA, FACC, FSCAI; Henry Ting, MD; Ashok Subramanian; Rik Renard; Nina Lathia, RPh, MSc, PhD; Don Berwick, MD; Kenny Cole, MD; Steve Pearson, MD, MSc; Sarah Emond; Alex Sommers, MD, ABEM, DipABLM; and Jodilyn Owen.

You can learn more at the Morgan Health Web site and follow Dan on LinkedIn.

Dan Mendelson is the chief executive officer of Morgan Health at JPMorgan Chase & Co. He oversees a business unit at JPMorgan Chase focused on accelerating the delivery of new care models that improve the quality, equity, and affordability of employer-sponsored healthcare.

Mendelson was previously founder and CEO of Avalere Health, a healthcare advisory company based in Washington, DC. He also served as operating partner at Welsh Carson, a private equity firm.

Before founding Avalere, Mendelson served as associate director for health at the Office of Management and Budget in the Clinton White House.

Mendelson currently serves on the boards of Vera Whole Health and Champions Oncology (CSBR). He is also an adjunct professor at the Georgetown University McDonough School of Business. He previously served on the boards of Coventry Healthcare, HMS Holdings, Pharmerica, Partners in Primary Care, Centrexion, and Audacious Inquiry.

Mendelson holds a Bachelor of Arts degree from Oberlin College and a Master of Public Policy (MPP) from the Kennedy School of Government at Harvard University.

04:50 How do we connect the dots between value-based care and pharmacy benefits?

07:43 Where do things need to go for employers in terms of drug spend integration?

08:42 How do we think about having a value-based component in the decision-making process?

09:44 How do we enable the necessary information to make proper decisions?

10:56 EP206 with Ashok Subramanian.

11:21 “Many payviders just haven’t gotten to pharmacy yet; they need to.”

14:14 Why do pharmaceutical companies need to be prepared to contract on the basis of value?

16:46 EP426 with Nina Lathia, RPh, MSc, PhD.

17:36 EP431 with Kenny Cole, MD.

18:07 Why is it important to “let the market work”?

21:04 Why do we have cost sharing, and when does it not make sense to have that as a co-pay?

23:59 Why are evidence requirements good for everyone?

28:45 Why is pooling of risk important?

29:49 How do you pool risk without going to an insurance company?

32:03 What is Dan’s advice to hospitals?

33:30 “In a value-based world, buy and bill does not make sense.”

33:36 What is Dan’s advice to primary care doctors?

33:54 What is Dan’s advice to entrepreneurs and innovators?

You can learn more at the Morgan Health Web site and follow Dan on LinkedIn.

@dnmendelson discusses #pharmacybenefits on our #healthcarepodcast. #healthcare #podcast #digitalhealth #healthcareleadership #healthcaretransformation #healthcareinnovation

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Dr Benjamin Schwartz, Justin Leader, Dr Scott Conard (Encore! EP391), Jerry Durham (Encore! EP297), Kate Wolin, Dr Kenny Cole, Barbara Wachsman, Luke Slindee, Julie Selesnick, Rik Renard

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For a full transcript of this episode, click here.

I’ve been in a couple of meetings lately. In one case, a healthcare company came up with a strategy and deployed it; and the strategy didn’t go as planned. The other one, it did go as planned—it worked great. Of course, I’m coming in on the back end like a Monday morning quarterback here; but the plan that failed, I have to say, I wasn’t surprised. Had they asked me ahead of time, I would have told them to save their money because the plan was never gonna work, even though the strategy looked like kind of a straight line from here to there.

Nor was I shocked by the success of the other plan, even though this one that triumphed had what looked like five extra steps and was slightly counterintuitive if you looked at it cold, without understanding the way the healthcare industry actually works.

Here’s my point: It might feel like the healthcare industry is chaos monkey central and impossible to predict actions and reactions—and, for sure, there’s always unknowns and intersecting variables—but it’s not a complete black box. The trick is, as you know and I know, you gotta understand what other stakeholders are up to. You gotta get a bead on what they’re doing and what their incentives are because then you can better predict actions and potentially reactions.

So, let me state the obvious (that’s why listeners tune in to this show as I just said, and it’s what we aim to shine a light on here at Relentless Health Value): the pushes and the pulls and the forces. What’s going on outside of the organizations or the silos that we work within day-to-day. Because if you’re looking to sell to, partner with, not be obstructed by [insert some stakeholder here], then it’s very vital to be keyed in on what they’re doing or what their customers are doing or what their customers’ vendors are doing. This show should feel like it gives you a measure of control (or at least that’s my hope) or a method to find the measure of control. And I hope you succeed. That’s why I continue to put out these shows. The RHV tribe members want the same thing I want—to fix the healthcare industry for patients and for members—so, thanks for being here and for making actionable the insights that you might find here.

I have been so looking forward to doing a show with Ben Schwartz, MD, MBA, orthopedic surgeon and prolific writer of deeply thoughtful and insightful posts on LinkedIn. In this healthcare podcast, we are talking about bundled payments. And today’s your lucky day if you think you know a lot about bundles, because most people who listen to this show at least know enough to be dangerous. So, that’s our starting point, which is why I asked Dr. Schwartz to talk to me about what most people find surprising about bundles and bundled payments. There are four surprises that we go through in the show today. Listen to the show or read the transcript to find out exactly what they are. So, no spoiler alert alert.

But relative to these surprises, we get into the four types of bundles that may or may not be available. And those four types of bundles are:

CMS bundles such as the BPCI (Bundled Payments for Care Improvement) and the CJR (Comprehensive Care for Joint Replacement) bundles, and we talk about the current state of said BPCI bundles, which are being sunsetted probably because so many efficient clinical teams are being penalized for getting too efficient. They become victims of their own success the way the program is currently designed, wherein the goalposts keep shifting.
Commercial bundles—ie, a bundle that is offered by a commercial carrier such as a BUCA (ie, Blue Cross Blue Shield/UnitedHealthcare/Cigna/Aetna/Anthem) carrier
Direct bundle—a bundle that is paid for directly by a plan sponsor such as a self-insured employer
Condition- or diagnosis-specific bundle. These types of bundles do not spiral around a surgical intervention at their core, which most of the current bundles do. This may describe CMS’s recently announced “Making Care Primary” initiative, but we’ll have to see about that.

Speaking about the #3 kind of bundle, the employer-direct bundles, especially for musculoskeletal (MSK), let me share a post by Moby Parsons, MD, that I thought captured the entrepreneurial spirit of some of these orthopedic surgeons who are seeking employers to direct contract with and cut out the middleman, etc (which, by the way, is the main topic of an entire show upcoming with Elizabeth Mitchell from the Purchaser Business Group on Health). But Dr. Parsons wrote:

“When our bundle business has sufficient growth to ensure the absolute sustainability of our practice against declining reimbursements … in a fee-for-service system, I am getting this tattoo. Don’t tell my wife. [And the tattoo is ‘Free Yourself.’]”

My guest today, aforementioned, is Dr. Ben Schwartz. He’s an orthopedic surgeon in the Boston area still in full-time clinical practice. He’s grown very interested in healthcare innovation, healthcare technology, and does some advising and investing. Dr. Schwartz also writes a great Substack called Dem Dry Bones.

After you listen to this show, please go back and listen to the one with Steve Schutzer, MD (EP294) talking about how to create a Center of Excellence and also the one with Rob Andrews (EP415) about how and why if you are a plan sponsor you might want to consider direct contracting with quantifiably amazing provider groups.

Also, if you are an ortho or involved in MSK care, I might suggest following Karen Simonton on LinkedIn, as well as Moby Parsons, MD, and, for sure, of course, my guest today, Dr. Ben Schwartz.

Also mentioned in this episode are Moby Parsons, MD; Elizabeth Mitchell; Steve Schutzer, MD; Robert Andrews; Karen Simonton; Peter Hayes; Al Lewis; and Cora Opsahl.

You can follow Dr. Schwartz on LinkedIn and read his blog on Substack.

Benjamin J. Schwartz, MD, MBA, is a fellowship-trained orthopedic surgeon with over 15 years of experience. He has served numerous healthcare leadership roles on both a local and national level with a focus on developing and implementing evidence-based, high-quality musculoskeletal care delivery pathways. Dr. Schwartz is vice chair of the Practice Management Committee for the American Association of Hip and Knee Surgeons and helps advance knowledge of musculoskeletal conditions as a member of the Hip and Knee Content Committee for the American Academy of Orthopaedic Surgeons and editorial board member/elite reviewer for The Journal of Arthroplasty.

Dr. Schwartz has extensive experience in value-based care, having personally achieved over $400,000 in savings during his first year in the CMS BPCI-A program. He has received awards for clinical care and professionalism and was named a Castle Connolly Top Doctor in 2022 and 2023.

In addition to his clinical work, Dr. Schwartz maintains a strong presence in healthcare technology and innovation as advisor and investor to early-stage digital health companies. He is frequently sought after by clinicians, founders, and venture capitalists for his ability to bridge the gap between real-world medicine and start-ups/entrepreneurship.

Dr. Schwartz’s passion is thoughtful implementation of technology and innovation to improve healthcare quality, accessibility, costs, and outcomes.

06:07 Where are we in the development of the bundled payments space?

08:09 What are the four types of bundled payments?

09:52 How can bundled payments create perverse incentives?

11:04 What are the positives in bundled payments, and how can they help push us toward value-based care?

13:02 What is surprising about bundled payments?

18:50 EP415 with Rob Andrews.

27:03 How do Centers of Excellence connect back to bundled payments?

29:00 EP346 with Peter Hayes.

30:29 EP294 with Steve Schutzer, MD.

33:38 EP331 with Al Lewis.

33:43 EP372 and EP373 with Cora Opsahl.

37:13 What does Dr. Schwartz think the future is for bundled payments?

You can follow Dr. Schwartz on LinkedIn and read his blog on Substack.

@BenSchwartz_MD discusses #bundledpayments on our #healthcarepodcast. #healthcare #podcast #digitalhealth #healthcareleadership #healthcaretransformation #healthcareinnovation

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Justin Leader, Dr Scott Conard (Encore! EP391), Jerry Durham (Encore! EP297), Kate Wolin, Dr Kenny Cole, Barbara Wachsman, Luke Slindee, Julie Selesnick, Rik Renard, AJ Loiacono (Encore! EP379)

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For a full transcript of this episode, click here.

On the show today, I am going to use the term TPA (third-party administrator) and ASO (administrative services only) vendor kind of interchangeably here. But these are the entities that a plan sponsor—for example, a self-insured employer is a plan sponsor—but these plan sponsors will use to administer their plan. And one of the things that TPAs and ASOs administer is this so-called weekly claims wire.

Every week, self-funded employers get a weekly claims run charge so they can pay expenses related to their plan in weekly increments. The claims run usually comes with a register or an invoice. This invoice might be just kind of a total (“Hey, plan. Pay this amount.”). Or there might be a breakdown like, “Here’s your medical claims, and here’s your pharmacy claims.” Maybe there’s another level down from that of detail if the plan or their advisor is sophisticated enough and/or concerned enough about the fiduciary risk to dig in hard about what the charges are actually for.

I was talking about this topic earlier with Dana Erdfarb, who happens to be executive director of HR at a large financial services organization. Dana I’m definitely gonna credit for inspiring this conversation that I’m having today with Justin Leader. Dana was the first one to really bring to my attention just the level of hidden fees that are buried (many times) in these claims wires … because when I say buried in the claims wire, I mean not charged for via an administrative invoice. These hidden fees are also not called out in the ASO finance exhibit in the contract, by the way. So, yeah … hidden.

I don’t know … if you have to hide your charges, in my mind that’s a pretty big tell that your charges are worth hiding. Now the one thing I will point out is that just because the charges are worth hiding doesn’t necessarily mean that the services those charges are for are unwarranted. Some of these services are actually pretty worthwhile to do. There’s just a really big difference from a plan sponsor knowingly contracting at a known rate with a third party to do something versus paying for a service knowingly or unknowingly via fees hidden in a claims wire wherein the amount paid is not in the control of the one paying the bill.

Anyway, I was talking about all of this earlier, as I mentioned, with Dana Erdfarb. That conversation was exactly the framework that I needed to snag Justin Leader, my guest today, to come on the pod and really dig into the detail level of what’s going on with this claims wire. So, in this healthcare podcast, we’re gonna talk about the five fees that tend to be tucked in to many claims wires. We also talk about one bonus—not sure if it’s a fee—one bonus way that plan sponsors give money to vendors in ways the plan sponsor might be unaware of. Here are the five hidden fees that we talk about at length in the show today, and then I’ll cover the bonus:

Shared Savings Fees. This is where a member of a plan goes out of network, and the TPA/ASO goes and negotiates a discount from the out-of-network provider and then shares the savings. Get it? Shared savings? This category also might include BlueCard Access fees, which we talk about in the show. But there also could be overpayment recoupment fees lumped in here. This is where the TPA messes up, overpays, and then charges the plan sponsor a percentage of the money they just got back when they corrected their own mistake. I’m just gonna pause here while everyone contemplates how we’ve all gone so wrong in life to not have figured out a way to charge others when we correct our own mistakes. Here’s a link to a great LinkedIn post by Chris Deacon and a deep dive article on this topic.
Prior Auth Fees. Lots to unpack with this one, which Justin does in the pod.
Prepayment Integrity Fees. This is evaluation of the claim before it’s being paid. Listen to the show for how this may (or may not) differ from what the TPA/ASO is supposed to be doing (ie, it’s the TPA that’s supposed to be [yeah, right] adjudicating and paying claims).
Pay and Chase Fees. This is where a bill was paid wrong, and it’s not immediately the TPA/ASO’s mistake. This is where something like a provider double billed or overcharged or something, and the TPA/ASO later figures this out and then chases the pay to get the money back.
TPA Claims Review Fees. Sort of self-explanatory but also not. Again, please listen to the show for more.

When I’d been talking about all of this with Dana Erdfarb, as I mentioned earlier, just about this whole thing, she said something that Justin Leader echoes today: Many of these fees are structured as a percentage of savings. This is challenging for a plan sponsor because the savings is vendor reported and not validated. But it also means that if the savings increase annually with trend (as they, generally speaking, do), then the fees will increase with that trend as well—and that is something to keep in mind.

Okay … so, here’s the bonus thing that didn’t get a number in the show today, but it is certainly a way that plan sponsors pay money to vendors. And this is medical claims spread pricing. This is buried in the claims wire and inside the dollar amounts the plan sponsor thinks they are paying a provider for a service. It turns out that it can turn out that the amount the plan sponsor is paying is more than the check that’s being written to the provider for the service being delivered. Or the amount the plan sponsor is paying the provider for a service is more than for simply that service that has been rendered, right? The plan sponsor is paying the provider for other stuff as well, as is alleged in the DOL v BCBS of Minnesota lawsuit, which Justin brings up in the show today.

It drives me nuts, honestly, when there are people who tout their transparency. But then it turns out if the equation is A plus B equals C, only like one of the numbers is transparent. Sorry, functionally, that doesn’t count as transparency except in marketing copy.

This is all to say—and here’s Dana Erdfarb’s actionable advice which sums up points Justin also made—when employers review their medical plan vendor contracts, they should make sure to identify, review, and document all fees being paid to their vendors and incorporate this knowledge into their renewal/RFP (request for proposal) discussions and negotiations.

Jeff Hogan echoed this advice on LinkedIn the other day when he commented on this show: “Such a great opportunity for employers to have their administrative services agreements and other documents examined to discover these schemes. It’s not hard to do. Also, a great advertisement for the value of having retrospective audits performed. It is eye opening to see not only the amount of arbitrage but often how payers don’t even pay according to their contracts. Justin Leader is the perfect guest.”

As mentioned a myriad of times already, my guest today is Justin Leader, who is president and CEO of BenefitsDNA. Justin works with plan sponsors, both commercial plans as well as Taft-Hartley plans, across the United States.

Before we kick into the show today, I just want to thank By the 49ers for the really nice review on iTunes. By the 49ers calls Relentless Health Value a “leading voice in healthcare” and says he or she always leaves “with intrigue, a new idea or a new approach to problem solving.” Really appreciate that. That is certainly one of our goals around here. So, thank you so much.

Oh, also, please subscribe to the weekly email that goes out. You can do that by going over to our Web site and signing up. There are a lot of advantages to doing so, which I’ve talked about before, so I’m not gonna do so again; but it is a great way to make sure that if you’re a member of the Relentless Health Value Tribe, you are aware of the current goings-on.

Also mentioned in this episode are Dana Erdfarb, Chris Deacon, Jeffrey Hogan, BenefitsDNA, Rik Renard, Cora Opsahl, Al Lewis, Julie Selesnick, Mark Davenport, Karen Handorf, Dawn Cornelis, AJ Loiacono, and Mike Miele.

You can learn more at benefitsdna.com or wefixyourhealthcare.com.

You can also follow Justin on LinkedIn.

Justin Leader began his career in the pharmaceutical and financial services industries. By 2011, Justin entered into the group benefits field consulting for many notable Fortune 500 clients.

In 2014, he established BenefitsDNA, an objective, independent health and welfare benefit plan consulting firm providing compliance oversight, actuarial services, cost mitigation, and traditional broker services to Group Health Plan Sponsors. As a Certified Health Rosetta Chartered Advisor (eighth advisor to join), he’s acknowledged for contributing to healthcare solutions in the United States both in policy as well as practice and is an avid supporter of Patient Rights Advocate.

Throughout his career, Justin has been instrumental in introducing successful healthcare benefit solutions to the market, which have been pivotal in solving critical issues and saving millions for employers and their employees.

As a mission-driven leader, he and his team are passionate about fixing healthcare one client, one member, and one partnership at a time. Having trademarked We Fix Your Healthcare™, their mission is one that his team takes seriously.

Justin, a native of Bedford, Pennsylvania, holds a pre-medicine degree and a master’s degree in exercise science from California University of Pennsylvania. His dedication extends to servant leadership, volunteering in the local community including serving on the PA State Council of SHRM (Society for Human Resource Management) since 2016. Justin is a public speaker and owner of Leaders Never Quit, where he dedicates his time to inspiring others with a message of hope, humor, and resilience.

07:55 How is the claims wire typically explained to a plan sponsor?

11:18 What is the whole point of self-funding?

11:27 Why is it so vital to understand what you’re paying for?

12:38 What are the five “buried” items that wind up in these claims wires?

13:03 What is a shared savings fee?

17:10 “Rates are important, but so are your rights.”

21:01 What’s going on with prior auth fees?

23:35 What is prepayment integrity?

28:16 What is pay and chase?

31:54 What is a TPA claim review?

35:47 Is there medical claim spread pricing?

You can learn more at benefitsdna.com or wefixyourhealthcare.com.

You can also follow Justin on LinkedIn.

@JustinDLeader discusses #plansponsor #payments on our #healthcarepodcast. #healthcare #podcast #digitalhealth #healthcareleadership #healthcaretransformation #healthcareinnovation

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Dr Scott Conard (Encore! EP391), Jerry Durham (Encore! EP297), Kate Wolin, Dr Kenny Cole, Barbara Wachsman, Luke Slindee, Julie Selesnick, Rik Renard, AJ Loiacono (Encore! EP379), Nina Lathia

View Details

For a full transcript of this episode, click here.

Here’s a great musing that I read on LinkedIn:

How will alternative primary care models fare when growth mode gets balanced with profitability and VC-supported burn rate is transformed to Big Retail bottom-line expectations? Mission v. margin.

I’m gonna add to this: How will alternative primary care models, or even just doing good primary care, fare when it encounters the current system rife with perverse incentives of all kinds, including, yeah, for sure, Big Retail bottom-line expectations but also Big Health System and Big Payer bottom-line expectations and current business models?

This show from last year was wildly popular—maybe one of our most popular shows—and relisten to it in the current context of what’s going on right now in the primary care and MSO (Managed Services Only) space. Coming up, I’m gonna probably do a whole show on this if I can get my act together; but this encore is really relevant right now.

One piece of podcast business before we get into the episode: Please sign up for our weekly email if you haven’t already, especially if you consider yourself part of the Relentless Health Tribe. I am mentioning this not only because it’s a great way to keep track of our shows because you can do an email search to remember where you heard something, since a good deal of the show intros are in the emails, but also, there’s a plan afoot to hold some Zoom meetings to talk about different topics etc—and you won’t be notified of such goings-on unless you’re subscribed. You can unsubscribe whenever you want, by the way; and I am way too busy to send more than one email a week or spam if that was a concern.

On Relentless Health Value, I don’t often get into our guests’ personal histories. There are a bunch of reasons for this, which, if you buy me beer, we can talk podcast philosophy and I will tell you all about my personal, very arguable opinion here.

Nevertheless, in this healthcare podcast, we are going rogue; and I am talking with Scott Conard, MD, who shares his personal story. You may ask why I decided to go this route for this particular episode, and I will tell you point-blank that Dr. Conard’s experience, his narrative, is like the perfect analogue (Is analogue the right word [allegory, composite example]?). His story just sums up in a nutshell what happens when a PCP (primary care provider) does the right thing, manages to improve patient care for real, and then at some point gets sucked into the intrigue and gambits and maneuvering that is, sadly, the business of healthcare in the United States today.

Before we kick in, I just want to highlight a statement that Scott Conard makes toward the end of the show. He says:

So, this isn’t about punishing or blaming aspects of care that are being overrewarded today. It’s really about what’s the path forward for corporations, for middle-class Americans, and for primary care doctors who don’t choose to be part of a big system.

We have to figure out how to solve this problem. I hope people don’t hear this and think that there are horrible people at some not-for-profit hospital systems, for example. There are some great people at not-for-profit health systems, but they have some really screwed-up incentives.

A few notable notes from Dr. Scott Conard’s journey and words of wisdom that I will just highlight up front here:

Another point that Dr. Conard makes very crisply toward the end of the show is that doctors can kinda get pushed and pulled around in this mix. You have docs just trying to provide good care, and they work for one entity that gets bought and now it’s some other entity … and what’s happening upstairs and the prices being charged or somebody somewhere deciding not to make prices transparent, or deciding to sue low-income patients for unpaid medical bills or what charity care to offer or not to offer. These are not doctors in clinics making these calls, and we need to be careful here not to homogenize what some of these health systems are choosing to do like some kind of democratic vote was taken by everybody who works there. Health systems, hospitals, are many-celled complex entities.

And a third takeaway—there are a bunch of takeaways in this show, but a third one I’ll highlight here from Dr. Conard’s story—is the old fiduciary responsibility code word being used by health system administrators as a euphemism for strategies that might need a euphemistic code word because the strategy has questionable community benefit.

In the case study that we talk about today, the local health system managed to raise healthcare spend in North Texas by $100 million year over year. Employers and employees in North Texas communities wound up paying $100 million more year over year in healthcare one particular year.

This was prices going up. It also was removing a big systemic initiative to keep heads out of hospital beds. Reiterating here, we are not talking about doctors here particularly because, of course, the vast majority of doctors are trying to prevent avoidable hospitalizations. But suddenly in North Texas, physicians did not have the population health efforts and the team really standing behind them helping to prevent avoidable hospitalizations.

That sucks for everybody trying to do the right thing, and, as has been said, burnout is moral injury in a cheap Halloween costume. Moral injury happens when you have good people, clinicians, doctors, and others who realize that what is going on, at best, is not helping the patient.

Also mentioned in this episode are Benjamin Schwartz, MD, MBA; David Muhlestein, PhD, JD; Brian Klepper, PhD; Al Lewis; Robert Pearl, MD; Karen Root, MBA, CCXP; and Wendell Potter.

You can learn more by emailing Dr. Conard at scott.conard@converginghealth.com.

Scott Conard, MD, DABFP, FAAFM, is board certified in family and integrative medicine and has been seeing patients for more than 35 years. He was an associate clinical professor at the University of Texas Health Science Center at Dallas for 21 years. He has been the principal investigator in more than 60 clinical trials, written many articles, and published five books on health, well-being, leadership, and empowerment.

Starting as a solo practitioner, he grew his medical practice to more than 510 clinicians over the next 20 years. In its final form, the practice was a value-based integrated delivery network that reduced the cost of care dramatically through prevention and proactive engagement. When this was acquired by a hospital system, he became the chief medical officer for a brokerage/consulting firm and an innovation lab for effective health risk–reducing interventions.

Today, he is co-founder of Converging Health, LLC, a technology-empowered consulting and services company working with at-risk entities like self-insured corporations, medical groups and accountable care organizations taking financial risk, and insurance captives to improve well-being, reduce costs, and improve the members’ experience.

Through Dr. Conard’s work with a variety of organizations and companies, he understands that every organization has a unique culture and needs. It is his ability to find opportunities and customize solutions that delivers success through improved health and lower costs for his clients.

06:54 What triggered Scott’s career journey?

07:31 What caused Scott to rethink what is good primary care?

08:11 Why did Scott realize that he is actually a risk-management expert as a primary care doctor rather than someone who treats symptoms?

09:25 EP335 with Brian Klepper, PhD.

09:53 How did Scott’s practice change after this realization?

10:04 What is a “Whole-Person Risk Score”?

11:08 Scott’s book, The Seven Numbers (That Will Save Your Life).

13:05 “You start to move from a transactional model to a relationship model.”

15:31 Did Scott have any risk-based contracts?

16:08 Why is it so important to look at total cost of care and not just primary care cost?

21:08 Scott’s book, The Art of Medical Leadership.

22:13 EP381 with Karen Root.

30:43 Why did Scott move over to help corporations?

33:10 EP364 with David Muhlestein, PhD, JD.

33:51 “Everybody thought they were honoring their fiduciary responsibility, and the incentives are completely misaligned.”

34:31 EP384 with Wendell Potter.

34:43 “It’s the system that’s broken; it’s not bad people.”

You can learn more by emailing Dr. Conard at scott.conard@converginghealth.com.

@ScottConardMD discusses #primarycare #marginvsmission on our #healthcarepodcast. #healthcare #podcast #digitalhealth #healthcareleadership #healthcaretransformation #healthcareinnovation

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Jerry Durham, Kate Wolin, Dr Kenny Cole, Barbara Wachsman, Luke Slindee, Julie Selesnick, Rik Renard, AJ Loiacono (Encore! EP379), Nina Lathia, Marshall Allen

View Details

For a full transcript of this episode, click here.

This show has implications for provider organizations of all stripes, especially those looking to succeed in value-based care or those who need patient trust and relationships for any other reason, including just patient volume.

This episode also is for provider organizations who are trying to prevent clinician burnout better.

It’s also for practices trying to get themselves into narrow networks where patient satisfaction is surveyed at some point in the process, and this includes Centers of Excellence networks.

You know what the rate critical is that I talk about on the show today with Jerry Durham that rarely, if ever, gets talked about in any of these contexts? It’s not some fancy data artificial intelligence thing or something else the doctor needs to be clicking on or nurses need to step up and handle. Nope. I’m talking about the front desk. What an overlooked secret to success or a clinician and clinical failure point!

Consider that what goes on on or about the front desk is either gonna set up the doctor or other provider for success or make it really really hard for them.

This is what I talk about today with Jerry Durham in this encore episode from a couple of years ago that is still so incredibly relevant because the insights that Jerry shares are so often overlooked and they impact both patients but also doctors and other clinicians in ways we don’t often think about but, in this era of staff shortages and burnout, I’d suggest maybe we should.

Here’s something I never really understood: how physicians and nurses more often than not get to be responsible for the entire patient journey, including, start to finish, patient satisfaction. But if you just take one look at any random poorly rated physician’s reviews, they’re usually littered with complaints about the front desk in the practice. Negative reviews, of course, are not limited to front desk diatribes; but there’s often a lot of front desk commentary in them.

It has always seemed to me to be a common and strange phenomenon in healthcare provider practices where the front desk is like a totally separate little fiefdom with a different mission statement and goals from the healthcare providers in the same exact office. Isn’t that odd when you think about it? I mean, first, the front desk is literally physically separated from everybody else. No matter which direction you approach from, there’s at a minimum a half-wall barrier surrounding them. Sometimes, in directions most likely to receive an attack, I suppose, there’s been added a big glass barrier.

Liliana Petrova pointed this out in episode 236 of the Relentless Health Value podcast, and it was really the first time that I had thought about it at all and also thought about the implicit message this sends not only to patients but also to clinicians. That whole physicality of the setup, it just screams, “We over here have nothing to do with the mission or vision of anyone else in this place. We have our own thing going on over here, and to do it, we need to be protected from you all and all of your chicanery and untoward goings-on, you doctors and nurses and patients!”

So, I was really inspired the first time I heard Jerry Durham from The Client Experience Company talking. His message, as I understood it, was that a practice really on board with helping patients achieve the best patient outcomes and, nothing for nothing, erode clinician burnout includes the front desk in their thinking. Jerry has said that there’s four phases in the patient life cycle, as he calls it, which is sort of a synonym for the patient journey:

Marketing
The moment that a patient/person engages with the clinic or office
Provider interactions
The post course of care

So, all of these phases—all four of them—are critical to both patient outcomes and experience but also, really, to business success. So, you kind of almost have to do well by doing good. The front desk is mostly responsible for that phase two: what happens when that person/patient engages with your office or clinic.

In this healthcare podcast, as mentioned, I’m talking with Jerry Durham. He’s a former physical therapist and practice owner who has worked with a whole lot of PT (physical therapy) practices and also other MSK (musculoskeletal) specialties among other clients. His message transcends the specialty, however.

In this healthcare podcast, we get into a lot of aspects in terms of how a front desk can work for or against patient experience and outcomes. One of them is how a front desk can help secure a patient’s relationship with a practice. Without a relationship and trust, patient outcomes are meh at best. But a lack of trust is a big hairy factor behind disparities in outcomes among different ethnic groups, for example, as one point to ponder.

Also mentioned in this episode are Liliana Petrova and Julie Rish, PhD.

You can learn more at clientexperiencecompany.com or by emailing Jerry at jerry@jerrydurhampt.com.

Jerry Durham is a healthcare consultant and physiotherapist with a singular passion for leveraging the entire healthcare practice team toward improved patient outcomes while increasing the practice bottom line. Jerry has 30+ years’ experience as a physiotherapist, including 20+ years of business ownership, including practice ownership, business consulting, and a virtual front desk sales solutions for healthcare practices. Jerry has spent a lot of time on the front line of physio practices answering calls and learning why patients think and act the way they do when interacting with the front desk team. He has learned how to leverage the information at first contact carried all the way through to a completed plan of care, and these are the systems that lead to greater patient outcomes and greater practice success. Jerry defines these systems as “the rules of client engagement.”

05:49 What is the patient life cycle?

06:48 What are the milestones of the patient life cycle? When does it start?

10:05 “This isn’t a business solution; this is a patient-driven solution.”

10:21 “What is best for the patient is best for business.”

13:25 “The takeaway there is that your team members are all driving toward the same goal.”

14:34 How does the front desk impact health outcomes?

16:41 What is the objective of a front desk to reduce provider burden?

20:03 EP236 with Liliana Petrova.

21:18 “There’s actually three roles at the front desk.”

30:37 EP228 with Julie Rish, PhD.

You can learn more at clientexperiencecompany.com or by emailing Jerry at jerry@jerrydurhampt.com.

@Jerry_DurhamPT discusses #patientengagement and #clinicianteam success on our #healthcarepodcast. #healthcare #podcast #digitalhealth #healthcareleadership #healthcaretransformation #healthcareinnovation

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Kate Wolin, Dr Kenny Cole, Barbara Wachsman, Luke Slindee, Julie Selesnick, Rik Renard, AJ Loiacono (Encore! EP379), Nina Lathia, Marshall Allen, Stacey Richter (INBW39)

View Details

For a full transcript of this episode, click here.

First of all, I just want to start out this pod and really thank everyone listening and for showing up for a show like this one. You do it and you are here because you care about patients/members.

It’s just so easy to feel like we’ll never be able to do enough, and that’s a rough, rough feeling. Please take a moment to truly hear how grateful I am for you being here and for doing all that you do and that you try to do.

I saw on the interwebs the other day a Marcus Aurelius quote. What he said was, “Be satisfied with even the smallest progress.” And I think this is really important to remember because nobody working in the healthcare industry, especially today, is ever probably gonna get anything close to a perfect solution. So instead, just aim for progress—even the smallest amount—and feel good about that, please.

This show is an important one for anybody either in the business of healthcare delivery or buying healthcare delivery services. It’s an exploration of what works and what doesn’t work and how what works can easily become what doesn’t work in the face of the real world.

This peril of cutting clinical “waste” perilousness all starts with the whole “Hey, let’s make some money, so we gotta scale and be efficient. We gotta do our thing at as low as possible a cost and maybe grow as fast as possible. We gotta keep our investors happy or pay off the debt we got saddled with or pay that giant management fee we’re being charged or compensate the C-suite at the level they’ve grown accustomed to.” So again, the “let’s be efficient and get everything repeatable” has entered the building.

The first point my guest today, Kate Wolin, ScD, makes about all of this—and this is exactly the same point that Rik Renard made in episode 427—efficient to what endgame? Now, it turns out, surveys show, only a small, small percentage of healthcare delivery solution providers are measuring outcomes of pretty much any kind.

So, how do we even know if cutting so-called waste is actually waste at all? I mean, in the absence of any actual measures—here’s a hypothetical for you—someone could look around: “Hey, I see these nurses. They’re all just sitting around chatting with patients and, I don’t know, talking about throw rugs? What is this? An episode of HGTV? Who cares if a patient with diabetic neuropathy has throw rugs in their hallway? Let’s tell these nurses chop-chop, get them on the computer using AI to be efficient, right? Let’s get rid of that clinical waste.”

I just made a point in the most sarcastic way possible, but the bottom line is this: It’s actually really efficient to not engage patients in these ways, right? Patients, they talk slow, they ask questions that seem irrelevant, and they’re time-consuming. It’s very efficient to not build relationships or foster trust or, I don’t know, assess fall risks … but whatever is going on is also going to fail in that model—from a patient outcome standpoint at least.

Here’s a quote from Sergei Polevikov, with some light edits. He wrote on LinkedIn: Primary care is not scalable in the same way as Scrub Daddy or Bombas Socks. That’s something not taught in MBA and CFA programs. Someone should have told Walgreens, CVS, Amazon, and Walmart.

They also probably should tell a whole bunch of point solutions and payers. Also, some health system execs or pharmacy leaders might also want to get that memo.

What I really liked about the conversation with Kate Wolin in this healthcare podcast is that she retains optimism in the face of all of this. She offers advice for how to navigate the balance between mission and margin in a way that’s better for patients and also sustainable financially. She talks about three points:

Founders and investors being in alignment and the essential nature of that
The importance of having clinical leadership and a team dynamic that enables innovation but in a clinically sound way
How you gotta measure what matters and do it in a way that inspires a mission-driven culture

If we’re talking about relevant shows to listen to next after you listen to this one, please do not forget episode 331. This is where Al Lewis teaches us how to evaluate wellness vendors and health solutions, but it also teaches us how to be a good wellness vendor or health solution. Also, do come back and listen to the encore with Jerry Durham next week about front desks and the total care experience. Lots of really bad avoidable things happen if the front desk isn’t considered—and it isn’t often considered. For sure, also listen to the show with Kenny Cole, MD (EP431); that’s a must-listen. Then again, the show with Rik Renard (EP427) came up several times in this episode. The show with Jodilyn Owen (EP421) also gets brought up; that’s a great cautionary tale there to keep in mind for mission-driven entrepreneurs and investors. And then, I also recommend J. Michael Connors, MD. He writes a lot of stuff in a newsletter along these lines.

Last, last, last … Please go to our Web site and subscribe to the weekly email. I am planning on doing a few invite-only sessions for email subscribers. Plus, the weekly email is a really very convenient way to get the episode transcripts and stuff. And if you don’t get it, you’re making your life less efficient. So, go fix that.

Kate Wolin, my guest today, trained as a behavioral epidemiologist and has done research in chronic disease prevention and management. She launched and led a digital health start-up and sold it to Anthem. She’s been in the digital health start-up space largely at the intersection of science and product strategy ever since.

Also mentioned in this episode are Rik Renard; Sergei Polevikov; Walgreens; Amazon; Walmart; Al Lewis; Jerry Durham; Kenny Cole, MD; Jodilyn Owen; J. Michael Connors, MD; Carly Eckert, MD; and Mike Pykosz.

You can learn more by following Dr. Wolin on LinkedIn.

Kate Wolin, ScD, is a behavioral epidemiologist who left academic medicine to launch and lead a digital health start-up, which she bootstrapped to profitability before selling to Anthem. She has since been a C-suite leader, investor, and advisor to digital health start-ups and enterprise organizations on bridging clinical and behavioral science with product strategy and execution. She has been named as a Forbes Healthcare Innovator That You Should Know and a Notable Woman in STEM by Crains. Dr. Wolin is a Fellow of the Society of Behavioral Medicine and the American College of Sports Medicine and teaches entrepreneurship at Kellogg.

06:24 Irrespective of money, what works in clinical care and population healthcare?

09:51 EP361 with Carly Eckert, MD, PhD(c), MPH.

10:26 Why is creating a gathering place and sense of community important in clinical care?

12:46 “Sometimes, we make this about the clinical provider. It always makes me think about the rest of the people in an ecosystem that create trust.”

13:49 EP297 with Jerry Durham.

14:11 Where can things go wrong when we start to think about the margin in respect to the clinical care that works?

16:47 EP427 with Rik Renard.

19:35 “We’re actually very unspecific in what we’re trying to achieve a lot of times in these digital health programs.”

24:00 “Are you aligned as a founder, as a business with your investors on the pace of growth and what is feasible … ?”

25:30 Why is Dr. Wolin optimistic about achieving growth and still providing value?

28:17 Why is it important to ask why something is being done?

30:39 EP421 with Jodilyn Owen.

34:35 How are people motivated, and how can you use that to reduce turnover?

35:21 Why measuring what matters and communicating that is important.

You can learn more by following Dr. Wolin on LinkedIn.

Kate Wolin, ScD, discusses #clinicalwaste on our #healthcarepodcast. #healthcare #podcast #digitalhealth #healthcareleadership #healthcaretransformation #healthcareinnovation

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Dr Kenny Cole, Barbara Wachsman, Luke Slindee, Julie Selesnick, Rik Renard, AJ Loiacono (Encore! EP379), Nina Lathia, Marshall Allen, Stacey Richter (INBW39), Peter Hayes

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For a full transcript of this episode, click here.

There’s this meme that’s going around on the interwebs with the caption, “Sometimes the shortest distance in between two places isn’t a straight line.” What? Yeah, because actually there’s three dimensions in the real world.

So, when we all consider the real world, understanding the contours of reality and aligning with them is the only way to devise a winning strategy—not only if you’re timing rubber balls getting dropped off straight or curved slopes. I’m saying this because I’ve seen (and you’ve seen) a whole lot of great ideas fail because someone draws a very elegant straight line on a whiteboard, calls it the fastest and most efficient way to get from here to a desired outcome … and then the plan ultimately fails.

What contours am I talking about taking into account right now? Oh, pretty much the entirety of US healthcare. If you combine the complexities and perverse incentives of the industry itself plus the art and science of medicine plus epidemiology and social determinants and I’m probably forgetting other dimensions, you have contours that are mountain ranges. Not considering the reality of those elevations and just thinking there’s some kind of straight line here to be found is really a kind of delusion. Now, investors and C-suites may like these delusions, but let’s just get real: It’s not gonna actually work out as written.

One case study that I am talking about is digital health solutions or pharma companies even or pretty much anyone who thinks that the fastest way to increase sales is to talk about the product, let’s just say as one example. That’s the straight line to growth: Talk about the product. Another one is stripping away things that feel like they’re a waste of time in the name of efficiency without actually checking if you’re cutting into essential stuff. I talk about this at length with Kate Wolin, ScD, in an episode coming up. Jodilyn Owen has a thing or two to say on this point in episode 421 also.

But let me be clear: I’m not talking about anyone listening to the show today making this mistake, at least wholesale. We all make it incrementally; it’s hard to avoid. But you get this. That’s why you’re here.

You get that the fastest path anywhere is truly understanding the problems faced by customers. And then it’s showing how the product or whatever you’re doing helps solve those problems. No one cares how efficient or safe your thing is if it’s accomplishing something that no one cares about, no one gets paid for, and/or can figure out how to deploy or use. This is what the entire episode last week, episode 430 with Barbara Wachsman, was about.

Why is all of this relevant? It’s actually what makes Relentless Health Value relevant, frankly.

Many listeners—and shout-outs to Nate Walker and MaryCarol Evans—say that this is why they listen to Relentless Health Value and what Relentless Health Value helps them with: finding those contours, understanding reality so that it can be aligned with. And on the show today, Kenny Cole, MD, I gotta say, could be really impactful in this regard as well as in others.

Nate Walker wrote, “[Relentless Health Value] inspires me every day to stay true to my desire to make a difference in healthcare for patients by adding transparency and helping to connect the dots within this fragmented system.”

MaryCarol Evans has alluded to the same thing multiple times as well and often highlights that Relentless Health Value helps her think through and identify the small things that are possible—she says there’s plenty of them—that have a huge impact on the lives of plan members.

Dr. Kenny Cole is from Ochsner Health System, and I love this conversation today because it has lessons for anybody working in a clinic or managing a clinic who wants to learn from a master. But it also is really interesting for anyone who’s trying to work with, alongside of, or sell to a clinical practice or health system that is pulling away from the status quo, that is standardizing care and working as a team, one that is earning the trust of its patients, and also one that is figuring out how to reinvent the business model of healthcare such that clinical pathways and care flows are aligned with financial viability. That’s really, obviously, the holy grail here.

We talk today about how to achieve clinical and financial success, even if the financial models are all over the map. We talk about how to create a practice model or a clinical model that might appeal to clinicians and keep them from being burnt out while, at the same time, ensure that patients are getting the kind of outcomes everyone can be proud of and the place doesn’t go bankrupt either.

This episode reminded me a lot of the conversation with Scott Conard, MD (EP391)—there’s lots of complementary points. The shows with David Carmouche, MD (EP316, AEE15, EP343) from when he was at Ochsner are also pretty relevant here. Some of the points that Dr. Kenny Cole makes today also align very much with what Rik Renard (EP427) was talking about a few weeks ago.

But regardless of where you sit or what you’re trying to do, this show is a great one to really get a bead on the lay of the land to find the actual shortest path between here and there, which is not gonna be (most likely) an obviously straight line.

Dr. Kenny Cole makes, I’m gonna say, four main points by my counting; and they are as follows:

Clinical teams have to deliver care wherein outcomes are measurable, and it has to be done in such a way that those clinical teams are accountable for the outcomes that are generated.
Clinical teams need to really see with their own two eyes and believe that a clinical goal that they’ve been given is possible.
Care flows are critical here, which means getting everyone on the same page about what best-practice care looks like and operationalizing how that clinical excellence will be achieved.
Building trust with patients and connecting with patients cannot be underestimated, and care flows need to not only standardize care so that it can be delivered quicker and easier but also facilitate patient relationships.

Dr. Kenny Cole is a primary care internist. He sees patients one day a week. The other days, he serves as a system vice president for Ochsner Health, which is a large integrated delivery system. In this role, he designs and develops new care models.

If I’m making recommendations for what to listen to next, I’d go with episode 412 with Robert Pearl, MD—he talks about a model to lead healthcare transformation and clinical excellence. Then episode 391 with Dr. Scott Conard gets into what happens in the real world when the financial model is misaligned with excellent care. Lastly, episode 343 with Dr. David Carmouche.

Oh, two last things and new topics:

First, thanks to Santos-L-Halper, Nina Lathia, and KC64789 for some really nice reviews this month. I read them. They make me happy. Thanks so much for leaving them.

And lastly, heads up that Rule of Three (ro3) has an annual March Healthcare Classic that is currently ongoing. It’s pretty cool what they do. They have a very august panel that debates which trends will reign supreme in their impact on healthcare in 2024. The committee includes:

· Dr. David Carmouche, SVP Healthcare Delivery, Walmart Health

· Eric Gallagher, CEO, Ochsner Health Network

· Leah Binder, CEO, The Leapfrog Group

· Anisha Sood, Chief Financial & Strategy Officer, First Choice Health

Follow along with the experts through the ro3 March Healthcare Classic at https://ro3.com/healthcare-classic/.

Also mentioned in this episode are Jodilyn Owen; Barbara Wachsman; Nate Walker; MaryCarol Evans; Scott Conard, MD; David Carmouche, MD; Rik Renard; Robert Pearl, MD; Nina Lathia, RPh, MSc, PhD; Josh M. Berlin; Rule of Three, LLC; Eric Gallagher; Leah Binder; Anisha Sood; John Rodis, MD, MBA, FACHE, CPHQ; Bob Matthews; Marty Makary, MD, MPH; Sanat Dixit, MD, MBA, FACS; and Rob Andrews.

You can learn more at Ochsner Health. You can also follow Dr. Cole on LinkedIn.

Kenny Cole, MD, began his role as System VP, Clinical Improvement, for Ochsner Health in New Orleans in September 2019. He is a practicing primary care internist with advanced degrees from LSU Health Sciences Center and Dartmouth, as well as executive training from Harvard Business School. Prior to joining Ochsner Health, Dr. Cole was the chief clinical transformation officer for Baton Rouge General Medical Center, where he designed, developed, and implemented a completely reimagined multidisciplinary team-based model of primary care that focused on aligning clinical with financial outcomes. His current work at Ochsner Health built on that prior foundation to design and help develop Ochsner 65 Plus, a group of redesigned primary care clinics focused on the needs of older adults.

07:38 Is there an optimal care pathway where there might be a lot of treatment variability?

11:01 Why doesn’t Dr. Cole like the terms “noncompliant” and “nonadherent”?

11:45 EP412 with Robert Pearl, MD.

13:50 Why is it important to start with the end in mind?

17:20 How do you scale clinical excellence?

20:21 EP315 with Bob Matthews.

21:15 EP242 with Marty Makary, MD.

23:49 Why is it important simply to demonstrate what’s possible for better health outcomes?

24:58 EP427 with Rik Renard.

26:10 How do we reinvent the business model of healthcare?

27:50 EP415 with Rob Andrews.

30:06 EP391 with Scott Conard, MD.

38:37 Dr. Cole is published in various healthcare journals; check out his most recent article.

You can learn more at Ochsner Health. You can also follow Dr. Cole on LinkedIn.

Kenny Cole, MD, discusses #accountability for #healthoutcomes on our #healthcarepodcast. #healthcare #podcast #digitalhealth #healthcareleadership #healthcaretransformation #healthcareinnovation

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Barbara Wachsman, Luke Slindee, Julie Selesnick, Rik Renard, AJ Loiacono (Encore! EP379), Nina Lathia, Marshall Allen, Stacey Richter (INBW39), Peter Hayes, Joey Dizenhouse

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For a full transcript of this episode, click here.

We have been spending a bunch of time here on Relentless Health Value talking about PBMs (pharmacy benefit managers) lately and pharmacy benefits, but we are moving into a new topic area. It sort of kicked off three weeks ago with the pod with Rik Renard (EP427) on the importance of care flows if you are a digital health vendor trying to get consistent outcomes. But then I actually went back to the PBM/pharmacy benefits topic to talk with Luke Slindee, PharmD (EP429) and Julie Selesnick (EP428) because, you know, the J&J lawsuit. But now we’re back on the “let’s talk about digital health and point solutions” bus.

I wanted to talk today about the trend to sell to employers and advice for digital health solutions who want to sell to employers, but there’s a little bit of advice here for employers themselves. At a minimum, this conversation affords a little bit of transparency to employers about what’s going on on the other side of the table.

So, as I just said, in this healthcare podcast we talk about selling to employers. Why sell to employers is probably a first question. Well, one reason Barb offers is because that’s where the money is. It’s like that Willie Sutton quote. Someone asked him why he robbed banks, and he replied, “Because that’s where the money is.” I mean, hospitals know this. Have you seen their commercial rates and their multiples over Medicare? Payers know this, too. Payers who use their ability to raise commercial rates as leverage to get lower MA (Medicare Advantage) rates for themselves … they know this. So, yeah. Why wouldn’t a point solution entrepreneur take a page out of that business model? It’s saying the quiet part out loud, but … yeah, I guess it’s good to know when you’re the numero uno healthcare industry sugar daddy (or sugar mommy, as the case may be). Every employer listening right now has already opened up their phone and started an email to me.

Barb gets into four pieces of advice for entrepreneurs looking to sell to employers:

There has to be a market that has a need for what you are selling, and there won’t be a market with a need unless the problem you’re solving for is big enough—and right now, I am recapping things that Barb says on the show—because when she talks about whether the problem is big enough, she means as per the employer and maybe because the fallout from that big problem accrues to the employer in a way that the employer fully appreciates.

As I say in the pod that follows, the ground is littered with entrepreneurs, often really smart people who oftentimes I truly admire. These are individuals who found a problem for patients (or sometimes even clinicians) and solved for it and then discovered that no one will pay them for whatever they’ve done, because we can’t forget that, in the healthcare industry, one person’s waste is somebody else’s profit. There is show after show here at Relentless Health Value that showcases the sacred honeypots where these perverse incentives lie, so if you are an entrepreneur, please follow the dollar and see where it leads before getting too far. That would be my advice. I’d recommend the show with Rob Andrews (EP415) and the one with Jodilyn Owen (EP421) as a great place to start.

One comment about the whole “it’s gotta be a need that employers appreciate” point that Barb makes which caught my ear, she rhetorically asks, “Should HR purchasers be buying solutions that improve health and well-being?” And the short answer is no. Barb says none of that should be the primary driver. The primary driver, Barb mentions, should be about optimization of human capital to drive business outcomes. She says every decision a business makes should be about maximizing business outcomes.

Now, I could take this a bunch of different ways; and viscerally it has, again, kind of a “quiet part out loud” vibe. But in certain ways, it also means buying decisions should be bigger than just cutting costs. First of all, no one is arguing here that cutting wasteful spending isn’t always a good thing; but neither are cost-containment strategies that undermine employee health to the extent that they can’t complete their work role or their job. Listen to the show with Nina Lathia, RPh, MSc, PhD (EP426) for more on this cost containment versus value-based purchasing, specifically in the pharmacy benefit space, but same rules apply pretty much everywhere.

Be truly differentiated in terms of what you’re trying to sell. Barb gives a bunch of examples of “secret sauces” she thinks are kind of compelling right now.
Navigate the internal politics of the employer. And this is kind of Selling 101, but find a champion and help them navigate their own organization. We talk at length about how long the sell process can take, especially in some of these jumbo employers.
Manage your investors as closely as you manage your possible clients. And this is an interesting point that also comes up in the conversation with Kate Wolin, ScD, that’s coming up in a few weeks.

Also in this conversation, we have a sidebar about PMPM (per member per month) and performance guarantees and just some nuances about how to get paid.

Oh, and one last point here: If you are an entrepreneur who is thinking about selling to brokers, employee benefit consultants, or practice leads, do listen to the show with AJ Loiacono (EP379), which I encored a couple of weeks ago.

My guest today, Barbara Wachsman, has had experience in every single element of the healthcare ecosystem. She has worked in public health. She’s worked for an HMO. She’s worked for a hospital system. She’s run benefit consulting practices and also spent the last dozen or so years at Disney running strategy and benefits. Today she is a limited partner in several private equity funds at Frazier Healthcare Partners.

Oh, and hey, you might want to subscribe to our weekly email, which includes this introduction transcribed as well as links to the full episode transcribed. We also sometimes send out invitations to Zoom meetups and other ways to get involved or support us in our quest to get Americans better healthcare. So, go to relentlesshealthvalue.com and get yourself on that list

Also mentioned in this episode are Rik Renard; Luke Slindee, PharmD; Julie Selesnick; Rob Andrews; Jodilyn Owen; Nina Lathia, RPh, MSc, PhD; Kate Wolin; AJ Loiacono; Elizabeth Mitchell; David Claud, MD, PhD; Al Lewis; Kenny Cole, MD; and Cora Opsahl.

You can learn more at Frazier Healthcare Partners. You can also follow Barbara on LinkedIn.

Barbara E. Wachsman, MPH, is the former director of strategy and engagement for enterprise benefits for the Walt Disney Company. In this position, she led the strategic initiatives and designed the programs that addressed Disney’s long-term healthcare and goals and objectives, headed operations of large on-site clinics and full-risk physician partnerships, and was the creator of the Strategy Lab, the home for innovation in healthcare delivery. She is a speaker on the national stage regarding direct contracting and the value of primary care.

Barbara currently serves as a senior advisor to an $8 billion growth-buyout private equity firm specializing in healthcare and as head of employer strategy for a virtual primary care company with a unique medical practice model. She sits on the Boards of the Duke-Margolis Center for Health Policy Institute and the QueensCare Foundation, serving the low-income and underserved population of Los Angeles. She remains a senior advisor and founding member of the Employer Healthcare Innovation Roundtable (EHIR) and is a faculty member of the EHIR Academy. Barbara serves on the Executive Committee of the American Board of Medical Specialties and on the Advisory Boards of several healthcare start-ups as well as the corporate board of a large metabolic health company. She is also an advisor to the Purchaser Business Group on Health and to the Silicon Valley Employers Forum.

Barbara received her Master of Public Health and Master of City Planning/Architecture degrees from the University of California, Berkeley, and is a Phi Beta Kappa graduate of Scripps College, where she received her bachelor of arts degree.

06:55 Why have people cottoned on to selling to employers, and is it a good direction to focus?

07:28 What are the three ways healthcare gets paid for in America?

07:46 Where is the profit in the healthcare system?

08:32 What does an entrepreneur really need to understand in order to sell to employers?

13:05 “It really is about producing a productive employee.”

17:49 Why it’s not enough to understand the market but you must also differentiate.

21:01 What’s the biggest misunderstanding entrepreneurs have about per member per month?

24:10 What companies are standing out right now as differentiators?

28:02 Why is it important to also show that you are improving quality?

28:51 EP331 with Al Lewis.

28:55 EP427 with Rik Renard.

29:33 EP372 with Cora Opsahl.

30:07 Why is it important to find a strong champion who will advocate for you as a partner?

35:05 Why is it important to manage your investors and set appropriate expectations around the timeline of a sale?

36:21 What’s the lesson to be learned behind Livongo?

You can learn more at Frazier Healthcare Partners. You can also follow Barbara on LinkedIn.

Barbara Wachsman discusses #digitalhealthvendors selling to #employers on our #healthcarepodcast. #healthcare #podcast #digitalhealth #healthcareleadership #healthcaretransformation #healthcareinnovation

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Luke Slindee, Julie Selesnick, Rik Renard, AJ Loiacono (Encore! EP379), Nina Lathia, Marshall Allen, Stacey Richter (INBW39), Peter Hayes, Joey Dizenhouse, Benjamin Jolley

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For a full transcript of this episode, click here.

In this healthcare podcast we’re talking about pharmacy acronyms or terms like AWP and WAC, and, not really an acronym, but we’ll also talk pharmacy list prices, rebates, discounts. We also have NADAC, but that’s slightly off to the side for reasons we’ll get to in a sec.

Most of these acronyms refer to a number with a dollar sign in front of it, and it’s hell on wheels to figure out if and/or to what extent that number reflects what is going on in the real world, especially if you are a patient or a plan sponsor and all you see is the list price that Pharma puts out on one side of the storyboard, and then what the patient pays or (if you’re lucky) what the plan pays for the drug on the way other side of the whole chain of events. What’s a black box a lot of times for patients and plan sponsors is what goes on in the middle, wherein many middle people get their mitts on the transaction.

Real quick here, let’s run through the Mister Rogers’ neighborhood of all of these middle people right now; and we’re gonna do this really briefly. Most of you are already going to know most of this, but I just want to remind you so that when my guest today, Luke Slindee, and I kick into the conversation about the acronyms and the terms and we try to follow the dollar … yeah, you can put a name to a face.

Alright, so first we have pharma manufacturers. The pharma manufacturer—and this is largely gonna be true whether it’s a branded drug or a generic pharma manufacturer—but the manufacturer sets a list price. This list price is gonna be called an AWP or a WAC price, and we’re gonna get into the differences and what those terms actually mean in the show that follows.

But Pharma decides their price point. They go to wholesalers with that price. Wholesalers say they want a discount to purchase the product. Some kind of rebate or discount is negotiated. Now the wholesalers have the drug, and they get calls from pharmacies. Pharmacies have patients who have scripts for that, so the pharmacies need to buy the drug. What price does the pharmacy now pay the wholesaler for the drug?

Short answer: It’s nuts. It’s nuts how the wholesalers decide what to charge the pharmacies for the drug. We talk about that in the interview that follows, but suffice to say that now we have the list price turning into whatever price the pharmacies wound up paying to get the drug from the wholesalers for. Any way you cut it, the wholesalers are making some money.

Okay … now we get to the part where we’re figuring out how much the patient or the plan sponsor will pay to pick up that drug that started at the pharma manufacturers and went to the wholesalers and now is at the pharmacy. How much are the patients gonna pay? How much are the plan sponsors gonna pay?

If you spend any time in the real world (not the drug supply chain world), what you’d expect to happen next is that the patient would go into the pharmacy and the pharmacist would charge a markup and/or a dispensing fee on the price that they bought the drug from the wholesaler for. That’d be normal. And this can be the case when patients pay cash. Listen to the show with Mark Cuban (EP418, along with Ferrin Williams, PharmD, MBA), who started a pharmacy called Cost Plus Drugs. Get it? Their prices are cost plus. You have had other pharmacies for years doing similar things, like Blueberry in Pittsburgh. They get the drug. They buy it from a wholesaler or etc. But they buy the drug for some price, and then they sell it to their customers (ie, patients) at their cost plus.

But most of the time in pharmacy supply chain world, things don’t work that way because many patients have insurance. When a patient walks into the pharmacy, someone has to figure out how much the patient owes and how much their insurance will cover, right? So, enter PBMs (pharmacy benefit managers). They originally started out doing this math (ie, adjudicating claims), figuring out what the out-of-pocket will be for the patient and then what the insurance will cover. Then drugs started to get really expensive and a few other developments, and then, all of a sudden, we have PBMs negotiating with Pharma for how much of a rebate the PBM is going to demand for the PBM to put the manufacturer drug on formulary. The PBM also is determining how much they will pay the pharmacy for said drug on behalf of plan sponsors, in addition to doing the math for how much the patient will pay.

So, let me say that again because it kind of begs a “what now?” with eyebrows sky-high as the appropriate response to what I just said, especially if you think through the ramifications here, ramifications which I discuss at length with Vinay Patel (EP241); Benjamin Jolley, PharmD (EP422); Scott Haas (EP365); Paul Holmes (EP397); and others.

So, again, the PBM is not just adjudicating claims. They are also negotiating rebates from Pharma so plan sponsors do not have to pay the full amount that the wholesalers paid Pharma and that the pharmacies paid the wholesalers, which maybe is a lot of money. The PBMs are like, “Hey, Pharma. You need to give me a piece of your action because we, the PBM, have big market power. I serve 100 million patients or something. So, if you want access to my 100 million lives, you gotta shell it out. You gotta shell me out some rebates.”

So, fine, Pharma gives the PBM some amount of money in the form of a rebate. And it has to work that way, if you think about it, because the drug was originally sold to the wholesaler. You see what I’m saying? So, the pharma company has to give the PBMs a separate rebate amount. This is in addition to how much the PBM told the plan sponsor the plan sponsor owes for the drug, which is also paid to the PBM. But now, PBM is also still in charge of adjudicating the claim. So, they’re telling the pharmacy how much to charge the patient. Somehow or another also, the PBM also got itself in charge of deciding how much money the pharmacy itself would be reimbursed by that PBM.

In the rest of the world, the pharmacy might tell the PBM, “Hey, this is the price.” But not in pharmacy supply chain world. In pharmacy supply chain world, the PBM tells the pharmacy how much it’s gonna pay. The end.

And this, my friends, is how so often pharmacies get themselves in the pickle of having to pay the wholesaler one price to get the drug while they get reimbursed a totally different price to dispense the drug. And because independents have very little negotiating leverage on actually either side of that equation, they so very often buy high and sell low. Please listen to the shows with Benjamin Jolley (EP422) and Vinay Patel (EP241), where we get into this in a lot of detail.

But I just want to emphasize this point: All of that whole drug supply chain I just went through, where the manufacturer sells to the wholesaler who sells to the pharmacy and the PBM pays the pharmacy and the patient is paying something and the plan sponsor is paying something—many of the middleman transactions in there happen under the cover of darkness a lot of times. If I’m a plan sponsor, do I have any idea how much the PBM paid the pharmacy for any particular drug? Unless you’re good at looking at the NADAC numbers (more on this coming up), no. I do not have any idea what a fair price for that drug actually is and how much people are making on the back of that drug as it goes through the supply chain.

And this, my friends, is how come spread pricing can exist. Because spread pricing is when the PBM charges the plan sponsor more than they are paying the pharmacy, pocketing the difference, and then calling what they pocket a trade secret—even if it’s the plan sponsor whose butt is on the line to make sure that what the PBM is pocketing is fair and reasonable compensation. I mean, if only J&J had listened to this show (EP428). Here’s a link to the lawsuit, which is about J&J paying ridiculous amounts in spread pricing.

If what I just said is really confusing, I’m gonna validate that and say, “Yeah, it is really confusing.” And to a certain extent, that might be the main point. Where there’s mystery, there’s margin and all of that.

Here’s what Dawn Cornelis said on LinkedIn in response to an article about the lawsuit: “Data accessibility lies at the heart of mitigating a fiduciary lawsuit. It all begins with gaining access to your data. But let’s be clear—it’s not an easy feat. The major hurdle? Procuring accurate data from your TPA [third-party administrator]. And that’s just the first step. The subsequent challenge involves analyzing this data, a task best handled by a skilled healthcare data analyst—yet another formidable undertaking.”

The one acronym in this whole stew that is not questionable at all is the NADAC. So, let’s talk about the NADAC for a moment, the National Average Drug Acquisition Cost Price Benchmark. I was really thrilled to get Luke Slindee to be my guest today—or one reason I was so thrilled—is because Luke works for the accounting firm who, on behalf of CMS (Centers for Medicare & Medicaid Services) and the federal government, administers this NADAC, the National Average Drug Acquisition Cost. (Here’s a good NADAC explainer if you’re interested.)

In brief, NADAC was jointly developed by the Centers for Medicare & Medicaid Services, and it calculates the average price that pharmacies pay for prescription drugs. NADAC is based on a retail price survey.

My guest today, as aforementioned, is Luke Slindee. He is a second-generation pharmacist. His family owned a pharmacy in Minnesota when he was growing up. Now he is a senior pharmacy consultant for Myers and Stauffer, which is the accounting firm that calculates the NADAC Price Benchmark on behalf of CMS and the federal government.

Also mentioned in this episode are Mark Cuban; Ferrin Williams, PharmD, MBA; Blueberry Pharmacy; Vinay Patel; Benjamin Jolley, PharmD; Scott Haas; Paul Holmes; Dawn Cornelis; Capital Rx; Myers and Stauffer LC; Adam Fein; Joey Dizenhouse; Steven Quimby, MD; and Antonio Ciaccia.

For additional information, go to data.medicaid.gov. You can also follow Luke on LinkedIn.

09:52 Why is it important for plan sponsors to understand the going rate for every point in the supply chain?

10:21 How do manufacturers come up with a list price?

10:40 What does AWP stand for?

10:59 What does WAC stand for?

11:06 How are AWP and WAC numbers chosen by the manufacturer?

13:22 What is the difference between AWP and WAC?

14:54 How much are wholesalers paying to manufacturers?

16:43 How much is the pharmacy paying for branded drugs from a wholesaler?

17:34 Why might pharmacies be buying drugs for less than what wholesalers are paying?

18:17 Substack article by Benjamin Jolley, PharmD, on this topic.

19:22 EP423 with Joey Dizenhouse.

20:33 Why do things get weird when a PBM gets involved?

21:58 How does all of this work for generic manufacturers?

25:20 EP344 with Steven Quimby, MD.

26:15 How did Civica Rx come about?

32:21 What’s the difference between the NADAC and the AWP value?

36:04 Luke discusses the downstream effects to pharmacies.

For additional information, go to data.medicaid.gov. You can also follow Luke on LinkedIn.

Luke Slindee discusses #followingthedollar through #WAC, #AWP & #NADAC on our #healthcarepodcast. #healthcare #podcast #digitalhealth #healthcareleadership #healthcaretransformation #healthcareinnovation

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Julie Selesnick, Rik Renard, AJ Loiacono (Encore! EP379), Nina Lathia, Marshall Allen, Stacey Richter (INBW39), Peter Hayes, Joey Dizenhouse, Benjamin Jolley, Emily Kagan Trenchard (Encore! EP392)

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For a full transcript of this episode, click here.

This show is different, so if you’ve already listened to or read all about the gory details of the J&J and/or the DOL v BCBS lawsuits, this is not gonna be a repeat of that information. Julie Selesnick, my guest today, does cover the very, very top line about these two cases. But after that, we move on fast—because what I wanted to get to today was not the potential landslide of legal action that may or may not be confronting plan sponsors or payers or even brokers today. I did not want to really even talk about the CAA (Consolidated Appropriations Act) and its inarguable adjacency here. I just feel like there’s been a lot of talk about these topics already.

What I wanted to get to, and fast, is … now what? If I’m a plan sponsor or actually, again, an EBC (employee benefit consultant) or broker, now what? What should I be doing and thinking about right now?

To that end, I could not have been more thrilled to get a chance to talk to Julie Selesnick, who is an attorney deeply entrenched in helping plan sponsors and others understand and comply with fiduciary responsibilities.

I want to get to this interview quickly (the conversation with Julie), so this intro is gonna be on the short side; but let me just summarize a few of the points that Julie makes during the interview that follows.

First, we talk about the first step for pretty much everybody: Get your data, plan sponsors. But once you have that data, you also kinda have to use it. You can use it to ensure that you’re paying claims right, which is what most do. As a result of these two lawsuits, it’s also increasingly clear that you also have to use that data to ensure that the prices you’re paying for things (like generic specialty meds, for example) are fair and reasonable.

To get the data now, you may have to renegotiate administrative services agreements; and you might need to take a closer look at the disclosure agreements you’re getting as a result of the CAA. And, by the way, it’s not just brokers or EBCs who have to complete these disclosures. It’s all covered entities that you, plan sponsors, paid more than $1000 to.

Then we get into … okay, once you have the data and you’ve analyzed it, what are some in general things that could very well need to happen? And if the reason that they don’t happen is because they weren’t even considered, then plan sponsors have some risk exposure; and the brokers/EBCs who serve them might have some conflicts of interest. And it would be very interesting what would or could happen if a plan sponsor was able to back into those conflicts of interest, because if data clearly shows that something should be happening and it is not—and it is not even on the docket to be considered—if I’m a plan sponsor, I’m for sure gonna be wondering why. And maybe I’m gonna look into that and fast. Listen to the show with AJ Loiacono (EP379) from two weeks ago for more on some of the more egregious broker/EBC conflicts of interest, which could explain, potentially, the J&J lawsuit as well as definitely explains the earlier one in Osceola.

And also, by the way, if you’re sitting there wondering to yourself how exactly J&J managed to pay upwards of $10,000 for a drug that can be purchased for cash for something like $50, listen to the show next week with Luke Slindee, PharmD. We run through the exact pharmacy supply chain machinations that make all of this (and more) possible.

But I got off track. What I was talking about is the things that could easily wind up being called for when the data is analyzed:

Carving out specialty generics, especially drugs or infusions, from the larger pharmacy benefit manager
Your payment integrity vendor should not be the same vendor who is processing claims. Talk about a conflict of interest. I do not need to be an attorney—and I need to know absolutely nothing about anybody’s data—to tell anybody who’s listening that if you have the same vendor or two vendors with the same parent company who are both processing your claims and then auditing their own work … yeah, fix that.
Shut down any cross-plan offsetting. And we get to this in the show if you don’t know what cross-plan offsetting means.

Lastly, we get into a bunch of stuff that plan sponsors might want to consider as they consider how to administer their plan, like, for example, setting up a health and welfare committee that has an independent fiduciary expert on said committee. I’m gonna say that’s a good idea!

As I have mentioned, my guest today is Julie Selesnick. Julie is senior counsel over at Berger Montague’s Employee Benefits and ERISA group.

Also mentioned in this episode are AJ Loiacono; Luke Slindee, PharmD; Justin Leader; Chris Deacon; Bridget Mulvenna; Mark Cuban; Olivia Webb; and Dawn Cornelis.

You can learn more at Berger Montague. You can also follow Julie on LinkedIn.

Julie Selesnick has been practicing law since 2001 and has over 20 years of experience in complex dispute resolution forums representing plaintiffs and defendants. Julie has a wide variety of litigation, arbitration, and mediation practice, including first-chair jury and bench trial experience, representing some of the largest companies in the United States as well as small companies, labor unions, individuals, and classes of plaintiffs.

Julie’s current practice is a mix of class litigation on behalf of individuals, union funds, and employers, and a legal consulting practice advising self-funded health plans and service providers to self-funded health plans on minimizing litigation and regulatory risk, issues arising under ERISA, fiduciary obligations and best practices, and CAA compliance, including negotiating service provider contracts and business associate agreements, drafting plan documents and advising on plan design; helping health plans gain access to participant claims data, helping service providers draft and plan fiduciaries obtain § 408(b)(2)(B) compensation disclosures, assisting plans with ensuring their prescription drug data collection and reporting is properly conducted and copies are provided to plan fiduciaries, and ensuring proper review, MHPAEA Comparative Analysis reports on nonquantitative treatment limitations.

05:48 What’s happening with the J&J lawsuit?

07:38 What’s going on with the DOL v BCBS case?

08:49 What do these cases mean for plan sponsors?

09:21 Why is engaging with claims data critical?

12:30 EP408 with Chris Deacon.

14:20 EP379 with AJ Loiacono.

16:58 What’s one solution to avoiding a conflict of interest?

18:02 Why there’s still not a total understanding about what to do with claims data once acquired.

20:58 NADAC (National Average Drug Acquisition Cost) to check pharmacy prices.

21:31 What advice do plan sponsors need to know that never gets recommended to them when dealing with conflicting interests?

27:02 EP337 with Olivia Webb.

28:41 EP285 with Dawn Cornelis.

30:24 “As a fiduciary, your money should only go to pay your plan’s benefits, not to other plan benefits.”

30:59 What’s Julie’s advice to advisors?

33:17 “Giving nonconflicted advice … is something you really can only do if you have no conflicts.”

35:57 What’s Julie’s advice for administering whole plans?

You can learn more at Berger Montague. You can also follow Julie on LinkedIn.

Julie Selesnick discusses advice based on the J&J and DOL v BCBS lawsuits on our #healthcarepodcast. #healthcare #podcast #digitalhealth #healthcareleadership #healthcaretransformation #healthcareinnovation

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Rik Renard, AJ Loiacono (Encore! EP379), Nina Lathia, Marshall Allen, Stacey Richter (INBW39), Peter Hayes, Joey Dizenhouse, Benjamin Jolley, Emily Kagan Trenchard (Encore! EP392), Cora Opsahl (Encore! EP372)

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For a full transcript of this episode, click here.

Hey, Relentless Health Value Tribe, thanks so much for being here this week. I gotta say, I really appreciate all of you who write and tell me that you kick off your Thursdays by listening to this show every week.

You just pop open your app and you listen to the show. Because yeah, we’re a pretty sure thing over here. If the guest was boring or if the guest was talking about stuff that I already know and probably you already know, the guest would not be on the show. So, listening to Relentless Health Value every week is a hugely easy way to just keep up with what’s going on and, at the same time, get a pretty holistic deep dive into how all of the various parts of the industry fit together and how they ultimately impact patients and anybody who is at risk to pay for their care.

One thing that you’ll notice about the guests who we invite to come on Relentless Health Value, they are usually not the ones who are merely going to recite a very well-curated point of view that is fully in line with some marketing pitch. It would be easy enough, honestly—it would be so much easier—to just invite all of the bigwigs who we get pitched.

I get 50 pitches a day from PR teams who want to get their executives to come on the show because they want to get their message out to you, Relentless Health Value Tribe. You, for sure, have a reputation of being industry movers and shakers. Although it would be super easy for me to phone it in and let them have their way with you, I’ve never been one to take the easy way.

I want to find those individuals to be guests who are willing to share actionable insights to actually tell the truth. I’m really not into someone hijacking this platform for their own self-interest when that self-interest is not aligned with anything that I would consider a win-win for patients.

You’ll probably find more actionable insights here than listening to talk tracks, even if you’re just listening to figure out what to include in your pitch to some of these industry insiders. I’m gonna tell you that repeating their marketing spin or their party line isn’t probably gonna sell much. What they will say in public and what they really want to do are so very often sadly at counterpoint. So, come here for the real story.

Alright, so let’s get to the conversation that we’re gonna have today, which is about and for digital health vendors’ or virtual care providers’ point solutions (they go by many names) and also for anybody who is a customer of said solutions.

If we’re taking it from the top here, let me just make a Captain Obvious point. These digital health vendors, they kind of have to perform better than the traditional community health providers. Otherwise, they have no reason to exist, really, right? Purchasers would just go with the local gang of care providers. So then, what does “perform better” actually mean? Let’s discuss.

I’d say perform better means to offer better measurable patient outcomes probably, both clinically and patient reported. I’d also say it means to offer more affordability. Also, better engagement, accessibility, and maybe all of this at a better cost profile for purchasers such as employers or health plans that are taking on actual risk.

So, if all things are equal, again, why the heck would an employer or other purchaser even bother? It couldn’t even be considered, honestly, a member benefit from a regular benefit perspective if the local standard of care is superior or just as good.

Now, if any clinical entity is looking to actually achieve better performance in any or all of the ways that I just mentioned with any level of consistency and in a way that is profitable for them and their investors, you got to do a few things. And one of them is to design and implement care flows, care processes, pathways—again, you can pick a name and define it how you like. But bottom line, there needs to be a standardized way to deliver high-quality care that is measurable.

Here’s Ali Khan, MD, MPP, who is chief medical officer over at Oak Street Health, talking about this. He says:

“At Oak Street Health we think about standardization as a 70/30 split. It is important that the largest aspects of what your care team does are standardized. (...) The bulk of the work that we do is to make sure not only that we set standards, but that we also disseminate standards, coach standards, review standards, and then update and iterate those based on the things we learned. Our standards are constantly evolving and improving.”

Okay, so said another way, gotta have and use care flows. This doesn’t seem like rocket science, but yeah, that is a blue’s clue for what’s coming up here.

So, how are most digital health vendors doing when it comes to care flows performing better? Rik Renard and Thomas Vande Casteele from Awell have done a survey with a group called Health Tech Nerds and have dug into the usage of care flows among, specifically, digital health vendors.

Given everything aforementioned, I wasn’t surprised to hear that 84% of digital health vendors use care flows in 2023 … 84%. But it was kind of shocking, to be honest, to hear that in 2023, only 16% use care flows that they feel are based on evidence and the science of medicine.

If you don’t follow the latest science, then outcomes, both clinically as well as probably patient-reported outcomes, won’t be of the “perform better” variety.

Oh, boy. Also, only 7% of respondents have the ingredients to build a 360-degree picture of how their flows impact finances and quality of care. And I say that because only 7% can and do measure four things. And here’s the four things:

Performance metrics such as patient engagement and compliance rates
Financial metrics such as revenue per patient/per member
Clinician-reported outcomes
Patient-reported outcomes, or PROMs

Seven percent. That is less than one out of ten of these digital health vendors. There are other higher, but still pretty sad, percentages that measure combinations of the above four factors; but only 7% measure all of them.

And if you don’t or can’t measure what you’re doing, then you wind up with what my guest Rik Renard calls black box care, which is another way of saying if you don’t measure it, you can’t manage it. Because think about it, if you have black box care, well, the solutions to perform better are also a black box. If you don’t know the problem, good luck finding the solution to it.

A few things as we contemplate all of this. First of all, as Stacy Mays pointed out to me, if that digital health vendor is working for different payers or different purchasers, those different payers or purchasers might demand different care flows; and those different care flows might ladder up to different ultimate goals.

The hard part about being a digital health vendor employed by a payer or a purchaser is that your customer is the boss of you. So, complication. The other relevant conversation I had is with David Claud, MD, PhD, who told me that many employers/customers evaluating healthcare vendors, like on-site clinics, do not have the clinical expertise to meaningfully evaluate the quality of care; so, they tend to focus more on cost and service. When this happens, you kinda wind up with a race to the bottom, where being really nice and being cheap are more important than actually delivering high-quality care that no one can measure anyway.

And the last point that I’ll bring up is what Sanat Dixit, MD, MBA, FACS, brought up the other day; and I love how he put it. He said doctors don’t tend to caucus well. And coming up with care standards and best practice care flows means getting everybody to walk the same pathways. Bottom line, it’s really pretty hard to be a digital health entrepreneur these days.

Coming up here, I have a conversation with Barbara Wachsman. Barbara was the managing director over at Disney. She’s worked for PE (private equity) as well as being executive director over at PBGH, the Purchaser Business Group on Health. So, that’s upcoming in a couple of weeks. But the point that Barbara makes, which I think is really apropos here, she said that, in the United States, we desperately need really talented and great digital health vendors, great entrepreneurs, ones who actually can deliver real results and do it at a fair price.

So, my hope is that we get better at these care flows. Now, I say all this to say, let’s take the conversation today as an opportunity for both entrepreneurs, vendors, as well as customers like employers and other purchasers or payers. It’s an opportunity to recognize and work together where there’s room for improvement and also place value on achieving that headroom.

As I mentioned earlier, in this healthcare podcast I am speaking with Rik Renard from Awell. Rik has a background in nursing and healthcare management. He joined Awell four years ago and now manages strategic accounts.

For more on this topic, listen to the show with George Mathew, MD, MBA, FACP (EP253).

Also mentioned in this episode are Ali Khan, MD, MPP; Oak Street Health; Thomas Vande Casteele; Stacy Mays; David Claud, MD, PhD; Sanat Dixit, MD, MBA, FACS; Barbara Wachsman; George T. Mathew, MD, MBA, FACP; Yubin Park, PhD; Jessica H. Green, MPH; Thyme Care; Better Health; Wellinks; Bob Matthews; Emily Kagan Trenchard; Robert Pearl, MD; and J. Michael Connors, MD.

You can learn more at Awell and CareOps.

You can also follow Rik on LinkedIn and X (formerly Twitter).

Rik Renard transitioned from a nurse practitioner to a start-up operator. Currently leading strategic accounts at Awell, Rik focuses on helping large care organizations make their care flows work harder than their care teams.

As the coauthor and driving force behind CareOps, a vibrant community of over 4000 healthcare professionals focused on enhancing care flows, he imparts insights on designing and improving care flows. His expertise is grounded in over five years of hands-on experience, during which he has successfully implemented over 50 care flows in various medical areas, including oncology, musculoskeletal disorders, and cardiovascular care. These efforts have significantly improved patient outcomes and efficiently freed up time for healthcare teams.

Holding a master’s degree in health care management and policy from Ghent University, Rik combines his educational background with real-world experience to make a tangible impact in healthcare.

09:26 Why should clinicians care about care processes and care flows?

12:05 Why do care flows and care processes have a bad reputation?

12:31 What components does a good pathway include?

14:51 Why pathways need to be looked at as a process of continuous reconfiguration.

17:15 Who did Awell survey about care processes and flows?

18:42 How many clinicians were using care flows, and what did those care flows look like?

25:45 EP315 with Bob Matthews.

26:44 EP392 with Emily Kagan Trenchard.

28:21 EP412 with Robert Pearl, MD.

30:01 “Just document something.”

30:14 What was a shocking find from this care process survey?

31:06 Is AI the answer?

34:13 Why is it important to get the foundation of data correct before introducing AI?

34:51 How should employers use this information to vet vendors?

You can learn more at Awell and CareOps.

You can also follow Rik on LinkedIn and X (formerly Twitter).

@rikrenard discusses #digitalhealthvendors and #patientoutcomes on our #healthcarepodcast. #healthcare #podcast #digitalhealth #healthcareleadership #healthcaretransformation #healthcareinnovation

Recent past interviews:

Click a guest’s name for their latest RHV episode!

AJ Loiacono (Encore! EP379), Nina Lathia, Marshall Allen, Stacey Richter (INBW39), Peter Hayes, Joey Dizenhouse, Benjamin Jolley, Emily Kagan Trenchard (Encore! EP392), Cora Opsahl (Encore! EP372), Jodilyn Owen

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For a full transcript of this episode, click here.

Here on Relentless Health Value, we have done a bunch of shows lately on how some weird PBM (pharmacy benefit manager) and pharmacy goings-on impact plan members, patients, and also independent pharmacies. During the conversation with Benjamin Jolley, PharmD (EP422), for example, Benjamin mentioned that he thinks some of these contract terms that really hurt independent pharmacies are signed by employers at the urging of their brokers or employee benefit consultants (EBCs).

Think about this. You have these huge vertically integrated PBMs who own their own retail pharmacies and/or mail order. You have EBCs that work with employers who, a lot of times, do not understand the contracts that they are signing. This is a recipe for what AJ Loiacono talks about on the podcast encore today: just how much those EBCs and brokers are, in some cases, being compensated to get employers to sign contracts that allow PBMs to corner the market and take all the profit.

Even if you listened to this encore in 2022, you might want to revisit it and consider what AJ says in the context of these recent shows with Ge Bai, PhD, CPA (EP420); Joey Dizenhouse (EP423); Mark Cuban and Ferrin Williams, PharmD, MBA (EP418); and Benjamin Jolley, PharmD (EP422), as I just mentioned. Also keep in mind the shows with Scott Haas (EP365) and Paul Holmes (EP397) from earlier … Olivia Webb (EP337) as well.

This show with AJ Loiacono is different than others you may have heard with him because in this healthcare podcast, we are not talking about PBMs. We’re talking about brokers and EBCs.

So, say I’m a self-insured employer. Here’s the big question: Is my broker or EBC helping me make the right decisions, or is he or she helping me make decisions that will make them the most money?

While there are some amazing and totally above-board EBCs and brokers out there, unfortunately, caveat emptor is a thing. Buyer beware, that is. Too many self-serving and I’m sure very charming sharks are out there circling plan sponsors.

It is currently a fact that some EBCs and brokers and even TPAs (third-party administrators) or PBMs or others take hidden kickbacks or fees or percentages. They make a lot of money, maybe the most money, in these secret ways. All this money, money paid in secret backroom deals—let’s not lose track, these dollars increase the total prices paid by plan sponsors and employees.

Now, I say this to say that my guest today, AJ Loiacono, calls 2022, right now, a “magical moment” for plan sponsors—and for straight-shooting EBCs and PBMs and all the others who are actually doing the right thing by their clients also. It’s because of the Consolidated Appropriations Act (CAA), which states quite clearly that plan sponsors can ask their healthcare and benefits service providers to disclose the money that they are making off of the plan—all of the money, not just the direct fees.

The CAA went into effect December 2021, and contrary to what some people have said or may believe, it is in force right now. The field memo went out on 12/31/2021. So, the CAA is the rule right now.

And in fact, the CAA makes it imperative under ERISA (Employee Retirement Income Security Act) to do what I just said: Plan sponsors must disclose the monies that they are paying out on behalf of employees and ensure that those fees are reasonable and free from conflict. If you’re the fiduciary of the plan, you gotta disclose all these indirect and direct compensations of the people that you are paying or the people that you are paying who may be kicking back dollars to other people you are working with, unbeknownst to you. The Department of Labor is putting as much emphasis right now on healthcare as they put on 401(k) plans in the early 2000s, so this is a big deal—or it should be—for plan sponsors.

So obviously, in order to comply with the CAA, self-insured employers should be requesting from their EBCs and brokers or others that they disclose, in writing, how much money they are making off the plan. You can see why this disclosure would be necessary if the plan sponsor is responsible to determine if those payments are reasonable and seem to be free from conflict, right? You can’t evaluate something you do not know about, and if you don’t know about it, the plan sponsor is the one at risk. Ignorance is not an excuse here.

Here’s one example: What if the EBC or TPA is collecting a $40 payment per prescription from the PBM? Wait … what? Some plan sponsor is paying $40 per script in, I guess you’d call it, a commission? Yes, that is a rumored example—$40/Rx. It is basically full-on arbitrage, and if anyone disagrees, let me know why and how it’s not.

Or let’s say the EBC is making, say, $6 per script payable by the PBM, and this sum should be mailed quarterly to a PO box in another state. This was a condition, by the way, for a PBM to win an RFP (request for proposal) that the EBC wrote and picked the winner of. Yeah, you as the plan sponsor really probably want to know that this is going on because it’s your butt on the line.

So, in sum, the CAA is in effect right now. Penalties can be levied right now against plan sponsors. For a deep dive into the CAA, listen to the show with Christin Deacon (EP342) from 2021.

So, what’s the process if I’m an employer plan sponsor? Step 1: Request in writing the dollars that your EBC or broker is making off of you. Similar to the advice that you’ll hear often on this show, ask for actual dollars, not a percentage of this or that. Ask for how much money did you (broker or EBC) make off each program that you recommended to us, and what did that total up to. Once you make that request, the EBC/broker/TPA (whoever you’re asking) has 30 or 90 days to respond, depending on who you ask. But if they do not respond, then you, the employer, should report them to the Department of Labor.

Keep this in mind: Once that EBC or broker is reported for failure to comply by anybody, meaning likely some other employer, it is only a matter of time before that information becomes public. And the second that info becomes public, I guarantee you that there’s some attorney out there just waiting to file a class action lawsuit against every other self-insured employer who uses that EBC/broker because everybody else out there is now out of compliance. Right? I’m not a lawyer and I am certainly not a class action ambulance chaser, but even I can figure out that strategy.

AJ Loiacono is the CEO of Capital Rx, which is a PBM 2.0, as they call it.

To see how the CAA is playing out, you can read about one real-life example of a school district’s lawsuit against an insurance consultant.

Also mentioned in this episode are Benjamin Jolley, PharmD; Ge Bai; Joey Dizenhouse; Mark Cuban; Ferrin Williams, PharmD, MBA; Scott Haas; Paul Holmes; Olivia Webb; and Chris Deacon.

You can learn more at cap-rx.com and find resources through law firms.

AJ Loiacono is a serial entrepreneur with over 20 years of experience in pharmacy benefits, finance, and software development. As the CEO of Capital Rx, his mission is to upgrade America’s healthcare infrastructure to deliver the highest level of client service and patient engagement while reducing total cost of care. AJ has spent his career studying the pharmaceutical supply chain and developing solutions that have continually redefined the pharmacy benefit industry to achieve this goal. Before Capital Rx, AJ was a co-founder of Truveris, where he served for eight years as CEO, CIO, and a board member, leading the company to record growth (Deloitte FAST 500 and Crain’s Fast 50). Prior to Truveris, AJ co-founded SMS Partners, a joint venture with Realogy (RLGY), and in 2010 exited the partnership with a buyout. In his first venture, AJ started Victrix, a pharmaceutical supply chain consultancy, which was successfully sold to Chrysalis Solutions in 2007.

07:09 Who can get in trouble for mismanaging employee funds?

07:48 “When you talk about conflicts of interest, they’re everywhere.”

13:13 “You’re paying for access.”

13:34 Why is it important to request that they disclose direct and indirect compensation?

14:04 What are the layers to these hidden fees and compensations?

18:13 What is a reasonable fee for a good plan admin?

19:27 “I think people need to take a step back and say, ‘How many different ways are they getting compensated?’”

24:50 “The compensation is not just unreasonable, but if they were to move it, they would lose access to an entire column of revenue.”

25:06 “For every good broker consultant, there’s a horrible individual lurking out there and it’s easy to figure out: Ask for them to disclose their fees.”

28:08 “You can’t win if you can’t even pay the house fee to come in.”

31:35 Why do you need to ask for disclosure, and what do you need to ask specifically?

32:21 What are some of the characteristics of a good plan consultant?

You can learn more at cap-rx.com and find resources through law firms.

AJ Loiacono of @cap_rx discusses #ebcs, #brokers, and #plansponsors on our #healthcarepodcast. #healthcare #podcast #digitalhealth #healthcareleadership #healthcaretransformation #healthcareinnovation

Recent past interviews:

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Nina Lathia, Marshall Allen, Stacey Richter (INBW39), Peter Hayes, Joey Dizenhouse, Benjamin Jolley, Emily Kagan Trenchard (Encore! EP392), Cora Opsahl (Encore! EP372), Jodilyn Owen, Ge Bai

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Here’s something Randy Vogenberg, PhD, wrote the other day; and I made some light edits: Research has documented the unintended impacts of poor pharmacy benefit strategy. Examples include increasing costs of care, bankruptcies, and member satisfaction declines.

And, yeah … agreed. Also, probably health problems if we’re talking about a member unable to access a drug they really need. I heard the other day about how so many patients who have had organ transplants have a hard time getting their transplant rejection meds. What?! I just can’t even with that one. On the other hand, you could have a plan that pays for all manner of drugs, cost-effective or not, appropriate or not.

And now we have premiums that no one can afford, and everybody loses for the exact opposite reason. These are the downsides that happen when pharmacy purchasing gets itself into a suboptimal place. And this can happen for many reasons, but one of them is when there is not a concerted effort to buy pharmaceuticals in a value-based way.

Now, here’s some reasons why employers may have a rough time paying for value (ie, paying a fair price for drugs that work).

Here’s one reason: Most employers do not have the power to influence the price of a medication. So, any given employer could decide, based on some cost-effectiveness analysis, that the price of a drug is too high. But it’s not like they can march into Pharma HQ and haggle. It’s more of a take-it-or-leave-it kind of thing.

Here’s a number two reason why value-based pharmacy purchasing can be tough: Pharmacy spend is siloed a lot of times from medical spend. So, the pharmacy vendor is only concerned about cost and denies access to even drugs that are proven to reduce medical spend.

Why wouldn’t they do that? The PBM (pharmacy benefit manager) was hired to reduce pharmacy spend. The end. Who cares how many ER visits or disease exacerbations transpired? That’s the medical director’s problem, not theirs.

Here’s the number three reason why value-based purchasing is rough: The time horizon an employee is with an employer, which is not one day—and it’s not a lifetime. Why did I say one day? I have heard more than once that the actuarial time horizon that some pharmacy plans use to determine if a drug is cost-effective is one day. If the drug doesn’t accrue any benefits in one day, well then, it’s a cost. It’s not effective.

On the other hand (and also problematic in the real world), sometimes cost-effectiveness analyses are done with a timeframe of the patient’s lifetime. And, yeah … there aren’t many employers who have employees for a lifetime—like, they’re 85 years old and still on the employer’s dime—so the time horizon can’t be too short.

But if it’s a really expensive med that will, at most, prevent something that’s not gonna happen anytime soon (heart failure, kidney failure, a stroke), these are things that an employer may pay for but likely is never gonna see the cost benefit of because that benefit will happen 30 years from now when the patient is on Medicare.

And here’s a fourth reason why value-based purchasing is tough: The FDA is approving drugs based on evidence from one study (ie, not a ton of evidence). And these drugs are also really expensive.

So, some of the above issues are solvable; some are less solvable. With this in mind, let’s tick through some advice that my guest today, Nina Lathia, suggests if you want to offer members a value-based formulary.

Have a stated goal. And maybe that stated goal is to meaningfully improve health of plan members while maintaining access, satisfaction, and affordability for said plan members and the plan.
Think holistically about healthcare spend, not just pharmacy spend.
Know what the value-based price of a drug has been calculated to be. I talked about this at length in the show with Anna Kaltenboeck (EP303). Also, Bryce Platt, PharmD, has written about this a lot.
Look into risk-based deals with Pharma and/or installment payments and/or some of these other interesting payment models that are emerging. Luke Prettol linked to one of them the other day.
Set good decision-making precedents that include shared decision-making with members/patients. This means communicating with employees and plan members about what you are doing to make good drug purchasing decisions and evaluate the clinical pros and cons of expensive drugs for any given patient. There are genetic tests now that can be done to determine if a drug is ever going to work for a patient, were these tests even done.

I mean, from a patient standpoint, some of these drugs have horrible side effects; and they might be being prescribed by a doc who’s not an expert in that condition. If I’m a patient and there’s a genetic test I could take before I pay a ton of my own money and subject myself to what might be some pretty nasty side effects (you know, all the things that you hear about at the ends of those pharma ads on TV, right?), this could be, in the right hands, a patient benefit. This feels very different from prior auths administered by a vendor doing all kinds of stuff, where it’s hard to make any connections to clinical value or patient upside, even if you squint at it sideways and use your imagination.

And, yeah … this is easy to say and really hard to do.

One definition I want to chuck in here for you: If we’re talking about a cost-effectiveness analysis, cost-effectiveness analyses calculate how effective is the drug, minus side effects at diminishing the so-called burden of illness—burden of illness meaning the financial and health costs of the disease itself or its exacerbations.

Nina Lathia, my guest today, is a pharmacist by training who has worked in hospital pharmacies. She earned a PhD in health economics. Currently she’s doing consulting work, helping purchasers make value-based decisions about pharmacy spend and managing formularies.

Specialty Pharmacy Playlist: https://lnns.co/uNZ3moCaQMb

Hit the subscribe button to add it to your podcast player.

Also mentioned in this episode are Randy Vogenberg, PhD; Anna Kaltenboeck; Bryce Platt, PharmD; Luke Prettol; Olivia Webb; Pramod John, PhD; Scott Haas; Aaron Mitchell, MD, MPH; Keith Hartman, RPh; Erik Davis; Autumn Yongchu; and Berkley Accident and Health.

You can learn more by emailing Nina at nina.lathia@healthcaredecisionmaking.com.

You can also connect with her on LinkedIn.

Nina Lathia, RPh, MSc, PhD, has spent over 15 years helping healthcare payers achieve value on their drug spend.

As the chief executive officer of Healthcare Decision Making, Nina works with public and private healthcare payers, helping them to make evidence-based decisions about their pharmaceutical benefits that lead to improved health outcomes and long-term financial sustainability of their health plans. Her focus is on providing independent, actionable advice for healthcare payers on reimbursement decisions related to expensive new drug therapies.

Nina is a frequent public speaker and commentator on employer-sponsored pharmacy benefits design, value-based healthcare decision-making, and evidence-based medicine.

Nina honed her skills in value-based assessment of drug therapies when she was a senior technical advisor at the National Institute for Health and Care Excellence (NICE) in the United Kingdom from 2014 to 2017. She has also worked as a clinical lecturer at the University of Toronto. Her work has been published in a number of high-impact peer-reviewed journals.

Nina holds a master’s degree and doctorate in health economics from the University of Toronto.

06:34 What does cost containment mean?

07:43 Why is it important to consider health outcomes?

10:00 What does value-based purchasing mean in Pharma?

11:09 What are the principles of cost-effectiveness analysis?

12:50 Pharmacy plan time horizons versus employer time horizons.

14:42 Why is it increasingly important for payers to take a more global look at health and cost outcomes?

16:14 Why is the first step establishing a value-based price for drugs?

16:43 Why is the second step thinking about risk-sharing agreements with manufacturers?

18:57 LinkedIn article by Bryce Platt, PharmD.

19:20 What should an employer do if there’s only one drug option and the price is too high?

21:20 What’s a specialty carve-out solution?

21:26 EP352 and EP353 with Pramod John, PhD, of VIVIO.

22:10 Why should employers get more comfortable with saying “no” to certain drugs?

25:36 Why is patient engagement key?

28:23 What does “good” look like for employers implementing drug-spend changes?

29:51 EP337 with Olivia Webb.

You can learn more by emailing Nina at nina.lathia@healthcaredecisionmaking.com.

You can also connect with her on LinkedIn.

Nina Lathia discusses #costcontainment and #valuebasedpurchasing in #pharma on our #healthcarepodcast. #healthcare #podcast #healthcareleadership #healthcaretransformation #healthcareinnovation

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Marshall Allen, Stacey Richter (INBW39), Peter Hayes, Joey Dizenhouse, Benjamin Jolley, Emily Kagan Trenchard (Encore! EP392), Cora Opsahl (Encore! EP372), Jodilyn Owen, Ge Bai, Andreas Mang

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This show today is for physicians or other clinicians or providers who are still taking insurance—those who are going about their day being pretty normal ... but at the same time, they’re noticing one and/or two things potentially going on.

Here’s thing one: They may be seeing patients struggling to afford care, especially patients with commercial insurance and huge deductibles. And/Or thing two: They may have patients actually coming in and asking to pay cash. It’s definitely becoming known in some circles that about half the time the cash price for something is actually cheaper than the “negotiated” rate with an insurance carrier. And this has really become an actionable insight for patients who haven’t yet met their deductible, and some high percentage of patients—maybe upwards of 90% of patients—won’t meet their deductible in any given plan year.

So, all of this is probably some pretty obvious foreshadowing, but let’s run through two maybe quick reasons why a practice might want to contemplate ways to make it easier for patients to pay cash when it is, in fact, cheaper for that patient to pay cash than it is for them to go through their insurance. Now, a clarifying point here: We are not talking here about that patient always paying cash heretofore … like, never using their insurance ever again, even if they get hit by a bus. No. We’re talking about the patient coming in for some office visit or service, and today, they want to pay with a wad of money they take out of their wallet and hand you. That is the end of the transaction that we’re talking about here.

So, here’s the first of let’s just say two reasons that a practice might want to entertain taking cash from insured (technically, at least) patients. First reason: We have a situation in this country where 48% of insured commercial patients say that they are delaying or forgoing care due to cost or fear of cost. Sometimes I say this 48% number to a clinician, and they will reply, “Well, that’s not in my practice or in my hospital; our patients show up.” To which I reply, “Yeah, because the patients abandoning care are not the patients that are coming in. They are abandoning care.”

Now, the second reason a “normie” practice might want to be thinking about how to help patients get the best possible price here is maybe less intuitive, but it’s a financial motivation for the practice.

I just saw Eric Vanderhoef. He wrote on a Listserv recently, and this is what he wrote:

Patient no-shows and cancellations cost healthcare providers as much as $7500 per month. That’s a loss of $375 per patient.

Hmmm … okay. Keep this in mind: The whole cancellations costing providers upwards of $7500 a month would help reduce this. Coincidentally, I was talking to Paula Muto, MD (she’s the founder of UBERDOC) about this exact same topic the other day—just the crazy no-show rates that many practices experience—and she made some really good points, which are exactly in line with the Tebra report Eric Vanderhoef referenced above.

She said that if a patient knows exactly how much a physician visit is going to cost—because they’re paying cash and the price is set between the doctor and the patient, so the price is the price, the end—no-shows will go down, and this is especially true when the appointment is tomorrow and not six months from now when appointments are booking these days. It’s kind of not normal for anybody to know what’s gonna be happening in lives six months from now, so no wonder patients fail to show.

Dr. Muto is recommending maybe having a couple of slots open every day for patients who want to pay cash. Doing this could help improve some—not all, for sure, but some—practice cash flow issues which are caused by the no-show thing or the getting paid by the insurance carrier net whatever months later after a billing fight kind of thing. And it’s also a win-win for patients with high-deductible plans, especially those patients who are coming in asking to pay cash.

In the conversation today, Marshall Allen, my guest, explains how to, in a simple enough way, operationalize the ability of a practice to take cash. There’s a form that you’ll need for insured patients. You’ll actually need a cash price. It’s also a marketing opportunity. For example, you can get listed with entities that connect consumers to practices that take cash, like UBERDOC, but there’s also a growing movement of employers, especially in some parts of the country, who are looking around for providers who will do direct contracting or cash prices.

In fact, I just saw a study the other day: “New polling conducted by Marist … found that 94 percent of adults agreed that hospitals, insurance companies and doctors should ‘be legally required to disclose all of their prices, including discounted prices, cash prices, and insurance negotiated rates across hospitals and across plans in an easily accessible place online.’”

Alright, if I know you, you are thinking right now about all of the reasons why this won’t work. So, let me head you off at the pass. My guest today, Marshall Allen, solves for the most common issues that everybody brings up, including the big kahuna issue, the “I am contractually forbidden by a health plan to allow patients to pay cash.” You will need to listen to this podcast for the answer.

Now, there are, of course, other hairballs to untangle that we do not address today. As Marshall Allen says, there are layers of dysfunction here. One bit of weirdness is something that David Schreiner, PhD, told me about the other day. David is CEO of Katherine Shaw Bethea Hospital in Dixon, Illinois; and he’s also the author of a new book entitled Be the Best Part of Their Day: Supercharging Communications With Values-driven Leadership.

David said that sometimes hospital payer contracts have the payer reimbursing the hospital for a percentage of overall charges. Yes, you heard that right. The hospital totes up, using their charge master rates, the total amount of billings for the entire year; and the carriers pay a percentage of that total. So, the hospital has a big incentive to keep charge master rates as high as possible. If some patients pay lower cash amounts, then their carrier reimbursement (the hospital’s carrier reimbursement) will drop. Probably some math there, I guess, because if it’s determined that patients aren’t actually showing up for services due to cost, then they might be getting paid a percentage of zero by the carriers; but point taken still. There are, for sure, considerations to be thought through; and, for sure, having contracts like this is one of them.

I was talking to Lauren McAteer the other day, and she told me when she worked for a hospital and went to meetings, sometimes she’d bring in a hospital gown and hang it over a chair in the conference room to make it harder to not consider the patient perspective and think about how decisions impacted patients. Good idea, because where there’s a will, there’s often a way.

My guest today, Marshall Allen, probably needs no introduction. But I ask Marshall for the skinny on how he started Allen Health Academy, and you will hear him introduce himself. So, in the interest of eschewing redundancy, let’s do this thing.

Also mentioned in this episode are Eric Vanderhoef; Paula Muto, MD; David L. Schreiner, PhD; Lauren McAteer, CCXP; Benjamin Jolley, PharmD; David Scheinker, PhD; William Shrank, MD; Jerry Durham; Leon Wisniewski; Cristin Dickerson, MD; and Dutch Rojas.

You can learn more by signing up for Marshall’s newsletter at marshallallen.substack.com.

You can also go to Allen Health Academy or to Marshall’s site.

Marshall Allen has spent more than 17 years investigating the healthcare system as a journalist. He is the founder of Allen Health Academy and the author of Never Pay the First Bill: And Other Ways to Fight the Health Care System and Win. His book and his health literacy videos, The Never Pay Pathway, are helping working Americans save hundreds and thousands of dollars—per healthcare encounter. Marshall is a two-time finalist for the Pulitzer Prize and winner of the Harvard Kennedy School’s Goldsmith Prize for Investigative Reporting and dozens of other journalism awards. For more information, visit allenhealthacademy.com and sign up for his newsletter at marshallallen.substack.com.

07:04 What Allen Health Academy is doing.

11:01 What’s the problem with the system now?

14:19 EP363 with David Scheinker, PhD.

14:27 EP413 with Will Shrank, MD.

14:34 What’s the hack Marshall Allen shares for insured patients paying cash?

15:06 How can patients cite HIPAA to pay cash instead of using their insurance?

19:00 What’s the first recommendation Marshall Allen has when dealing with healthcare billing?

21:26 EP297 with Jerry Durham.

21:48 What are the other benefits of a clinic accepting cash payments?

25:36 Why do we need to have more direct pay happening?

26:36 How should a medical provider set a cash price?

27:12 Research tools for fair pricing: fairhealthconsumer.org, BILLY, colonoscopyassist.com, Jason Health, Green Imaging.

32:36 How do you find the win-win between a patient and a doctor?

32:51 What’s the final tier of partners in creating more direct-pay opportunities?

34:30 What’s Marshall Allen’s opinion on having to pay credit card fees?

You can learn more by signing up for Marshall’s newsletter at marshallallen.substack.com.

You can also go to Allen Health Academy or to Marshall’s site.

@marshallallen discusses operationalizing cash payments for #clinicalpractices on our #healthcarepodcast. #healthcare #podcast #pharma #healthcareleadership #healthcaretransformation #healthcareinnovation

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Stacey Richter (INBW39), Peter Hayes, Joey Dizenhouse, Benjamin Jolley, Emily Kagan Trenchard (Encore! EP392), Cora Opsahl (Encore! EP372), Jodilyn Owen, Ge Bai, Andreas Mang, Karen Root (Encore! EP381)

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For a full transcript of this episode, click here.

This inbetweenisode is me geeking out, so if that’s not your thing, you’ve been warned.

There’s a term I’d like to encourage anyone interested to look up. It’s the narcissism of small differences. It explains a lot. The narcissism of small differences is the idea that those who, maybe in theory, should be friends/BFFs working side by side toward the same major goal are not. We divide ourselves into these micro-camps. Why? It’s a thing to get really narcissistic about small differences.

Consider vegans and vegetarians who are so often all up in each other’s business in really nasty ways. Who knew whether or not someone decides to eat cheese could create such enmity? Or there’s subreddits on Reddit dedicated to people fighting about fantasy football. You would think that everyone who plays fantasy football would be friends, except … not. There are apparently major schisms in the fantasy football world. Or consider branches of the same religion who are at war with one another. Consider people in the same political party fracturing over who is the very most whatever … pick something.

So, now let’s talk about the narcissism of small differences and how it’s relevant when we’re thinking about helping patients in the United States get better healthcare for an affordable price. We have these gigantic corporate entities right now very industriously vertically integrating to control supply chains and cornering markets buying up physician practices and using every trick in the book to extract maximum profitability from patients and taxpayers and employers.

Achieving some kind of tipping point where these incredibly well-orchestrated and well-funded profit machines are driven back will only happen when enough people, individuals, amass behind that tipping point. It will take more than a village. And my ardent request here is to—I don’t know—we quit it with the narcissism of small differences. Do not succumb.

“When you cling to ‘my way’ you preclude your ability to synthesize, cooperate, support, or even—in [some] extreme cases—peacefully co-exist with other members of your tribe. You destroy a fundamental reason for belonging in the first place: community.” That last bit was a quote from a blog post by Frances Cole Jones.

I love the community who I interact with most on LinkedIn, and there’s also some Listservs and some Slack groups that I love. Even X and Threads, for the most part, are lovely nests of great people trying to understand one another and further a common cause. I guess when you get into the kind of wonky stuff that you and I get into, there’s a finite group of us who are even reading these Tweets or posts or whatever they are. It’s a “small junior high school,” as one of my clients used to call it a long time ago.

But there’s also often enough that somebody who swoops down and in the name of ... something … slams a 95% aligned cause. It’s like two people agreeing on the restaurant to go to lunch, but one wants to go there and get a rice dish or because it’s closer to their house and the other wants to go there because the restaurant serves a great tortilla—and the two of them fight over what’s the right reason to go to that restaurant or what the best item is on the menu. This is literally a metaphor that describes some of the sniping that I have seen, that you have seen amongst mostly aligned folks trying to figure out how to put patients over profits. I mean, guys, go to the restaurant. Once you’re there, you can place separate orders. Work together to just get to the restaurant.

It's certainly easier to say than do, but if we’re aware of this and we focus on the points of agreement and maybe just think a little bit about whether the points of difference really even matter—in real life, not theoretical philosophy life—because a lot of times, they don’t. And then divided we fall.

I think a lot about small difference narcissism-ing when someone comments derisively that a post or an article puts too much emphasis on … I don’t know, transparency or employers or mental health or … pick something. But here’s the thing: In the village, everybody is gonna have different number one priorities. That’s why it takes a village. Maybe I’m wrong, but I’m thinking it’s not a zero-sum game. Just because someone is angling hard for patient empowerment or consumerism or whatever doesn’t make it harder for anybody else to promote patient health literacy or better quality measures or integrated behavioral health. Probably it will make it easier, since both are trying to figure out how to put patients over profits. Both are pushing in the same direction, albeit one is headed northwest and the other one might be angled really far northeast. Point is, everybody will get momentum as long as we’re all roughly headed northbound.

Now, caveat and sidebar: There are people emphasizing things because they’re actually working on them, and then there are people promoting things because it’s good marketing. Jeff Hogan wrote about this at the beginning of January, and I agree with him here. Here’s what he had to say, and then I’m gonna connect it back to what I think is a really important point about the narcissism of small differences. Jeff wrote:

Over the course of the last month [I have] been asked no fewer than 20 times about exactly which conferences [I am attending] … this year. … All of my conference intentions are focused on one question: What will this conference do to promote a complete change in our healthcare paradigm … focused on superior [patient] access and outcomes as well as payment reform and care transformation?

Said a different way, is this conference literally a honey pot for those who have screwed up the existing system and who are merely virtue signalling …? Who is speaking at this conference? Is it representatives of the same health systems and the same payors [and perpetuating] legacy moats and monopolies or is it a conference promoting change makers, risk takers and provider models and systems embracing risk and [healthcare] transformation?

… What kind of change and innovation ever came out of an echo chamber?

Challenging my friends and healthcare influencers to think carefully about their choices. Conferences create the opportunity to leverage great ideas and movements. We’re finally seeing first followers having expanded influence. Are you one of them?

So, talking about that conference that happens at the beginning of January, I heard that a CEO of a major PBM (pharmacy benefit manager) stood up in front of that room and used the word transparency or a synonym six times in five minutes. Check out this LinkedIn post/video and this article as to why my eyebrows are sky-high on what transparency actually means for the CEO when you look at what this PBM is actually doing.

If you look at quarterly reports again of some of these big entities, the cover of that annual report has lots of wonderful patient-centric words on it—while if you look at how those entities are actually making money, it is in direct conflict with those words. Now, there’s always going to be nuances here … always. And that’s what makes this very subjective and very personal. Everyone doing well by doing good is going to have a marketing statement, and it wouldn’t be a marketing statement if it didn’t sound amazing, right?

The nuance or the question is: To what degree are they actually achieving that marketing statement? What’s the line that separates pure spin from an acceptable level of achievement of the marketing statement? Because we want to support the organizations that are trying here while, at the same time, make sure that we’re kind of quarantining those who are just all talk in ways that confuse the marketplace and don’t help patients get affordable quality healthcare, just like Jeff just said.

I gotta say, sometimes I struggle here myself. This is why I wrote a manifesto (EP399 and EP400). And you might struggle, too. It’s probably no coincidence that sometimes the loudest individuals advocating for patients over profits are retired. And, throwing no shade here, I love the whistleblowing and the truth telling. But I think we have to be a little careful because who is actually gonna do the changing and the tipping point reaching are those who are still working for a living on or about the healthcare industry.

And when I say “working for a living,” I mean we’re taking money and putting it in our pockets. We need to pay the rent and go on vacation every now and then. And we need money to pay for our family’s healthcare. If we didn’t take money, if we just volunteered, that cash might have funded more patient care or maybe made that care or premiums more affordable. Every one of us is a cost center if we think about it from the standpoint of the patient or plan member. Every one of us. If you did it for free, the money could accrue to patients, right?

I also keep in my mind that there are, for sure, individuals within any of these profit-seeking, financially motivated, maybe not patient-motivated organizations; and these individuals have a job to do the good that that organization is doing. These are the ones who are actually working on pilots that actually work or doing work with social determinants of health or behavioral health that are actually (again) working. While I dislike the overall impact potentially of the one who is paying their paycheck, I gotta keep in mind that the more successful this individual is within that corporate entity, the more good that that entity is gonna wind up doing. I think about this because, again, my main concern is doing better by patients, helping the sort of insurgents within some of these entities. These entities should be held accountable, no doubt; but the people who work within them should—I don’t know—I still want to encourage them to do better. The goal is to help patients, not catch up some good people in a quest to punish their boss.

So, it’s always a matter of degrees. It’s always nuances. It’s always how much value got delivered back for the dollars that we took in compensation for the work that we did. What did the work we do add up to?

In my personal case—and I covered this in the manifesto (again, EP399 or EP400)—I worked really hard, by the way. I was sweating bullets when I was creating that manifesto. I was not sure whether I was gonna get skewered. It really was hard, and it took some major soul searching to create (again, EP399 and EP400). What I try to do, I usually shoot for trying to get patients better outcomes in a way that is cost neutral. The work that I do most of the time (ie, my day job) is probably not gonna lower costs. It’s not gonna lower costs. It’s just not within the parameters of what I do, and it’s not within the parameters of my expertise. Others who I count on to do their thing here, they might be working the opposite angle—the care might be the same, but costs are reduced. Again, a fine way to go. Maybe some of you have figured out how to get patients better care at lower costs. That’s the holy grail … and big kudos. But not everybody can do it. It’s just not possible a lot of times on any number of levels that we don’t have time to get into today.

Again, all of this is why I wrote my manifesto for how I reconcile my own self and determine what “having personal integrity” means to me and for me and also for my company. And maybe over the years I’ve made some choices that I wouldn’t make again—but those choices ultimately have wound up funding this podcast, so maybe that’s my redemption potentially. I don’t know. We all live and learn, and we can’t start to hate ourselves because we haven’t been perfect. A lot of times, you don’t realize the ultimate impact of something until after you’ve done it. And at that point, you just gotta regroup and try again and do better this time. We all just have to contemplate patient impact.

On the other hand, there are often conversations with very motivated entrepreneurs that I’ve had where the words affordability, impact on patient premiums, access, or better actual measurable health … these words don’t come up. At all. Or you talk to somebody else who works at one of these behemoth payers or hospital systems or whoever, and those words do not come up. At all.

Again, tracking back to the narcissism of small differences here, are we fighting with someone who is basically 95% aligned with what we’re trying to do? Or is this somebody on the other side who’s really not in the village because they do not have the same overall intent?

The point I’m making here in this inbetweenisode is simply that if we’re thinking about this from the standpoint of the patient, then every one of us who isn’t retired or independently wealthy or volunteering, we all have a great opportunity to do some amazing work. But we’re also all living in glass houses, and if somebody really wants to get all small difference narcissistic about it, they probably could very self-righteously take out most of us. This isn’t some kind of cartoon where all the good guys all look the same and everything is black-and-white and there’s no nuances. I’m belaboring these points because if we want to build a village, we cannot do so without contemplating who we choose to let in it and who we’re gonna beat up on LinkedIn or wherever. But we can be a motley bunch and still work together, as long as we accept each other for the imperfect souls that we are and what we can in the aggregate add to the common cause. There’s no “one size fits all” for what we want for ourselves and what we want our legacy to be.

I wanna just track back for one sec to that earlier comment I made about people who work for a company that’s actively working to take as much money out of the system as possible and give it to their shareholders at the corporate level … because here’s an actual case study example of that, and maybe it will be helpful. The other day, I was talking to an actuary who worked for a large (again) payer. And this actuary was trying to figure out ways to create win-wins for plan members within the constraints of his job. This actuary, if he can figure out the math, given the scale of members that he’ll reach, he could have a really large positive impact even if he only changes the trajectory of his math by a fraction of a percentage point. I want this guy on my team and in my tribe. He is trying to help, and he has the power to incrementally fix some stuff that is gonna matter to potentially millions of people. I’m not gonna kick him out of my village anyway because of who pays his paycheck. Conversely, I’m gonna try to encourage him to spread his way of thinking to the other actuaries that he works with.

Or I get emails all the time (all the time) from people, especially at the beginning of their careers; and they’re looking to find a job where they can make an impact. These are smart, ambitious young job searchers, and I hear from them so often I actually have a very long template response that I’ve been poking away at for years. And I always tell them some variation of many of the things that I have said on this podcast.

Often enough, though, I’ll get a response back that’s something like, “Wow! Thanks so much. This was all so helpful. After much thought, I’ve decided I’ll go work in private equity (PE). I’m gonna go work for a private equity firm so I can fund start-ups who are gonna make a difference for patients.”

They may go on, and they mention how they were reading the Slack channel of one of these many groups where they don’t talk about the stuff that we talk about on Relentless Health Value. They talk about the thrilling world of start-ups and health information technology and scaling and AI and repeatable whatever. Hold your judgment. I am managing to keep mine in check. I consider that Iora Health (now One Medical) and ChenMed really help a lot of patients. There are some great new companies out there. People also have made lots of money at some of them. Nuances. Choices. Also, who’s their leadership?

Now, it’s inarguable that anyone that’s working for a profit-seeking missile of a publicly traded company or a PE-funded company is going to have to contend with a moral framework that is more of a money framework than a moral framework. Same thing goes for anyone working at a huge, consolidated hospital system like the ones that get written up in the New York Times for all kinds of egregious stuff.

This money focus may be irrevocably misaligned with the values of someone who works there, and the person may ultimately quit because it becomes too much cognitive dissonance. And if and when they quit, great. They’re at a different place in their journey. Maybe they listened to Relentless Health Value long enough and began to realize some of their employer’s Kool-Aid might not taste quite right. For them to get to the next stage of their journey and have the impact that they may ultimately want to have, they kinda had to start out in the belly of the beast—and I won’t hold that against them, especially if they were able to alter the trajectory of the organization or help patients along the way while they were there.

Here’s another example to think about as we think about the narcissism of small differences and who gets to be in the village and who we’re gonna tell to talk to the hand. I was talking to a friend of my dad’s who literally was going to die from a neuroendocrine cancer. He had weeks to live, maybe not even plural. He was given a new immunologic cancer drug. And it’s now two years later, and he’s still here and in remission. According to the package insert of this drug, he’ll probably have 47 months, almost four years, of extra life.

Yeah, that drug was expensive. I opened my mouth to say something, and my dad’s friend … he kinda shushed me. He said, “Do not say anything bad about the pharma company or my doctors at the big, consolidated health system where I got my care. I am alive, and I should be dead.”

This is why I started Relentless Health Value and why I continue to do this thing. It’s because almost everything in the healthcare industry along the good-for-patients curve is a matter of degrees. Tip too far in one direction, and we start to cost more than the value we put out in exchange. Tip too far in the other direction, we go out of business.

Everything I talk about on Relentless Health Value is in the service of helping myself and you and anybody else I can reach. It’s in the service of us figuring out how all of these nuances work in the real world—to help figure out who gets what when and how that might impact patients caught in the crossfire. It’s to help figure out my own path forward that I can be proud of, and maybe I can help others trying to do the same.

But at the end of the day, we’re all gonna make slightly different choices and evaluations. Please don’t let the narcissism of small differences prevent us from creating a village large enough to fix healthcare for patients. Also, it’s just a nicer way to exist.

Also mentioned in this episode are Frances Cole Jones; Jeffrey Hogan; Eric Bricker, MD; Iora Health; and ChenMed.

For more information, go to aventriahealth.com.

Each week on Relentless Health Value, Stacey uses her voice and thought leadership to provide insights for healthcare industry decision makers trying to do the right thing. Each show features expert guests who break down the twists and tricks in the medical field to help improve outcomes and lower costs across the care continuum. Relentless Health Value is a top 100 podcast on iTunes in the medicine category and reaches tens of thousands of engaged listeners across the healthcare industry.

00:42 What “the narcissism of small differences” means.

02:18 How does this narcissism of small differences show up in the effort to fix the healthcare industry?

05:26 Quote from Jeff Hogan.

10:12 “What did the work we do add up to?”

16:31 Why we shouldn’t judge someone for working within the “belly of the beast.”

For more information, go to aventriahealth.com.

Stacey Richter discusses small differences and #healthcaresystem fixes on our #healthcarepodcast. #healthcare #podcast #pharma #healthcareleadership #healthcaretransformation #healthcareinnovation

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Peter Hayes, Joey Dizenhouse, Benjamin Jolley, Emily Kagan Trenchard (Encore! EP392), Cora Opsahl (Encore! EP372), Jodilyn Owen, Ge Bai, Andreas Mang, Karen Root (Encore! EP381), Mark Cuban and Ferrin Williams

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Here’s a quote from Ann M. Richardson, MBA. She wrote it on LinkedIn, and I love it:

Quiet the noise that doesn’t add value.

Surround yourself with intelligent and respectful people who can deliver endless opportunities.

Celebrate brilliance and new beginnings.

Together, we’ve got this.

Thanks for this beautifully stated call to action (I wish I would have written it myself) because it is also precisely the goal of Relentless Health Value and my hope for the Relentless Health Value Tribe—those of you who have connected with each other by way of this podcast vis-à-vis LinkedIn, or maybe you’ve met each other at an online or live event. For sure, subscribe to the weekly email to get notified of such goings-on.

Now, this aspirational vision doesn’t mean putting the onus on just any given individual to fix the systemic failings that get talked about on the podcast, but we can start somewhere. We can sit with ourselves; we can ask ourselves some big questions. We can decide the legacies we want to leave and what we want our life’s work to add up to. That is what this show should, I hope, help you accomplish. And, yeah … together, we’ve got this.

In this healthcare podcast, I am speaking with Peter Hayes; and we talk about five realities of 2024 for hospital chains, integrated delivery networks, health systems. Now, to make one thing very clear, as I have said many times on many Relentless Health Value shows: Not all hospital chains or hospitals are the same. There are large, consolidated, extremely rich, extremely politically and economically powerful organizations who are called health systems. And then there are rural or urban institutions that are barely scraping by and serving huge vulnerable patient populations. And despite the many aforementioned names for hospital chains and their associated outpatient facilities and owned physician groups and urgent care centers, all these names for these big care delivery entities are flabbergastingly meaningless because they do not separate the consolidated rich ones from the very desperately not rich ones.

Today on the show, we’re talking about the first kind of health systems: the big rich consolidated ones which are taking over every geography where there’s money to be made. These are the ones where you read about their bad behavior in the New York Times or hear about them in YouTube videos like this one.

Peter Hayes talks about the five things that these behemoth entities may really need to start thinking hard about, even in the face of their fierce and often-unrelenting market power and the political hold that they have over many local communities and all the regulatory capture that goes along with that.

So, here’s Peter’s list in a nutshell—the five things to get real about:

Health systems need to get real about the CAA (Consolidated Appropriations Act) and its implications that plan sponsors only pay “fair and reasonable” prices for medical services. Now, before I dig in on this, jargon alert: When we say plan sponsors, that means entities such as self-insured employers—sponsors of health plans, if you will (the purchasers, the ones who are actually paying the bills). Peter explains the quick version of what the Consolidated Appropriations Act is in the show that follows, so do listen. But for more info on this really, really meaningful bit of legislation that is the law as of 2021, go back and listen to the episodes with Chris Deacon (EP342 and EP408) or check out the myriad of LinkedIn posts from Jeff Hogan. Also, others like Darren Fogarty, Justin Leader, Jamie Greenleaf, and others have some great words of wisdom that you will be able to find that really explain what the point is of the CAA, the Consolidated Appropriations Act, and its sprawling implications.
To survive on reduced commercial reimbursements, health systems need to get real about becoming ruthlessly aggressive in driving administrative and technology efficiencies.
They need to get real about pivoting from fee-for-service reimbursement to episode-based care based on taking real downside risks for good clinical outcomes. They need to pivot from a mindset of maximizing patient revenue to maximizing patient health. They need to move from a sick care reimbursement model to a healthcare reimbursement model based on health.
They need to get real about being completely transparent and accountable in reporting how they are using the value of their tax-exempt status. Similarly, they need to account for and report how they’re using the estimated $55 billion in net margins that they’re realizing off the 340B drug program.
They need to get real about quality and patient safety. We still have about 46% of our hospitals that have a C or lower Leapfrog rating. And, by the way, the chance of having a fatality on an avoidable error is 90% higher at a C or lower-rated Leapfrog entity versus a Leapfrog entity that has an A or a B.

Now, some of you—and by some of you, I mean practically everybody listening—are thinking of reasons why any one of these “get real about” things is arguable or how one of the above is not holding up in some market. I think Peter would tell you the same thing that I would: You’re not wrong. But trying to predict a zeitgeist or the next pet rock never works well because it’s always a confluence of right time/right place where the whole is way more than the sum of its parts.

Think about Malcolm Gladwell’s The Tipping Point. It’s about how small changes can have enormous effects if the context is right. So, now contemplate these five things that Peter brings up. All these forces are pushing in the same direction. Put it all into a stew where 48% of Americans have delayed or forgone care due to cost. Listen to the show with Wayne Jenkins, MD (EP358) for more on that. Or, you have the article John Tozzi just wrote in Bloomberg. Here’s a quote: “In one California community, teachers have to pay an extra $10,000 a year to upgrade to insurance that covers the local hospitals. Teachers who can’t afford it … give birth outside the county.”

Meanwhile, insurers are making record profits, along with hospital CEOs and C-suites. At the same time, you know who I think is the third-biggest group with medical debt in this country? Yeah, it’s people who work in hospitals—nurses, others. There’s this frothing lack of trust for hospitals and what goes on there: 30% of physicians do not trust the leadership of their health system. And no wonder. There are examples of healthcare executives sitting up there in their palatial offices acting more like mobsters than the nuns they took over the hospital from.

So, to orient your context, you are here.

Peter Hayes is the newly retired former president and CEO at the Healthcare Purchaser Alliance of Maine. He is a national presence in healthcare strategy, innovation, and a keynote speaker.

For more on the wild-ass problems with hospital pricing, check out this list of shows. But, spoiler alert, some of these are hair-raising.

Encore! EP249: The War on Financial Toxicity in North Carolina as a Case Study Everybody Should Be Keeping Their Eye On, With Dale Folwell, North Carolina State Treasurer

EP395: Consolidated Hospital Systems and Cunning Anticompetitive Contracts, With Brennan Bilberry

EP390: What Legislators Need to Know About Hospital Prices, With Gloria Sachdev, PharmD, and Chris Skisak, PhD

EP389: The Clapback When Hospitals Cannot Constrain Their Own Prices, With Mike Thompson

EP346: How Did Health Systems Get Addicted to the Inflated Prices They Charge Employers and Some Patients? 2021 Update, With Peter Hayes, President and CEO of the Healthcare Purchaser Alliance of Maine

EP394: Spoiler Alert: It Is Counterintuitive Which Hospitals Offer the Most Charity Care, With Vikas Saini, MD, and Judith Garber, MPP

Also mentioned in this episode are Ann M. Richardson, MBA; Chris Deacon; Jeffrey Hogan; Darren Fogarty; Justin Leader; Jamie Greenleaf, AIF, CBFA, C(k)P; Wayne Jenkins, MD; John Tozzi; NASHP (National Academy for State Health Policy); Gloria Sachdev, PharmD; Chris Skisak, PhD; Leon Wisniewski; Cora Opsahl; Rik Renard; John Rodis, MD; Rob Andrews; Al Lewis; Eric Bricker, MD; Vikas Saini, MD; Judith Garber, MPP; Lown Institute; RAND Corporation; Dale Folwell; Brennan Bilberry; and Mike Thompson.

You can learn more by following Peter on LinkedIn.

Peter Hayes recently retired as the president and CEO of the Healthcare Purchaser Alliance of Maine and formerly a principal of Healthcare Solutions and director of associate health and wellness at Hannaford Supermarkets. He has been recognized as a thought leader in innovative, strategic benefit design for the past 25+ years. He has received numerous national awards in recognition of his commitment to working collaboratively with healthcare providers and vendors in delivering health benefits that are focused on value (high-quality efficient care). He has been successful in this arena by focusing on innovative solutions for patient advocacy, chronic disease management, and health promotion programs.

Peter has also been involved in healthcare reform leadership roles on both the national and regional levels with organizations like Center for Health Innovation, Care Focused Purchasing, and Leapfrog. He’s also co-founder of the Maine Health Management Coalition and has been appointed by two different Maine Governors to serve on Health Care Reform Commissions to recommend public policies to improve the access and affordability of healthcare for Maine citizens.

08:04 Why do hospitals need to get real about the implications of the Consolidated Appropriations Act?

10:09 What is considered fair pricing for hospitals?

13:00 EP390 with Gloria Sachdev, PharmD, and Chris Skisak, PhD.

15:59 The medical transparency tool, Billy.

16:34 How does lowering prices become more challenging with consolidated hospital systems?

18:07 What is one of the solutions available to combatting this now?

19:31 Why do hospital systems need to get real about administrative and technology efficiencies?

22:27 EP373 with Cora Opsahl.

26:51 Why do hospitals need to get real about pivoting from fee-for-service reimbursement to episode-based care?

30:16 EP415 with Rob Andrews.

30:53 Why do hospitals need to get real about the 340B program and their tax-exempt status?

35:38 EP394 with Vikas Saini, MD, and Judith Garber, MPP.

38:19 What are the ethical and moral issues that are coming to a head with healthcare costs?

39:03 Why do hospitals need to reexamine their care quality and patient safety?

40:05 “We just need to make sure that the health industry is as accountable as some of our other industries.”

42:53 Why does Peter think it’s going to take regulation to move the dial?

You can learn more by following Peter on LinkedIn.

@pefhayes discusses #hospitalsystems and what their executives need to do on our #healthcarepodcast. #healthcare #podcast #pharma #healthcareleadership #healthcaretransformation #healthcareinnovation

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Joey Dizenhouse, Benjamin Jolley, Emily Kagan Trenchard (Encore! EP392), Cora Opsahl (Encore! EP372), Jodilyn Owen, Ge Bai, Andreas Mang, Karen Root (Encore! EP381), Mark Cuban and Ferrin Williams, Dan Mendelson (Encore! EP385)

The Tipping Point: How Little Things Can Make a Big Difference

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For a deep dive into the way back backstory here, listen to the show with Dea Belazi, PharmD, MPH. That’s episode 293, and it’s entitled “Game Theory Gone Wild,” because gone wild is what has happened with pharma manufacturer co-pay assistance programs.

Don’t forget that the original intent of the first chess move here was by pharma manufacturers to circumvent basically PBM (pharmacy benefit manager) formulary restrictions, because the leverage PBMs have is access and patient out-of-pocket costs—and let’s focus on the out-of-pocket costs right now. If a drug is on formulary, patients can get said drug for a lower relative price. Drugs not on formulary are abandoned at the pharmacy counter quite often because patients cannot afford them, and this is by design. This patient abandonment of their prescriptions is what gives the PBM leverage when negotiating with Pharma. If Pharma doesn’t play by PBM rules, they get kicked off the formulary; and then patients can no longer afford to get their meds and pharma market share tanks.

So, the original intent of co-pay cards was for Pharma to say, “Ha ha, talk to the hand, you PBMs. You can not put us on formulary if you want, but I’m gonna lower the out-of-pocket costs all by meself with me co-pay cards. If you, PBM, force a $300 co-pay or whatever, which is way too high for most patients, I, Pharma, will pay $275 of that (or maybe all $300) a month on the patient’s behalf with my co-pay card program. So, patients are now left with a reasonable amount that they should be able to afford, and my pharma drug’s market share is unhindered.”

I think one thing to keep in mind here as we evaluate the net impact is that not all situations are the same. Let’s say there’s two main scenarios—and keep both of these in mind during the conversation that follows with Joey Dizenhouse as you consider the impact on plan sponsors and patients vis-à-vis their premiums and also on patients/members in the short term.

Scenario #1: Let’s say there’s one drug out there for a particular condition. One drug. And on some plan, that one drug has a ridiculously expensive out-of-pocket cost, say, $8000 or something like this, whatever their deductible or the max out-of-pocket is for that particular member on that particular plan. And this is $8000 every year if this is a chronic condition, which makes it different than someone hitting their deductible this year because they had a knee replacement or whatever. In this first scenario, we’re talking about patients or their kids who in perpetuity need a drug and who effectively just had their salary reduced year over year by $8000 or whatever. If they want the med, they have no other option than this huge out of pocket. That’s one situation.

Scenario #2: Let’s say there’s another really expensive drug, but in this scenario, there’s a generic equivalent or there’s some other brand that costs $70 and works for most patients. So, yeah … now we have patients who get a co-pay card and are thus incented by their low or no out of pocket to get a drug that is effectively a rip-off. So, now the plan is paying something upwards of $8000 instead of $70. And it’s not like the patient got a better product. It’s upwards of 8000 wasted plan dollars that really don’t accrue any better health.

And so, this is really where our story begins.

A couple of definitions here:

Maximizer refers to the entity running a maximizer program. It’s a noun. It’s a who. Oftentimes the maximizer is the PBM, but not always.

Joey talks about two kinds of maximizer programs: One is what Joey calls a spread model, and then there’s also the transparent model.

We also in the podcast that follows talk about a scheme which is often pitched to plan sponsors that I’m going to call the “the drug’s not covered” approach.

At the end of the show, we come up with three bits of advice. And here they are, spoiler alert:

Buyer beware. If you are a self-insured employer or some other entity who is purchasing these maximizer programs, purchasing due diligence is required. If your vendor makes more money the more a drug costs, yeah, you have misaligned incentives and the chances of you (the plan sponsor) and all of your members getting screwed is on the high side. (Eric Bricker, MD, shows how this could work in this video about the Cigna “transparent” CostVantage offering.)
As Lauren Vela said also in episode 406, everybody always thinks that their contracts are amazing. It’s everybody else’s contracts that suck. You ask a roomful of HR folks if their PBM contracts are above average, and the whole room raises their hands. This ain’t Lake Wobegon, folks. Don’t kill the messenger.
Get on the ground and actually talk to plan members who are taking these drugs or who have kids taking drugs that are covered by these maximizer programs or covered by the “it’s not covered” alternative funding programs. I certainly hope no one listening is taking the word of the program sponsor on how satisfied plan members are, especially with all these class action lawsuits afoot.

My guest today, as aforementioned, is Joey Dizenhouse, FSA, MAAA. He is an actuary by background. He serves as CEO of SlateRx, which is a pharmacy benefit experience provider, or a PBX, as they call it. He is also head of HealthTrust IHP.

Also mentioned in this episode are Dea Belazi, PharmD, MPH; Eric Bricker, MD; Lauren Vela; Andreas Mang; and Kollet Koulianos, MBA.

You can learn more at SlateRx.

Joey Dizenhouse, FSA, MAAA, has spent more than 25 years in the healthcare industry, serving in a number of strategic, leadership roles.

As president and chief executive officer at SlateRx, Joey is responsible for driving the organization’s mission of revolutionizing the pharmacy benefit experience. With a key focus on servant leadership and innovation, he seeks value for SlateRx’s clients and their covered lives across the complex pharmacy supply chain. He also provides strategic guidance for partner organization HealthTrust.

At HealthTrust, Joey led the Insurance, Human Capital, and Pharmacy (IHP) business segment, managing more than $15 billion in annual drug purchasing. Prior to HealthTrust, Joey spent 15 years at a large professional services consulting firm in a number of health and welfare leadership roles, serving many organizations during his tenure, including several from the Fortune 100.

Joey is a frequent public speaker on subject matter related to pharmacy insurance, benefits strategies, and the US healthcare landscape. He is a fellow of the Society of Actuaries, member of the American Academy of Actuaries, and a licensed life and health insurance agent across all 50 states.

06:21 How was the first iteration of maximizers conceived?

10:59 “I’d always encourage you to come back to the underlying incentives.”

11:18 What does maximizer acceleration look like?

12:24 What are the two kinds of maximizers?

12:43 What is the spread model for a maximizer?

13:02 What is the transparent model for a maximizer?

15:26 “Ask the questions: How do you make money? Prove it!”

15:56 EP419 with Andreas Mang.

16:25 How might Pharma be making more money with maximizers?

26:14 What is the “it’s not covered” approach?

32:29 “The right kind of program has been properly narrowed.”

33:51 Is there a purpose that some of these programs can serve, issues aside?

35:57 How does a free drug program actually cost money?

You can learn more at SlateRx.

Joey Dizenhouse discusses #pharmacybenefits, #employer #costsavings, and #outofpocket costs on our #healthcarepodcast. #healthcare #podcast #pharma #healthcareleadership #healthcaretransformation #healthcareinnovation

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Benjamin Jolley, Emily Kagan Trenchard (Encore! EP392), Cora Opsahl (Encore! EP372), Jodilyn Owen, Ge Bai, Andreas Mang, Karen Root (Encore! EP381), Mark Cuban and Ferrin Williams, Dan Mendelson (Encore! EP385), Josh Berlin

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Listen to this show as either a follow-on or a prequel to the shows with Mark Cuban and Ferrin Williams, PharmD, MBA (EP418) and Ge Bai, PhD, CPA (EP420). And if you’re interested in this “what’s going on in the world of PBMs, pharmacies, and employers” topic, also listen to the show with Joey Dizenhouse coming out on January 11, 2024. If you need the 101 on what’s going on out there for indie pharmacies in your community, I’d recommend the show with Vinay Patel (EP241).

What would you do if you owned an independent pharmacy and you discovered that most of your profit was coming from dispensing 10% of prescriptions? That if you just stopped filling 90% of the drugs; fired all your staff except, like, one person; and just filled the drugs that you made money on? If you did this, you would actually make more money in the pharmacy than you’re currently making filling every single prescription. What would you do?

This is the math that Benjamin Jolley, PharmD, my guest in this healthcare podcast and a multigenerational pharmacy leader and consultant to other pharmacies, discovered and wrestles with on the show today. And oh, by the way, a pharmacy is not gonna make it up in extra toilet paper sales or chewing gum sales when patients come into the pharmacy to pick up their meds. I asked Benjamin this, and he basically laughed at me.

[What are the 10% of drugs that an indie pharmacy can make money on? You’re going to find this to be a shocking coincidence. It’s the same drugs that many of the consolidated PBM/pharmacies mandate are filled at their own pharmacies or mail order. And many self-insured employers maybe unwittingly sign contracts enabling this to go down, which, in effect, enables these consolidated PBM/pharmacies to essentially corner the market on profits from commercial purchasers.]

So, turning our attention now to how to lose money in the pharmacy business, there’s two ways to lose money: either outright losing money because the acquisition costs of the meds are actually more than the PBM (pharmacy benefit manager) mandates the indie pharmacy can charge its insured members. So, that’s one way to lose money. A second way to lose money as an indie pharmacy is because generics are so cheap. The cost of providing the pill bottle might exceed the profits on a 47-cent generic, even if the profit margin is 100%—again, because the PBM sets the price.

Now, you might be thinking the same thing I was thinking when Benjamin Jolley talked about this: Okay, well maybe … ugh! We want the patient to save money here, so … ?

Here’s the really big point that Benjamin Jolley knows because he sees this every day: What the patient pays and what the pharmacy gets paid has no relationship to each other or to what an employer plan may or may not pay. So, if the patient/member pays more and the independent community pharmacy gets paid less, that doesn’t mean it will be a better deal for the employer. It doesn’t mean it will be a better deal for the patient. Why? Because there’s a PBM in the middle. Ge Bai talks about this in episode 420. For every $100 that is spent on generic drugs, $41 goes to the PBM. Seventy-nine percent of the time, if a plan member is in their deductible phase, it’s cheaper to pay cash than to use the insurance that member is paying for.

As someone said on LinkedIn the other day talking about patients paying premiums and paying more for generics than if they’d just gone in and paid cash, here’s the quote: “You can pay more to pay more.” With so many deductibles as high as they are and with so many people who never reach their deductibles, as Benjmain Jolley says during the show today, we’re giving this third party a lot of control over a transaction that they literally have nothing to do with something like three out of four times that any given patient picks up their generic med. How’d we get here as a society? It’s weird.

If you’ve listened to most of the shows that I’ve been doing lately largely spiraling around the whole “what’s going on with the prices that patients/members are paying for generic drugs,” you might be thinking the same thing I am: It’s such an egregious situation that it becomes an opportunity because the bar is so darn low and so many in the supply chain or the demand chain are getting royally screwed by the PBMs, not just patients. I mean, there’s a lot of possible win-win collaborations, at least situationally. Local pharmacies and local businesses, for example, would seem to have a natural alliance. I’m reminded of the collaboration from a couple of years ago that Drew Leatherberry and Dan Strause talked about in episode 313. I’m super sure that you in the Relentless Health Value Tribe has or could come up with all kinds of innovative collaborations to help patients get affordable generic drugs, and I’d be super psyched to hear about them.

Benjamin Jolley is a pharmacist by training. His pharmacy consulting company is Apex Pharmacy Consulting.

Also mentioned in this episode are Ge Bai, PhD, CPA; Mark Cuban; Ferrin Williams, PharmD, MBA; Joey Dizenhouse; Vinay Patel; Drew Leatherberry; Dan Strause; Kyle “Transparently Kicking PBM Ass” McCormick and his pharmacy, Blueberry Pharmacy, in Pittsburgh. Also, AJ Loiacono from Capital Rx (EP379) and CPESN Networks.

You can learn more at benjaminjolley.substack.com and through Apex Pharmacy Consulting.

You can also connect with Benjamin on LinkedIn.

Benjamin Jolley, PharmD, is a third-generation independent pharmacy operator. Since 2019, he has been dedicated to supporting pharmacy operators across the nation in unraveling the complexities of the financial systems that drive their businesses. Through his occasional blog at benjaminjolley.substack.com, he shares insights derived from his experience. In 2023, he partnered with Joe Williams to launch Apex Pharmacy Consulting. Their goal is to provide comprehensive and personalized consulting services tailored to enhance pharmacy operations.

04:47 Benjamin Jolley’s recent revelation.

06:14 What are the 10% of drugs that provide all the profit for pharmacies?

09:21 What’s happening with the other 90% of drugs that pharmacies are filling?

11:05 What is the breakdown of costs when fulfilling prescriptions and running a pharmacy?

18:50 EP379 with AJ Loiacono.

21:42 What is the “cost savings” within the “insane system” of PBMs not sharing profit with independent pharmacies?

23:00 What is one of the things that PBMs and pharmacies don’t often talk about?

26:39 What can employers do so that patients aren’t getting overcharged by PBMs?

27:51 “How do I make the PBMs irrelevant?”

33:30 What’s the difference between an independent pharmacy delivery service and a service like Express Scripts?

34:36 What’s the other potential solution in solving the problems independent pharmacies face, and why does Benjamin Jolley feel that it’s not the best solution to pursue?

You can learn more at benjaminjolley.substack.com and through Apex Pharmacy Consulting.

You can also connect with Benjamin on LinkedIn.

Benjamin Jolley of Apex Pharmacy Consulting discusses #indiepharmacy on our #healthcarepodcast. #healthcare #podcast #pharma #healthcareleadership #healthcaretransformation #healthcareinnovation

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Emily Kagan Trenchard (Encore! EP392), Cora Opsahl (Encore! EP372), Jodilyn Owen, Ge Bai, Andreas Mang, Karen Root (Encore! EP381), Mark Cuban and Ferrin Williams, Dan Mendelson (Encore! EP385), Josh Berlin, Dr Adam Brown

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I thought I would encore this show after coming back from the 2023 NODE Conference held in the Microsoft building in New York City, which I always enjoy. NODE stands for Network of Digital Evidence. Why is evidence so important?

Here’s the NODE answer to this question: It is so smart purchasing decisions can be made by consumers, health systems, and payers so devices and software that improve patient experience, provide actionable insights, and save time and money become part of care delivery so trust is built between industry and healthcare.

No matter what direction you come at this from, evidence for care delivery endeavors is sorely needed.

What’s always interesting to me is kind of the context of this said evidence, however the “who said” evidence is evaluated by and to what end. It was a really interesting juxtaposition, frankly, to hit up the NODE conference—which is attended mainly by digital health entrepreneurs and health system execs—right on the heels of me going to multiple events with self-insured employer types like the PBGH (Pittsburgh Business Group on Health) summit in early December, for example.

What Emily Kagan Trenchard, my guest on this encore, talks about today is very much not a nice-to-have from the employer/purchaser point of view. It’s a must-have from their perspective because all of these care delivery, technological, and organizational inefficiencies that Emily alludes to … yeah, it’s all defined as expensive waste from the standpoint of the employers or other self-insured entities. These self-insured entities are the ones paying for fragmented and unsupported patient journeys with their escalating commercial rates, after all.

In sum, I like how Joseph Wu, MD, PhD, who is the current president of the AHA (American Heart Association), put it at the recent AHA Scientific Sessions in Philadelphia last month, which I was honored to attend.

Dr. Wu said during his presidential address, “Work hard, work smart, work together.” Emphasis on all of the above, especially the work together. That’s what the Relentless Health Value Tribe is all about, after all; so thanks so much for being a part of it.

So, a few things to remind everybody. First of all, don’t forget EHRs (electronic health records) were purpose built originally for billing. This is no secret. People quite openly have called EHR systems glorified cash registers. If I want to be generous, maybe I would restate this to say that EHRs were designed to document patient interactions. This is what their core architecture was built to achieve.

But today, there’s a lot that goes on that isn’t a traditional patient interaction. First of all, me even calling it, frankly, a patient interaction should give longtime listeners a clue where this is headed. I mean, say you’re sitting at home on your couch. I don’t know. You’re probably not considering yourself a patient. You’re considering yourself a person sitting on your couch.

However, say you’re sitting on your couch and you haven’t taken your COPD maintenance therapy. Potentially that is something of clinical significance that maybe should get figured out and noted somewhere—potentially prior to the acute event going down.

In sum, what is happening between codes getting written in patient health records? Where’s all that information going?

My guest in this healthcare podcast, Emily Kagan Trenchard, makes a super point about all of this that I haven’t heard made so succinctly or so eloquently. She talks about identifying the core functionalities, the centers of gravity that are needed to bring together providers and patients and everybody else in the mix.

She talks about the four platforms that she feels are very necessary to underpin or be the chassis to best support helping providers and others help patients and people in and out of the clinic. She calls each platform a tentpole. These four platforms are:

The EHR
A CRM (customer relationship manager). And, by the way, when Emily says CRM, she’s talking about more than software. It’s more like a philosophy or a whole approach around relationship building with patients/people/customers.
A cloud platform for data and analytics
A data exchange

One last takeaway, for me at least. Emily has talked about two basic facts that inform her thinking: (1) Providers and patients alike are increasingly not tolerant of friction. (2) What is easiest is the most likely to happen.

Something that we don’t get into in this show but certainly bears considering is the larger context here. Yeah, we got Amazon, we got Google—not only what they are doing alone but also what they are investing in. They have platforms that are purpose built to remove friction and to be really, really easy … one-click easy.

So, let’s talk about the WIIFM (the “what’s in it for me?”) here for health systems to get a move on. When Merrill Goozner was on the show a few weeks ago (EP388), he says that when patients and employers and taxpayers start crying uncle on both healthcare prices as well as just bad friction-filled experiences and also when, at the same time, technology and new competitors move in on the supply side, he says what’s gonna happen then is older incumbents like hospitals could find themselves getting their lunches eaten, especially as we contemplate the stuff that Mike Thompson was talking about in episode 389 about how there is increasingly data out there which identifies hospitals who are very inefficiently run.

Also, I would be remiss not to mention that non–purpose-built, dare I say bad, technology causes bad clinician burnout, which causes bad turnover, which is really expensive. Arshad Rahim, MD, MBA, FACP, talks about this in episode 323.

Emily is SVP and chief of consumer digital solutions over at Northwell Health. Northwell, in case you haven’t heard of this health system, is very large: 21 hospitals, 850 outpatient clinics, 300,000 patients a year. Yeah, it’s big.

Also mentioned in this episode are NODE.Health; Pittsburgh Business Group on Health; Joseph C. Wu, MD, PhD; American Heart Association; Merrill Goozner; Mike Thompson; Arshad Rahim, MD, MBA, FACP; and Megan Antonelli.

You can learn more at northwell.edu and connect with Emily on LinkedIn.

Emily Kagan Trenchard offers a unique perspective from within the American medical system: A spoken-word-poet-turned-healthcare-executive, she is on a mission to remix the human in healthcare, challenging entrenched assumptions about what it means to give and receive care in the digital age. 

As senior vice president, chief of consumer digital solutions, for New York state’s largest health system, Northwell Health, Emily leads product strategy, analytics, research, and design for Northwell’s digital ecosystem of patient-facing Web sites, apps, and digital channels. She started Northwell’s first user experience department to advance the use of design to care for people in a digital world. Passionate about creating seamless experiences steeped in humanity, Emily now serves as the executive sponsor for Northwell’s enterprise CRM program.

In prior roles, Emily has led Web systems for New York City’s famed Lenox Hill Hospital, spearheaded the consolidation of Northwell’s 60+ Web sites onto a single Web platform, and transformed Northwell’s Web, social, and digital signage properties. Most recently, Emily co-led an agile, interdisciplinary start-up within Northwell charged to rapidly create a seamless digital front door experience. Within 18 months, that team delivered an award-winning mobile app, launched Northwell’s consumer identity program, and created the first unified online booking and bill payment capabilities for the health system.

Emily holds a master’s degree in science writing and communication from MIT. Her executive training was at the Yale School of Management.

07:08 How does customer digital solutions fit into the larger technology infrastructure in healthcare?

09:07 “Where else do you have centers of gravity that you should respect in the architecture?”

09:25 “There is a constellation of need here.”

11:05 “We interact with way more than just patients.”

13:42 “We have to be able to understand the network of relationships in a population.”

14:25 How do EHRs and CRMs interact as two tentpoles in healthcare?

16:45 “The question is, where does a human being work?”

19:07 How are patients staying on a nonfragmented care journey in a proactive way?

23:00 “Anybody who’s a consumer of our digital offerings has a relationship with us.”

28:46 “The medicine is being practiced not only on our physical bodies but on our digital bodies.”

You can learn more at northwell.edu and connect with Emily on LinkedIn.

@ektrenchard of @NorthwellHealth discusses #EHRs and #CRMs on our #healthcarepodcast. #healthcare #podcast #EHR #CRM #healthcareleadership #healthcaretransformation #healthcareinnovation

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Cora Opsahl (Encore! EP372), Jodilyn Owen, Ge Bai, Andreas Mang, Karen Root (Encore! EP381), Mark Cuban and Ferrin Williams, Dan Mendelson (Encore! EP385), Josh Berlin, Dr Adam Brown, Rob Andrews

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Why did I decide to encore this episode where Cora Opsahl from 32BJ spends 29 minutes talking about the importance of getting your data if you are an employer or a union health fund? Let me quote Jeff Hogan with some light edits here. Jeff wrote about the “outsized role” that employer data and intentional analytics can and will play. This is emerging and a must-have. The show with Andreas Mang (EP419) from three weeks ago, the show with Dan Mendelson (EP385), the one with Mark Cuban and Ferrin Williams (EP418) … everything that has been talked about in all of these shows and more is gonna be hard to do without having the data so you know what’s going on. But I will let Cora Opsahl explain far more succinctly than I can here.

One more note before we dive in here: After you listen to this show, you might want to go back and listen to episode 373 with Cora—and that one is entitled “How to Kick a Big Hospital Out of Your Network”—because this is one of the things that 32BJ did when it got its data. 32BJ realized that if it kicked out the really expensive hospital from their network, it would (and did!) save $35 million. Kicking this one hospital out of its network enabled the union to get its biggest wage hike in however many years, and also the employers employing union members got a premium holiday and did not have to pay into the health fund for a few months.

Imagine if they didn’t have this data and realized the millions and millions of dollars being siphoned out of the plan by this one hospital charging way too much. It’s just crazy how many employers or unions wind up becoming imprudent fiduciaries because they just don’t have the data to know better. But I’ll tell you who is realizing it: class action attorneys.

In this healthcare podcast, I am speaking with Cora Opsahl, who directs the 32BJ Health Fund.

Important to know about Cora’s background is this: In previous roles, she’s worked deep in the inner workings of the healthcare industry. So, she came to 32BJ armed with a BS meter that is finely tuned, which is, unfortunately, an essential skill for anyone trying to help the patients and members relying on them to successfully navigate the healthcare industry.

This conversation gets into everything that the 32BJ Health Fund does with their data. They have lots of data. They demand it. So, besides kicking out overly expensive health systems from their network, here’s other things that 32BJ is currently doing with their data and which other employers and unions may get a few ideas from. If you have the data, you (like 32BJ) can use it to:

Make smart benefit decisions that are validated, not just guesses. Before you decide to do something (add a wellness program etc), be able to model it accurately for how much it will actually cost you—which, spoiler alert, is most of the time not what the vendor will estimate. You have way more data than the vendor does, so you can certainly use it to great effect in this way.
Make sure that the right members are being communicated with so that benefit designs are successful. As Ashleigh Gunter said in episode 368, success when changing benefit designs has a lot more to do with communication than many realize.
Create dashboards for leadership that may show trend lines, for example, which could be very helpful to ensure that the fund doesn’t run out of money etc … little things like that.
Figure out how much the fund is spending on various procedures and where. There’s all this talk right now about the crazy variability of prices for the same exact service in the same local market. At one hospital, a colonoscopy could literally cost $10,000; and in another hospital—same quality, same basically everything—that same colonoscopy will be $2000 or $3000. I mean, there’s a 500% delta or something in some of these cases.
Ensure that if a vendor said they were going to do something, that they are actually doing it. This is especially meaningful for point solutions because of the whole squeezing the balloon thing. I can save money in a silo, and you won’t realize that those dollars are getting transferred elsewhere unless you are doing your own math. This is a big deal if you start thinking about how pharmacy benefits are typically siloed from medical benefits. So, if I’m a pharmacy benefit manager, I can talk about how much I’m saving by denying patients drugs without consideration of the medical downstream implications of that.
Ensure you’re not paying a bill and writing a check for more than the bill was for, which is weirdly common. There’s a whole show with Dawn Cornelis (EP285) about this.
32BJ has an engineering team that is creating an app to help members navigate to great doctors with fair prices.

All of these things roll into basically three categories:

Cutting wasteful spending and finding fraud
Making smart benefit decisions
Being able to see trends and forecast the future, which is really helpful for financial solvency etc

As Cora Opsahl says, “I think we [all can] recognize [that] you [cannot] make smart … decisions and be a fiduciary of [a] fund without having [data].”

This whole conversation has been really a big bright spot for me and will provide hope, I think, for any employer/union who is seeking ways to protect their members and patients, the ones on their plans and therefore under their aegis and whom they have a fiduciary responsibility to look out for. 32BJ represents about 200,000 members. They are mostly in residential and commercial real estate—so, for example, your doormen, your maintenance workers, your security, your cleaners, amongst others. Members are in about 11 states, but a lot of them are in the New York City metro area. These union members who are in the fund work for over 5000 different employers. The 32BJ Health Fund has zero-dollar premiums. Wowza on that point—that’s a huge benefit.

Also mentioned in this episode are Jeff Hogan; Andreas Mang; Dan Mendelson; Mark Cuban; Ferrin Williams, PharmD, MBA; Ashleigh Gunter; Dawn Cornelis; and Wayne Jenkins, MD.

You can learn more at 32bjhealthfundinsights.org.

Cora Opsahl is the director of the 32BJ Health Fund, a self-funded plan that provides affordable, comprehensive, and innovative health coverage to 200,000 union members and their families. As director of the Health Fund, Cora has implemented multiple benefit changes that saved more than $35 million: removing NewYork-Presbyterian Hospital System and physicians from the network, transitioning to a new pharmacy vendor and pharmacy group purchasing coalition, and establishing an expanded Centers of Excellence program administered by Mount Sinai Solutions. Currently, she is leading a comprehensive medical RFP.

Prior to joining the 32BJ Health Fund, Cora spent 12 years at Express Scripts, a pharmacy benefit manager, where she held a variety of roles, including with Medicare Part D, strategy and acquisitions, operations, and account management. She holds an MBA from Saint Louis University.

06:53 How much data does 32BJ Health Fund have, where do they get it, and how do they use it?

08:52 How did 32BJ Health Fund successfully demand their data from 100% of their vendors?

09:42 “We feel it’s really important that we own this information ourselves.”

10:05 “It always concerns me—if a vendor doesn’t want to give you the information, what are they hiding?”

10:32 “It’s not just getting the data; it’s then using the data.”

13:41 “Without data, you’re really just taking a guess; and guesses are never gonna get you where you need to go.”

15:19 EP285 with Dawn Cornelis.

15:40 Is the cost of creating a data analytics team worth the cost savings of those data discoveries?

19:03 “The use of data has really built our knowledge.”

20:52 “It’s really important to us that as we make benefit decisions, we’re doing it smartly.”

25:27 EP358 with Wayne Jenkins, MD.

25:38 How is 32BJ Health Fund making their data knowledge actionable?

28:11 “If we can figure out how to make telehealth accessible … there may be an opportunity for telehealth … to upset some of these … monopoly systems or low-choice options.”

30:22 “It’s really easy to think that we can solve this problem through benefit design … but in the end … it’s the price.”

You can learn more at 32bjhealthfundinsights.org.

Cora Opsahl discusses #healthdata on our #healthcarepodcast. #healthcare #podcast #healthcareleadership #healthcaretransformation #healthcareinnovation

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Jodilyn Owen, Ge Bai, Andreas Mang, Karen Root (Encore! EP381), Mark Cuban and Ferrin Williams, Dan Mendelson (Encore! EP385), Josh Berlin, Dr Adam Brown, Rob Andrews, Justina Lehman

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I want to kick off this show with a clip from episode 415 with Rob Andrews, wherein he so very eloquently sets the stage here:

We think that one of the core problems here is that too many intermediaries and providers in the system, their compensation is not in any way dependent on the outcome. So, let’s think about this NICU baby problem again. Looking at the hospital system—and I’m not at all implying or suggesting any hospital system tries to do this—but I think it is clear that they actually benefit commercially from more babies spending more days in the NICU. NICU’s usually a pretty good margin business. It’s expensive. Lots of money is paid, and margins run pretty well there. So, I don’t think there’s a hospital system in the country that intentionally says, “Oh, good … let’s go out and try to fill up the NICU every day.” But when it gets filled up, they benefit.

On the other hand, if the hospital invests significantly in early effective intervention prenatal or even pre-pregnancy, there’s no upside to that financially. They don’t get rewarded for that. They might win an award from some magazine for best practices, but their margin suffers.

Then if you look at the intermediaries, the carriers, and PBMs [pharmacy benefit managers], their outcomes are irrelevant to their performance. If an employee of a self-insured employer has a significant risk prenatal or pre-pregnancy and the carrier does a great job identifying that problem and solving it, they make the same amount of money off that patient or that consumer that they would if they did nothing. So, it’s a bit harsh to say this, but the carriers make the same amount of money if every child is born healthy and there’s not a day spent in the NICU as if they do if every child’s born with severe crises and winds up in the NICU.

It's not a big mystery in the US economy that people do what you pay them to do. And if you have a system, which we do now, where the case of maternal health, diabetes management, musculoskeletal management, cholesterol and cardiac management … when you have a system where many, many players in the system, at best, make the same amount of money for bad outcomes as they do for good ones and, at worst, they prosper from the bad outcomes, that explains the problem.

So, is this show about improving maternal health outcomes in the US, where it is relatively deadly to have a baby compared to other industrialized nations? Yes. But improving maternal health is also a great case study for what needs to be done to just improve health. You could apply it to primary care. You could apply it to chronic care management. It is a fairly broad-spectrum solution, as it were.

I’m thinking right now about how Dave Chase, co-founder of Health Rosetta—how does he put it?—he says every big problem in healthcare already has been solved. The existing challenge is how to massively replicate proven solutions. So, yeah … keep that in mind when we talk about what Jodilyn Owen has accomplished with her team in Washington State with their birth and health center. Also, as you consider how you might replicate, keep in mind the struggles she has faced getting contracts from self-insured employers or payers to pay her clinic and a very interesting encounter she had with a VC/PE (venture capital/private equity) funded maternal health start-up. It’s just interesting where the money is flowing and where it’s not flowing.

But let’s talk about Jodilyn’s clinic’s outcomes. Their zip code is one of the most diverse in the nation. There are 79 languages spoken. There is lots of social determinants of health going on. It is a medically underserved area. It is a federally designated provider shortage area. So, this community has every right to have horrible outcomes.

Meanwhile, nearby, there is a wealthy community. In that zip code, they live 17 years longer than in Jodilyn’s clinic’s zip code.

But if you compare the outcomes that Jodilyn’s clinic has compared to the outcomes in the hospital in that fancy neighborhood, Jodilyn’s group has far less cesarean rates, far less NICU admissions, far less incidence of gestational diabetes, far quicker access to treatment for hypertension.

You might be wondering how much their birth bundle costs that they are having trouble getting most payers except one to pay for and getting no VC dollars or funding at all. They’re charging $5000 to $7000. So, let’s just say $5000 to $7000 compared to … what does one NICU admission cost? So, yeah … this is an exact example of what Rob Andrews was talking about. An EXACT example.

So yeah, enjoy this episode; it’s as heartwarming and actionable as it is frustrating. And if you are a payer or self-insured employer in South Seattle, please give this clinic a contract.

Not to drop a major spoiler alert here, but you know what Jodilyn’s “secret sauce” is? Nuances for sure, but bottom line, it’s about trust. It’s about relationships. It’s about listening to the patient. It’s being part of the local community.

If you’re shocked right now, raise your hand. There’s gonna be no one with their hand raised. How many times do we have to figure this out?

Jodilyn Owen is the clinical director of the Rainier Valley Birth & Health Center. She is a licensed midwife along with a bunch of other credentials.

Also mentioned in this episode are Rob Andrews; Dave Chase; Vivek Garg, MD, MBA; and Larry Bauer.

You can learn more by emailing Jodilyn at jodilyno@myrvcc.org.

You can also connect with her on LinkedIn.

Jodilyn Owen, LM, CPM, Ma MCHS, is a licensed, certified professional midwife and co-founder of Rainier Valley Birth & Health Center. She was born and raised in Seattle and raised her own family in South Seattle, working as a doula and parenting educator for 13 years before becoming a midwife. This is where she saw healthcare through the lens of observation of hundreds of families and provider experiences of maternal and child healthcare. An avid learner and critical thinker, Jodilyn began to reimagine healthcare and to develop a vision for what access in its truest form might be, not just to healthcare for the deeply underserved and mis-served families of South Seattle but also to quality healthcare delivery for the providers who want to give more than what the system allows.

Jodilyn built her practice around the idea that parents know themselves and their babies best, and her direct patient work is designed to promote this first relationship. She provides individualized, gentle, and holistic pregnancy, birth, and postpartum care for families planning a home, birth center, or hospital birth.

Jodilyn is currently director of clinical partnerships and staff midwife at the nonprofit–for purpose Rainier Valley Birth & Health Center. She provides infrastructure development, guides clinical programs and partnerships, and supports students from multiple university health professions and public health programs at all levels from high school through doctoral studies.

07:12 How much cost savings is there when you avoid a NICU admission?

09:43 How is “slow care” feasible among an ob-gyn shortage in many communities?

10:42 “Start people at the risk that they are appropriate for.”

11:37 EP407 and Summer Shorts 3 with Vivek Garg, MD, MBA.

13:50 “To effect change, we have to unwind what has been wound so tightly and so carefully through medical … education.”

14:13 “It’s not a people problem; it’s a system problem.”

18:46 What does relationship-based care mean?

22:32 “Everything in pregnancy at least is a trend.”

28:01 How does Jodilyn’s practice work with payers?

31:08 EP409 with Larry Bauer, MSW, MEd.

32:24 Why is it important to address the root of this problem in the education space?

You can learn more by emailing Jodilyn at jodilyno@myrvcc.org.

You can also connect with her on LinkedIn.

@essntialmidwife discusses improving maternity #patientoutcomes in our #healthcarepodcast. #healthcare #podcast #healthcareleadership #healthcaretransformation #healthcareinnovation

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Ge Bai, Andreas Mang, Karen Root (Encore! EP381), Mark Cuban and Ferrin Williams, Dan Mendelson (Encore! EP385), Josh Berlin, Dr Adam Brown, Rob Andrews, Justina Lehman, Dr Will Shrank

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This show is a very natural follow-on to episode 418 with Mark Cuban and Ferrin Williams, PharmD, MBA. This show is the how, as in, “How did everything that we talked about in the earlier show wind up the way it did?” And it also proves it … with data.

I gotta say I never quite understood the finer points of the rationale of a cash pay system for minor expenses—expenses like generic drugs. I always framed this whole thing in the context of a senior on a fixed income taking 10 drugs, as my grandma did. And even if each of those drugs was only $5 or $10 a month, that’s enough beans a month that it was a big deal for her to swing.

So, I have always had this thought that these drugs should be covered by her insurance so she and everybody else living on a fixed income trying to make ends meet could get them and take them and not die from complications of diabetes or high blood pressure.

Now, the counterargument to the above, which I have certainly heard more than once, is to offer members/patients HSAs (health savings accounts) and have them buy stuff with their HSA. My knee jerk there is, yeah, but I can barely figure out the deal with HSAs. Most Americans don’t even know what a deductible is let alone an HSA. This approach just feels like it demands a lot of health literacy.

So, that’s the place I was when I walked into this conversation in this episode with Ge Bai, PhD, CPA.

Here’s two facts that got me inching away from my original position:

Generic drugs are cheap. There is already competition in the manufacturing marketplace that holds these prices down.
PBMs (pharmacy benefit managers) and insurance are devices to pool risk. If you have a high expense, that expense gets spread out over the rest of the insured population (ie, the risk pool). This whole spreading out of the risk is arduous to pull off and requires a level of administrative costs.

So, let’s break this down: In terms of #1 fact, that generic drugs are cheap, let’s think about the value prop of PBMs. It’s to throw their market power around to lower drug prices. But, oh wait … the prices of cheap generics are already cheap. So, not much need for market power? Yeah, that’s a fact. One of the studies that I talk about in this healthcare podcast with Ge Bai quantifies that. For patients in their deductible phase actually, 79% of the time paying cash is cheaper than if the patient had used their insurance and gotten the price “negotiated by their PBM.”

So, yeah … anytime pretty much anybody can wander in and get a better price than a Fortune 15 PBM, it’s pretty clear that market power is not overly required here. In fact, getting PBMs in the mix just seems to make the drug prices higher for patients.

Alright now, moving on to my fact #2 I talked about earlier, which is, what is the point of insurance (and PBMs are a derivative of insurance)? The point with them is to pool risk, to spread out the cost of something over the entire risk pool. So, yeah … drug costs $3. What is the administrative burden that goes in to spreading $3 across a risk pool? Is it worth it? Or is the admin cost burden more burdensome than the actual cost burden of the cost of the drug, and all we’re doing here is driving up the price of healthcare, which ultimately might throw more financial burden back on the patient through higher premiums or out-of-pockets?

That’s the second study that I talk about today with Ge Bai, and it quantifies exactly how much that administrative burden is when it comes to generic drugs. Because you know who makes the most money in a generic drug transaction? No, it’s not the pharma manufacturer, if that’s what you were thinking. It’s not the pharmacy. It’s not the wholesaler. Yeah, it’s the PBM. The PBM, by a margin of 10 points, makes the most money. The administrative cost burden is actually the most expensive part of buying a generic drug using your insurance and going through that PBM. There’s a bar chart that visualizes these proportions.

But while I’m on a roll here, here’s a #3 fact that speaks to my concerns about HSAs that I raised at the beginning and the financial literacy required to use them: Health insurance is already super complicated, and no one can understand it. And here’s a #4 let’s-talk-about-the-real-world fact: Health insurance and paying for drugs is already pretty unaffordable for lots of people.

So, I guess in theory it would be amazing if we could have our drugs paid for so they could be affordable. And if that were true and things were a little complicated … okay, trade-offs and all that. But right now, the situation is that drugs can be pretty unaffordable, including “cheap” generics; AND getting them covered is complicated. So, bar is pretty low to do better by patients is my point.

And this is what I talk about with, as aforementioned, my guest today, Ge Bai. Ge Bai probably needs no introduction. She is a professor of accounting at Johns Hopkins Carey Business School and also a professor of health policy and management at Johns Hopkins Bloomberg School of Public Health. As she says, she studies nothing but healthcare dollars.

Also mentioned in this episode is the show with Steven Quimby, MD (EP344) going deep on the generic drug market.

Additional links for this episode:

Links for second study: JAMA Health Forum, coauthored with Joey Mattingly, Kenechukwu Ben-Umeh, Gerard Anderson; The Johns Hopkins University - Carey Business School; Johns Hopkins Bloomberg School of Public Health; University of Utah College of Pharmacy

Bar chart/article: by Jason Shafrin

You can learn more about Ge’s research on LinkedIn and X (formerly Twitter).

Ge Bai, PhD, CPA, is a professor of accounting at the Johns Hopkins Carey Business School and professor of health policy and management at the Johns Hopkins Bloomberg School of Public Health. An expert on healthcare accounting, finance, and policy, she has testified in Congress, written for the Wall Street Journal and the Washington Post, and published her studies in leading academic journals such as the New England Journal of Medicine, JAMA, and Health Affairs. Her work has been widely featured in the media and cited in regulations and congressional testimonies. She was a visiting scholar at the Health Analysis Division of the Congressional Budget Office from 2022 to 2023. She teaches graduate courses and has received the Johns Hopkins Alumni Association’s Excellence in Teaching Award.

06:13 What is the background on generic drugs that is need-to-know?

06:39 EP344 with Steven Quimby, MD.

07:04 Do we have affordability for generic drugs?

15:40 What’s the policy failure around generic drugs?

18:34 Why is there a huge health equity issue?

20:13 How do PBMs have both a monopoly and a monopsony?

21:59 What should be the goal for cheap generics?

23:36 “Whenever we have no competition, we’ll see high price.”

26:00 What’s the best approach to addressing operational challenges behind generic drug costs?

28:42 How do we solve generic drug costs on the back end?

31:15 “Healthcare insurance is not the same as health.”

36:07 “It’s time for us to reflect and think whether there is a better way to try.”

You can learn more about Ge’s research on LinkedIn and X (formerly Twitter).

@GeBaiDC discusses paying cash for #genericdrugs in our #healthcarepodcast. #healthcare #podcast #digitalhealth

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Andreas Mang, Karen Root (Encore! EP381), Mark Cuban and Ferrin Williams, Dan Mendelson (Encore! EP385), Josh Berlin, Dr Adam Brown, Rob Andrews, Justina Lehman, Dr Will Shrank, Dr Carly Eckert (Encore! EP361)

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For a full transcript of this episode, click here.

Are you on the board of directors of a company? Or are you a shareholder of a publicly traded company? Or are you a CEO or a CFO who reports to a board of directors or these shareholders? Well, this show is for you. And it’s about how the healthcare industry has become financialized at the same time that providing health benefits has become the second-biggest line item after payroll for most companies. We talked about that with Mark Cuban (EP418) also.

So, this show isn’t really about health benefits; it’s about the business that these health benefits have become and how, if the CEO or CFO of an employer is not intimately involved in the financial layer wrapping around health benefits, then the company is getting really taken advantage of by those entities who are intimately familiar with the financial layer surrounding those healthcare benefits.

And the employees of that company also are getting equally taken advantage of. This is not a case where paying more or less results in better or worse employee health or healthcare. It is a case where not minding the shop in the C-suite means that financial actors just take more of the pie and nobody wins but them. Employer loses; employee loses.

Andreas Mang, my guest today, kicks off this interview talking about the conversation that will go down between himself and any CEO whose company gets bought by Blackstone. So, if you’re a CEO and you’re aspiring for this to happen, yeah … heads up. But he says it’s kind of an unnatural act to dig into anything that smells like health benefits or health insurance.

Some may not even realize that this whole financial layer has developed that sits above the healthcare benefits themselves. And they also may not think that there’s anything that’s possible that can be done.

As far as both of these points are concerned, Andreas Mang gives a list of, as he calls them, easy things a C-suite can do to save 10% while improving employee satisfaction and health. Saving 10% or more, this can be a really big number. A lot of this is just enforcing purchasing discipline that is being used elsewhere.

Here’s Andreas’s list recapped:

Have CFO engagement throughout the year. (We talked about that with Mark Cuban also.)
Be self-insured once you have reached a certain size. (Andreas gets into this in more detail during the show itself.)
Be very, very careful who you hire as your broker or benefits consultant. There are five things that need to be true:

· They have the experience to do the job.

· Flat-fee model compensation

· No product pushing

· Fees at risk (30% or more)

· Simple termination provisions

Do carrier/ASO/TPA RFPs once every three years or thereabouts.
Do dependent eligibility audits. (Cora Opsahl talked a lot about this also in an episode [EP372] last summer.)
Leverage pharmacy coalitions and stop-loss collectives. (In the show itself, Andreas offers some warnings because some of these coalitions and collectives are great and some are not.)

But bottom line, just keep in mind, as Mark Cuban said two weeks ago (EP418), those that are taking your money, your company’s money, are advantaged when you are confused. Where there’s mystery, there’s margin. If you can’t convince ’em, confuse ’em and all that.

This is a business strategy. Healthcare should not be this complicated. But yet, it has become so; and anyone who doesn’t realize that is letting themselves and their employees really get taken advantage of. Unknown unknowns are not benign.

As I have said several times already, Andreas Mang is my guest today. He is a partner at Blackstone, the private equity and alternative asset manager. His job is helping portfolio companies manage their US healthcare benefits for their employees.

You can learn more at Blackstone and by connecting with Andreas on LinkedIn.

Andreas Mang is senior managing director, portfolio operations, and chief executive officer of Equity Healthcare, where he is involved in managing medical benefits spend across the Blackstone portfolio. Andreas brings 20 years of healthcare experience to Equity Healthcare, having held various roles in healthcare finance, operations, and strategy.

Prior to joining Blackstone, Andreas was the vice president responsible for national provider network operations at CareCentrix, a PE-backed, leading home health benefit-management company. At Blue Cross Blue Shield of Massachusetts, he held a variety of roles, including a leadership role identifying and implementing administrative cost savings opportunities throughout the organization and ultimately designing a new corporate business model. In addition, he held roles as the manager of strategic financial planning at Harvard Pilgrim Health Care and was a senior consultant with Deloitte Consulting’s Strategy and Operations group in Boston.

Andreas has a bachelor’s degree in healthcare management and policy from the University of New Hampshire and an MBA from the University of Rochester’s Simon School of Business Administration. He currently serves on the board of DECA Dental.

04:19 Why Andreas starts every conversation with the question, “How’s your healthcare company?”

07:04 Why is it important, as a self-insured employer, to treat your business as a small healthcare company?

08:42 Why is it unnatural for companies to be providing health insurance?

10:13 What can be achieved when there is alignment between employers and insurers?

12:07 What things can a company do to reduce spend by 10%?

13:40 Why is it better to have CFO engagement in the benefits plan throughout the year?

15:51 Why does self-insurance save 5% to 9% for companies automatically?

17:41 “The funding isn’t a healthcare thing; it’s a CFO thing.”

17:54 Why is it vital to have a reliable, trustworthy broker?

24:38 When is the last time your company has RFP’d their health plan?

27:06 Why does changing a health plan feel scary but is necessary?

27:58 What is a dependent eligibility audit?

30:48 Why are employers better together?

34:02 How do employers truly get a flat-fee model with brokers?

You can learn more at Blackstone and by connecting with Andreas on LinkedIn.

Andreas Mang of @blackstone discusses the financialization of #healthcarebenefits in our #healthcarepodcast. #healthcare #podcast #digitalhealth

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Karen Root (Encore! EP381), Mark Cuban and Ferrin Williams, Dan Mendelson (Encore! EP385), Josh Berlin, Dr Adam Brown, Rob Andrews, Justina Lehman, Dr Will Shrank, Dr Carly Eckert (Encore! EP361), Dr Robert Pearl

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Why did I decide to encore this show about being customer-centric and transforming or innovating at a very large organization? Well, two main reasons.

First reason can be neatly summed up by this recent Tweet from Rik Renard, which I have edited slightly to suit my own purposes. Here’s the Tweet: “The Achilles’ heel for most healthcare [innovators] is overlooking the role of change management. The deal isn’t sealed until the whole team is raving. Adoption doesn’t [automatically follow innovative thoughts no matter how good they are or how much it cost to build or buy anything]. Take change mgmt seriously.”

This is relevant to pharma companies, to big provider organizations, to SaaS vendors, to payers … pretty much anyone. So, yeah. This show … still relevant.

But also there’s a #2 reason for this encore. It’s coming at ya smack in the middle of an ongoing series for boards of directors, CEOs, and CFOs of self-insured employers. As discussed last week in the show with Mark Cuban and Ferrin Williams, PharmD, MBA (EP418), healthcare has become financialized. There is a whole financial layer sitting in between health benefits and the employer, and dealing with that requires customer centricity, transformation, and innovation at the employer level—a little change management, if you will.

And with that, here is your encore.

I was at the PanAgora Pharma Customer Experience (CX) Summit. Let me tell you one of my big takeaways. Many at pharma companies who are trying to convince their organizations of the need to be provider- and/or patient-centric are having a tough go of it. Heard that coming from every direction. Seems there are quite a few pharma organizations out there who are not actually customer/patient-centric. Say it isn’t so. Turns out, they continue to be pretty darn brand-centric whether or not anyone besides the CX team and the most successful KAMs (key account managers) realize this hard truth.

This matters because, from a provider organization, physician, or patient standpoint, it’s not what’s written on the walls … it’s what goes on in the halls. It’s what a company actually does in their interactions with the rest of the healthcare ecosystem that matters and that builds their reputation.

Look, this doesn’t just pertain to Pharma; this is a message for the whole industry. But there is certainly a way to do well by doing good, and how that starts is helping provider organizations and patients improve patient outcomes as the primary goal. Being innovative to that end.

It’s about supporting the best-practice standard of care and bringing resources to bear that are truly helpful. That is how more of the right patients can get the right treatment/drug at the right time or take their meds as per the A1A clinical guideline. It’s probably also the way to sustainable business success.

I’ve said it here a thousand times: People trying to do the right thing by patients all need to work together. If there’s a party in the mix that nobody else wants to deal with because they are deemed not a team player or they don’t listen … yeah, that’s what I call a competitive disadvantage, beyond just squandering their ability to achieve their mission statement and improve patient care and lives, that is.

Today’s conversation is with Karen Root, who was a speaker at the aforementioned PanAgora conference. In this healthcare podcast, we are talking about how to make transformation and innovation actionable at a large organization—maybe a pharma company but pretty much any large organization with lots of people, lots of human beings with different motivations and goals. As we all know, for every early adopter, there are (it feels like) five laggards who will fight you tooth and nail because they do not want to transform. They like being brand-centric, and it’s been working out fine … well, up until this year, at least.

Karen Root is currently director of experience strategy at Boehringer Ingelheim, which is a pharma company. For many years prior to her current role, she was an enterprise head of brand and culture at WL Gore & Associates. What we talk about in this show is how to break down the historical “brand is king” mentality so that people want to follow with the awareness, courage, and determination to do so. Everything that we talk about in this episode can also be applied to pretty much any organizational transformation or the rollout of any innovation or new capability.

Here’s the key things that Karen talks about which are essential for an organization to transform, maybe (again) in a way that is customer-centric and/or to roll out new innovations or capabilities:

Leaders must communicate a compelling vision that also includes a realistic assessment of what it’s gonna take to reach that vision and offer hope and the promise that the hard work and inevitable problems will all be worth it.
Systems thinking—a consideration of the systems and the people who will need to be a part of the transformation, thinking through what is likely to go wrong and proactively planning for it
Identify the right entry point. This should be a micro-journey or a quick win so that the team can score a victory and get through the messy middle that exists in any transformation or rollout. Triple points if you can find a micro-moment that has some emotionality connected to it from your customers’ perspective or patient perspective. If you can fix a so-called moment that matters, it really matters. Consider starting by looking into call center logs, finding a common complaint, and fixing it. Do it this way and it’s harder for anybody to complain that the status quo is so super amazing and tell you to talk to the hand.
Determine how you are going to measure what your quick win accomplished, as well as your whole larger transformational effort.
Ensure you have a full story arc here that shows the before and the after that clearly articulates that the before (the status quo) is problematic and that we have to, with urgency, get to the after.
Never forget that we’re working with human beings here and not, as they say, rational economic actors.

One heads-up: In the conversation with Karen today, we talk a lot about the so-called J curve. As Karen says (and you can look this up), whenever you introduce a new anything into an organization, at some point, there’s gonna be a mess-up. And when something messes up, the whole team will spiral into a so-called “trough of disillusionment” or a “trough of despair,” sometimes it’s called. This is the rock-bottom hook of that J in the J curve. The thing is, if a leader’s vision isn’t sufficient or their will to continue isn’t sufficient, then the organization quits at this low point instead of working through it and coming out in a better place on the other side of the J.

And you know what happens then. From that point forward until eternity, everybody who brings up implementing an innovation or a transformation will definitely hear the lecture about the time we tried that and how it failed miserably. So, the J curve … Check it out. Don’t underestimate it.

One very last thing: If you are working for a large organization (like Fortune 500 large) and you have succeeded in moving a transformation forward (like being actually patient-centric or customer-centric, for example), hit me up. I would certainly love to hear your thoughts on how you did it and why you think you were successful and the impact that you had.

You can learn more by connecting with Karen on LinkedIn.

Karen Root, MBA, CCXP, is a strategy, innovation, operations, and marketing executive with more than two decades of experience in healthcare, including medical devices, biopharma, and pharmaceuticals. Her background spans more broadly to include computer software, publishing, and consumer package goods. She has driven transformation and growth as a senior executive for companies ranging from start-ups to Fortune 100 multinational organizations.

Driving transformative capabilities include digital marketing for Sanofi Pasteur and marketing at start-up for their subsidiary, VaxServe. Karen then led the medical division in customer experience at WL Gore & Associates, later leaving the organization as enterprise leader of brand and culture. She is currently leading customer experience in the United States for Boehringer Ingelheim.

Karen has been adding innovative experience design in the metaverse to her arsenal of knowledge. Certified in blockchain technology, cryptocurrency, non-fungible tokens (NFTs), and as a metaverse expert, she has a patent pending in smart contracts and is exploring integrating NFTs and meta-realities into the healthcare space.

Karen is the author of Spectrum Thinking and Signature Experience: The Intersection of Brand Promise and Customer Experience for Competitive Advantage. Her next book, Ready Worker One, was co-written with her daughter, Kayla Root, and is expected to be published in early 2024. It pulls from gaming and behavioral science, along with DAO structure (decentralized, autonomous organizations).

Karen was recognized by Forbes in 2022 as one of the Top 10 Healthcare Entrepreneurs to Watch.

08:51 What skills does leading a large company in customer centricity require?

10:36 What needs to be included in a vision for customer-centric change?

11:01 “In transformation, we have to adjust the approach to that vision. We have to break it down into a couple of key steps.”

11:39 What is the J curve?

12:26 “Disruption is going to happen; it’s just how do we minimize its impact.”

14:00 Why is hope so important for success in change?

17:22 “Leverage your people; understand where they are in the change curve.”

26:24 “We can’t manage what we don’t measure.”

26:33 “We have to not only measure in quantitative ways but qualitative.”

27:35 What’s the downside to not being able to innovate?

28:55 Why does leadership need to have a story to tell?

31:19 “We have to remember that these are human beings and to look for those tells.”

You can learn more by connecting with Karen on LinkedIn.

Karen Root of @boehringerus discusses #customercentricity in our #healthcarepodcast. #healthcare #podcast #digitalhealth #pharma

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Mark Cuban and Ferrin Williams, Dan Mendelson (Encore! EP385), Josh Berlin, Dr Adam Brown, Rob Andrews, Justina Lehman, Dr Will Shrank, Dr Carly Eckert (Encore! EP361), Dr Robert Pearl, Larry Bauer (Summer Shorts 8)

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CEOs and CFOs … hey, this show is for you. Let’s start here:

What do all of these numbers have in common: $140,000, $3 million, $35 million, and $3 billion?

That first step is CEOs and/or CFOs or their equivalents roll up their sleeves and get involved in healthcare benefits. Why can’t much happen without you, CEOs and CFOs?

Here’s the IRL: In 2023, the healthcare industry has been financialized. There is a whole financial layer in between your company and its healthcare benefits.

And unless the C-suite is involved here and bringing their financial acumen and organizational willpower to the equation, your company and your employees are currently paying hundreds of thousands, maybe millions, of dollars too much and doing so within a business model that deeply exacerbates inequities. There are people out there who are very strategically taking wild advantage of a situation where CEOs/CFOs fear anything to do with healthcare in the title and don’t do their normal level of due diligence. You think it’s an accident that this whole space got so “complicated”? HR needs your help.

Bottom line, if you are a CEO or CFO and you do not know everything that Mark Cuban and Ferrin Williams talk about on the pod today … wow, are you getting shellacked. Mark Cuban uses a different word. Healthcare benefits are, after all, for most companies the second biggest line-item expense after payroll.

But don’t despair here, because all of this information is really and truly actionable. Others out there are cutting zeros off of their spend and actually doing it in ways that are a total win for employees as well.

My guest today, Mark Cuban, is a CEO, after all; and when he looked into it, it took him T-minus ten minutes to figure out just the order of magnitude that his “trusted” benefits consultants and PBM (pharmacy benefit manager) and ASOs (administrative services only) and others were extracting from his business. He pushed back. So can you.

But just another reason to dig into that financial layer wrapping around your employee health benefits right now, you might get sued by your employees. Below is an ad currently being sent around on LinkedIn by class action attorneys recruiting employee plan members to sue their employers for ERISA (Employee Retirement Income Security Act of 1974) violations. It’s the same attorneys, by the way, from those 401(k) class action lawsuits. I’ve talked to a few CEOs and CFOs who are scrambling to get ahead of that. You might want to consider doing so as well.

Now, for my HR professional listeners, considering that some of what Mark Cuban says in the pod that follows is indeed a little spicy, let me just recognize that the struggle is real.

There are multiple competing priorities out there in the real world, for sure. And bottom line, because of those multiple competing priorities out there in the real world, it’s really vital that everybody work together up and down the organization in alignment. Lauren Vela talks a lot about these realities here in episode 406. This is a longer show than normal, but it’s also like a show and a half. Mark Cuban talks not only about his work with Mark Cuban Cost Plus Drugs, which is a company that buys drugs direct from manufacturers and sells them for cost plus 15%, a dispensing fee, and shipping. It’s kind of crazy how so often that price is cheaper, sometimes considerably cheaper, than the price that plan members would have paid using their insurance—and the price that the plan is currently paying the PBM.

Most Relentless Health Value Tribe members (ie, regular listeners of this show) will already know all that, but what is also fascinating that Mark talks about is what he’s doing with his own businesses and the Mavericks on other fronts, like dealing with hospital prices. In this show, we also talk the language of indie pharmacies, fee-only benefits consultants, TPAs (third-party administrators), PBMs, and providers doing direct contracting. There are, in fact, entities out there trying to do the right thing; and Mark acknowledges that.

Ferrin Williams, PharmD, MBA, who is also my guest today, is chief pharmacy officer at Scripta and an expert in pharmacy benefits. She adds some great points and some context to this conversation. Scripta is partnering with Mark Cuban Cost Plus Drugs. Scripta has a neat Med Mapper tool and also services to help employees find the lowest costs for their prescriptions. If you are a self-insured employer, for sure, check out Scripta.

Here are links to other shows that you should listen to now if you are inspired to take action. I would recommend the shows with Paul Holmes (EP397); Dan Mendelson (Encore! EP385); Andreas Mang (upcoming); Rob Andrews (EP415); Cora Opsahl (EP372); Lauren Vela (EP406); Peter Hayes (EP346); Gloria Sachdev, PharmD, and Chris Skisak, PhD (EP390); and Mike Thompson (EP389). Also Mark Cuban mentions in this show the beverage distributor L&F Distributors.

Thanks to Ge Bai, Andreas Mang, Lauren Vela, Andrew Gordon, Andrew Williams, Cora Opsahl, Kevin Lyons, Pat Counihan, David Dierk, Connor Dierk, John Herrick, Helen Pfister, Kristin Begley, AJ Loiacono, and Joey Dizenhouse for your help preparing for this interview.

For a full transcript of this episode, click here.

You can learn more at Mark Cuban Cost Plus Drug Company and Scripta Insights.

You can also connect with Scripta and Ferrin on LinkedIn.

Mark Cuban has been a natural businessman since the age of 12. Selling garbage bags door to door, the seed was planted early on for what would eventually become long-term success. After graduating from Indiana University—where he briefly owned the most popular bar in town—Mark moved to Dallas. After a dispute with an employer who wanted him to clean instead of closing an important sale, Mark created MicroSolutions, a computer consulting service. He went on to later sell MicroSolutions in 1990 to CompuServe.

In 1995, Mark and longtime friend Todd Wagner came up with an internet-based solution to not being able to listen to Hoosiers basketball games out in Texas. That solution was Broadcast.com—streaming audio over the internet. In just four short years, Broadcast.com (then Audionet) would be sold to Yahoo!

Since his acquisition of the Dallas Mavericks in 2000, Mark has overseen the Mavs competing in the NBA Finals for the first time in franchise history in 2006—and becoming NBA World Champions in 2011.

Mark first appeared as a “Shark” on the ABC show Shark Tank in 2011, becoming the first ever to live Tweet a TV show. He has been a star on the hit show ever since and is an investor in an ever-growing portfolio of small businesses.

Mark is the best-selling author of How to Win at the Sport of Business. He holds multiple patents, including a virtual reality solution for vestibular-induced dizziness and a method for counting objects on the ground from a drone. He is the executive producer of movies that have been nominated for seven Academy Awards: Good Night and Good Luck and Enron: The Smartest Guys in the Room.

Mark established Sharesleuth, a research and investigation Web site to uncover fraud in financial markets, and endowed the Electronic Frontier Foundation’s Mark Cuban Chair to Eliminate Stupid Patents, an effort to fight patent trolls.

Mark gives back to the communities that promoted his success through the Mark Cuban Foundation. The Foundation’s AI Bootcamps Initiative hosts free Introduction to AI Bootcamps for low-income high schoolers, starting in Dallas. Mark also saved and annually funds the Dallas Saint Patrick’s Day Parade, the largest parade in Dallas and a city institution.

In January 2022, he started Mark Cuban Cost Plus Drug Company as an effort to disrupt the drug industry and to help end ridiculous drug prices because every American should have access to safe, affordable medicines.

Ferrin Williams, PharmD, MBA, is chief pharmacy officer of Scripta. With 15+ years’ experience in the pharmacy industry, Ferrin brings a unique perspective to Scripta that spans the retail pharmacy, pharmacy benefit manager (PBM), and broker/consulting sectors. Her expertise ranges from pharmacy operations and services to innovative clinical programs, pharmacy audit, alternative payer funding, and specialty drugs.

As chief pharmacy officer, Ferrin leads the company’s clinical strategies organization responsible for devising innovative cost-containment strategies for prescription drugs, ensuring Scripta clients, members, and their providers are provided with best-in-class clinical insights and tools.

Ferrin earned her bachelor’s, Doctor of Pharmacy, and MBA degrees from the University of Oklahoma.

05:41 What was Mark Cuban’s own journey as a self-insured employer with Cost Plus Drug Company?

06:56 What did Mark find when he decided to go through and look through his company’s benefit program?

08:23 “When you think it through, you start to realize that money is being spent primarily by your sickest employees.” —Mark

09:13 How do you get CEOs and CFOs of self-insured employers to realize that their sickest employees are the ones subsidizing their checks?

12:10 What is the role of insurance in healthcare?

13:42 “If you can’t convince them, confuse them and hide it.” —Mark

14:35 The reality behind getting a rebate check.

15:32 Why are rebates going away, and why isn’t that changing PBM earnings?

18:17 How do you get CEOs and CFOs to dig into their benefits plan?

20:13 Does morally abhorrent move the needle?

20:47 “What we’re trying to do is just simplify the [healthcare] industry.” —Mark

23:33 What’s been changing in consumer behavior?

24:18 “Transparency is a huge part of building that trust.” —Ferrin

24:33 Why CEOs and CFOs really have the power to change healthcare.

31:42 What are Cost Plus Drugs’ plans to expand?

38:36 Where is the future of the prescription drug market going?

41:25 What will happen to the prescription drug market in 10 to 20 years?

47:56 The wake-up call self-insured employers should be acknowledging now.

51:18 Where is the real change in the healthcare industry going to come from?

You can learn more at Mark Cuban Cost Plus Drug Company and Scripta Insights.

You can also connect with Scripta and Ferrin on LinkedIn.

@mcuban and Ferrin Williams provide advice for #CEOs and #CFOs of #selfinsuredemployers on our #healthcarepodcast. #healthcare #podcast

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Dan Mendelson (Encore! EP385), Josh Berlin, Dr Adam Brown, Rob Andrews, Justina Lehman, Dr Will Shrank, Dr Carly Eckert (Encore! EP361), Dr Robert Pearl, Larry Bauer (Summer Shorts 8), Secretary Dr David Shulkin and Erin Mistry

How to Win at the Sport of Business: If I Can Do It, You Can Do It

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There are two big reasons why I decided to encore this show with Dan Mendelson from Morgan Health at this exact moment in time.

It’s a great show (one of our most popular shows in the last year, actually) with lots of keen insights for self-insured employers—and by self-insured employers, I mean HR folks, of course, but also CEOs and CFOs. That was foreshadowing for my second reason.
It’s gonna be an employer CEO/CFO triple play here on Relentless Health Value. Next week on the pod, my guest is Mark Cuban, along with Ferrin Williams from Scripta. And Mark Cuban, spoiler alert, has his own message for CEOs and CFOs of self-insured employers. Then the week after that, we hear from Andreas Mang from Blackstone who shares, among other things, what happens when some company gets bought by Blackstone and that CEO shows up for a meeting with Andreas and that CEO happens to know nothing about their vast, inefficient, and wildly wasteful healthcare spend.

And with that, here is your encore.

For a physician practice to transform itself from an FFS (fee-for-service) machine cranking out volume but not necessarily health or care, the office has to have a high enough percentage of their patients in value-based arrangements to make it actually feasible to transform. It is only when they hit a tipping point of enough patients in risk-based contracts that they can afford to be accountable for their results. At that point, yeah, everybody wins—doctors, patients, actually the entire community wins because when a local practice transforms, all of their patients tend to benefit at some level from the new processes and procedures and standardizations and pop health systems that get put in place.

So, let’s move forward with this with all haste, shall we? Why aren’t we? What’s the problem here? Well, there are lots of problems, don’t get me wrong. But a big one is self-insured employers on the whole are not offering any sort of accountable care arrangements to the providers in their community. This is 150 million patient lives we’re talking about here—a huge chunk of many providers’ patient panels. Self-insured employers have a really big opportunity to level up the care in their whole community due to the spillover effect when a provider practice transforms itself because it has enough patients to do so.

But these employers are stuck. They are paralyzed. They are doing the same thing this year that they’ve done last year, and therefore their whole community is equally stuck in a smorgasbord of suboptimal FFS goings-on.

So, offering accountable care contracts is one thing (a very big consequential thing) that is also one of the five things self-insured employers can do to improve employee health that I talk about in this healthcare podcast with Dan Mendelson. Dan Mendelson, my guest today, also wrote a Forbes article listing out these five things. Here are all five things that Dan mentions in one handy list:

Expand availability of accountable care models to improve the care experience, quality, and affordability at a local level. For a deep dive on this, listen to the show with Dave Chase (EP374).
Invest in the data access needed to assess health outcomes. For a deep dive on this, listen to the show with Cora Opsahl (EP372).
Align employees’ health benefits with pop health outcomes. For a deep dive on this, listen to the show with Mark Fendrick, MD (Encore! EP308).
Prioritize care models that can meet employees wherever they are. For a deep dive on the DEI (diversity, equity, and inclusion) aspect of this, listen to the show with Monica Lypson, MD, MHPE (EP322).
Make care navigation a central part of the benefits package and experience.

My guest today, Dan Mendelson, is CEO of Morgan Health at JPMorgan Chase. He previously founded Avalere Health. Before that, Dan served as associate director for health at the Office of Management and Budget.

Besides exploring the why and the what for each of the five things employers should do right now, I also wanted to find out from Dan what’s going on at Morgan Health and how they are looking to help self-insured employers who want to do these five things actually do them.

You can learn more at the Morgan Health Web site.

Mendelson was previously founder and CEO of Avalere Health, a healthcare advisory company based in Washington, DC. He also served as operating partner at Welsh Carson, a private equity firm.

Before founding Avalere, Mendelson served as associate director for health at the Office of Management and Budget in the Clinton White House.

Mendelson holds a Bachelor of Arts degree from Oberlin College and a Master of Public Policy (MPP) from the Kennedy School of Government at Harvard University.

05:01 Why did Dan direct his article about health benefits at CEOs?

06:03 What does an accountable care model mean to a self-insured employer?

07:58 “This alignment of value will never work … if the 150 million Americans … getting their health insurance through their employer are not also aligned in the same way.”

11:28 “We’re offering them a higher level of service.”

11:40 “Everything that we do is intended to be scalable and not just for us.”

12:09 “We have an obligation to do better for our employees.”

14:52 “Employers need to understand, the only way to get outstanding care is locally.”

17:28 Encore! EP206 with Ashok Subramanian and EP358 with Wayne Jenkins, MD.

18:18 Why is getting quantitative metric data important?

18:50 Encore! EP308 with Mark Fendrick, MD.

20:58 “This is a much broader vision of accountable care than … primary care.”

22:48 “Until everything is aligned, the employer is just not going to be providing an optimal product.”

23:39 “There are substantial issues with … health equity, and employers are paying for the care of 150 million Americans in this country.”

25:23 Is digital health access important for creating meaningful relationships between patients and providers?

29:50 What is the myth that employers need to tackle?

30:18 Why is care navigation important for employees?

31:44 EP334 with Sunita Desai, PhD.

You can learn more at the Morgan Health Web site.

@dnmendelson of @JPMorgan discusses #selfinsuredemployers on our #healthcarepodcast. #healthcare #podcast

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Josh Berlin, Dr Adam Brown, Rob Andrews, Justina Lehman, Dr Will Shrank, Dr Carly Eckert (Encore! EP361), Dr Robert Pearl, Larry Bauer (Summer Shorts 8), Secretary Dr David Shulkin and Erin Mistry, Keith Passwater and JR Clark (Summer Shorts 7)

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Yeah, it’s a fact that the vast majority of past and present provider and payer relationships are not exactly collaborative. They may better be described as fairly adversarial, actually—especially when viewed through the lens of provider organizations trying really hard to find a payment model that will enable them to do better by their patients and deliver better outcomes.

We’ve had Justina Lehman (EP414), Ali Ucar (EP362), Dan O’Neill (EP359) talking about this from the provider organization standpoint. We also had Dan Serrano (EP410) and Will Shrank, MD (EP413) corroborating here.

But after each of these earlier episodes, many comments and conversations ensued about said potential (or not) payer/provider collaborations. And there was a theme of many of these online exchanges. The theme was wondering if we’d all get laughed at for even talking about these rare and elusive Shangri-la scenarios. Like expending words and energy thinking about payers and providers working together was as crazy as being seen earnestly discussing, I don’t know, whether mermaids know about pants or something.

And that’s why I wanted to get Josh Berlin on the podcast today: to talk about the why, the what, and the how of collaboration. I wanted to know if there really is a solid why here for the why collaborate, especially from a payer point of view. And when I say payer, I mean a payer kind of payer like a Blue Cross, United, Cigna, Aetna plan kind of payer.

And I’m calling that out because payers are intermediaries in all cases except for their fully insured members. Except for that one book of business, entities actually taking the risk are taxpayers or self-insured employers. So, saving money on its face is not a super compelling value proposition. Listen to the show with David Contorno (EP339) for the why there.

As we talk about in the interview that follows, though, what might be compelling is predictable spend, possibly—or even more compelling could be a competitive differentiation for that payer that leads to higher market share. Payer/provider collaborations can also lead to a more resilient market foothold that can stand up to threats from upstart competitors or big tech and big retail swooping in looking for a tasty slice of this $3 trillion industry. There’s also the potential for a higher profit margin.

And, oh, one additional reason to collaborate if you’re a payer that we don’t get into super heavily but I’d be remiss to not mention is the whole Star Ratings thing for Medicare Advantage plans, because stars equal big money. But a payer is not gonna get that Star Rating shekel if providers aren’t delivering high enough quality care. Also, of course, we have HEDIS (Healthcare Effectiveness Data and Information Set) and other quality measures that have financial value ascribed to them.

In the conversation that follows, Josh talks about different types of collaborations. Collaboration is a really very vague term, so what exactly is this collaboration, what does it entail, and how do you do it?

Josh told me that there are five kinds of collaboration, and here they are in order of their depth of entanglement, I guess you could call it.

Sharing data back and forth
Use that data to identify areas of need and then do something programmatic together, like create clinical pathways or work on one very specific type of quality program.
A joint venture (JV)—you JV and work together on some sort of narrow network kind of product
Become capital partners in some way.
Having a risk-bearing kind of relationship—the provider gets a piece of the premium dollar

So, that’s the five types of collaboration. But here’s the things you’ve got to tick through, that you have to really go through and make sure you’ve got all these things before you start. Otherwise, it’ll be a monumental waste of time.

Complementary capabilities that enable scalability
A desire for sustainability in a market, and both have common goals and objectives and an agreed-upon time horizon
Both parties need to be pretty flexible. Rigid products have a shelf life. You’ve got to be willing to advance with market dynamics flexibly—know how to iterate around whatever it is you’re doing.
Excel at collaboration. If you’re going to collaborate, you have to know how to collaborate. And that’s a cultural thing.
Compatible risk profiles—this means not just “taking risk” but knowing how to do it in a way that will work and navigating around things that could cause trouble when moving from fee for service to a more capitated way of going about things. Josh talks about some of them.

Just to loop back around on #4 there, because … yeah, to collaborate, you need to collaborate. I call Josh out on this one, and he reiterates that … yeah, nothing to take for granted here. It might seem obvious, but it’s so frequently an internal unknown unknown—at a lot of payers especially. I mean, if I’m a provider organization and you force me to only communicate with you through snail mail (ie, postage stamp, letter box, the whole nine), I don’t know, I’d kind of get the vibe that I’m being enthusiastically ignored, which I just cannot square with a collaborative spirit of any kind.

Josh Berlin is a founding partner of Rule of Three, which is a consulting firm. Rule of Three has clients that are physician practices, hospitals, health systems on the traditional side; and they also work with nontraditional organizations like Walmart Health and Wellness. They also work with payers, like regional blues and employer plans.

You can learn more at Rule of Three and by connecting with them on LinkedIn.

Josh M. Berlin, JD, is CEO of Rule of Three, LLC, with more than 25 years of experience, most of which has been in healthcare advisory in service to his clients. Most recently, he has served as principal and co-practice leader of Citrin Cooperman’s Healthcare Practice and managing partner for IBM Watson Health’s Strategic Advisory Practice, leading a unique group of consultants in each instance to serve clients across the full healthcare ecosystem (providers, payers, employers, governments, advocacy, etc). Prior to those roles, Josh served as a principal in the healthcare consulting practice at Dixon Hughes Goodman (now FORVIS), helping to lead their strategy consulting business, and served as a leader in all versions of KPMG (KPMG Consulting/BearingPoint and KPMG). Currently, he serves on the Boards of the Validation Institute, Population Health Management journal, and HealthTrackRx.

Josh’s expertise spans both the consulting and healthcare industries. Some of his clients have included the Hospital Corporation of America, the Department of Health and Human Services (including the Centers for Disease Control and Prevention and the Centers for Medicare & Medicaid Services), various pediatric health systems, the National Association for Healthcare Quality, Nebraska Medicine, Penn Medicine, the Ochsner Health System/Network, the BJC Collaborative, and The Leapfrog Group, as well as a variety of other healthcare organizations. Josh has developed long-standing client relationships at all levels of organizations, notably including some of the most prestigious C-suite executives in healthcare today.

06:06 Why should payers want to collaborate with providers?

09:46 “Collaboration … is bilateral. … Both sides, plan and provider, should be equally as interactive with the individual populations they work with.”

12:37 What are the must-haves for collaboration between providers and payers?

13:10 What are the five different types of collaboration?

16:03 What are the five characteristics you want to be focused on in partnership?

21:35 EP359 with Dan O’Neill.

22:16 In order to collaborate, do you have to be collaborative?

26:11 Ochsner as a great example of collaboration.

27:46 Episodes with David Carmouche, MD, and Eric Gallagher.

28:51 A collaboration failure in Haven.

You can learn more at Rule of Three and by connecting with them on LinkedIn.

Josh M. Berlin of Rule of Three, LLC, discusses #payer and #provider #collaboration on our #healthcarepodcast. #podcast #digitalhealth #valuebasedcare #healthcare

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Dr Adam Brown, Rob Andrews, Justina Lehman, Dr Will Shrank, Dr Carly Eckert (Encore! EP361), Dr Robert Pearl, Larry Bauer (Summer Shorts 8), Secretary Dr David Shulkin and Erin Mistry, Keith Passwater and JR Clark (Summer Shorts 7), Lauren Vela (Summer Shorts 6)

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Now, I’m being pretty careful here because med schools are super sensitive about their curriculums. And I am sensitive to the fact there’s much to teach in four years. So, throwing no shade here, what do I know from the Krebs cycle? Choices of what to teach are tough. With that disclaimer, in this healthcare podcast I am speaking with Adam Brown MD, MBA, about an article he wrote entitled “Dear Medical Schools, Educate Students on the Business of Medicine—Without it, you are doing your students a disservice.”

Let me give you Dr. Brown’s list for the “why teach the business of medicine.” He says:

The role of physicians in medicine has changed, and we dig into this in the episode.
There’s an expectation mismatch. Docs are investing 10 years and, on average, $200K to $300K in real dollars to get that MD or DO. You don’t want those new physicians quitting on the quick because the reality is so different from what they thought it would be. Not being up front about the business of medicine is like hiding the reality of the situation instead of preparing them.
If you don’t understand the business of medicine, you do not know how to advocate for yourself or the profession or even patients in a way that is compelling to the current set of decision-makers.

As maybe a corroboration here, may I just report that I probably have gotten (conservatively) 100, 150 emails and LinkedIn notes from physicians who say basically some version of the same thing: Thanks so much for Relentless Health Value. I wish I would have learned even the basics of what you cover in med school. If I had, I would have been able to help myself and help myself help patients far better.

Docs are the ones with the prescription pads. Docs are just functionally the gang who are driving costs that patients and employers and taxpayers ultimately incur. Not knowing the how much or just the whole story here can inadvertently contribute to clinical morbidity, because patients who fear they cannot afford care do not follow doctors’ orders. We should get real about that. Or if they do follow doctors’ orders and go into debt … I mean, there’s just study after study in oncology and otherwise that shows patients who cannot afford their care have worse outcomes. We cannot hide from this any longer.
The last reason is that there’s lots of things that docs can do besides just be at the bedside. Not giving insight into these alternative paths seems unfortunate for any doc who maybe wants to mix it up some because they’re feeling burned out or in a different season of their life looking for something more aligned with where they are as a person.

So, now let’s think about this whole question from the standpoint of the system itself—from the standpoint of doing better by patients. Why is it important to teach docs the business of medicine? Let’s start here.

When physicians do not understand the business of medicine, it’s harder for docs to get into boardrooms and have their voices heard. Not teaching the business of medicine in med school might be one reason why there is such a shockingly small percentage of doctors on the boards of directors at major nonprofit hospitals (listen to the show with Suhas Gondi, MD, MBA [EP404]) and why there’s so little “dyad leadership” in the ranks of both clinical and payer organizations, etc. And even fewer nurses are in organizational decision-making roles, by the way, despite nurses actually being the most trusted profession—even more trusted than doctors by 14 percentage points, according to Gallup.

One way to interpret this lack of docs and other clinicians in the boardroom is simple cause and effect. Doctors are losing control and ownership—and I mean this in literal terms—of the organizations that run the business of medicine, which controls the medicine of medicine.

Chad Erickson wrote a comment about this on LinkedIn that I thought was great. He wrote, “Opportunities for physicians to really control or even impact the 86% of healthcare outside of their practice are being reduced every year. We expect doctors to make the decisions and be accountable for patients and outcomes, yet we are taking away their ability to do so.”

And going one level deeper here on how not having enough docs in admin roles becomes a snowball rolling downhill kind of downward spiral, I’m gonna quote Jeremy Granger, MD, FAAP. He wrote, “When you are a physician administrator, it can be very strange. There is tremendous pressure from administrators to think and act like one of them and give insight into how to best coerce physician behavior to align with administrator-determined goals without necessarily involving the physician with setting those goals. When you advocate instead with your physician hat, you can find yourself ostracized from that administrator clique. You realize that they view physicians as knaves and you as the Judas goat. You either pick a side or, if you’re lucky, you land with a team that has physician leaders equipped with equal power as administrators.”

So, you see what happens. Doc gets an admin role and either chucks their stethoscope and their patient-first mindset out the window to fit in, or they quit. And then we never get to any sort of critical mass of clinicians in leadership roles that would reset the organizational ethos.

So, here we are. Too few mission-driven and business-savvy docs in boardrooms mean patients get the kind of care they’re currently getting and at the prices we’re all currently paying. From the standpoint of doing better by patients, I hear story after story about some doc who was under the impression that, I don’t know, working with a private equity firm to do a roll-up of all the specialty practices in a local market was pretty cool and a totally victimless strategy. Or the surprisingly high number of docs prescribing drugs on that most wasteful spending list. There’s one on that list, for example, that costs taxpayers or an employer $2000 when that drug consists of basically two $15 over-the-counter meds mashed together—and yet there’s the impression that the $2000 drug is a better financial choice because there’s a co-pay card and the patient out of pocket might conceivably be less … until it isn’t, of course, because it’s not like that additional $1970 in cost suddenly becomes free.

Or what happens when a clinician is told to order largely unnecessary MRIs because workers’ comp covers everything and no one cares—so this kind of thing continues to just happen … all this stuff. It takes a broader understanding to get the why and create the intrinsic motivation and necessary insight and right language and arguments to make things better.

But all of this is about patients. If I’m talking to margin-driven people sitting around the conference room table with their calculators, are there any organizational consequences, meaning financial consequences, to not making sure doctors understand business and have a seat at the table? Here’s two (there’s probably more):

Staff turnover. If that’s a concern for any organization now, and if moral injury is cited as a reason for that turnover (which it often is), moral injury doesn’t happen when organizational demands are aligned with clinician values.
Successful value-based care isn’t gonna happen if docs don’t understand the business of medicine. Listen to the show with Eric Gallagher (EP405) or the one with Amy Scanlan, MD (EP402) or Larry Bauer (EP409). There’s like 10 guests who essentially say the same thing. Docs who are in the dark about how the world actually works IRL cannot be an aligned force helping move past the FFS (fee-for-service) status quo and the whole business model that underpins that.

Adam Brown, MD, MBA, my guest today, is a practicing emergency physician, board-certified ER doc. He recently founded ABIG Health, working with healthcare companies on communication strategies and advising investment firms. He’s also a professor of practice at the University of North Carolina, Chapel Hill.

Mentioned in this episode is a Tweet by Brendan Keeler. Also, Dr. Denver Sallee’s very inspirational predictive scheduling work.

I’ll leave the last word on this to Michael R. O’Brien, MD: “You don’t overcome the corrupting influence of money in medicine by ignoring its existence. … To slay the dollar-eyed dragon, we must be able to see like the dollar-eyed dragon.”

You can learn more at ABIG Health and by reading Dr. Brown’s bimonthly column.

Adam Brown, MD, MBA, is a board-certified emergency physician, entrepreneur, and accomplished healthcare executive whose professional journey traverses clinical practice to strategic leadership.

Having risen through the ranks at Envision Healthcare, Dr. Brown’s tenure there culminated in his role as president of emergency medicine, where he spearheaded the COVID-19 response and clinical communications. His impactful leadership led to his appointment as chief impact officer in 2021.

In 2022, Dr. Brown left Envision and established ABIG Health, a healthcare strategic advisory firm. Additionally, he took on the mantle of professor at the University of North Carolina, Chapel Hill, Kenan-Flagler School of Business (his alma mater), teaching healthcare operations and strategy to MBA students. He is the advisory board co-chair at the Center for the Business of Health and on the business school Board of Advisors.

A frequent media presence, Dr. Brown has been featured on CBS, Yahoo Finance, BBC, and local Washington, DC, outlets, speaking on various healthcare issues. His column, “Prescriptions for a Broken System” in MedPage Today, showcases his commitment to meaningful change in healthcare.

His passion for empowering informed health decisions shines through his roles as a communicator, leader, and strategist. A recognized thought leader, his ability to connect, envision, and lead underscores his impact on shaping healthcare.

08:49 What does it mean to teach the business of medicine?

11:04 The four Ps that are key within the business of medicine.

13:27 Why is it important for doctors to understand the business of medicine?

21:46 “Things don’t happen without a physician’s signature.”

27:27 Why physicians who understand the business side of medicine can broaden the view of outcomes for the business decision-makers.

28:30 Why is it important to make sure physicians are in the boardroom?

29:36 EP404 with Suhas Gondi, MD, MBA.

30:52 “We are getting what we designed.”

33:37 Dr. Brown’s advice for clinicians in the boardroom.

38:21 The work of Denver Sallee, MD, MMM, using artificial intelligence to do predictive scheduling.

You can learn more at ABIG Health and by reading Dr. Brown’s bimonthly column.

@ERDocBrown discusses teaching the business of #medicine on our #healthcarepodcast. #podcast #digitalhealth #valuebasedcare #healthcare

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Rob Andrews, Justina Lehman, Dr Will Shrank, Dr Carly Eckert (Encore! EP361), Dr Robert Pearl, Larry Bauer (Summer Shorts 8), Secretary Dr David Shulkin and Erin Mistry, Keith Passwater and JR Clark (Summer Shorts 7), Lauren Vela (Summer Shorts 6), Dr Jacob Asher (Summer Shorts 5)

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I just want to stop here and have a gratitude moment. I wanted to thank the Pittsburgh Business Group on Health for inviting me to do the keynote at their annual symposium. It was a big honor. But in doing so, I had the opportunity to play clips from both the podcast and also from people who helped out and gave me a custom clip special for the occasion. So, thanks to Matt Ohrt; Jodilyn Owen; Justina Lehman (who provided a clinical pathway example); Andreas Mang; Larry Bauer; Rob Andrews (my guest in this episode); Nicole Bradberry; Amy Scanlan, MD; Rebecca Etz, PhD; David Muhlestein, PhD, JD; Lisa Trumble; and Doug Eby, MD, MPH, CPE. If you’d like a copy of that presentation, which is all about care gaps and the impact of care gaps especially as it might relate to self-insured employers, click here to request it.

I also again want to thank Havarti Risk Services and Keith Passwater for a super nice donation to support the show, as well as Employees First. Please support these organizations who have supported us and help us keep the lights on over here.

I am so looking forward to the show today. It is with Rob Andrews, who is the CEO of the Health Transformation Alliance (HTA), which is a group made up of jumbo employers. I had wanted to get Rob on the show ever since I heard him say at the thINc360 conference in DC earlier this summer, “Morally abhorrent doesn’t move the needle. What moves the needle is financial implications.”

This interview was my chance to ask Rob Andrews, what are these financial implications of which you speak that move needles? Financial implications to whom? What kinds of financial implications are we talking about? And when that needle moves, what happens?

In the show that follows, Rob says that when you improve the health of employees and dependents and actually just the health of the community, you as an employer improve your financials directly and also indirectly, which Rob talks about relative to maternal health outcomes as his exemplar because, as a case study, it’s undeniably superb. It’s really interesting how employers in a geography wind up footing indirectly a rather shockingly large bill for babies and uninsured or underinsured moms or moms on Medicaid avoidably going to the ICU and the NICU, which the hospitals tally up as hundreds of thousands of dollars in billed charges. The term million-dollar baby is a term, after all.

Listen to the episode that follows for more on these indirect costs and how they happen, but let me focus on the direct bucks out of pocket right now because … yeah, study after study shows that, for self-insured employers, if you pay for the right things and you steer to the right providers in the right care settings known to actually improve health, a self-insured employer and the member do a whole lot better than if the employer kind of laissez-faire pays for any manner of things provided by anybody who can manage to submit a billing code—even if that billing code comes with a too-good-to-be-true discount.

Buying things is not a strategy. And that is true no matter what price you think you’re paying. Also not a strategy is buying things and then cost shifting to plan members, by the way. I love how Josh Butler uses a grocery analogy to describe but one possible flashpoint. Strategy, on the other hand, means addressing root causes. It’s a considered plan of action to achieve an optimized ambition.

Here is the strategic stepwise that Rob offers on this:

Discern the difference between rumor and data. Get your data and get it objectively analyzed by an objective third party, self-insured employers. Similar to what Justina Lehman was talking about last week (EP414), then you have what you need to figure out the delta between the worst performers and the best performers on a risk-adjusted basis.
Now that you know what normal is and what good looks like, gang up and negotiate contracts that hold intermediaries accountable for outcomes and with performance guarantees. Address root causes and the excess and wasteful spend, in other words. Listen to the show with Dr. Will Shrank (EP413) for more on wasteful spend.
Be transparent with consumers/employers about relative quality. Educate them. You may also want to reward members who go to see those high-quality docs and/or make it expensive for them to go to the worst performers. There are lots of win-win case studies here on how well this works.

Rob Andrews and I talk a bunch, as aforementioned, using maternal outcomes as a case study for lots of the points made; and this was done for several reasons.

One is that, for some employers, maternity is a large chunk of their healthcare spend; so avoidably bad outcomes for moms and babies here is not only scandalous, as Rob Andrews puts it, in a country as wealthy as ours but also really costly—and many times avoidably so. Keeping even one mom and/or one baby out of the ICU or NICU can save hundreds of thousands of dollars. I said this already, and it’s a brutal number worth repeating.

But the good news is that there are really cost-effective pathways that actually work to keep moms and babies out of the most expensive care settings money can buy. Jodilyn Owen (on an episode coming up in about three weeks) talks about one of them in detail: how her maternal health clinic, which serves ZIP codes with, let’s just say, a lot of social determinants of health going on, moms in her clinic have a lower rate of NICU admissions than even the fancy ZIP codes nearby. So, this can be done. Purchasers of healthcare just have to demand that it happens and pay for it to happen. Rob Andrews talks about this, and he also talks about why it is quite unlikely that payer or provider organizations themselves are gonna pick up this torch and make this happen unilaterally of their own volition. Now, he offers some nuance, and you should listen to that nuance.

You can learn more by emailing Rob at randrews@htahealth.com.

Robert E. Andrews is the chief executive officer (CEO) of the Health Transformation Alliance (HTA), an original author of the Affordable Care Act, and a former member of Congress. As CEO of the HTA, Robert oversees the strategic direction of approximately 60+ major corporations that have come together in an alliance to do one thing: fix our broken healthcare system. Formed by four founding members in September 2015, the HTA member companies collectively are responsible for more than 8 million employees, dependents, and retirees with an annual healthcare spend of $30+ billion.

07:29 How did Rob get to his current role?

09:11 The problem of maternal health and mortality rate, and how self-insured employers wind up directly and indirectly paying for this.

10:36 Why economic consequences move the needle, and why sometimes they don’t.

12:36 Why the best way to address costs isn’t to re-shift costs but to address them directly.

14:34 Why compensation that isn’t dependent on outcomes is a problem.

18:09 “Strategy’s not what people say; it’s what they do.”

21:40 How do you operationalize saving money with better outcomes?

29:46 How do employers turn conflict into collaboration?

31:41 What is the win-win-win structure among employers, payers, and providers in Rob’s eyes?

34:13 To whom should the task of risk adjustment fall?

38:03 “Better contracts do improve outcomes.”

You can learn more by emailing Rob at randrews@htahealth.com.

Rob Andrews of HTA Health discusses how employers can save money and get better #healthcareoutcomes on our #healthcarepodcast. #podcast #digitalhealth #valuebasedcare #healthcare

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Justina Lehman, Dr Will Shrank, Dr Carly Eckert (Encore! EP361), Dr Robert Pearl, Larry Bauer (Summer Shorts 8), Secretary Dr David Shulkin and Erin Mistry, Keith Passwater and JR Clark (Summer Shorts 7), Lauren Vela (Summer Shorts 6), Dr Jacob Asher (Summer Shorts 5), Eric Gallagher (Summer Shorts 4)

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Here’s why I think this interview with Justina Lehman is different. We get into the actual whys and how-tos of trying to be specialists, like an OB/GYN or an orthopedic practice that offers coordinated care … AND gets paid to do so.

There’s so many conversations that transpire at the 50,000-foot level. This one is far closer to the ground. And if you want an even deeper dive on this topic, go back and listen to the episode with Steve Schutzer, MD (EP294).

There are so many who put financial growth and doing “value-based” coordinating care kinds of things at a counterpoint. Like, “Oh, boy … we need to make some money this quarter, so let’s put all the VBC [value-based care] stuff on the back burner.”

The point that Justina Lehman makes, both implicitly and also explicitly, is that doing the right things for patients, things we know are going to improve patient outcomes … doing these right things can also be a growth strategy. And I don’t just mean offering access and convenience. I mean also doing things that defragment care and coordinating it—things that will truly drive better chronic disease outcomes.

This is what we talk about exactly and specifically in this healthcare podcast: How do practices work alone or band together into a kind of “value alliance,” I’ll call it, to both improve patient care AND make money?

Alright, so here’s the absolute simplest possible business upside that taking really good care of patients can achieve: higher patient volumes at the practice. Patients, who I guess could be called consumers in this example, want to go to such a practice. The practice is differentiated. Your marketing has to be good for that to happen, but yeah … turns out patients really like nonfragmented care with a physician, a nurse navigator, and the rest of their clinical team who patients know, like, and trust. Also, turns out clinicians, ones who are purpose driven, like to work at places where they can be part of a team providing great care. So, you wind up with growth—you got your demand from patients who want to come to your practice; you got supply of clinicians who want to work there. Who would have thought?

So, as long as practice leadership is also purpose driven, this can all be very opportunistic. But there’s also some risk exposure for those who don’t consider models like this. Will Shrank, MD, said on the pod last week (EP413) that any specialists who aren’t figuring out how to work with capitated primary care docs are gonna have some referral problems coming up here. And how do you work with capitated, advanced primary care docs? You demonstrate you have better patient outcomes. You cannot do that unless you do all the things that Justina Lehman talks about in this healthcare podcast. So, there’s risk in not doing some of this stuff.

I’m gonna summarize the process that Justina uses to level up care and also get paid for it.

Assemble a committee of purpose-driven, committed physicians who want to improve care. Committee should self-select. No one should be there who doesn’t want to be there.
Define the situation analysis. What is care as usual? And then, what’s ideal care? And then, determine what the delta is between where we are now and where we want to go.
Design ideal care and the plan for how you’re gonna get from where you are now to where you want to be. What does ideal care look like? I actually gave the keynote at the PBGH (Pittsburgh Business Group on Health) symposium a few weeks ago, and I showed a slide that Justina Lehman had put together showing the ideal care pathway for a patient with gestational diabetes. If you weren’t there, here’s the aha: Ideal care includes multiple physicians. It includes working with payers and PBMs (pharmacy benefit managers) and how you’re gonna do that. There’s also gonna be a nurse navigator involved. It includes standardizing certain care flows and choices and making sure that patients have the right information so that they can get to the right care settings at the right time. The exam room, as Justina Lehman says, is but the start of the patient journey; it’s not the beginning, middle, and end of it.
Align the model to possible financials. First of all, consider two potential payers: self-insured employers … you could offer a bundle if you see a lot of any self-insured employer’s members. You also could go to a regular payer kind of payer.

There’s gonna be two kinds of payers: engaged payers and not engaged payers. If there’s an engaged payer who is actually trying to figure out how to work with providers in their network, then there’s four potential opportunities with such an engaged payer: (1) You could start talking about prospective bundle payments. (2) Less attractive, you could start talking about retrospective payments based on savings. (3) There could be quality incentives that are a percentage of FFS (fee-for-service) withhold, or a quality incentive that is in addition to FFS payments. (4) There could be specialty quality programs that are PMPM (per member per month).

If you’re dealing with a not engaged payer, then one potential move is to gang up with others in the area, create some sort of value alliance, and see if you can inspire the payer to become more engaged. You also could try to align your care pathway to what is possible to get paid for within an FFS model. Scott Conard, MD, in an earlier episode (EP391), talks a little bit about that. He’s talking from a PCP standpoint, though.

Measure results.
Prepare the story/value prop for payers.
Get more docs on board. Create the meaningful stories that inspire additional doctors to want to become a part of this beyond your initial gang.
Manage and maintain success; continue to evolve.

Big takeaways for me: It’s really important to engage payers and get them at the table early. Will Shrank, MD, in another point of alignment from last week’s show to this week’s, Dr. Shrank also was talking about this same thing. He said, historically payers and providers have had a pretty adversarial relationship … but it can be really hard for a provider to migrate to a value-based arrangement without the payer to provide data and, to some degree, shelter for providers who are along the transition to value journey.

Besides the show with Dr. Steve Schutzer and Dr. Scott Conard that I mentioned earlier, I’m gonna leave you with two other interesting “for further reading or listening” references. One is a LinkedIn post from Benjamin Schwartz, MD, MBA, that also includes some pretty great comments and back and forth. In sum, Dr. Schwartz wrote, “We need to uncouple value from the payment model and focus on outcomes tied to diagnoses.”

I also thought a Radio Advisory show was thought provoking. This was with Rae Woods, Erik Johnson, and Daniel Kuzmanovich. The gist of it is, at one point, Rae Woods says, “If I think about the very fragile financial state that a lot of these leaders are in, they’re telling me, ‘I’ve got to pull back on my value-based care objective for 2024, maybe even 2025, because I just have to focus on my margin right now.’ But what I’m hearing you say is that’s actually not the right mindset to have.”

You can learn more by connecting with Justina on LinkedIn.

Justina Lehman, CNP, DNP, founder and president of Revolution Health, is a proven visionary leader at the forefront of transforming healthcare and fueling people’s passion for high-value care. With over a decade of leadership experience, she has devoted herself to urging forward a revolution in healthcare. She stands as a staunch advocate for physicians and clinicians eager to join the movement toward high-value care. In an evolving healthcare landscape, Justina serves as a guiding force, reigniting the passion of physicians and clinicians and accelerating them toward a future of high-value care that is transparent, accessible, and transformative for all.

07:35 What has Justina been up to, and why is it relevant to this conversation?

08:23 What is high-value care, and how do we figure out what it is in reality?

08:59 EP412 with Robert Pearl, MD, on the art and science of medicine.

10:08 “What is the clinical design of … high-value care?”

10:21 Care as usual vs ideal care.

11:11 Summer Shorts 8 with Larry Bauer.

12:23 How does Justina figure out what the benchmark is for high-value care?

12:36 Meeting patients where they are at, not where we want them to be.

17:42 EP402 with Amy Scanlan, MD.

18:28 “What is the story as a group to the payer? What is the story as a group to the self-funded employer?”

19:19 How do you align business operations and the financials?

20:16 What are the four avenues for getting paid for high-value care?

21:58 What are highly engaged payers most intrigued by in high-value care?

24:11 What are the different ways a practice can get compensated?

28:52 Are there programs that have advanced without payers leading the way?

29:37 What’s the “hook” for payers?

31:12 What’s a winning message to payers and employers?

33:04 Summer Shorts 4 with Eric Gallagher.

34:13 “Not everyone needs to participate.”

38:24 Can a program be successful even if a physician is a passive participant in the program?

You can learn more by connecting with Justina on LinkedIn.

Justina Lehman discusses delivering better care and getting paid for it on our #healthcarepodcast. #podcast #digitalhealth #valuebasedcare

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Dr Will Shrank, Dr Carly Eckert (Encore! EP361), Dr Robert Pearl, Larry Bauer (Summer Shorts 8), Secretary Dr David Shulkin and Erin Mistry, Keith Passwater and JR Clark (Summer Shorts 7), Lauren Vela (Summer Shorts 6), Dr Jacob Asher (Summer Shorts 5), Eric Gallagher (Summer Shorts 4), Dan Serrano

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We start out this conversation talking about waste in healthcare. In fact, Dr. Shrank was on a team who did a study about waste in the US healthcare system. (The article is, unfortunately, firewalled.) In that study, it says estimates suggest we have upwards of a trillion dollars of waste a year.

I recently heard a story about a bunch of employed PCPs who went to their health system bosses and asked to stand up an APCP (advanced primary care practice) able to coordinate care, etc, do all the things that at this juncture we know are the right things to do for patients. Now they got shot down—bam!—with the backhands from above. I hope those engaged and activated PCPs quit and start up their own thing. Maybe they will. PCPs getting together here could be a way to solve for waste if they can gang up and harness it.

In sum, we have a waste problem in this country. Aligning incentives might be one way to curb that waste.

Can I just share with you some of the reviews that we got on iTunes recently? They make my heart so warm. I just want to acknowledge these individuals who took the time to write reviews. Here’s the first one. It’s from Jspeaks1987.

He wrote, “[RHV is] my weekly go-to for smart takes on VBC [value-based care]. I have recommended this podcast to literally hundreds of people (including onstage at our recent customer success summit). Anyone who cares about the sustainability of our healthcare system owes it to themselves to give [Relentless Health Value] a permanent spot on their playlist. Always smart, often provocative, scrupulously fair [I like that … scrupulously fair], it’s well worth the listen.”

Thank you so much, Jspeaks1987. Here’s another one. And this is from happygilmore80. I know who you are, happygilmore. “RHV is an amazing podcast and sorely needed in the healthcare community. I tell everyone about it. … I’m a recent listener and have learned so much from [episode] 399 and 400 [which are the manifestos]. Episode 410 was packed with knowledge, 407 was great, etc. Let’s start a hundred RHV communities across the US where we implement small experiments so change is grassroots and ubiquitous. Then the status quo will concede.”

And yeah, for sure with that. If anyone is interested in creating a meetup or something in your local area, reach out. I’ll try to hook you up with others in the Relentless Tribe. Here’s a third one, and this is by Miriam. Thank you so much for this, Miriam.

Miriam says, “I scoured the podcast world to find a healthcare industry podcast that offers intelligent, relevant, clear information and dialogue. I found it. Stacey and RHV cover the US healthcare industry across all sectors while managing to go deep within those sectors. Most importantly, [RHV] highlights how all of those sectors interact, supposedly with the patient at the center, while performing as businesses that are really driven by capitalism.”

Miriam says she never misses an episode. To the three of you, thank you so much. It’s actually reviews like this that keep me and the team going over here.

You can learn more by connecting with Dr. Shrank on LinkedIn.

05:56 Can we cut healthcare waste while improving patient care?

06:35 What does “healthcare waste” consist of?

06:48 What are the six categories of “healthcare waste”?

09:25 EP363 with David Scheinker, PhD.

09:39 How much money does Dr. Shrank estimate is wasted each year in healthcare?

12:11 Where is that healthcare waste going, and why does it happen?

19:09 Uncaring by Robert Pearl, MD.

20:20 “We’ve built a backbone of extraordinary waste on a fee-for-service chassis.”

21:18 EP409 with Larry Bauer, MSW, MEd.

23:26 EP359 with Dan O’Neill.

25:04 Dr. Shrank’s warning to providers out there.

29:04 Summer Shorts 2 with Scott Conard, MD.

30:43 Why there might be a generational shift among younger providers looking to work with different models.

You can learn more by connecting with Dr. Shrank on LinkedIn.

@WillShrank discusses #healthcarewaste, #vbc, and #PCPs on our #healthcarepodcast. #podcast #digitalhealth #valuebasedcare

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Dr Carly Eckert (Encore! EP361), Dr Robert Pearl, Larry Bauer (Summer Shorts 8), Secretary Dr David Shulkin and Erin Mistry, Keith Passwater and JR Clark (Summer Shorts 7), Lauren Vela (Summer Shorts 6), Dr Jacob Asher (Summer Shorts 5), Eric Gallagher (Summer Shorts 4), Dan Serrano, Larry Bauer

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Just taking a moment here to thank our Relentless Tribe for really getting yourselves involved in the work that I had originally kicked off to improve the outcomes for CKD (chronic kidney disease) patients in this country.

With the momentum that we have so far, this Relentless Tribe of ours, we are really (for reals) going to produce measurable improvements for patients with CKD—so many of you, not just talking but actually out there, actively doing what you need to do so that patients do better, and it’s making a difference.

I have talked to doctors, other clinicians, administrators, IPAs, other provider organizations big and small, payers, societies, a great data company, a number of you who are consultants. It’s crazy what we have been able to build so far, and we’ve been doing this for less than a year. The Relentless Tribe … let me tell you, we move mountains.

We get patients properly diagnosed. We get them into appropriate treatment plans. What restores my faith in these rough times, we have encountered one PCP, one clinician after another; and the second that we show them the “as per the guidelines” way to accurately diagnose and stage chronic kidney disease (which is not just using eGFR for those clinicians who might be listening), yeah, that’s it! These are great doctors, and they switch it up. They switch up what they are doing, and that makes my heart warm. These are doctors across the board, from ones in independent practices to ones maybe employed by academic medical centers. And once they have the right information, they use it.

And it’s a wonderful thing, and I cannot thank everybody who has contributed enough. We are making real differences in patients’ lives. If what I am doing speaks to you in any way, please hit me up, because we’re cooking with gas and I could not be prouder of this community of change agents that we have built here.

You’re amazing. You know what needs to be done, and you’re not afraid to do it.

Now, back to our regularly scheduled programming. In this healthcare podcast, I am talking with Secretary David Shulkin, MD, and Erin Mistry. Here’s the first reason why I was interested in taking this interview after their public relations firm contacted me. We were at the thINc360 conference in DC earlier this summer, and I heard them talking about a new innovation to help patients on dialysis not die from infections, which … didn’t realize how common that was and it seemed like a nice adjacency to our ongoing CKD work.

I also thought this might be an opportunity to learn a little bit more about what’s going on with hospital-acquired infections and infection control. Superbugs are hella scary, but one thing I’m just gonna point out—and, small sidebar here, but listen to the show with Bruce Rector, MD (EP300) for more on this—in recent times, I don’t think there has been a pharma company who has managed to launch an antibiotic and achieve commercial success. So, what can easily wind up happening under the current payment model is that instead of just using the new antibiotic to treat resistant cases, there’s this perverse incentive to push for the drug’s use more broadly because more prescriptions, more money. But when the new antibiotic is used more broadly, that actually reduces its effectiveness against those resistant infections that it is here to treat.

Okay … back to bloodstream infections now, which is the topic of the conversation today. If a patient has a central line infection and then gets sepsis, their chances of readmission within 30 days is almost 99%. This is not a little cohort. It’s not small potatoes we’re talking about here either. As Secretary Shulkin says during this interview that follows, if you’re gonna make a preventative care economic case study, do it on hospital-acquired infections and, most particularly, those with central lines that lead to sepsis. Even with very short time horizons, you can make that case.

So, that was two reasons for this interview. The third: I’ve been extremely intrigued by how and why decisions get made in hospitals for whether or not to buy and use potentially expensive new innovative things—specifically, innovative new things which are used during inpatient goings-on paid for with a DRG.

DRG stands for Diagnostic Resource Group. Medicare (and others a lot of times) pays hospitals a flat sum to care for a patient coming in with heart failure or sepsis or needing dialysis, regardless of what services are actually delivered. There are something like 13,000 diagnoses and 5000 procedures that Medicare pays for with a DRG lump sum payment. It’s up to the hospitals to make sure they buy low and sell high.

So, you can see where this is going. A hospital can’t go tell Medicare, “Hey, we just got some fancy new equipment or a better IV drug, so now we’re gonna charge more.” The DRG is what the DRG is, and if the hospital chooses to spend more on the cost of goods, then the hospital makes less money.

This is kind of along the same lines as Marty Makary, MD, MPH, talks about in his book Unaccountable. The purchasing department or some administrator somewhere is making decisions about what monitors to put in the ORs, and they pick the cheap ones that don’t have the color contrast that the surgeons need to do a good job. But the monitors are cheaper, and the hospital can’t pass on the costs. So, from a strictly purchasing perspective, it seems like fiscally solid purchasing, even if doctors are not on board with the decisions and patients have worse outcomes.

Seems like somebody over at CMS figured this out, and to solve for the “purchasers or administrators or whomever who are not willing to lose money by using new stuff,” Medicare introduced this extra payment opportunity, which we’ll get into in the interview today. But the short version is this: Biotech companies, device companies, others who are innovators can apply to get Medicare to pay a so-called NTAP to healthcare delivery organizations who use the new product.

NTAP stands for new technology add-on payment. Again, these are additional Medicare payments in the inpatient setting that may be available to those who use certain qualifying new technologies as part of services rendered that are normally part of a DRG.

Here’s my assessment of the tension between hospitals and plan sponsors because, yeah, when hospitals get paid more for something, that is coming out of somebody’s wallet.

If we assume that we’re talking about an innovation that actually produces better patient outcomes, I don’t know how anyone can say there’s a right answer here. If the innovation is expensive, you’re gonna have payers worried about the money, and fair enough. I can easily hear them saying something like, “We’re already paying however much to the hospital, and now there’s an additional charge that’s allowed on top of the DRG?” On the other hand, if I’m a patient, yeah, it would kinda suck to not get the innovation that’s gonna save my life or whatever because the payers insist on paying no more than the DRG and the hospital won’t pay out of their own pocket.

Really enjoyed my conversation today with Secretary David Schulkin. Secretary Shulkin spent his career running healthcare systems, mostly in the Northeast. A number of years ago, he entered the Obama administration to run the VA (Veterans Affairs) healthcare system. In the Trump administration, Dr. Shulkin was in the Cabinet as the Secretary of the Department of Veterans Affairs. Secretary Shulkin now has a consulting firm and is working with CorMedix.

Erin Mistry, my second guest today, spent her career in health systems and then in biopharma. She now works for CorMedix.

My sincere thanks for helping validate a couple of facts in this intro to Scott Haas, Autumn Yongchu, and Erik Davis from USI. For more on the topic of hospitals getting paid to administer drugs through a patient’s medical benefit, listen to the show with Autumn Yongchu and Erik Davis (EP370). They cover the ways hospitals sometimes can figure out how to charge plan sponsors and patients 6x the cost of the drug.

Acronym alert! CVC, which comes up a couple of times in the interview that follows, stands for central venous catheter, which is something that many dialysis patients have.

Second Acronym Alert! QIDP stands for Qualified Infectious Disease Product. A QIDP qualifies for a special NTAP incentive specifically for infectious disease products.

So again, just recapping what an NTAP is. It’s a new technology add-on payment, and it’s paid for by CMS, who has studied the new technology thing and determined that they actually want hospitals to be using it. So, they’re willing to pay more than the DRG if a hospital uses this thing, because they recognize if they don’t pay more, then the hospital won’t eat the cost. And just because of all the focus on infectious disease right now, these qualified infectious disease products have some prioritized status over at CMS relative to getting the NTAP designation.

You can learn more by connecting with Secretary Shulkin, Erin, and CorMedix on LinkedIn.

Honorable David J. Shulkin, MD, was the ninth Secretary of the US Department of Veterans Affairs (VA), having been appointed by President Trump. Secretary Shulkin previously served as Under Secretary for Health, having been appointed by President Obama and confirmed twice unanimously by the US Senate. As Secretary, Dr. Shulkin represented the 21 million American veterans and was responsible for the nation’s largest integrated healthcare system, with over 1200 sites of care serving over 9 million veterans. Prior to coming to VA, Secretary Shulkin was a widely respected healthcare executive, having served as chief executive of leading hospitals and health systems, including Beth Israel in New York City and Morristown Medical Center in northern New Jersey. As an entrepreneur, Secretary Shulkin founded and served as the chairman and CEO of DoctorQuality and has served on boards of managed care companies, technology companies, and healthcare organizations. Since leaving government, Secretary Shulkin has been the University of Pennsylvania Leonard Davis Institute Distinguished Health Policy Fellow and Professor at the Jefferson University College of Population Health. He is a board-certified internist and received advanced training in outcomes research and economics as a Robert Wood Johnson Foundation Clinical Scholar at the University of Pennsylvania. Over his career, Secretary Shulkin has been named one of the “100 Most Influential People in American Healthcare” by Modern Healthcare.

Erin Mistry is executive vice president and chief commercial officer of CorMedix, appointed in January 2023. She served as senior vice president of payer strategy, government affairs, and trade from 2020 to 2022. She leads the company’s commercial strategy and execution. Erin brings over 15 years of industry experience at the executive level, from consulting to in-house executive management. Prior to joining CorMedix, Erin was vice president of market access at Intarcia Therapeutics, responsible for pricing, coverage, access, real-world evidence (RWE), and channel strategy for a competitive product in type 2 diabetes. Erin was also senior managing director at Syneos Health, where she was responsible for the global P&L of the Value Access Practice. In this capacity, Erin consulted on commercial strategy and market access with emerging, mid, and large biopharma across a broad range of therapeutic categories. Erin holds an undergraduate and master degree in biomechanical engineering from North Carolina State University.

10:17 What is happening with antimicrobial stewardship and combatting antibiotic resistance?

11:22 How is CorMedix working to prevent infections caused by catheters, and who is paying for the innovation to prevent this type of infection?

12:38 Why should hospitals pay for new innovations like the one created by CorMedix?

14:32 What do hospitals need to do in order to realize the benefit of this new innovation?

16:14 What does antimicrobial stewardship mean to Secretary Shulkin?

17:06 “If we continue to ignore this and not use antibiotics appropriately, it’s simply a matter of time before the superbugs figure out how to take over.” —Secretary Shulkin

18:32 “Anytime you have a preventative medicine, you have to have an economic story.” —Erin

20:55 Who is using this product, and who is paying for it?

21:38 What needs to be considered if rolling out an innovation like this broadly?

24:47 How does an innovative product qualify for an NTAP?

26:37 “It’s not just financial economics; it’s mortality data.” —Erin

28:08 What does Secretary Shulkin see as “shifting the paradigm”?

You can learn more by connecting with Secretary Shulkin, Erin, and CorMedix on LinkedIn.

@DavidShulkin and Erin Mistry of @CorMedix_News discuss payment for #innovation in #hospital procedures and #DRG on our #healthcarepodcast. #healthcare #podcast #digitalhealth #hcmkg #healthcarepricing #pricetransparency #healthcarefinance

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Keith Passwater and JR Clark (Summer Shorts 7), Lauren Vela (Summer Shorts 6), Dr Jacob Asher (Summer Shorts 5), Eric Gallagher (Summer Shorts 4), Dan Serrano, Larry Bauer, Dr Vivek Garg (Summer Shorts 3), Dr Scott Conard (Summer Shorts 2), Brennan Bilberry (Summer Shorts 1), Stacey Richter (INBW38)

Unaccountable: What Hospitals Won't Tell You and How Transparency Can Revolutionize Health Care

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On our Web site, relentlesshealthvalue.com, there is a little orange button that says send us a voice message. If you have a question, feel free to click on that button and we’ll try to round up a posse to answer your question if we can.

So, let’s do this thing.

“Hey, Stacey! Really big fan. Really loved the last episode. I had a question. Could you provide more clarity on what the key takeaway was about the actuaries and the different timelines that they’re working on versus physicians? I would greatly appreciate it. Thanks.”

Great question.

And yes, I did kind of drop in an episode something about risk horizons with no explanation. Instead of trying to answer that question myself, I reached out to a couple of actual actuaries, Keith Passwater and JR Clark. I’m gonna play their answers and give a little color commentary before and after to kind of knit together this whole thing into a few succinct takeaways for you.

Keith Passwater is former senior vice president and chief actuary over at Anthem. Keith founded Havarti Risk Services. He brings better risk products and services to healthcare clients. Keith is also a Fellow of the Society of Actuaries, a member of the American Academy of Actuaries, and he serves on the General Committee of the Actuarial Standards Board.

JR Clark is SVP of health plan product and strategy at Paytient Technologies, where he partners with thoughtful employers, insurers, and health systems to help people better access and afford healthcare. JR is known for his public exchange marketplace strategies (and that’s relevant for today) and the creation of alternative products in the individual and small group segments.

So, our panel here is strong is the bottom line. I do want to take a moment to underscore five times that if any healthcare transformation is going to happen, whomever is transforming pretty much anything must—and this is mandatory—they are going to have to be hip to hip with an actuary. But a special kind of actuary—one who applies their considerable smarts to factor in the patient or member as an actual stakeholder in their equations, because what now? Came to discover that in most actuaries’ current models, the impact on the patient or member is not part of their equation. Yeah, yes, you heard that right. Despite the fact that study after study shows that once co-pays or coinsurance reaches a certain dollar amount, patients will start abandoning care, as just one example. And despite financial toxicity being clinical toxicity, and how the cost of care can be a comorbidity, as Cody Coonradt has put it, you only have a small percentage of actuaries who are factoring this in when adding and subtracting and toting up the benefit design.

So crazy, especially because even if you forget about the human aspect here (just ignore it), I’d suspect the math is actually wrong if you ignore the patient as a stakeholder. There are financial consequences when patients abandon meds and care, and some of them manifest fairly quickly—and not in a way that is revenue positive for the plan: Diabetes patients who don’t take their insulin. Guy sees a spot on his arm. Is it melanoma? I don’t know, but I do know I’ll be $600 in the hole if I go see the doctor, so he doesn’t go until it’s really big. I mean, unless the patient dies on the quick, you’d think that there’d be some statistical contemplations about this (ie, how much does it cost plans in the short/medium term when patients who need care fail to seek it).

Actually, Alex Sommers, MD, wrote a post on this the other day. In this post about how much it actually costs when patients abandon care, he references the Four Horsemen of the Apocalypse, which is probably why I remember it.

Any actuaries out there who are taking the patient into account—or health equity is another thing—let me personally give you a round of applause. It’s really easy to feel powerless inside a big machine where everybody is a cog in the wheel, and therefore it’s really hard for anybody to have accountability for the outcomes that we all contribute to.

So, it’s a hugely impressive thing when I meet someone who is figuring out how they can create some net positive patient impact. Okay, so you heard the listener question, “What do you mean by risk horizons?” I played the same question for Keith Passwater. Listen to his response.

You can learn more by connecting with Keith, JR, and Paytient on LinkedIn.

Keith Passwater is former senior vice president and chief actuary of Anthem (Elevance). After founding PascoAdvisers and consulting to clients in need of risk solutions, Keith founded Havarti Risk Services to bring better risk products and services to healthcare providers and self-funded employers. Keith is a Fellow of the Society of Actuaries, a member of the American Academy of Actuaries, and serves on the General Committee of the Actuarial Standards Board.

JR Clark is the senior vice president of health plan product and strategy at Paytient Technologies, where he partners with thoughtful employers, insurers, and health systems to help people better access and afford healthcare. JR is a former director and actuary of Anthem (Elevance), where he was known for his public exchange marketplace strategies and creation of alternative products in the individual and small employer segments. JR obtained a bachelor’s degree in mechanical engineering from the University of Missouri-Columbia, is an associate of the Society of Actuaries, and is a member of the American Academy of Actuaries.

02:39 Why is it a problem for actuaries to ignore the patient as stakeholders in benefit design plans?

04:37 What is a risk horizon for actuaries?

05:38 “What’s the time interval over which we hope to impact healthcare costs?”

07:25 What is a risky investment from an actuary’s point of view?

08:05 How do you keep premiums down when the time horizon is short in an actuary’s point of view?

10:31 How do actuaries assess risk horizons or health insurance, and why do they choose those risk horizons?

14:05 What options are on the table when the risk horizon is longer?

16:06 How does the length of risk horizon affect benefit design?

You can learn more by connecting with Keith, JR, and Paytient on LinkedIn.

Keith Passwater of @HavartiRS and JR Clark discuss #actuarial #riskhorizons on our #healthcarepodcast. #healthcare #podcast #digitalhealth #hcmkg #healthcarepricing #pricetransparency #healthcarefinance

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Lauren Vela (Summer Shorts 6), Dr Jacob Asher (Summer Shorts 5), Eric Gallagher (Summer Shorts 4), Dan Serrano, Larry Bauer, Dr Vivek Garg (Summer Shorts 3), Dr Scott Conard (Summer Shorts 2), Brennan Bilberry (Summer Shorts 1), Stacey Richter (INBW38), Scott Haas

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Lauren Vela is back on the pod today with a summer short that originally was a section of episode 406 that, unfortunately, I had to cut. It was a little bit tangential to the “why with the employer inertia” theme that the original episode was about. But tangential does not mean unimportant. This clip has some really critical insights on a different topic that may or may not to a greater or lesser degree contribute to inertia. And I’m gonna call this other topic the benefit design that most employees might ultimately be the most satisfied with might not be the one that they are explicitly asking for.

Let’s start with three kinds of market research insights that Lauren Vela, my guest in this healthcare podcast, uncovered when interviewing friends and neighbors not in the healthcare industry about their benefits:

1. Nobody reads their benefit information.

2. They are unhappy with their benefits.

3. The most important thing for them is to have choice. They want to avoid the notion of “managed care.”

In thinking about this, I was reminded of a Henry Ford quote: “If I asked my customers what they wanted, they would have told me a faster horse.”

Or Steve Jobs famously said, “Some people say, ‘Give the customers what they want.’ But that’s not my approach. Our job is to figure out what they’re going to want before they do.” Jobs’s whole thing, after all, was that true innovation often comes from anticipating customer needs and desires before they can articulate them themselves.

So, let me reconcile Lauren’s findings when she interviewed people about what they want in their benefits and what Henry Ford and Steve Jobs have to say about the matter.

First of all, patients/plan members—most people have never experienced a comprehensive primary care situation where they are assisted in finding the highest-quality specialists or sub-specialists and have their care coordinated. They have never had someone worrying about them in their “in-between spaces,” as Amy Scanlan, MD (EP402), put it, between appointments. This is all just a fantasy. It is a reputed Shangri-la that almost no one has ever seen with their own two eyes.

But what many have seen—I have; you have—are narrow networks in which cost containment is wielded like a brute-force weapon, where, for example, the NCI-designated cancer centers are out of network as a way to make sure that people with cancer don’t sign up for your plan … or don’t last long on your plan if they do. (Did I say that out loud?)

Do I sound like I suffer from a brutal lack of trust? Yes, I do—and I was just role-playing there an employee probably pretty accurately.

Most of us remember the HMO a-go-go years when your PCP was an administrative gatekeeper and you had to see them to get a specialist appointment—except you never could see them. Wait times were weeks or months, obviously by design, right?

But this way-too-expensive PPO model is the devil I know because, even if it totally sucks, it’s better than the conspiracy theories and/or accurate or exaggerated recollections of other options.

Here are my recommended next steps. Listen to the shows with Vivek Garg, MD, MBA (EP407), and Scott Conard, MD (EP391), and Douglas Eby, MD (EP312), as a start. All three make it really clear that advanced primary care—maybe even direct primary care—can not only save money, but it also can produce better health and patients are super happy and usually clinicians, too. It’s like a quadruple aim home run.

But none of this can happen if we say “integrated care or advanced primary care and you have to go there to get a referral” and then leave whatever that means up to employees’ or plan members’ imaginations. Communication is really required here, as it is when rolling out most new things—not just cars or cellular telephones.

You can learn more about Lauren’s work by connecting with her on LinkedIn.

Lauren Vela is a passionate advocate for a more rational and sustainable healthcare system and recognizes the influence had by employers and other commercial purchasers through their oversight of employer-sponsored insurance plans. As an independent consultant, she partners with entities that are committed to changing the ineffective status quo.

Previously, Lauren was the director of health care transformation with Walmart, where she partnered with the Walmart Benefits team to identify solutions concerning low-value care, site of care, and vendor evaluation. Prior to her tenure at Walmart, Lauren led market strategy and member initiatives for the Purchaser Business Group on Health, where she cumulatively spent two decades working within various healthcare sectors, including health information technology, provider organizations, and pharmacy benefit management. Lauren also served, for seven years, as the executive director of the Silicon Valley Employers Forum, a trade association of high-tech employers collaborating on innovative delivery of both domestic and international benefits.

The cartoon. The decisions commercially insured employees across the country are truly facing …

©Dan Piraro

05:15 Do employees really understand what it means to have integrated care?

06:57 Why employees want choice and avoid the notion of managed care.

07:15 “I’m not sure that Americans really know what would be better.”

07:19 What would be a better way to do integrated primary care in America?

08:04 How do you fix it without disrupting what everyone thinks would be better?

You can learn more about Lauren’s work by connecting with her on LinkedIn.

@laurenvela1 discusses #employeebenefitdesign on our #healthcarepodcast. #healthcare #podcast #digitalhealth #hcmkg #healthcarepricing #pricetransparency #healthcarefinance

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Dr Jacob Asher (Summer Shorts 5), Eric Gallagher (Summer Shorts 4), Dan Serrano, Larry Bauer, Dr Vivek Garg (Summer Shorts 3), Dr Scott Conard (Summer Shorts 2), Brennan Bilberry (Summer Shorts 1), Stacey Richter (INBW38), Scott Haas, Chris Deacon

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This summer short is about the dynamic between payers and providers. An opening point that Jacob Asher, MD, my guest in this healthcare podcast, makes in the interview that follows is that, for a payer, it’s super hard to competitively differentiate from both a cost and/or a quality perspective when you and all of your payer competition use the exact same PPO (preferred provider organization) networks. I mean, what? Are these same exact doctors gonna somehow do a better job with your members than with the rest of their patients?

This is even more true if you think about this from a physician or a practice point of view. Will clinical teams in their clinical workflow figure out who your members are, first of all, which is a thing, and then switch up what they choose to do for your members that is special? Even theoretically, that sounds like an executional fandango, which is exacerbated in markets with lots of payers.

I guess I am not shocked when I hear stories like Dr. Asher was talking about: Doctor sits down at desk after a long day and sees 27 “Dear Doctor” letters from all of the payers in his or her payer mix. “Hey, Doc. Let me tell you about our amazing new thing.”

And Doc’s like, “Pajama time awaits.” And—boom!—the letters, unopened, right in the recycle bin. From a payer’s standpoint, back to square one, I guess.

Now, I will chuck in the mix here—and this has nothing to do with the conversation with Dr. Asher that follows—but one thing I’ve spent my entire career doing is helping organizations set up programs to collaborate with other organizations. If I authentically solve an actual, authentic, prioritized problem, I usually can find many people who seem pretty pleased to work with me.

Now, is this easy to do? No. It takes strategic thinking and executional competence and/or grit to see it through. You really have to understand and account for vested interests and all the weird perverse incentives. Personally, I gotta work with a whole team of others coming at this from all different directions to untie this Gordian knot.

But anyone who really wants to or needs to reach across the aisle and engage with other stakeholders or customers, even in any sort of systemic way, it’s just not possible to phone it in.

Anyway, I just want everyone to succeed in working together. It is impossible to have a longitudinal patient journey if everybody is all up in their own silos fragmenting care.

You can learn more by connecting with Dr. Asher on LinkedIn.

Jacob Asher, MD, completed a residency in otolaryngology–head and neck surgery at the University of California, San Francisco, after receiving degrees from Brown University and the Boston University School of Medicine. Dr. Asher then practiced as an ENT (ear, nose, and throat) surgeon with Kaiser Permanente in Northern California and also served on the board of directors of The Permanente Medical Group, where he focused on physician compensation reform, member satisfaction initiatives, and retirement benefits.

After transitioning to full-time health plan management, Dr. Asher served as a California commercial market medical director between 2008 and 2022 for Anthem Blue Cross, Cigna, and UnitedHealthcare. In those roles, he supported membership growth and retention in both fully insured and self-funded product lines and promoted value-based reimbursement, including capitation.

He has led utilization management teams, collaborated with internal and external population healthcare advocates, and worked to develop clinical initiatives that sought to achieve the Triple Aim. In his role as the clinical face of the health plan to the local market, he worked with network colleagues on accountable care organization partnerships and hospital and physician contract renewals with integrated pay for performance, supported Obamacare exchange participation, engaged in quality improvement collaboratives, and supported regulatory compliance efforts.

Currently, Dr. Asher is serving as a mentor for the Stanford Master in Medical Informatics program while exploring innovative solutions to healthcare delivery.

03:38 Why providers contracted with multiple health plans don’t have a financial incentive to do something unique with one payer over another.

04:01 Why it doesn’t make sense for providers to offer unique pathways for different payer organizations.

05:23 Why, broadly speaking, standards of care between payer policies aren’t really differentiators in clinical practice.

06:47 Why financial incentives might not be aligned to make providers want to standardize their care.

09:16 What improvement has there been in plans making providers more aware of the benefits they offer?

11:47 Why won’t providers off-load their pop health?

You can learn more by connecting with Dr. Asher on LinkedIn.

@JacobAsher18 discusses #payers and #providers on our #healthcarepodcast. #healthcare #podcast

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Eric Gallagher (Summer Shorts 4), Dan Serrano, Larry Bauer, Dr Vivek Garg (Summer Shorts 3), Dr Scott Conard (Summer Shorts 2), Brennan Bilberry (Summer Shorts 1), Stacey Richter (INBW38), Scott Haas, Chris Deacon, Dr Vivek Garg

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Here’s a quote from Rolling Stone magazine: “A supergroup is a very fragile thing. Rock bands are always about balancing huge egos, but when those egos are oversized from the get-go it can lead to huge problems. That’s why supergroups like Blind Faith often fail to go beyond a single album, and why long-lasting ones like CSNY had drama that never seemed to end.”

Hmmm … that’s apropos because, turns out, super ACOs (accountable care organizations) may have some similar issues. A super ACO means multiple ACOs or CINs (clinically integrated networks) which are each comprised of multiple practices or provider organizations, and it’s all under different ownership. Said another way, there are multiple levels of competitors—frenemies, if you will—trying to work together or not work together as the case may be. There’s a lot of infrastructure complexity and process complexity and, frankly, inefficiency. There’s trust issues. There’s the problem that rule #1 of change management is to create “quick wins” so that everyone can smell potential success and realize it’s possible, so momentum happens. But if doing anything is hyper-complicated, then it’s really tough to have a quick win.

Today in this summer short, this is what I am chatting about with Eric Gallagher. We talk about how Ochsner evolved from a super ACO or super CIN into its current form. This summer short is a 13-minute clip that went a little far afield from the main topic of episode 405, which was the full episode with Eric Gallagher, and therefore, I cut it. But as I always do when I cut an actually pretty great section from a show for reasons of time, I have been on the edge of my seat to share it with you.

This show is actually a very nice follow-on to the one with Dan Serrano (EP410) from last week. As Eric describes Ochsner’s history and its path forward, it is a case study of some of the recommendations that Dan mentioned. This summer short also really echoes some of the themes in episode 409, which was the one with Larry Bauer, and also one upcoming with Jodilyn Owen. What will work in one local market, don’t count on it working elsewhere—or not work as well at a minimum. Healthcare is local. This is a lesson many investors and entrepreneurs looking for rapid scaling prototypes have learned the hard way, and listening to Eric, it’s really easy to catch the why for that.

If this topic intrigues you, also listen to the show with Dr. Amy Scanlan (EP402). Also episode 349 with Lisa Trumble. And lastly, I would recommend the show with David Carmouche, MD (EP343). Dr. Carmouche was talking about Ochsner’s work improving patient outcomes with a Medicare Advantage plan.

One final note/point to ponder: scale. To really get value-based contracts, you need it. You need it to afford the infrastructure, and you need it to demand a seat at the table. But yeah with that … everything in moderation, I guess, because any scale that starts to approach monopoly proportions seems to invite bad behavior. You have to get big enough to matter in the market but not so big that your big footprint squashes market dynamics, because it seems like many succumb to the siren song at that point of putting profits over patients.

You can learn more at Ochsner Health Network.

Eric Gallagher, chief executive officer for Ochsner Health Network (OHN), is responsible for directing network and population health strategy and operations, including oversight of performance management operations, population health and care management programs, value-based analytics, OHN network development and administration, strategic program management, and marketing and communications.

Prior to joining Ochsner in 2016, Eric held leadership positions in healthcare strategy and execution—including roles at Accenture, Tulane University Health System, and Vanderbilt University and Medical Center.

A New Orleans native, Eric earned a bachelor’s degree in human and organizational development from Vanderbilt University and an MBA from Tulane University.

04:23 How Ochsner Health went from a super ACO to their current value-based care model.

06:09 What signs did Ochsner Health see that helped them recognize that the clinically integrated networks they were building wouldn’t help them achieve the outcomes goals they were aiming for?

07:42 Why Ochsner Health’s story is a classic example of change management.

08:41 What tough decision did Ochsner Health have to make that’s ultimately led to much higher success rates?

10:46 “Really … it’s about changing the economic model.”

11:03 Why was CMS a driver of change?

13:00 What’s the more sustainable business model in Ochsner Health’s market?

15:09 How has Ochsner Health been ahead of the game in the healthcare market?

You can learn more at Ochsner Health Network.

Eric Gallagher of @OchsnerHealth discusses #valuebasedcare and #superACOs on our #healthcarepodcast. #healthcare #podcast

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Dan Serrano, Larry Bauer, Dr Vivek Garg (Summer Shorts 3), Dr Scott Conard (Summer Shorts 2), Brennan Bilberry (Summer Shorts 1), Stacey Richter (INBW38), Scott Haas, Chris Deacon, Dr Vivek Garg, Lauren Vela

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In this healthcare podcast, I am talking with Dan Serrano; and we’re talking about payer/provider collaboration—blocking and tackling, I’m gonna say—from primarily a financial and revenue point of view. I’d classify this as, say, a 201-level discussion (ie, not entry level, but it’s also not super deep in the weeds). We mainly cover the ins and outs of why a provider organization should probably be looking to get paid to better take care of patients with chronic disease and drive better patient outcomes at lower downstream costs and, to some degree, also why payers should be helping provider organizations in their local communities to do so by providing some help and shelter on the journey from here to a capitated payment.

The focus today is really, I’d have to say, on the messy middle, where a provider organization does not have capitated contracts nor access to any premium dollars, which, by all accounts, is the holy grail here. The premium is where it’s at, and provider organizations might want to be aiming to get a piece of that action.

The why for this “get the premium dollar” prime directive is pretty self-evident when you look at the big bucks rolling around in the coffers of those who are collecting said premium dollars. So, this “get the premium” endgame is, for sure, a big piece of the why—why, if I am a provider organization, I might want to take the time and energy and spend the money to embark on a path that might lead me to be able to get compensated for the stuff that patients really want and need to do better, which includes all of the things that I spoke about with Eric Gallagher in episode 405. Also, Vivek Garg, MD, MBA, in episode 407 and Amy Scanlan, MD, in episode 402.

Spoiler alert: It’s not easy.

Now, I asked Dan Serrano, as aforementioned my guest today, to offer up his advice here in the context of CKD (chronic kidney disease) patients. Why did I ask Dan to use the CKD case study, as a touchstone? Well, first of all, talking about this topic in totally theoretical terms is not ideal. We need an actual example for a lot of this to kind of make sense, combined with the first step for most outcomes improvement programs, which is to study your data and pick a patient population to focus on where the data suggests that you can have a big impact. And speaking of impact, did you know that an underlying reason why heart failure patients get hospitalized and rehospitalized is because of underlying CKD? So, impact in the short term and longer term, which I’ll get to in a sec.

Another reason is—and I’m quoting John Rodis, MD, MBA, here, who is the independent medical director of QC-Health®—Dr. Rodis said the other day, “I sure as heck hope I don’t get CKD, because if I do, chances are I’m not going to be diagnosed. And even if I am diagnosed, I won’t be treated properly.”

So, there’s that. And I can see why he’s saying that. Two out of five patients with ESRD (end-stage renal disease) don’t even know they have kidney disease at all. And the number of patients with progressing CKD on any kind of evidence-based treatment plan is stunningly low.

But also, here’s another reason I asked Dan Serrano to talk about CKD patient populations specifically as his example: I and Dr. Rodis and the team at QC-Health are not the only ones who have figured out that CKD patients are notoriously expensive and way underdiagnosed.

You know who else has figured this out? Payers. Also, private equity. In fact, I was in a meeting with a payer recently, and they stated they had to get CKD patients into point solutions.

This payer—and I’ve heard of others, too—none of these entities are waiting around. And I guess, fair enough, if you look at some of the population health data, that I’m sure these payers and others are looking at. But if you work for a payer and you’re listening right now, what I would say, “Okay, with the point solutions, one that you have carefully vetted, of course, because we have patients suffering right now and dollars being frittered away right now.” But I also would submit that those point solutions will perform a whole lot better if we are all gunning for synergies.

PCPs (primary care physicians) and traditional FFS (fee-for-service) models in this country need your help. The payment models and admin burden are decimating. Payers certainly are a group with some culpability here. (Sorry to be saying the quiet part out loud.) Instead of forgoing them, please help PCPs. Am I saying be altruistic? Actually, no.

Listen to episode 409 with Larry Bauer or episode 391 with Scott Conard, MD, or an upcoming show with Jodilyn Owen and what you will hear is the amazing ability for clinicians rooted in the community to actually drive change in their local markets. In fact, I’d hypothesize that these community-rooted organizations probably have a better track record for actually moving the needle on patient outcomes than any snazzy tech that I have seen, although I am sure that there are one or two very effective snazzy techs out there—the exception proves the rule and all that.

Bottom line: As I do so often, I am advocating for payers and provider organizations within communities to collaborate, regardless of whether there’s a third party also in the mix. I am reporting all of this in the spirit of being helpful but also with some degree of urgency for any care delivery organization because, I mean, really, forget about the holy grail of trying to capture a percentage of the premium if the money is already going elsewhere to too many point solutions who are already capturing a portion of the premium.

IRL, this is what’s already going on out there.

But where there’s a challenge, there is also opportunity. As I have said pretty repeatedly for the past four minutes, because the bar is so low and because CKD patient outcomes are bad news, in general, from a lot of angles, CKD is actually a great place for providers to work hard to improve care and quality.

From a financial standpoint, I think there’s also a great business case for payers to help provider organizations do so. Doing better than the local standard of care is not hard, sadly. And what that means is that there’s so much money that’s possible to save due to the expense of this condition.

And if you’re a payer, even a payer with a third-party CKD solution, if you can help local PCPs and others level up their care, then either you don’t have to pay for the third-party point solution for patients who can be managed successfully locally and/or there’s a more frictionless path for those patients to be identified and get into the point solutions that are available to them.

Let’s all keep in mind that patients at rising risk are falling through a lot of cracks. You can have the best point solution in the world, but if patients aren’t making it there, then, yeah, no outcomes will improve. No costs will be reduced.

Everything I just went through are also all of the reasons why we picked CKD as our focus for a national Groundswell Movement™ that the benefit corp I am co-president of is kicking off to improve CKD patient outcomes. If you are also thinking about improving CKD patient outcomes, for sure, hit me up.

On to a few thank yous. Thank you so much to Carl Hansen, MD, a direct primary care physician, for a really generous tip in our tip jar. Also, thanks so much to Keith Passwater, who is CEO of Havarti Risk Services and Pasco Advisers, for a really nice donation to the cause over here. It was such an honor and a pleasure to moderate a panel at the Society of Actuaries’ latest meeting at Keith’s invitation also.

Additionally, may I extend thanks to Dffdgg, RKC2023, and Healthy economist for super nice iTunes reviews. The shout-outs are amazing, especially when public like this. Also much appreciated how you have shared Relentless Health Value with your colleagues.

Back on track, let’s hear from Dan Serrano, who is a consultant with COPE Health Solutions, where he works to help clients figure out the best way to make investments that drive better outcomes in a more cost-efficient way.

You can learn more at the COPE Health Solutions Web site or by emailing Dan at dserrano@copehealthsolutions.com.

Dan Serrano joined COPE Health Solutions in September 2022 as principal and senior vice president. He supports Analytics for Risk Contracting (ARC) finance build and cost models in terms of drive and delivery with Great Lakes Integrated Network (GLIN).

He is a seasoned healthcare/finance professional with 20+ years’ experience and has held a number of roles across the industry and has primarily served as a senior finance leader with proven ability to drive strategy development and execution across multiple business lines for complex organizations in various stages of maturity.

Prior to COPE Health Solutions, Dan served as senior vice president of finance at CareAbout, a private equity–backed start-up focused on driving performance for primary care physicians. He also was the vice president of value- and risk-based contracting at Mount Sinai Health System, where he worked to align contracting, operational performance, and network strategy for employed and voluntary physician groups. Prior to his role at Mount Sinai, Dan served as vice president of commercial products at Healthfirst, market chief financial officer at ChenMed, and Mid-Atlantic Region chief financial officer at Aetna, where he focused on driving strategic financial decisions by analyzing the value drivers for each of the stakeholders across the industry.

Dan holds a bachelor’s degree in finance from the Peter J. Tobin College of Business at St. John’s University.

09:08 What is the importance of payer/provider partnerships in reducing costs with chronic condition care?

10:52 Josh Berlin, JD, of rule of three; look out for his episode in a few weeks.

11:19 What’s the endgame here with this payer/provider collaboration?

11:43 What advice does Dan have for providers who want to do better by patients with chronic conditions?

15:11 Who’s driving costs in the system?

15:50 Why is lowering the average cost of chronic condition care important?

17:03 Why is there a meaningful delta between well-controlled CKD patients and those who aren’t well managed or identified?

21:57 What does a realistic time horizon look like for addressing chronic condition care?

22:38 Why is it important to start in a shared savings place?

25:25 William Shrank, MD, of Andreessen Horowitz; look out for his episode in the fall.

26:35 Financially, what is the goal and how are we achieving a sustainable goal?

29:06 What is the balance between progress and risk here?

You can learn more at the COPE Health Solutions Web site or by emailing Dan at dserrano@copehealthsolutions.com.

Dan Serrano of @COPEHS discusses #chronicconditions and #payer #provider #collaboration on our #healthcarepodcast. #healthcare #podcast

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Larry Bauer, Dr Vivek Garg (Summer Shorts 3), Dr Scott Conard (Summer Shorts 2), Brennan Bilberry (Summer Shorts 1), Stacey Richter (INBW38), Scott Haas, Chris Deacon, Dr Vivek Garg, Lauren Vela, Dale Folwell (Encore! EP249)

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In this healthcare podcast, we are talking about innovative primary care teams and, by way of Larry Bauer, my guest today, bringing you three inspiring case studies. Much can be inferred from these case studies, as much from how they are alike as how they are different. It is wildly important at the same time that it is wildly underappreciated how different local markets are. I love how Cody Coonradt put it on LinkedIn the other day. He wrote:

“Healthcare is not a $4T market—it’s 500 some-odd interconnected markets ranging in size from $1-50B. [It is] not a singular problem … each market [is driven] by unique third party payer incentives with unique patient cohorts. …

“Before you figure out the next great idea—seek to understand the underlying health economic, revenue cycle, service provider contracting, and cash conversion processes that undergird it all. [That] is how to truly disrupt healthcare.”

Or, said another way, if you’re part of the community, if you are already caring for patients in that community because you’re a doctor or another clinician, you probably have the best shot at truly—and in meaningful ways—helping patients in that community.

This whole statement is a really uncomfortable truth for many in private equity and anybody else who wants to find the easy button to fix healthcare with some big-ass, scalable, rapid-fire bulldozer approach. It’s also a very uncomfortable truth for any national payer looking for one model or one point solution to roll out in a broad stroke to every one of these 500 some-odd interconnected markets that Cody mentioned. One size does not fit all here, and leveling up patient outcomes and care is hard grueling work that requires local market knowledge, being rooted in the community with relationships to succeed. You gotta get a little closer to the ground. Policymakers, please take some notes here. And you, too, self-insured employers, payers. So many universal lessons are embedded in these three examples that Larry Bauer, my guest, shares today.

But bottom line—and round of applause required—you go, all you doctors and nurses and other clinicians or mission-oriented teams who take it upon yourselves to find ways to address the problem of human suffering in your local area.

Stay tuned for an upcoming show with Jodilyn Owen, where we dig into this whole dynamic hard. I’m talking about the dynamic where some barbarian at the gate (ie, some venture-funded start-up) has gotten money—in some cases, lots of money—while there are community-based organizations out there who are doing amazing work really helping patients in the community improving outcomes and cutting costs and struggling, scrambling for every penny they can manage to get their hands on. So, that’s in the future.

Talking about today, though, we’re gonna cover the bright spots when you get a really creative and committed PCP (primary care) team who is part of their own community and who wants to do better by patients locally and got some money to attain that goal. Today, as I said earlier, I am talking with Larry Bauer, who has been working with innovative PCPs and other docs for decades.

All three of these case studies that Larry describes on the show today concern frail elderly adults, and this is on purpose (this using of the same patient population) for a couple of reasons. One of them is just to highlight that the same population in different geographies is not the same population and, therefore, the solution set is going to be different if we’re gonna reach out and care for them.

The second reason for selecting three solutions that all pertain to frail elders is that this group is notoriously expensive and care is notoriously poor. Everybody has a story about how their frail elderly family member or friend died a bad death or did not “finish well,” as Larry Bauer puts it. It’s a patient population at the mercy of this industry and unable, a lot of times, to advocate for themselves. So, solutions here solve, in a way, for the worst-case scenario and might be a great starting point for anybody contemplating how to help other patient populations, too.

The three innovations we discuss today are:

1. Dan Hoefer, MD, and Suzie Johnson in their Transition Program in San Diego helping those at the end of their lives to “finish well.” This is a capitated program.

2. Ken Coburn, MD, who, along with his team, created Health Quality Partners in Pennsylvania. This is a nurse navigator program, and it is paid for by a CMS grant.

3. Alan “Chip” Teel, MD, at Full Circle America with a program to wire up patient homes so that the clinical team could monitor what was going on in the home, intervene in case of emergencies, as well as organize community services. This program is paid for by the patient or the patient’s family, but, point of note, it is 10 times cheaper than a nursing home.

I do ask Larry Bauer, by the way, how to best walk the line between right-sized care and not enough care (ie, the whole death panel counterargument to some of this stuff). I think Larry’s answer was elegant. You’re gonna need to listen to the show to hear it.

My guest today is Larry Bauer, as I have mentioned four to six times already. He is a social worker by training who has been at this, as he says, for a very long time. He created a not-for-profit called Family Medicine Education Consortium (FMEC) over 30 years ago, and it became a platform for bringing together very talented and capable family physicians and some general internists. This gang has been really redefining and re-creating primary care … which is a great way to sum up the three programs that Larry Bauer will talk about today.

You can learn more at the Family Medicine Education Consortium Web site or by emailing Larry at laurence.bauer@gmail.com.

Larry wrote a “Bright Spot” report; check it out here.

Laurence Mahoney Bauer, MSW, MEd, served as chief executive officer of the Family Medicine Education Consortium, Inc., from 1994 to October 2021. The FMEC is a not-for-profit corporation designed to promote collaboration among the academic family medicine and primary care communities in the northeast region of the United States.

He has also served as director of network development for the Center for Innovation in Family and Community Health in Dayton, Ohio, from January 2006. He is an associate clinical professor in the Wright State University School of Medicine, Department of Family Medicine, in Dayton.

Previously, he served at The Ohio State University School of Medicine, Department of Family Medicine, for 4 years as director of organization and faculty development. He served as director of faculty development and behavioral science in the Department of Family and Community Medicine at the Pennsylvania State University School of Medicine in Hershey, Pennsylvania, for 13 years.

Presently, he is an active consultant committed to the creation of a primary care–driven system in the United States. He lives in Hershey. He enjoys pickleball, basketball, and gardening.

06:53 In a brief overview, what does end-of-life care in America look like?

10:38 What are the three innovative systems and physicians Larry Bauer has worked with?

14:27 What does it mean to be in a capitated system?

19:14 What does the Health Quality Partners system look like?

22:13 Andreas Mang from Blackstone; look out for his episode in September.

22:50 What is a number one reason for hospital readmissions?

23:26 The third example of innovative primary care.

27:04 Why is comprehensive care at the community level so important and successful for end-of-life care?

28:03 “The number one goal is not cost containment; that’s one of the outcomes.”

28:26 What is the core issue for these three types of innovative care?

31:02 What does good policy to encourage this type of innovation look like?

33:22 EP326 with Rishi Wadhera, MD, MPP.

34:14 Why is it important to trust physicians and be present and partnered with physicians?

You can learn more at the Family Medicine Education Consortium Web site or by emailing Larry at laurence.bauer@gmail.com.

Larry wrote a “Bright Spot” report; check it out here.

Larry Bauer of @FMEC_ discusses #innovation in #primarycare on our #healthcarepodcast. #healthcare #podcast

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Dr Vivek Garg (Summer Shorts 3), Dr Scott Conard (Summer Shorts 2), Brennan Bilberry (Summer Shorts 1), Stacey Richter (INBW38), Scott Haas, Chris Deacon, Dr Vivek Garg, Lauren Vela, Dale Folwell (Encore! EP249), Eric Gallagher

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I cut this clip out of episode 407 with Vivek Garg, MD, MBA, from Humana; and it’s actually a really nice follow-on from the show last week with Scott Conard, MD, where we talked about the blowback that happened with clinicians at a clinic. This clinic had put into effect a bunch of the comprehensive primary care kinds of things that Dr. Garg talks about in this summer short. But what happened in Dr. Conard’s case is a new practice manager tried to go back to the olden days, and, spoiler alert, it was a kerfuffle. All the docs and the rest of the clinicians staged what sounded like a “mutiny on the bounty” moment from the way Dr. Conard described it.

So, this summer short you’re about to hear and the one from last week again share one key point: Doctors, advanced practice clinicians, medical assistants, pretty much everybody on the team really likes a well-executed, operationally excellent transformed primary care model. And it produces better patient care.

I was reading Dr. Robert Pearl’s book Uncaring the other day, and he summed up the reason why, I think, these transformed primary care practices do better. He was quoting Atul Gawande, and here’s the quoted quote: “The public’s experience is that we have amazing clinicians and technologies but little consistent sense that they come together to provide an actual system of care, from start to finish, for people. We train, hire, and pay doctors to be cowboys. But it’s pit crews people need.”

I interviewed Dr. Pearl, by the way, so stay tuned for that show coming up.

In this summer short, Dr. Garg digs into one common objection to more comprehensively comprehensive primary care, and that is that by improving care, we decrease throughput and, therefore, access to primary care, especially in areas where there are not enough primary care doctors.

You can learn more at humana.com, centerwellprimarycare.com, and the Humana report.

Vivek Garg, MD, MBA, is a physician and executive dedicated to building the models and cultures of care we need for loved ones and healthcare professionals to thrive.

He leads national clinical strategy and excellence, care model development and innovation, and the clinical teams for Humana’s Primary Care Organization, CenterWell and Conviva, as chief medical officer (CMO), where they serve approximately 250,000 seniors across the country as their community-based primary care home, with a physician-led team of practitioners, including advanced practice clinicians, nurses, social workers, pharmacists, and therapists.

Dr. Garg is the former chief medical officer of CareMore and Aspire Health, innovative integrated healthcare delivery organizations with over 180,000 patients in over 30 states. He also previously led CareMore’s growth and product functions as chief product officer, including expansion into Medicaid primary care and home-based complex care.

Earlier in his career, Dr. Garg joined Oscar Health during its first year of operations as medical director and led care management, utilization management, pharmacy, and quality, leading to Oscar’s initial NCQA accreditation. He was medical director at One Medical Group, focusing on primary care quality and virtual care, and worked at the Medicare Payment Advisory Commission, a Congressional advisory body on payment innovation in Medicare.

Dr. Garg graduated summa cum laude from Yale University with a bachelor’s degree in biology and earned his MD from Harvard Medical School and MBA from Harvard Business School. He trained in internal medicine at Brigham and Women’s Hospital, received board certification, and resides in New Jersey.

02:31 Does advanced primary care reduce access to patients?

03:01 Are five-minute visits with patients really access?

04:17 Will advanced primary care provide outcomes that make certain PCP responsibilities unnecessary?

You can learn more at humana.com, centerwellprimarycare.com, and the Humana report.

@vgargMD discusses #advancedprimarycare on our #healthcarepodcast. #healthcare #podcast

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Dr Scott Conard, Brennan Bilberry, Stacey Richter (INBW38), Scott Haas, Chris Deacon, Dr Vivek Garg, Lauren Vela, Dale Folwell (Encore! EP249), Eric Gallagher, Dr Suhas Gondi

Uncaring: How the Culture of Medicine Kills Doctors and Patients

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Back at the beginning of this year, I was so sad when I had to edit out the clip that follows from the original and extremely popular episode 391 with Scott Conard, MD.

In the literally probably three minutes that follows in this clip with Dr. Conard after I finish my ramblings here, Dr. Conard introduces the impact that changing the practice model in a PCP practice in Queens, New York, had on the staff and patients alike. Spoiler alert: No way no how were they going back to the old way of doing things.

The “Before” here was a clinic where the waiting room was filled to overflowing out into the hall with patients waiting to be seen, and this included a mix of really sick people who really needed to be seen and also … others.

And thus they had, among a whole host of other bad things going on, the whole issue of suboptimal ER (emergency room) visits and urgent care usage. Anyone who couldn’t wait just headed elsewhere.

Also, as it is so many places, care was pretty transactional. A patient who wasn’t in clinic had an “out of sight, out of mind” relationship with their PCPs. There was no systemic way for the clinical teams to really think about the “in between spaces,” as Amy Scanlan, MD, put it (EP402)—the spaces in between office visits. But then as a result, of course, we wind up dealing with uncontrolled chronic conditions and the failure to prevent preventable disease. We wind up with urgent needs for care and acute situations that had, frankly, no business getting to that stage in the first place.

So, Dr. Scott Conard and his team worked on practice transformation, including focusing on operational excellence. I say all that to say, here’s Dr. Scott Conard:

DR. CONARD: We went and did one pilot clinic, which is, I think, the right way to do it. And then the practice manager was recruited by a competing group. They put another person in the clinic, another practice manager. And she immediately came in and thought that her job was to go back and put the old way of doing things in place, and within literally four or five days, they got together and sat down and said, “Look, we understand where you’re coming from, but we will never go back. We are not going back to that old system. We are going to do things in this new way because it makes our lives—and we work together—so much better. And we enjoy being together, and we’re seeing … we like not having 30 people waiting to get here at work. We like people getting … having a waiting room be close to empty as we just have one or two of the next people coming in. And we will never go back to that old system.” And, to her credit, she’s like, “Okay … cool. Let me understand this.” And she’s now one of the strongest leaders in that organization for this transformation.

STACEY: So, the PCPs … it was like mutiny on the bounty. They were like, “No way no how are we going back.”

DR. CONARD: Oh, it was the entire team: their receptionist, the telephone operator, the MAs. They have a patient navigator, which is another part of the equation we haven’t talked about that’s really important. And so, the whole team said no.

Listen to the full episode 391 to learn more about Dr. Scott Conard and his team’s approach to practice transformation. But in the meantime, Peter Watson, MD, captured a few learnings from the original episode really nicely on LinkedIn; so let me quote him here:

Dr. Watson has some other really great posts on the topics of value-based care and primary care. I would highly recommend following him on LinkedIn.

Should you continue to be interested in this topic of transformational primary care, additional shows on transforming primary care—including bright spots and challenges—are the shows with Eric Gallagher (EP405) and, as aforementioned, the show with Dr. Amy Scanlan (EP402). Also check out the upcoming show with Larry Bauer, which will be approximately episode 409, should I get my act together. And Vivek Garg, MD, MBA (EP407), who, by the way, is coming up in next week’s summer short talking about the common rebuke of comprehensive primary care, which is that it diminishes patient access because PCP patient panel sizes tend to be smaller in comprehensive primary care models.

Since the original show with Dr. Scott Conard aired, his new book Which Door? came out. I’m gonna say that this book is relevant. It’s written for employers but still relevant here because employers have a terrible track record for helping (ie, paying for healthcare) in a way that enables PCPs who want to do comprehensive primary care to actually do comprehensive primary care. When an employer lets the status quo prevail, employees get fragmented care provided by PCPs struggling under the weight of brutal administrative burden and often nasty and counterproductive incentives.

You can learn more by emailing Dr. Conard at scott@scottconard.com.

Scott Conard, MD, DABFP, FAAFM, is board certified in family and integrative medicine and has been seeing patients for more than 35 years. He was an associate clinical professor at the University of Texas Health Science Center at Dallas for 21 years. He has been the principal investigator in more than 60 clinical trials, written many articles, and published five books on health, well-being, leadership, and empowerment.

02:15 Why a transformed PCP practice didn’t want to go back to the old way of doing things.

03:39 Dr. Peter Watson’s takeaways from Dr. Conrad’s EP391.

04:02 Can fee for service in the short term still benefit primary practice?

04:43 EP405 with Eric Gallagher; EP402 with Amy Scanlan, MD; upcoming episode with Larry Bauer; and EP407 with Vivek Garg, MD, MBA.

05:24 Scott Conard’s new book, Which Door?

You can learn more by emailing Dr. Conard at scott@scottconard.com.

@ScottConardMD discusses #PCP transformation on our #healthcarepodcast. #healthcare #podcast

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Brennan Bilberry, Stacey Richter (INBW38), Scott Haas, Chris Deacon, Dr Vivek Garg, Lauren Vela, Dale Folwell (Encore! EP249), Eric Gallagher, Dr Suhas Gondi, Dr Rachel Reid

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May I just take a moment and thank the Healthy economist for leaving a super nice review on iTunes? The title of the review is “Best podcast on the healthcare industry,” and the Healthy economist writes, “There’s no one simple fix [for the healthcare industry], but [Relentless Health Value] contains valuable insights on what actions can be taken to make things better for consumers and patients.” Thank you, Healthy economist.

In this summer short, I am talking with Brennan Bilberry; and we’re talking about why everybody isn’t suing health systems for behaving badly in sometimes pretty egregious ways. Why isn’t anybody stepping in to prevent all of this consolidation that we all know, at this point, is pretty bad news? FTC, where are you?

Brennan Bilberry cites three reasons for the way fewer antitrust lawsuits than you’d think would be going on:

1. A continuing lack of transparency. It’s tough to sue someone when you aren’t really sure what they’re up to, and, even if you do, it’s hard to prove because you can’t get the data you need to prove it.

2. Political power of hospitals means legislatures have a hard time telling their major donors to kiss off and pass laws that actually enable legal recourse.

3. Turns out the FTC is a little toothless when it comes to those with tax-exempt (ie, nonprofit) status. Nobody expected nonprofits to act the way that some nonprofits are acting, and the laws haven’t caught up with the reality of the situation.

My guest in this healthcare podcast as aforementioned is Brennan Bilberry, who is a founding partner over at Fairmark Partners, which is a law firm litigating some of these antitrust lawsuits against some of these hospital chains.

The original pod with Brennan (EP395) is entitled “Consolidated Hospital Systems and Cunning Anticompetitive Contracts.”

Here’s a link to an article I was thinking about while recording this show about Daran Gaus’s hypothesis for how mergers will impact hospital prices.

And here’s a link to an article about how commercial prices for outpatient visits were 26% higher for patients receiving care at a health system than those visiting nonsystem physicians and hospitals.

Covering some of the consequences of consolidation and what it tends to do in local markets is the show with Cora Opsahl (EP373) and also the encore with Dale Folwell, state treasurer in North Carolina.

One last link is to the conversation I had with Scott Conard, MD (EP391), where the local hospital bought a local ACO (accountable care organization) physician organization and the community paid an additional $100 million to the hospital the following year.

You can learn more at fairmarklaw.com.

Brennan Bilberry is a founding partner of Fairmark Partners, LLP, a law firm focused on fair competition issues, especially in the healthcare industry. Fairmark has filed numerous antitrust cases against dominant hospital systems, seeking to tackle anticompetitive practices that lead to higher prices for businesses, consumers, and unions.

Prior to founding Fairmark, Brennan worked as a policy consultant and political operative whose work included overseeing environmental public policy campaigns in numerous countries, providing international political intelligence for US investors, advising political campaigns around the world, and designing consumer and legal advertising.

Brennan also worked on numerous US political campaigns, including serving as communications director for Terry McAuliffe’s 2013 successful campaign for Virginia governor, serving as deputy executive director of the 2012 pro-Obama Super PAC Priorities USA, and developing research and policy communications for the House Democrats.

Brennan is a native of Montana and South Dakota and has lived in Washington, DC, for the past 15 years.

00:23 Healthy economist’s review of Relentless Health Value.

00:52 Why aren’t more people suing hospitals?

01:16 How is the lack of transparency diminishing the number of lawsuits?

01:41 Why is the FTC a “little toothless” when it comes to nonprofits?

02:12 EP395 with Brennan Bilberry.

02:35 Why aren’t there as many antitrust cases as there are instances of antitrust laws being broken?

03:10 Has consolidation of hospitals systems been good or bad?

03:45 What quirk in the law creates an impediment for FTC?

04:17 What are certificates of public advantage?

05:03 Why is private antitrust litigation important?

You can learn more at fairmarklaw.com.

@brbilberry discusses #hospital #antitrust cases on our #healthcarepodcast. #healthcare #podcast

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Stacey Richter (INBW38), Scott Haas, Chris Deacon, Dr Vivek Garg, Lauren Vela, Dale Folwell (Encore! EP249), Eric Gallagher, Dr Suhas Gondi, Dr Rachel Reid, Dr Amy Scanlan

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Thanks for joining me as we kick off the summer season. Here’s what we’re gonna talk about today in our 10-ish-minute conversation. Keeping it short and sweet.

First up, we got three super interesting voice messages left by your fellow members of the Relentless Tribe that I wanted to share with you. Next up, I will cover plans for the summer, because this summer, we have plans.

And then after that, just wanted to chat a little bit about what I am up to right now.

Agenda item #1: Episodes 399 and 400 of Relentless Health Value were me sharing my manifesto as it were. At the end of the show, I said that if you have a manifesto of your own, to share it by going to relentlesshealthvalue.com and hitting the orange leave a voice mail button. Doug Pohl, CEO of HealthTech Content, did so; and here is what he had to say:

“My name is Doug Pohl. I’m the founder and CEO of HealthTech Content, and I'm pretty frustrated by the lack of progress toward making the improvements we need for healthcare. So, I put this out there to sort of be a bat signal for anyone else who feels the same way I do but to also hold myself accountable to be congruent outwardly with how I feel inwardly. No longer will I accept healthcare’s prioritization of the bottom line. No more will I ignore the flagrant victimization of our society. I won’t sit silently while shortsighted greed ruins families. I don’t accept a profit-first model that kills people daily. I can’t let complacency keep me from taking action. I won’t let my voice wither away in fear. I can’t—and I won’t—remain quiet. I believe in the potential of regular people. I know how powerful we can be working together. Every one of us is affected by healthcare eventually, and it will take all of us to create the healthcare we deserve. The first step is rejecting the status quo. I’m tossing it out the window. How about you?”

And now let me share two more voice mail messages, and here’s why they both are meaningful. We know that this journey to transform the healthcare industry in this country can be long and slow and, at times, lonely. But together we are stronger and more able to help patients receive the care that they need and deserve at a price that we all can afford. So, thank you for being part of our community, and here’s two perspectives on why you being here matters.

Here’s a voice mail from Justina Lehman from the Infinite Health Collaborative (iHealth):

“When you are in the work of creating change in healthcare and really working to align with value for the patient, value for the physician, the clinician so they have an environment that they can thrive in, the work can feel hard. And it can feel lonely, and you can feel on an island. And Relentless Health Value podcast is your people. We often say this in our team of … when you look to that podcast, you’re reminded of all the amazing people across this country doing incredibly meaningful work. And linking up with one another can create that strength and help you with your resiliency, especially on those days where you’re feeling down and that the work is hard and that you’re doing it alone. And sometimes you may even question: Is this work of value? Will it be valued of others? The Relentless Health Value podcast, Stacey, all of her guests have really been those people for us. Not uncommon for us to share podcasts amongst each other during the work of reminding each other of the people out there doing great things. So, so incredibly grateful for what Stacey’s built and for all the guests that have been on her show and the value it’s adding and the support it’s giving to those of us who are out in the trenches trying to make this happen. So, thank you, Stacey.”

And here’s a message from Amy Scanlan, MD, who was also a guest on episode 402:

“Hi, Stacey. It’s Amy Scanlan. Wanted to say thank you for your latest episode. It’s so helpful to be reminded that, even though we’re making little steps, we are making progress and we’re part of a greater movement. Thanks so much for the inspiration and for always doing the good work.

Bottom line, here’s my point and call to action: Share this show, especially with colleagues, with anybody trying to find a path forward who may be helped by a little companionship along the way. I just got a note, in fact, from Rajiv Patel, MD, MBA, FACP, from Bluestone Physician Services, and he wrote, “I am only a six-month listener and pretty upset to have not found this podcast earlier.” So, help spread the word and there are some people out there—not everybody, but some people—who you would be doing, frankly, a great service to. It sucks to feel alone.

Agenda item #2: Let’s talk about our summer plans here at Relentless Health Value. These plans are made possible because I am a collector. I grew up in Pennsylvania Dutch country. What can I say? We don’t throw things away. We get a recycled jar and start throwing, I don’t know, old keys into it until—it’s like a magic trick, really—suddenly we have a collection of old keys. You know you’re a collector when you have to buy a Brother P-Touch label maker because you have so many collections you require fancy labels to keep track of them all.

Here’s why this is relevant to you: Over the past year or so, I started collecting the sound bites that we had to cut from our episodes. I’m not talking about bloopers. I’m talking about really good insights and information but on a topic that maybe was slightly off-topic from the main thrust of the episode or sometimes just a little too long. I try to keep our shows around the 32-ish-minute mark because … yeah, you people are busy.

At a certain point, though, I realized I had maybe half a dozen of these 5- to 10-minute clips. So, that’s what we’re doing this summer. We’re going to play a drawer of, I’ll call them, “Summer Shorts.” Get it? Summer shorts? These shorts are all with previous guests, and each short shares one or two very concise insights.

I have about seven shorts in this drawer, so this will take us through most of the summer. There will be an episode or two sprinkled in. We have one on deck from Larry Bauer, who goes through some really heartwarming bright spots in the delivery of healthcare, and another one from Dan Serrano talking about CKD (chronic kidney disease) from a financial modeling standpoint.

We’ll see how it goes. Feedback is welcome.

Speaking of bloopers, though, after 400 or whatever shows, I have to say I’m very blasé about bloopers as you will discover if you ask me about them, which many people do. I’ve heard them all what feels like a thousand times each: the ambulances, the helicopters, the lawn guys, the kids screaming about not wanting to give their germs to the dog (come to think of it, I should have saved that one), squirrels in the mini blinds, dogs barking, obviously the cat on the keyboard, the ice machine, the doorbells, things beeping, an occasional rooster.

I always just delete them because guests get embarrassed. But yeah, I probably have enough audio to put together a game show entitled Where Is the Guest Working From— Home, Hospital, Office? Answer correctly and win prizes.

That was a detour. Back on track now.

One of the other reasons for doing summer shorts is because … wow, I am really busy. QC-Health®, the benefit corp that I’m co-president of, is working really hard in the CKD space. Right now, we are collaborating with several provider organizations—amazing ones, if you ask me—trying to co-design with PCPs in a very helpful way (ie, a way that is intrinsically motivating) to diagnose CKD earlier, slow disease progression, and help their colleagues do so, too.

Considering that 50% (five-oh percent!) of patients who go into dialysis crash into dialysis in the ER (ie, they go to the emergency room for something or other and, while there, they are told that the root cause of their problem is “Oh yeah, you have end-stage renal disease [ESRD] and need to be on dialysis,” which costs, what, a quarter million dollars a year [according to a study in JAMA Network Open]). Oh, and also, two out of five of those patients who crash into dialysis—this is sad—had no idea they even had CKD, meaning they had no chance to slow their disease progression even if they wanted to. So, lots of work to be done there.

This said, if you are working on anything that has to do with CKD, hit me up. There may be some alignments that we could explore.

The process that we are using here to address and try to level up CKD outcomes is the same process that we used in the chronic liver disease (CLD) space, in which we improved the use of clinical guidelines for end-stage liver disease by 23% in about six months nationwide. Yeah, I know. I actually have a day job and do real work.

Now, I will say that if you have a drug in the CKD space or a device or you are an ESRD value-based provider … yeah, call me kinda quick. It’s humbling and nice validation the number of folks who are interested in working with us, but we don’t want to bite off more than we can chew.

Moving on, here’s some more news about me. Thanks so much to the Validation Institute for awarding me Healthcare Influencer of the Year. That was a really cool surprise, and I am looking forward to picking up the award in DC at thINc360. So, that happened.

I’m also looking forward to giving the keynote at the Pittsburgh Business Group on Health Symposium in September. Please come and see me there. I would love to meet you.

For more information, go to aventriahealth.com.

01:14 Doug Pohl’s manifesto.

02:43 Justina Lehman’s thoughts on why our podcast listeners are important.

04:05 Dr. Amy Scanlan’s voice mail.

04:39 Note from Rajiv Patel, MD, MBA, FACP.

05:01 Relentless Health Value’s plans for the summer.

09:18 Stacey’s plans for the summer.

For more information, go to aventriahealth.com.

Our host, Stacey, discusses our #healthcarepodcast plans for the summer. #healthcare #podcast

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Scott Haas, Chris Deacon, Dr Vivek Garg, Lauren Vela, Dale Folwell (Encore! EP249), Eric Gallagher, Dr Suhas Gondi, Dr Rachel Reid, Dr Amy Scanlan, Peter J. Neumann

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I hope you enjoy this encore episode of one of the most popular shows in the last 12 months.

One of my mentors often said price is irrelevant. He said he would sell anything for any price as long as he could define the terms of the deal. During this conversation today with Scott Haas about PBMs (pharmacy benefit managers), that quote was playing in my head like an earworm.

I’m henceforth gonna struggle with the term rebate to define dollars that the PBM gets back from Pharma, because, according to my guest in this healthcare podcast Scott Haas, it turns out “rebates” comprise only about 40% of those back-end dollars that some PBMs manage to score from pharma manufacturers. I don’t have any insight really into this, but Scott Haas certainly does—and this is the average that he has seen in his work and that we’re going to dig into today. But in sum … wow! Let me just repeat that a mere 40 cents on the dollar of the gross amount that PBMs take in “rebates” from Pharma these days winds up going back to plan sponsors, even plan sponsors who are getting “100% of the rebates.”

If you didn’t understand what I just said, no worries. I’m gonna explain it right now. If you did and you know the why behind all of this also, you could probably skip ahead about five minutes.

Here’s the backstory on this whole rebate fandango. Let’s start with part one of what is a two-part transaction.

So, part one: the deal between pharma manufacturers and PBMs. In general, a pharma manufacturer signs a deal with a PBM to give back whatever percentage of their gross sales revenue to the PBM at the end of the year, say. It’s along the same lines as a cash-back coupon for the PBM.

Why would a pharma company be up for giving cash back like this? Well, to get on a PBM’s formulary, giving cash back is like the price of admission. PBMs have a lot of leverage, after all—at least the big ones. They control access to millions and millions of patient lives. So, if Pharma wants their drug to be accessible to those millions and millions of lives, they have to play the cash-back game, otherwise known as the rebate game. They have to agree to give back to the PBM a certain amount of cash on the back end.

So, PBM pays Pharma’s list price up front—that’s the gross amount paid, based on the list price of the drug—and then after all the cash back gets toted up at the end of the year, there’ll be a net price. List price or gross price minus the cash back equals net price. It’s this net price that’s the true kind of final price which the pharma company gets paid per script by said PBM at the end of the day.

These days, most everybody pretty much knows that PBMs are getting these so-called rebates—this cash back from pharma companies that I just explained. And it’s pretty common knowledge the so-called gross-to-net bubble (the gross-to-net dollar amount) is pretty huge, meaning the rebate or cash-back amount is pretty huge. And many have also noticed that the gross-to-net dollar amounts seem to be growing bigger and bigger every year. I mean, for one insulin manufacturer, consider this: Their list price, their gross price, is $350 per script. And their net price after cash back/rebates was $52 this past year. Wait ... what? After all the cash back to the PBM, the insulin manufacturer got paid 86% less than their list price—$350 went down to $52 per prescription. The PBM vacuumed up 86% of the dough for every script written for this particular brand of insulin.

Okay … so, say Pharma gives $100 back to the PBM based on the terms of their deal. Call that part one of this example transaction.

Here’s part two: the deal between PBMs and health plans or self-insured employers. Health plans and self-insured employers are customers of the PBM. They hire PBMs to manage the pharmacy benefits for their members or employees.

So, because everybody knows this whole rebate thing is going on, as part of the contracts that the PBMs put in place with their customers (meaning the health plans or employers), the PBMs tell their customers that they’re going to give 100% of the rebates back to the plan/employer. So, you’d think that if the pharma manufacturer paid $100 to the PBM, that the customers of the PBM (the plan sponsors) would get the $100 back then, right? The PBM would pass on 100% of the savings, as it were, if they’re saying that they’re gonna give 100% of the rebates. I mean, if this is actually true, that $100 in and $100 out, then the PBM is potentially performing a useful service, right? They’re lowering drug costs for their customer, the plan sponsors for their members and employees.

Except … turns out, not so much. Because what is a rebate, really? A rebate can be anything the PBM defines as a rebate. And it turns out that, on average, as I said before, according to those in the know, something like $60 of that $100 is not a rebate. It’s an administration fee. Or a data fee. Or an education fee. A clinical program fee. Some other name that is not rebate.

As my guest Scott Haas says, the term rebate is meaningless because it can mean whatever the PBM wants it to mean. It’s like inconceivable from The Princess Bride. I do not think that word rebate means what you think it means.

Now it is a tangled web we weave here, and for more on why I say that, listen to the episode with Chris Sloan (Encore! EP216) entitled “How Medicare Part D Plans Became Addicted to Drug Rebates.” There’s also a show with Pramod John, PhD (EP353) where we dig into, specifically, specialty drugs and rebating and so-called rebate walls.

But net net, all of this probably myopic focus on rebates means that you have to keep an eagle eye out for so-called exclusions in contracts if you are a plan sponsor. So, what are exclusions?

This is that whole thing where some cheap generic is excluded from a PBM formulary while some expensive brand for the same condition is on formulary. Why would a cheap generic be excluded from a PBM formulary? Simple. Cheap generics don’t have rebates. PBMs lose a lot of money when some high-priced specialty drug, for example, goes generic. They might have made thousands of dollars per script on that high-priced brand by collecting its rebate. Think about that insulin example. The rebate is 86% of the cost of the drug. And everybody wonders why some cheap generic insulin or biosimilar or whatever isn’t on formulary. It is not a mystery when you’re dealing with for-profit enterprises built around a model of revenue maximization.

So, given all this, what’s my guest Scott Haas’s bottom-line advice in this whole thing? If you’re a health plan or employer and you’re trying to negotiate a PBM contract where your spend is predictable and your contracted price promises have any meaning whatsoever, Scott Haas’s advice is, you have to ensure that the contract defines the actual prices for the drugs in the contract. With absolute numbers. Not percentages off or weird formulas or the empty promise of getting an AWP or a WAC (which means average wholesale price or wholesale acquisition cost) or any of the other various acronyms for some drug pricing schema. All of these are basically shorthand for “this price could change at any moment.”

There’s a reason in-the-know people say AWP stands for “Ain’t what’s paid,” meaning ain’t what’s ultimately going to be paid by plan sponsors. What is necessary in PBM contracts is the final price—that number. Some digits with a dollar sign in front of them and a “per unit” after them. No acronyms and no percentage signs.

Whoever gets to define the terms ultimately controls the price. So, get the price up front.

As mentioned several times already, I am talking to Scott Haas, who is a senior VP over at USI Insurance Services. He’s speaking today from the perspective of a plan sponsor, meaning from the point of view of a health plan, including those health plans managed by and paid for by a self-insured employer and their employees.

For more information on PBMs and how drugs get adjudicated, listen to the show with AJ Loiacono (Encore! EP231), which was one of the most popular episodes over here at Relentless Health Value. Somebody on a LinkedIn post the other day commented on how much she appreciated AJ Loiacono’s frank assessment of things and how she would love to go to a meeting with more people similarly telling it like it is. That’s pretty much what we aim to do at every episode over here at Relentless Health Value, and AJ nails it on that objective for sure in this episode.

One last thing, also on the show: Scott Haas brings up GPOs that the Big Three PBMs have been spinning up to aggregate and maximize all of those rebates that we just talked about. I discuss this exact topic at some length in another incredibly popular episode with Mike Schneider (Encore! EP288).

You can learn more at usi.com or by emailing Scott at scott.haas@usi.com.

Scott Haas has over 38 years of employee benefits experience. His background includes the development and validation of care management programs; prescription benefit management solutions; provider network evaluation, valuation, and negotiation; and underwriting.

Scott started and operationalized a third-party administrator (TPA) and a pharmacy benefit manager platform from scratch. He has worked in the arena of alternative funding for most of his career. Scott’s primary focus is in the area of alternative delivery and financing of healthcare other than fee for service, along with prescription benefit and healthcare risk management consulting.

Scott has held officer-level positions within Blues plans and TPAs as vice president of sales and marketing, vice president of underwriting, and president. Scott has also served as a trustee for both union and non-union health and welfare and pension plans.

Scott frequently shares his consulting expertise speaking at national events hosted by organizations such as Health Rosetta, the International Foundation of Employee Benefits, the Health and Welfare Plan Management Conference, the Western Pension and Benefits Conference, and the Self-Insurance Institute of America (SIIA). Scott has authored and coauthored articles on various topics over his career.

Scott earned his bachelor’s degree in business administration and economics from the University of Nebraska at Kearney. Scott also holds Chartered Life Underwriter (CLU) and Registered Health Underwriter (RHU) designations.

10:34 What’s the major flaw with the buyer-seller relationship between plan sponsors and PBMs?

12:08 What are the five things that need to be considered in order to get a fair price from a PBM?

13:21 Why does using average wholesale price cause problems for plan sponsors?

15:10 What does it mean to put the network risk on the PBM?

17:15 What’s happening with drugs moving from specialty brand to specialty generic?

19:19 “A generic is a generic; in our world, it’s binary.”

23:36 “The term 100% of rebates is really irrelevant.”

23:59 What does it mean to have a minimum guarantee in drug rebates?

26:43 “When you do a line-item assessment … is it producing an optimal result in comparison to competitively achieved … pricing for generics … and for specialty?”

27:57 “Plan sponsors need to grow a backbone.”

28:40 EP342 with Christin Deacon.

29:10 Why do you need to understand your consultant’s process as a plan sponsor?

29:36 Why do you need to understand formulary exclusions as a plan sponsor?

29:46 Why is it important to create a more equal PBM contract?

30:57 “Rebates inure to the benefit of the plan sponsor; they don’t necessarily benefit the consumer.”

31:50 What does Scott do at USI?

You can learn more at usi.com or by emailing Scott at scott.haas@usi.com.

Scott Haas of @USIIns discusses #PBMs and #drugrebates on our #healthcarepodcast. #healthcare #podcast

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Chris Deacon, Dr Vivek Garg, Lauren Vela, Dale Folwell (Encore! EP249), Eric Gallagher, Dr Suhas Gondi, Dr Rachel Reid, Dr Amy Scanlan, Peter J. Neumann, Stacey Richter (EP400)

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I couldn’t resist the “who’s suing who” because, yeah, you can’t go wrong with Aretha Franklin references.

Back on the pod we have Chris Deacon, who is going to give us a rundown of the legal goings-on going on right now that impact self-insured employers, carriers, hospitals, and taxing authorities like cities.

Chris breaks down the legal activity into three main categories, and then we discuss some examples of lawsuits in each category. So, here’s the outline of our upcoming conversation:

Breach of Fiduciary Line of Cases Against Carriers

a. Bricklayers vs Anthem Class Action

b. Mass Laborers vs Blue Cross Blue Shield

c. Member vs Cigna

Carrier vs Hospital (upcoding) and Hospital vs Carrier (underpayment)

a. United vs TeamHealth

b. TeamHealth vs United

Taxing Authority vs Nonprofit Hospitals

a. Tower Health line of cases in Pennsylvania

b. Pittsburgh vs UPMC

This episode itself is a little on the longer side—and I didn’t want to edit too many of Chris’s words of wisdom—so I’m gonna make this a little bit shorter, this intro.

But just one point that I’ll make, and this is about the first category of legal activity wherein self-insured employers mostly try to pass the “who is actually the fiduciary” hot potato to carriers, ASOs (administrative services only), and TPAs (third-party administrators). And the carriers, ASOs, and TPAs are like, “It ain’t us.” Moving forward here, I’m just gonna say carriers as a catchall for carriers, ASOs, and TPAs to save myself a mouthful.

But bottom line on this topic, I just want to underscore something that Chris makes clear later on in the show: Plan sponsors (ie, self-insured employers) are the fiduciary, the sole fiduciary, at least according to the carriers who are getting sued right now. This is the position that you can see them taking in every lawsuit that I have seen. What the carriers say also, as a follow-on, is that if there is any contractual language between the carrier and the employer that violates the CAA (Consolidated Appropriations Act) or any other regulations, it is or was the employer’s responsibility to not sign the contract.

It’s not the carrier’s responsibility to point out that there’s stuff in their own contract that’s in violation for the employer to sign. And this includes contracts that don’t give self-insured employers the right to their own data, which is pretty much a rate critical for any and all CAA compliance.

As Justin Leader wrote the other day in reference to the bricklayer case, “To get to the point of filing the suit, there was a solid 2 years of failed negotiations [for the bricklayers to get their own claims] data.”

Two years trying to get claims data that is necessary for a fiduciary to have from a carrier who is saying essentially, “Good luck with that. You’re the ones that signed our contract.”

Here’s one of Chris Deacon’s latest LinkedIn posts about this topic.

And here’s another one from Jeff Hogan that was interesting.

Also, here’s the link to the earlier episode with Chris (EP342), where we dive into the deep end on the topic of the CAA, which was signed into law at the beginning of 2022 and states that self-insured employers have certain rights and responsibilities based on their role as the fiduciary of their health plan.

For more on the Member vs Cigna case, check out the encore episode with Dawn Cornelis (Encore! EP285).

The show with Vikas Saini, MD, and Judith Garber, MPP (EP394) comes up where we talked about hospitals and their charitable giving.

And lastly, I mention the show with Suhas Gondi, MD, MBA (EP404) about who is on the board of directors of hospitals, big nonprofit hospitals in particular.

My guest in this healthcare podcast, Chris Deacon, is a lawyer by training. She ran the state health plan for the state of New Jersey, which covered about 820,000 public-sector lives. She now has an independent consulting firm, VerSan Consulting.

You can learn more at versanconsulting.com and connect with Chris on LinkedIn.
You can also email her at cdeacon@versanconsulting.com.

Chris Deacon has a deep understanding of the fiduciary role health plan administrators hold and should be leveraging in order to drive value for their plan sponsors and members. An attorney by training, Deacon formed VerSan Consulting, LLC, in order to educate and engage employers to be more prudent purchasers of healthcare. From creative procurement methodologies and demanding contracts to population health initiatives and primary care investment, Deacon believes that large employer-sponsored health plans have not only an opportunity but an obligation to drive healthcare transformation that delivers value for the market.

Prior to founding VerSan Consulting, Deacon ran one of the largest health plans in the country for the New Jersey Department of Treasury, which covered over 820,000 public-sector lives, including state employees, teachers, and uniformed professionals. During her tenure, Deacon was credited with helping the state save over $3 billion through a number of initiatives, including enhanced oversight, payment integrity programs, procurement strategy, and strict accountability for the vendors with which the state engaged. Deacon has also served as a deputy attorney general and then special counsel to Governor Christie where she oversaw the Department of Banking and Insurance, Economic Development Authority, and Treasury. She holds a JD from Rutgers Law School and bachelor’s degree in international affairs from The George Washington University.

04:47 What does the current legal landscape look like, and how does it bode for the future?

07:24 “We need to catch the legal framework up with the current reality.”

19:53 How is this first circuit decision affecting who might be found liable in future cases?

21:38 What happened in the Member vs Cigna case?

24:49 Are we heading in the direction of the employer having fiduciary responsibility?

25:47 What’s happening in the Carrier vs Hospital cases?

28:49 Who’s really paying the price for the current business practices being examined in court?

30:00 What’s happened in the Tower cases?

You can learn more at versanconsulting.com and connect with Chris on LinkedIn.
You can also email her at cdeacon@versanconsulting.com.

@VerSan_cdeacon discusses current legal affairs in #healthcare on our #healthcarepodcast. #podcast #digitalhealth #hcmkg #healthcarepricing #pricetransparency #healthcarefinance

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Dr Vivek Garg, Lauren Vela, Dale Folwell (Encore! EP249), Eric Gallagher, Dr Suhas Gondi, Dr Rachel Reid, Dr Amy Scanlan, Peter J. Neumann, Stacey Richter (EP400), Dawn Cornelis (Encore! EP285)

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Okay … let me get real here for a sec. For a few reasons, I wanted to chat with Vivek Garg, MD, MBA. Dr. Garg is CMO (chief medical officer) of primary care at Humana. Dr. Garg is an inspiring and incredibly articulate individual, and I like to both learn from and also be kept on my toes by the likes of such folks.

But also, yeah, I’m suspicious of vertically consolidated payers. I mean, you listen to this podcast. I don’t need to recap what the financialization of the healthcare industry has done to patient care.

But you heard my manifesto in episode 400. It’s about trying to find the right path forward and being open to exploring options here. It’s considering what doing well by doing good actually means. It’s contemplating whether to celebrate some good stuff going on in the industry even if there’s some not-so-good stuff going on in that same sector or even in that same company.

Bottom line: We’re living in the real world here, and utopia is not on the table, at least anytime soon. So, that means there is always going to be one thing that we are always going to have to have to weigh in our consideration set, in our assessment equation that I talked about in my manifesto in episode 400.

What’s this one thing? It’s self-interested, shareholder-centric goal setting. In other words, just because I spot a self-interested, shareholder-centric goal doesn’t mean I’m automatically gonna get out my red Sharpie and cross off the whatever with a sour expression on my face because … yeah, if I did that, a whole lot of Americans are not gonna get, even incrementally, better healthcare.

The right equation to determine if something is net-net good is always going to be nuanced. The equation should weigh the impact of the self-interest, which is always going to be there, against the impact on patient care and patient financials and how the whole thing impacts clinicians at a local level or maybe a national level, depending on what’s going on.

I’d also suggest that there’s no real broad strokes here, because the equation for any given initiative or pilot or approach is really singular. I think it’d be a big mistake to lump together, for example, all payviders across the country and assume that their impact is all the same. Or all Medicare Advantage plans. Or anybody doing advanced primary care. All of these words/groups I just referenced are relevant to the conversation today. You have some payviders, for example, doing all kinds of crap with dummy codes and/or anticompetitive contracts and/or steering only to their own medical groups which they staff inadequately and/or blanket denials of anything that will throw off their medical trend calculations and/or prescribing and care pathways coinciding with their own highly financialized PBM (pharmacy benefit manager) formularies.

But then, on the flip side, you also have some interesting things going on that help patients and their communities. A key ingredient of these interesting things is taking into account longer time horizons. Longer time horizons are actually pretty key here for anybody trying to do anything preventative or anything involving forming patient relationships.

Also, of course, you have those who are doing some combination of the good stuff and the not-so-good stuff; and one of the reasons why the not-so-good stuff becomes so ingrained is that risk adjustment (especially if you’re a payvider) across the board has anything but a longer time horizon.

So, let’s dig into what Dr. Vivek Garg has going on at Humana Primary Care, which includes CenterWell Senior Primary Care and also Conviva Care Center. I ask Dr. Garg some pretty hard questions about balancing the tension between being a payer with a PBM with an incentive to deny care and a provider organization seeing patients that is also beholden to those same shareholders.

Dr. Garg taught me a new term, and that’s the “dyad model,” where you have doctors and admins working together or clinicians and admins working together. You get the clinical team to shadow the administrative team, and you get administrative team to shadow the clinical team. You teach doctors and others the business of medicine, and you teach admins what it’s like to be a clinician or a patient on the other end of some of those policies.

Now, if you have a good memory, you are probably also recalling that Eric Gallagher from Ochsner (EP405) talked about this exact same concept (ie, working together, ie, the scrubs and the suits coming together into this dyad leadership model). There’s a quote from Denver Sallee, MD, in episode 402 with Amy Scanlan, MD, talking about pretty much this exact same thing. And furthermore, this whole getting doctors up to speed on the business of medicine is gonna be the topic of an upcoming episode with Adam Brown, MD, MBA. So, yeah … this is becoming a thing—the idea of teaching clinicians the business of medicine. But the opposite should also get some focus—teaching admins the medicine of medicine.

Dr. Garg cites three pillars to improving an organization’s ability to sustainably deliver better healthcare, and these three pillars are (1) to focus on the patient experience, (2) to focus on outcomes, and then (3) to engage the clinical teams and really protect them, to protect this precious resource that doctors and other clinicians actually are.

Taken together, these three pillars coincide with the pivotal question here. And that pivotal question is: How much is any given entity actually investing in clinical leadership? Because in combination, great clinical leadership plus the three pillars (ie, a focus on experience, outcomes, and clinical engagement), you put all those things together and it adds up to each individual who works in the place to harness their own intrinsic motivation—to be able to explore and double down on and actually achieve the reasons why they went into healthcare to begin with and spent years of their lives in school in order to do so.

Dr. Garg mentions the latest Humana report in the show. And then I mention how I interviewed Steve Blumberg from Guidewell (AEE12) about the 2020 Humana report.

Also mentioned on this show is episode 312 with Doug Eby, MD, MPH, CPE, from the Nuka System, and episode 405 with Eric Gallagher from Ochsner.

You can learn more at humana.com, centerwellprimarycare.com, and the Humana report.

Vivek Garg, MD, MBA, is a physician and executive dedicated to building the models and cultures of care we need for loved ones and healthcare professionals to thrive.

07:27 What does comprehensive primary care look like, and what can we expect from it?

07:39 Is the comprehensive primary care model the single biggest tool to help improve health?

10:41 How does a competitive ecosystem affect a comprehensive primary care model?

15:44 What is the impact of physicians and clinicians on the delivery of comprehensive care?

19:25 EP312 with Doug Eby, MD, MPH, CPE, of the Nuka System.

20:22 “What we need to do with the technology is actually support and enable the team.”

21:42 Why it’s important to create “space” in your comprehensive care model.

24:56 What three areas does every organization need to pay attention to?

31:03 Why the opportunity for alignment is greater than the potential for conflict.

32:48 Why long-term orientation is a key to success, even in an ecosystem that’s more short-sighted.

34:30 AEE12 with Steve Blumberg.

You can learn more at humana.com, centerwellprimarycare.com, and the Humana report.

@vgargMD of @Humana discusses comprehensive #primarycare on our #healthcarepodcast. #healthcare #podcast #digitalhealth #hcmkg #healthcarepricing #pricetransparency #healthcarefinance

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Lauren Vela, Dale Folwell (Encore! EP249), Eric Gallagher, Dr Suhas Gondi, Dr Rachel Reid, Dr Amy Scanlan, Peter J. Neumann, Stacey Richter (EP400), Dawn Cornelis (Encore! EP285), Stacey Richter (EP399)

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I’m gonna run through the five reasons Lauren Vela talks about in this healthcare podcast for the “why” with the inertia in benefits departments of self-insured employers. But before I do, let me report that, in sum, they add up to … in many cases, benefits folks sit between a rock and a hard place.

You really can’t poke fingers at benefits teams who don’t have the bandwidth, the resources, the expertise, or the organizational power to, in essence, run a small insurance company in-house and also do the rest of their jobs.

This is especially true when benefits teams get no help or air cover from the CFO or CEO of their companies. So, the bosses are, in effect, telling benefits teams to manage the second-biggest company expense—this uncontrolled thing growing at multiples of the rates of inflation. They say, “Go get a handle on that but also don’t make any noise, don’t disrupt anything.” And meanwhile, I don’t know, is the CFO under the impression that all he/she needs to do is pop by once or twice a year, issue some nastygrams about renewal rates to people who have no training in any of the financial and probably other skills required to manage this huge spend?

And/or, on the other hand, the CHRO doesn’t report to the CFO—so, same result, opposite problem.

Here’s the five pillars for the “why” with the inertia that I explore pretty deeply with Lauren Vela on the show today:

1. Transforming the healthcare industry is not actually in the job description of benefits professionals.

2. Outsourcing to consultants. Benefits departments a lot of times don’t have the resources or adequate staffing to get deep into the complexities of healthcare, which means that lots gets outsourced to consultants. If you have listened to the episode with Paul Holmes (EP397) or AJ Loiacono (EP379), the problem here is that many traditional EBCs (employee benefit consultants) and brokers have a very vested interest to maintain the status quo. Currently, some are able to skim commissions of up to 30% of pharmacy spend, of employer healthcare spend, into their own pockets. These consultants have zero interest in upending absolutely anything. Employer inertia is paying for their vacation home, after all.

3. Nobody gets fired for hiring the same ASO (administrative services only) or TPA (third-party administrator) or PBM (pharmacy benefit manager) or whomever as their predecessor hired or they’ve been using for years. But they might get fired for doing something new that doesn’t go so well. There might be no patience for even the shortest of learning curves or the smallest amount of disruption. There’s also the aspect of a benefits team being capable of selling a transformational idea up the organizational ladder. Does the benefit department really know what the goals of the C-suite are? And if they aren’t crystal clear on C-suite goals and aren’t the best presenters in the world, it’s gonna be a no-go on the new idea and then, yeah … inertia.

4. There’s no obvious solution, no magic bullet, or easy answers. It might be hard to even figure out what to do that might have the positive impact a benefits team might be looking for. And then we get into the “is the juice worth the squeeze” discussions.

5. There is a status quo bias. Inertia is human nature.

But at the same time, employers are wasting up to 30% or more of their healthcare benefits spend. That’s a lot of money. These dollars are getting siphoned right off the top and going into someone’s pockets in ways that do not help employees get better health. Dollars that could have been used to give tens of thousands of dollars in raises. Dollars wasted by the employer. But also, the employee gets ensnared in this financial lack of oversight because employees have deductibles and coinsurance. So, it’s everybody sagging under the current model of some EBCs and payers and providers and PBM executives getting rich and hardworking Americans paying for it.

So, let’s cut to the chase. What are two solves? There’s many more, but here’s two. And Lauren Vela and I sort of ran out of time before we could adequately explore more, but these two will get anyone who wants to started:

1. C-suites. Yeah … you. Get involved. Provide adequate air cover for your benefits teams to move in new directions and also resource and staff your benefits teams with the kind of stuff and skills that they desperately need right now.

Attracting and retaining employees has a whole new reality and opportunity, and a benefits team staffed for the market environment 10 years ago but not for the market today is a growing competitive and financial disadvantage.

2. There is a playbook for how to go about this. Listen to the show with Lee Lewis (EP244) for his, but step one of almost everybody’s playbook is to find the right consultants working at the right consultant organizations. These right consultants and companies are the ones who are not taking indirect money under the table from an employer without that employer’s knowledge. And if you’re sitting right there thinking, “Oh no, that’s not me,” unless you’ve very deliberately changed consultants so that it isn’t, don’t kill the messenger here.

Again, listen to the shows with AJ Loiacono (EP379) or Paul Holmes (EP397). Ignorance is not bliss in this case like many others.

Also, Eric Bricker, MD, just did a video on EBCs and broker types.

So, do these solves mean spending more on a department that is already a cost center? Yeah, good question … wrong question, as the conversation with Lauren Vela today really gets into. The actual question is: Can you afford not to spend more on a department so that you aren’t getting wildly taken advantage of in the current market environment. If you spend one dollar and save more than one dollar and also get employees better health, that does not seem to be a bad deal.

As I’ve mentioned several times, today I am speaking with Lauren Vela. Lauren is a very experienced consultant working with coalitions, groups of employers, physician organizations, and also in the PBM space.

You can learn more about Lauren’s work by connecting with her on LinkedIn.

07:16 What does inertia actually mean in the healthcare benefit space?

08:02 “Fixing healthcare is not really the benefit manager’s job.”

08:22 How could a benefit manager’s job actually do the opposite of making healthcare better?

10:56 EP358 with Wayne Jenkins, MD.

11:56 “Americans are in pain.”

13:31 Why do benefits managers partner with consultants, and why is that bad?

14:17 “Benefit departments are cost centers; they’re not revenue centers.”

15:30 “Every single company is in the healthcare business.”

16:40 EP397 with Paul Holmes.

18:12 Why relationships with consultants can make it very difficult for benefits departments to change.

22:46 Is the juice worth the squeeze?

23:12 “There’s not one silver bullet that fixes healthcare.”

27:42 What is status quo bias?

28:56 Why employers may not be able to stay with their legacy vendors and also change for the better.

30:56 EP244 with Lee Lewis.

You can learn more about Lauren’s work by connecting with her on LinkedIn.

@laurenvela1 discusses #benefitdepartments and #selfinsuredemployers on our #healthcarepodcast. #healthcare #podcast #digitalhealth #hcmkg #healthcarepricing #pricetransparency #healthcarefinance

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Dale Folwell (Encore! EP249), Eric Gallagher, Dr Suhas Gondi, Dr Rachel Reid, Dr Amy Scanlan, Peter J. Neumann, Stacey Richter (EP400), Dawn Cornelis (Encore! EP285), Stacey Richter (EP399), Dr Jacob Asher

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So, let’s talk about North Carolina. What a weird outlier of the direction of other states getting active on their healthcare spend. I’m talking about Texas, Indiana, Wisconsin ... I’m naming so-called red states because the legislature in North Carolina is a Republican majority.

Gotta say, normally I’m down for a little weird. I find it mostly charming. But with the information I have at present about what’s going on in North Carolina, I don’t love this for you. And when I say “you,” I pretty much mean any family who happens to live in North Carolina or any businesses in North Carolina trying to afford their employee health benefits right now. This whole shebang and the reason I’m covering this on Relentless Health Value is that it is also extremely relevant to anybody else in this country as a case study or a cautionary tale, depending on your point of view.

So look, there’s two pieces of legislation running through North Carolina’s Senate and House right now, but both of these pieces of legislation—one that Blue Cross Blue Shield (BCBS) is angling for and the other one that UNC, a big hospital chain in North Carolina is all hachi machi to get passed—both of these have precedents. Both of these things were done elsewhere, and the results were not great, to put it mildly.

BCBS wants to be able to open up a holding company that is able to take BCBS policyholder payments and invest them in for-profit ventures—BCBS being a nonprofit and all. Here’s a quote Chris Deacon mentioned on LinkedIn from an article on this topic:

“A 2019 examination of the aftermath of 11 conversions of BCBS affiliates showed that fully insured premiums increased roughly 13 percent … suggesting a post-conversion exercise of market power. Significantly, rivals of these large converting insurers also raised their prices following the conversions.”

And here’s a link to a Health Solutions podcast with Cristy Gupton, Chris Deacon, and North Carolina Commissioner Mike Causey.

So, that’s one of the pieces of legislation on the docket.

Then, on the hospital side of the equation, we also have a proposed bill that could give UNC Health Care a green light to expand and buy more physician practices and hospitals without as much oversight.

Proponents of the bill say that this will better enable UNC to take over struggling rural hospitals in danger of closing. Considering that UNC has already taken over rural hospitals in danger of closing, not exactly sure how or why basically removing federal and state antitrust scrutiny is helpful here. I went around looking for evidence that if you reduce antitrust scrutiny and enable more unfettered consolidation and expansion that population health outcomes improve. I could not find any. I did find lots of great talking points, but all of them seemed a little light on the evidence.

There is, however, an insane amount of evidence at this point that shows unfettered hospital chain consolidation harms local communities from a financial standpoint without improving the quality or outcomes of patient populations, especially when hospital chains, in conjunction with third-party payers, are not willing to share their pricing, even with their largest customer. But I’m getting ahead of myself, because this is exactly what I’m talking about in this 2019 interview with Dale Folwell, the state treasurer of North Carolina. And it is a doozie of a frustrating story, just to cut to the chase.

Look, you might be able to hear I definitely have an opinion formed on this topic, and I don’t want to sway yours until you look into all of this yourself. But I loved what Jeff Leston wrote the other day. He wrote, “The North Carolina Legislature proves that they report to the healthcare industry in the State, not the people who actually elected them.”

Okay … teeing up the interview today, this whole thing started when the North Carolina State Employees Health Plan (SEHP) crafted a proposal to pay network hospitals based on a transparent pricing schedule. Considering that SEHP purchases benefits for 720,000 people in North Carolina at a cost to taxpayers of billions of dollars, this seems reasonable. When you’re the fiduciary of thousands of dollars, let alone add six more zeros, it would seem to be nonnegotiable to actually see the numbers and not write a check to a black box. Nonetheless, a few of North Carolina’s largest hospital chains disagreed. They wanted to bill whatever they wanted to bill shrouded in a cloak of secrecy.

In this healthcare podcast, as I mentioned earlier, I am speaking with North Carolina State Treasurer Dale Folwell. This is a rebroadcast from an interview in 2019 but still, somewhat sadly, completely relevant.

You can learn more at nctreasurer.com.

You can also connect with Treasurer Folwell on Twitter at @DaleFolwell or on Facebook at Dale Folwell.

Dale R. Folwell, CPA, was sworn in as State Treasurer of North Carolina in January 2017. As the keeper of the public purse, Treasurer Folwell is responsible for a $100 billion state pension fund that provides retirement benefits for more than 900,000 teachers, law enforcement officers, and other public workers.

Under Treasurer Folwell’s leadership, the pension plan was rated among the top five highest funded in the country and won accolades for proactive management and funding discipline. In 2018, the state’s coveted AAA bond rating was reaffirmed by every major rating agency, making North Carolina one of only 13 states in the country to hold that distinction. Treasurer Folwell also oversees the State Health Plan, which provides medical and pharmaceutical benefits to more than 720,000 current and retired public employees and is the largest purchaser of healthcare in North Carolina.

Folwell was first elected to public office as a member of the Winston-Salem/Forsyth County Board of Education. He brought his problem-solving skills to the North Carolina General Assembly in 2004, where he served four terms in the House of Representatives, including one term as Speaker Pro Tempore.

Treasurer Folwell began his career as a blue-collar worker and became a Certified Public Accountant and investment advisor after earning bachelor’s and master’s degrees in accounting from UNC-Greensboro.

05:59 The North Carolina state spend on healthcare.

07:21 “In medical terms, why has this become acute?”

08:00 One week of work for starting North Carolina troopers and teachers out of every four is going to family healthcare costs.

09:14 The problem of health insurance vs healthcare.

09:59 “If they can do this to the largest customers in this state … imagine what they can do to them.”

10:20 “This is about the industry whose whole business model is based on secrecy.”

11:47 “We’ve already focused on the why, and now we’re [focusing] on the how.”

12:46 “We’re trying to attack a problem.”

15:46 What the Clear Pricing Project aims to do.

18:08 “We’re not trying to be disruptive; we’re trying to fix a problem.”

19:55 Why the Clear Pricing Project went the self-insured route and how that’s worked for them.

24:14 Who’s behind the institutions fighting transparent pricing in North Carolina.

25:15 Instances where the Clear Pricing Project could actually stand to help rural hospitals make more money.

27:29 Dale’s advice for other states trying to do this.

28:49 Dale’s message to healthcare providers out there who want to see this change to price transparency.

You can learn more at nctreasurer.com.

You can also connect with Treasurer Folwell on Twitter at @DaleFolwell or on Facebook at Dale Folwell.

@DaleFolwell discusses #financialtoxicity in #healthcare on our #healthcarepodcast. #podcast #digitalhealth #hcmkg #healthcarepricing #pricetransparency #healthcarefinance

Recent past interviews:

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Eric Gallagher, Dr Suhas Gondi, Dr Rachel Reid, Dr Amy Scanlan, Peter J. Neumann, Stacey Richter (EP400), Dawn Cornelis (Encore! EP285), Stacey Richter (EP399), Dr Jacob Asher, Paul Holmes

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Let’s cut to the chase. You’ve gotten to the point where you have a gang of physicians/clinicians/physician practices who have expressed a desire to work together. What do you need to know right now?

Eric Gallagher, CEO of the Ochsner Health Network, is my guest in this healthcare podcast; and I largely asked him the same question that I had asked Amy Scanlan, MD, from the UCHealth/Intermountain clinically integrated network in Colorado in episode 402 a couple of weeks ago. The question I asked both Eric and Dr. Scanlan is: What are you doing to help align physician practices into an integrated model? How are you going about that?

Now, let me remind you, Ochsner Health Network is practically long in the tooth when it comes to clinically integrated networks; and it also exists in an environment that is unique, as are most local markets. But Ochsner’s local market is mostly Louisiana, which has an older population and a huge Medicare Advantage penetration. That is quite a different local market from what’s going on in Colorado, which is the location of Dr. Scanlan’s joint. As we all know, different stages of any journey require different solution sets; and different local markets certainly require different solution sets.

But what was so interesting to me was to notice that despite the market differences and the where-are-we-in-the-transformation-journey differences, how many of the things that you’ll hear about in this episode are in the same spirit as the stuff that we talked about in that earlier show with Dr. Scanlan.

Eric Gallagher lists three things that he says are essential in the transformation journey:

Making sure that physicians, care teams, and those working directly with patients are part of the transformation process, both from a practice standpoint but then also from a financial standpoint.

This makes so much sense when I state it explicitly here, but so frequently, it doesn’t happen. So frequently there’s a value-based care team that tinkers around in a silo and then an announcement comes over the loudspeaker one day that henceforth we shall add some more clicks … but trust us, it’s important for some reason we aren’t going to bother to tell you about … you’d be bored by it or you wouldn’t understand it. Even if this was not the intention (and it probably wasn’t), the result is going to be the bad taste in your mouth that I just left you with.

Eric Gallagher’s #1 here, that everybody be part of the transformation, might be the umbrella really over the first thing that Dr. Scanlan talked about in that earlier episode, which was to make sure to give practices the tools that they need to succeed—not what you think they need but what you’ve discerned they actually need because you’ve listened to them. It’s a bidirectional exchange here with everybody working together.

Eric adds some new ground to that. He says that to make sure that everybody can productively contribute to this transformation process (and probably know what tools they may need), it’s vital that everybody understands the “why” behind what the organization needs to do, meaning educating physicians and other clinicians in the business of medicine and the financial reasons for the “why” with the whatever. Insulating docs from the real world here helps no one, and it’s not really viable actually in the world that we live in today …

… which is a callback to the point that Denver Sallee, MD, made also in episode 402, which, in a nutshell, was that he thinks that unless docs, as a gang, start learning a lot more about the business of medicine, that we’ll continue to see this value extraction and financial toxicity and moral injury–inducing environments that we see right now. Dr. Sallee wrote, “I needed more education in order to truly help patients.”

So, let me posit that this “everybody works together and gets educated together” step can help the practice and help patients in a myriad of ways, both at the practice level and at the patient level and also probably at a national level.

A recognition that practice transformation requires process transformation and thinking about things very differently. Now, all of a sudden, we are getting paid to coordinate care. We must work as a team because there are people on staff who can influence social determinants of health, for example. We have a vested interest to create a community board advocating for food banks and sidewalks and air pollution controls so all the kids who play soccer don’t wind up with asthma. Ochsner actually set up a school because they realized educated communities are healthier communities.

Dr. Scanlan’s clinically integrated network? They’re much earlier in the journey. They’re at the point where they’re working hard to get participating practices the tools that they need to succeed and help doctors and other clinicians help patients through what Dr. Scanlan calls the “in-between spaces”—the times between appointments.

But all of this really rolls up to the point that Eric Gallagher is making about everybody working together and recognizing that practice transformation requires process transformation.

The culture change that’s necessary among physicians and other clinicians (pretty much everybody), and Dr. Amy Scanlan leaned into this one, too—hard. Both brought up the same nemesis: inertia. And the requirement to change culture can’t be underestimated, and the change management that’s required here cannot be phoned in. Culture eats strategy for breakfast, lunch, and dinner, as they say.

My two macro-level takeaways after talking with Eric Gallagher today and Dr. Amy Scanlan earlier are that, even though the local market and the nuances of any given particular practice have such a huge impact on what’s going to work at an operational and tactical level, if we stay up in the strategic zone, there’s some best practices and points to ponder which are likely possible to universalize.

Now, emphasis on the “stay up in the strategic zone.” I was just talking to another person today with yet one more story amounting to “it didn’t work because it never was going to work,” wherein, in this case, apparently a very large payer is running around attempting to do a pilot in an attempt to learn exactly and specifically how to operationalize something, and then their plan is to roll out this one model nationwide. So, something works in one local market at one practice, and we’re just gonna assume if it worked there, it’s gonna work everywhere. And, yeah … good luck with that.

After you listen to this show, listen to episode 402 with Amy Scanlan, MD, as I have mentioned multiple times. Episode 343 and episode 316 with David Carmouche, MD, would be good to check out. Also episode 393 with David Muhlestein, PhD, JD, and episode 394 with Vikas Saini, MD, and Judith Garber, MPP.

You can learn more at Ochsner Health Network.

Eric Gallagher, chief executive officer for Ochsner Health Network (OHN), is responsible for directing network and population health strategy and operations, including oversight of performance management operations, population health and care management programs, value-based analytics, OHN network development and administration, strategic program management, and marketing and communications.

A New Orleans native, Eric earned a bachelor’s degree in human and organizational development from Vanderbilt University and an MBA from Tulane University.

08:14 What does everyone need to be on the same page about when it comes to clinical integration?

13:42 “For physicians, we really have to overcome this threat to physician autonomy.”

16:52 “Health inequity is really just societal inequity.”

19:24 What is the principal agent problem?

20:00 “There are things health systems can do that are probably outside of their traditional field of responsibility.”

20:09 Why did Ochsner Health Network start a couple of schools?

20:42 What can empower a care team in a value-based care model?

21:53 Why is it important to transform into a team-based model?

23:24 “In the DNA of our organization, resiliency runs strong.”

26:01 Why is building an effective care model easier than building trust with patients?

26:14 What is Eric’s advice to physicians trying to integrate right now?

28:50 How do you get everyone on the same side of aligning for integration?

You can learn more at Ochsner Health Network.

Eric Gallagher of @OchsnerHealth discusses #clinicalintegration for #physicians on our #healthcarepodcast. #healthcare #podcast

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Dr Suhas Gondi, Dr Rachel Reid, Dr Amy Scanlan, Peter J. Neumann, Stacey Richter (EP400), Dawn Cornelis (Encore! EP285), Stacey Richter (EP399), Dr Jacob Asher, Paul Holmes, Anna Hyde

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So much of this episode (and this podcast as a whole, really) is about one consistent theme: How do we reset or redesign our healthcare industry, including hospital chains—mostly talking about the big consolidated ones that have a lot of money here—but how do we redesign these leviathans to be more consistent with our values as a country and the values of the doctors and other clinicians and others who work in these places and who went into the healthcare profession for a reason that had, you know, something to do with patients? And I mean something to do with patients that doesn’t involve dressing up for Halloween as a giant cardboard dollar sign, like some finance department guy did at one large nonprofit hospital in the spirit of shaking money out of poor patients (see article here). Or listen to previous episodes about hospitals raising prices way higher than the rates of inflation.

Not to belabor this because we’ve already talked about it so very often, but you also have the whole thing with big, well-funded, nonprofit hospital chains going on cost-cutting extravaganzas and, at least in one case, basically creating their own staffing crisis.

Do these activities have a familiar ring to them? Do they strike you as a page out of a playbook you may have seen elsewhere? I don’t know about you, but they remind me of things that private equity or financial folks run around doing. I mean, the classic stepwise for how to maximize the financial value of an “asset” from a financial industry standpoint is to cut costs and raise prices.

Piling on this “kind of sounds like a B-school group project” thesis, what about the thing with a bunch of these big, consolidated hospital systems with rich endowments crying crocodile tears about how much money they lost last year? Except … in a whole bunch of cases, the money they lost—some of which came from the COVID CARES relief act funds they got, by the way—but this money was lost when their risky stock market investments tanked. Those are their losses. Stock market losses. From speculative investments. Are you kidding me?

But hospitals are charities, right? They are nonprofits. They aren’t owned by private equity. They aren’t owned by an investment bank or a team of financiers, so you wouldn’t expect them to be acting like they are owned by Wall Street.

But … oh, wait … how weird.

You know who is on the boards of some of these very well-known nonprofit hospitals? If you don’t, I’m not surprised, because in too many cases, if you ask me, you have to dig around in tax filings and other bureaucratic paperwork to unearth the names of these members who have quite a large amount of power (it turns out) over what goes on in the hospital. But you know who is on these boards? Yeah … almost half of board members tend to have a financial background. Almost none of them are nurses. And what about doctors? Are physicians on these boards? Well, almost one-third of hospital boards did not have a single physician member. So, there’s that.

Here’s a quote from a STAT news article written by my guest in this healthcare podcast, Suhas Gondi, MD, MBA, and also Sanjay Kishore, MD, about a study that the two of them coauthored about who is on hospital boards. Here’s the quote:

Our findings are cause for concern. If hospital executives are largely held accountable by finance professionals and corporate leaders, instead of by clinicians and patients, might they focus more on revenue and expenses than the needs of their communities or staff? While some argue that margin facilitates mission, the measure of a nonprofit organization is how these priorities are balanced by leaders who ultimately answer to their board.

So, I get there’s balance. You have to be financially sustainable. But I also get that, apparently, tigers don’t change their pinstripes. The pin-striped suit remains even when the finance tigers become the board members of a charitable organization that’s supposed to be serving the surrounding community paying its freight in the form of its tax exemptions.

This is what this conversation is about today: Who is on these hospital boards? How much power do these hospital boards have? And what might be done to switch it up some so that we can get hospitals that are reflective of our values as a nation and what we want for ourselves and our families?

Today, as aforementioned, I’m speaking with Suhas Gondi, MD, MBA, who, along with his coauthor Sanjay Kishore, MD, wrote a paper on this exact topic. Check out some great Tweets and comments. Following are some suggestions that Dr. Gondi makes in this podcast interview that follows to help us get a little less misaligned.

Here’s one mandate and three suggested models for current hospital boards, which (let’s get real) are currently comprised a lot of times of a group of people making decisions in closed boardrooms that impact a whole lot of people.

First of all, there should be transparency about who is on the board and what they are doing in those closed rooms—what decisions they are making. Second of all, the IRS could surely mandate that for anybody looking to get tax-exempt status, certain requirements are in order for the boards of said organizations.

Then here’s three suggested models to consider:

At other kinds of charities and even healthcare organizations with clear missions, like Federally Qualified Health Centers (FQHCs), the composition of the boards is mandated; and for FQHCs, 50% of the board has to be patients who are patients at the FQHC, for example. And, yeah with this. Hospitals are tax-exempt entities. That means that others in the community are paying more in taxes so that this hospital isn’t paying taxes. This hospital, therefore, is in debt to the community. Having a board that is reflective of the community could be one way to ensure that this hospital has an accountability to that community and can serve its needs adequately.
NASDAQ requires that two members of every board have some “under-represented” diversity, so that could be a thing. You could add to that professional background diversity. I was looking at a Web site the other day featuring a team photo with the caption something like “Here’s our diverse team,” and the entire photo was of, I’m going to say, literally 30+ white men. The caption clarified that they all had different experiences … in the pharmacy benefit administration space. So, nothing against white men, but … yeah, it might be a good idea to align as a community on a broad definition of diversity and what “reflective of the community” means.
Accountable capitalism. This was originally suggested by Senator Elizabeth Warren, who argued that 40% of boards should be elected by workers. So, not the majority of the board but enough of the board that it becomes accountable to frontline workers and others.

You can learn more by connecting with Dr. Gondi on Twitter and LinkedIn.

Suhas Gondi, MD, MBA, is a resident physician in internal medicine and primary care at Brigham and Women’s Hospital.

As an EMT in his hometown in Virginia, he saw how structural barriers impact access to healthcare for vulnerable patients. He dedicated himself to studying medicine and policy together with the goal of building a healthcare system that delivers better outcomes and prioritizes equity.

His academic work focuses on incentives in our healthcare system and how they shape the behavior of providers and payers. His work on healthcare payment and delivery system reform has been published in the New England Journal of Medicine, JAMA, and The Lancet and has been cited by the Medicare Payment Advisory Commission. His advocacy and writing have been featured by CNN, NPR, New Yorker, and USA Today.

He graduated from Harvard Medical School and Harvard Business School and previously served on the White House Health Equity Leaders Roundtable.

05:26 What’s a hospital board, and how much power do they have over goings-on?

06:51 How big is a hospital board typically?

07:45 How powerful is a hospital board actually?

09:12 What percentage of these board members have roles within the finance industry?

10:04 What percentage of these hospital board members are health professionals?

10:47 How do these hospital boards work?

12:44 Have hospital boards always been made up of financial board members, or is this a recent thing?

18:12 “The private equity model … fundamentally changes the incentives of the organization.”

23:21 Are hospital boards a potential place to create change within the healthcare industry?

25:16 “It’s about who has power.”

30:55 What’s the hope with diversifying hospital boards?

You can learn more by connecting with Dr. Gondi on Twitter and LinkedIn.

@suhas_gondi discusses on our #healthcarepodcast who is on #hospitalboards. #healthcare #podcast

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Dr Rachel Reid, Dr Amy Scanlan, Peter J. Neumann, Stacey Richter (EP400), Dawn Cornelis (Encore! EP285), Stacey Richter (EP399), Dr Jacob Asher, Paul Holmes, Anna Hyde, Dea Belazi (Encore! EP293)

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This is a conversation about physician compensation, which is often oddly misaligned from the way that the whole physician or provider organization is getting paid.

Now, first thing to point out: There are lots of different kinds of physicians doing all kinds of different things. As with most everything in healthcare, lumping everybody together and making general proclamations about what is best is a really cruddy idea.

With that disclaimer, if you think about the main models of physician compensation, there are two; and this is oversimplified, but let’s call one fee for service (FFS), which is really getting paid for generating RVUs (relative value units)—in short, getting paid for volume. The more you do (especially the more expensive things you do), the more you get paid. And then we have getting some kind of capitation payment. A capitated payment is some kind of per member per month-ish flat payment to ideally keep patients healthy, and you will make the most money if you can figure out how to have the least volume of expensive stuff. As an individual doc getting a salary to care for a patient panel of a certain size, let’s just consider commensurate with that.

These incentive models obviously have a big impact on any given doctor’s ability to get paid to do things that they think they should be doing. For example, the current fee-for-service RVU fee schedule frequently rewards those doing the stuff a lot of specialists do much more than those doing primarily cognitive work, including those doing work for patients who aren’t sitting in the exam room at the time—like a PCP arranging for a patient to go to hospice or answering patient portal questions.

In my opinion, the goal here should be to pay docs and others fairly for providing high-value care. These payments also should actually be proven to actually incent that high-value care.

Here’s the obvious problem: Neither of these two things, either the quantifiable definition of high-value care and/or the best way to pay for it, has any kind of canon. There are no rules which are considered to be particularly authoritative and definitive here, really.

So, what is the downside of not aligning physician compensation models to what good looks like, meaning to the kind of care that patients really need in that particular community?

A couple of downsides for you: One is moral injury. Not the only reason, but a reason for moral injury is getting paid in misalignment with what is best for patients. That sucks. You want to help your patients as best you can, and then you can’t earn a living and/or you get in trouble with the boss if you do what you think is right. This can cause real mental anguish for especially PCPs but also others who see the need to do anything that doesn’t have a billing code.

Here’s another downside to not worrying about physician compensation, and it’s for plan sponsors (employers, maybe) who are trying to get integrated care or a medical home for their employees. I was talking to Katy Talento about this. She was telling me that in ASO (administrative services only) contracts, there are often line items for value-based care and for capitated payments. So, good news?

Well, let’s follow the dollar here, because we wind up with a disconnect that doesn’t help patients but certainly can earn a nice little kitty for those who can get away with it.

Here’s where that dollar goes: This VBC (value-based care) or capitated payment kitty may go to a health system that the ASO says is to be a medical home for employees or plan members.

But the PCPs mainly who are treating members in those medical homes are getting paid, it often turns out, fee for service with maybe some quality kickers. So, the plan is paying a value-based care payment, but the PCPs are getting paid FFS. Is anyone shocked when the members report that they don’t actually feel like they are getting integrated care, that they are getting rushed in and out because maximizing throughput becomes a thing when you’re getting paid for volume?

Dan O’Neill also talks about this at length in episode 359, because IPAs (independent physician associations) are doing kinda the same thing. Getting so-called value-based care contracts with MA (Medicare Advantage) plans or CMS or employer groups, I’d imagine, and then paying all the individual practices or the solo practitioners fee for service and scooping up the excess payments themselves, most docs manage to provide high-enough-quality care that the contract holder can scoop up the profit off the capitation without actually having to share the capitation to achieve this high-enough-quality care.

In this healthcare podcast, I am digging into all of this physician compensation ballyhoo with Rachel Reid, MD, MS. She was an author on a study at the Center of Excellence on Health System Performance at RAND. This study specifically set out to look at how health systems and provider organizations (POs) affiliated with those health systems incentivize and compensate the physicians who work there.

Short version: Yeah, it’s confirmed. Most docs are paid using the classic RVU productivity measures representing a big chunk of their compensation, even PCPs. There’s frequently some kickers or extra payments to achieve some kind of quality metric, but this is the icing, not the cake. The cake is still very fee for service-y. This is true regardless of how the physician organizations, the provider organizations themselves are getting paid by payers.

I asked Dr. Rachel Reid a bunch of questions about this, but one of them was (this seems weird, a weird misalignment), Why is this happening? And Dr. Reid listed out five reasons beyond the macro existential question of what is value and do we even know how to change human behavior to get it.

The payment is not big enough from the payer for the physician organization to go through all the time and trouble and risk frankly of changing the whole comp model.
The value-based payment arrangements that do exist at the organizational level often have a fee-for-service chassis with an icing of quality payments or some kind of value payment on top of it. So, maybe there’s actually more alignment than we might think.
It’s hard to try to change comp models—it’s a thing. And there is risk in messing it up.
Inertia. The ever-present inertia.
We know what we want to move from, but what exactly are we moving to? And this “What do we want to move to?” is going to change for PCPs and for every single different specialty and could even vary by patient population.

I then also asked Dr. Reid what could be done by plan sponsors, for example, to pay docs in alignment with the goals of the contract; and she said, write physician comp expectations into the contract. Something to think about.

We dig into all of this today.

Shows that you should, for sure, listen to for additional insights include the one with Dan O’Neill (EP359) as aforementioned. Also the show with Brian Klepper, PhD (AEE16), where we dig into how the RUC is behind some of these FFS rates. Also episode 391 with Scott Conard, MD.

My guest today is Rachel Reid, MD, MS. She is a physician policy researcher at RAND Corporation and a primary care physician at Brigham and Women’s Hospital.

You can learn more about Dr. Reid, her publications, and the work she has done on the RAND Web site.

Rachel Reid, MD, MS, is a physician policy researcher at the RAND Corporation. Also a practicing primary care physician, her research focuses on measuring cost, quality, and value in healthcare. She has particular interest in the primary care delivery system, physician payment and compensation, and delivery and payment system reform. Dr. Reid has been engaged in the RAND Center of Excellence on Health System Performance, assessing health systems’ compensation and incentives for physicians, leading work related to assessing low-value healthcare delivery, and measuring primary care spending. She is the principal investigator on an NIH-funded grant assessing novel Medicare billing codes for transitional care provided after hospital discharge. Prior to joining RAND, Dr. Reid worked in the Research and Rapid Cycle Evaluation Group at the Centers for Medicare & Medicaid Services’ Innovation Center. Her clinical work has included ambulatory primary care and hospital-based internal medicine. She is an associate physician at Brigham and Women’s Hospital and an instructor in medicine at Harvard Medical School. Dr. Reid received her AB in biochemical sciences from Harvard University and her MD and MS in clinical research from the University of Pittsburgh School of Medicine.

07:13 What did Dr. Reid’s recent study show about how doctors are currently being paid and incentivized?

08:11 Why Dr. Reid decided to do the study in the first place.

09:49 What are the main foundations of what doctors are paid on?

10:31 Why is value-based compensation still just the “icing” on the cake?

13:08 What is the biggest value add for doctors, and does it vary between specialties?

14:32 Why wouldn’t a physician organization change their comp models?

19:55 Are we at a moment of evolution?

20:20 “Tying dollars to measured quality gaps doesn’t necessarily produce results.”

20:42 EP295 with Rebecca Etz, PhD.

22:04 “I don’t think there’s a current gold standard for how to pay doctors.”

25:37 Job one: What are we trying to incent?

31:28 From the payer or insurer perspective, what’s the leverage they have to change doctor compensation?

You can learn more about Dr. Reid, her publications, and the work she has done on the RAND Web site.

Rachel Reid, MD, MS, of @RANDCorporation discusses on our #healthcarepodcast how doctors get paid. #healthcare #podcast

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Dr Amy Scanlan, Peter J. Neumann, Stacey Richter (EP400), Dawn Cornelis (Encore! EP285), Stacey Richter (EP399), Dr Jacob Asher, Paul Holmes, Anna Hyde, Dea Belazi (Encore! EP293), Brennan Bilberry

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So, let me just cut to the chase here with very little preamble, and all of this is a setup to the interview that follows, although it is not really what the interview that follows is all about. A mentor of mine used to say, you can’t legislate the heart. Let me also suggest you can’t give someone in finance financial incentives and then expect them to not prioritize financial incentives.

It stands to reason that if the healthcare industry is found to be quite attractive to those who are money focused, then do I need to say this? The money focused amongst us will, of course, do the whatever to the extent that they can make money. They aren’t gonna be throwing their backs into quality or cost effectiveness or taking care of patients. They are throwing their backs into making money. Is anyone shocked?

Now, don’t get me wrong; I’m not a Pollyanna. And in this country, in order to run a healthcare business, you have to make money; otherwise, you’ll go out of business. So, do well by doing good and all of that. But how much money is too much money? This is an important line to figure out because that’s where you are doing well but you’ve stopped doing good—you’ve tipped into financial toxicity. You are taking more than the good you are doing, and the net positive becomes a net negative.

But complicating fact of current life, it’s becoming increasingly obvious that in order to stand up a practice that can take advantage of value-based care payments—payments where primary care docs mainly at this time can get paid more and likely more fairly to care for patients well—you need a lot of infrastructure. You need data, you need tech, you need a team. Translation: You need money, maybe a lot of money, to invest in all of this. And let me ask you this: Who has a lot of money in this country?

Here’s the point of everything I just said: These are the external realities that hit anyone trying to do right by patients from every direction. But on the other hand (or maybe different fingers on the same hand), as Amy Scanlan, MD, says in this healthcare podcast, physicians are the backbone of this system. Dr. Scanlan talks in the interview today about the opportunity, and maybe the responsibility, that physicians have here for patients; but also the Eric Reinhart article comes up again about rampant physician moral injury (unpaywalled link with my compliments).

Right now might be a great time to read something from Denver Sallee, MD. He wrote to me the other day. He wrote, “Like many physicians, I did not have much understanding of the business side of medicine, as I mistakenly thought as long as I helped take great care of patients that I was doing my job. More recently, it became apparent to me that by ceding the management of medicine to nonclinical administrators and to companies interested primarily in value extraction for the benefit of shareholders that I needed more education in order to truly help patients.”

Today as aforementioned, I’m talking with Amy Scanlan, MD, who is chief medical officer of the clinically integrated network (CIN) that is the new joint venture between Intermountain Health and UCHealth in Colorado.

We talk about what it’s like to be in the kind of messy middle of transformation to integrated care in a clinically integrated network, trying to figure out how to help physician practices and the CIN itself navigate the external environment in a way that empowers different kinds of practices at different points in their transformation journey that empowers physicians to be in charge, and considering clinical and financial outcomes (ie, the business of healthcare).

Dr. Scanlan brings up four main factors to consider when plotting strategy from here to there:

Give practices the tools that they need to succeed—not what you think they need but what you’ve discerned they actually need because you’ve listened to them.
Many times, these tools will consist of some combination of data, tech, and also offering the team behind the scenes to help doctors and other clinicians help patients through what Dr. Scanlan calls the “in-between spaces”—the times between appointments.
Medical culture really has to change, and in two ways: doctors learning how to be part of and/or leading functional teams and building functional teams. Because there are teams, and then there are teams. Well-functioning teams can produce great results. Nonfunctioning teams, however, are, as Dr. Scanlan puts it, just a series of handoffs. And don’t forget, handoffs are the most dangerous times for patients. The DNA of team-based care—real team-based care—for better or worse, are the relationships between team members, between physicians who work together, between doctors and patients, between clinicians and clinicians. So, fostering relationships, creating opportunities to collaborate and talk, is not to be underestimated. How do you re-create the doctors’ lounge in 2023?
Getting out from underneath the long shadow of fee-for-service incentives, specifically the paradigm that only patients who get mindshare are the ones in the exam room. Value-based care, integrated care is as much contemplating the patients who don’t show up as the ones who do. This is a really big mind shift, much bigger than many realize.

You can learn more by reaching out to Dr. Scanlan on LinkedIn.

Amy Scanlan, MD, serves as chief medical officer for the new joint venture CIN between UCHealth and Intermountain Health—a physician-led, clinically integrated network of more than 700 primary care providers from UCHealth, Intermountain Health Peaks Region, the University of Colorado School of Medicine, and multiple independent practices along the Front Range.

06:33 How is Dr. Scanlan thinking about the transformation process and the shift to value?

09:14 “It is really trying to think about, how do we help practices get there?”

11:46 “The hard part is the in-between spaces.”

14:10 “Team-based care done badly is really just a series of handoffs.”

15:50 “We have to get to that point where the culture of collaboration is more pervasive.”

19:57 “How do we as healthcare providers step in and solve this problem?”

20:04 Why do providers have a responsibility to step in and try to fix the healthcare system?

20:20 Article (unpaywalled) by Eric Reinhart, MD, PhD.

21:50 Why do physicians need to be accountable for the cost of care as well as outcomes?

23:37 Why does physician burnout give Dr. Scanlan hope?

24:25 What is the solution to changing fee-for-service incentives?

25:42 What are some of the challenges facing changing incentives?

27:14 Why is data so important?

28:53 EP393 with David Muhlestein, PhD, JD.

30:11 “It’s important to understand that we are in the middle of this change.”

31:16 Dr. Scanlan’s advice for those trying to stand up a CIN.

You can learn more by reaching out to Dr. Scanlan on LinkedIn.

Amy Scanlan, MD, of @uchealth discusses real-world #clinicalintegration on our #healthcarepodcast. #healthcare #podcast

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Peter J. Neumann, Stacey Richter (EP400), Dawn Cornelis (Encore! EP285), Stacey Richter (EP399), Dr Jacob Asher, Paul Holmes, Anna Hyde, Dea Belazi (Encore! EP293), Brennan Bilberry, Dr Vikas Saini and Judith Garber

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Somebody wrote on Twitter the other day that he was gonna give a talk on the use of evidence in drug policy, and Barrett Montgomery replied, “That’ll be a short talk then!”

So, let’s talk about the IRA (Inflation Reduction Act) for a moment, specifically the “CMS can negotiate for drugs for Medicare patients” part of the IRA. There’s one topic I don’t hear discussed what I would consider maybe often enough.

Will these negotiations result in pricing that is evidence based? Will good drugs that companies developed using less taxpayer money for R&D, drugs that positively impact the patient lives or have spillover benefits for society or save downstream medical costs, drugs that have solid comparative evidence data, drugs that are a meaningful therapeutic advancement over competitors ... will these drugs be priced in line with that value? Everything I just mentioned, by the way, are things that CMS is supposed to take into account during its negotiations.

So, that’s what this show is all about. To have this conversation, I invited Dr. Peter Neumann on the podcast because Dr. Neumann (along with his two coauthors, Joshua Cohen and Daniel Ollendorf) just wrote a book about pharmaceutical pricing entitled The Right Price. I convinced Dr. Neumann to come on the show and talk about what the likely impact the IRA will have on these right drug prices. And short version, Dr. Neumann told me that “presumably drugs that offer more therapeutic advances will do better under these negotiations.”

Here’s a really, really top-line summary of the negotiation provisions that are in the IRA:

CMS will negotiate prices on the highest gross spend top 10 Part D drugs in 2026, 15 Part D drugs in 2027, and 15 drugs from Medicare Part B and D for 2028.

Small molecule drugs become negotiation contenders after 9 years, and biologics after 13 years.

Once a generic or biosimilar comes out (ie, the patent is well and truly expired), then this negotiation provision is no longer in play.

Now, CMS is given some discretion over how it’s going to do things, and they will issue guidance and figure out how to implement the law over the next couple of years. As with so many things (and Chris Deacon talked about this recently on LinkedIn), it’s how that law is operationalized that actually determines if it achieves this “right price” goal and/or—and Dr. Neumann, my guest in this healthcare podcast, makes this point really clearly, too—maybe the point of the law is as much about cost containment, frankly, as it is about achieving value-based “right” prices. And cost containment and value-based pricing are not the same thing. I’m gonna do a show on this coming up.

So, what are the likely effects of the IRA pharma price negotiation provisions? And not talking about the whole IRA here and the cadre of other stuff like patient out-of-pocket caps and inflation caps. This show is complicated enough just talking about the negotiation portion and just talking about its potential to achieve pricing based on “value.”

Here’s a summary of likely impact of Medicare drugs being negotiated, some of which we talk about in this episode. There’s “seven-ish” main implications:

“Some Medicare patients will benefit substantially from negotiations …, as a reduction in the drug’s price will result in lower coinsurance and liability during the deductible phase.” Okay … this makes sense.
“Overall, negotiations are projected by the CBO [Congressional Budget Office] to reduce premiums, resulting in lower costs for all Medicare beneficiaries.”

References: CBO estimates drug savings for reconciliation. Committee for a responsible federal budget. Accessed April 11, 2023. https://www.crfb.org/blogs/cbo-estimates-drug-savings-reconciliation Congressional Budget Office. Estimated budgetary effects of Public Law 117-169, to provide for reconciliation pursuant to Title II of S. Con. Res. 14. Published 2022. Accessed April 11, 2023. https://www.cbo.gov/system/files/2022-09/PL117-169_9-7-22.pdf

Okay … so, this #2 here is kind of thought provoking, especially when it’s unclear at this time whether the negotiated price will refer to the list price, the AWP (average wholesale price), or the rebated price (ie, the price after rebates are applied). There are many, many implications if the negotiated price is before or after rebates, just given how “addicted” plans are to rebates and use the rebates, and cost shifting to patients, in a convoluted and super-inefficient way to try to keep premiums down. Listen to the show with Chris Sloan (EP216) for more on this.

There’s more incentive to go after biologics than small molecule drugs—obvious, due to the 9-year versus 13-year thing. There’s additionally some incentive for rare-disease and orphan drugs, most of which are biologics, in other parts of the IRA.
More interest in drugs for non-Medicare markets (ie, drugs for diseases of younger populations, perhaps)
Possibly less pharma innovation, fewer drug launches

Oh, boy, with this one. Listen to the show with Mark Miller, PhD (EP380), for many, many nuances here. But let me give you a few things to think through, and I’d start with four words: We are chasing Goldilocks. There are two ends of the spectrum, and neither are good. On one end, Pharma charges way too much and the system gets bankrupted while pharma shareholders get rich. On the other side of the spectrum, there’s not enough returns for any investors to invest in new drug development. It’s all about moderation—finding the sweet spot in the middle—something the healthcare industry has a super hard time with.

Bottom line, we want to incent meaningful innovation, drugs that actually work. If we pay a ton of money for drugs that don’t work particularly well, then what’s the incentive to find good drugs? As per my earlier point, if this legislation does as was intended, then good drugs should get rewarded and less comparatively effective drugs should be less rewarded. Let’s cross our fingers, shall we?

Will Pharma raise its launch prices because the negotiations center on discounts? A higher price times the discount means a higher discounted price, after all. This one could be exacerbated by the part of the IRA that mandates inflation caps. There is some evidence that higher launch prices are already happening.
Manufacturers wait to launch until they have all their indications ready to go. If you didn’t understand this, we explain in more detail during the interview.
There are incentives for Pharma to jack up commercial prices. Because they’re making less money in Medicare, they try to make more money in the commercial market. But as Dr. Neumann says, you’d think that if Pharma could do that, they already would have done it. Or let me say that a different way: You’d think that if Pharma could have raised their commercial prices more than they already have been raising their commercial prices, they would have already done it. So, I think whether cost shifting actually increases here is a sizable question mark.
There’s also less incentive for Pharma to innovate me-too kinds of drugs. If a drug in the same class for the same disease is being negotiated, then a new drug coming out in that same category might sort of have to charge a price similar to the negotiated price of the other drug.

Dr. Peter Neumann, my guest in this episode, has a background in health economics and currently directs a research center that’s focused on health economic issues. His group does a lot of work trying to understand the cost effectiveness of drugs and other health interventions.

Other shows you should, for sure, listen to here are the ones with Mark Miller, PhD (EP380); Anna Kaltenboeck (EP303); Bruce Rector, MD (EP300); Scott Haas (EP365); and Chris Sloan (EP216). These shows offer context and adjacencies that are extremely relevant right now if you’re gonna understand the potential impact of the IRA.

Here’s a quote from the book The Right Price (written by Dr. Peter Neumann and his coauthors, Joshua Cohen and Daniel Ollendorf) that I thought summed up some of the issues here very nicely:

If there existed a Rorschach test for drug prices, it might conjure one of two images. Some people might perceive prices as a compass directing companies to invest in products that people value most. Aligning prices with value is akin to a “true north” orientation of the compass’s arrow. Failure to link prices with value sends misleading signals to drug producers.

Others might regard drug prices as a wall preventing patients from accessing the drugs they need. For them, the barrier should be as low as possible. But aligning prices with value might have little effect in lowering the wall. How then to accomplish that goal?

You can learn more at cevr.tuftsmedicalcenter.org or by reading The Right Price.

Peter J. Neumann, ScD, is director of the Center for the Evaluation of Value and Risk in Health (CEVR) at the Institute for Clinical Research and Health Policy Studies at Tufts Medical Center and professor of medicine at Tufts University School of Medicine. He is the founder and director of the Cost-Effectiveness Analysis Registry, a comprehensive database of cost-effectiveness analyses in healthcare. Dr. Neumann has written widely on the role of clinical and economic evidence in pharmaceutical decision-making and on regulatory and reimbursement issues in healthcare. He served as co-chair of the 2nd Panel on Cost-Effectiveness in Health and Medicine. He is the author or coauthor of over 300 papers in the medical literature and the author or coauthor of three books: Using Cost-Effectiveness Analysis to Improve Health Care (Oxford University Press, 2005); Cost-Effectiveness in Health and Medicine, 2nd edition (Oxford University Press, 2017); and The Right Price: A Value-Based Prescription for Drug Costs (Oxford University Press, 2021). Dr. Neumann has served as president of the International Society for Pharmacoeconomics and Outcomes Research (ISPOR). He is a member of the editorial advisory board of Health Affairs and the panel of health advisors at the Congressional Budget Office. He has also held several policy positions in Washington, DC, including special assistant to the administrator at the Health Care Financing Administration. He received his doctorate in health policy and management from Harvard University.

09:33 Is it imperative that drugs whose patents are expiring have their prices negotiated?

10:50 “We need innovation; we want to encourage innovation.”

11:01 Does this new law strike a balance between innovation and price regulation?

11:21 How are we assessing cost effectiveness and innovation in the drug space?

12:29 What’s the problem with the current drug markets?

13:14 Why can’t you rely on the drug market for the cost effectiveness of a drug?

14:13 Why very expensive drugs do not equate to poor value.

15:06 What are the likely outcomes of the IRA?

18:33 How does pharmacy budget factor into high-value drugs?

19:26 “Value-based pricing doesn’t mean necessarily lower spending overall.”

22:59 What are the types of drugs that will be excluded from the IRA?

23:22 Who will the law create problems for?

24:44 What have pharmacy benefit managers (PBMs) been doing to move forward with the new law?

26:04 What are plan sponsors doing right now?

28:32 What are the most important value metrics according to Dr. Neumann?

You can learn more at cevr.tuftsmedicalcenter.org or by reading The Right Price.

@PeterNeumann11 discusses #drugprice #negotiations on our #healthcarepodcast. #healthcare #podcast

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Stacey Richter (EP400), Dawn Cornelis (Encore! EP285), Stacey Richter (EP399), Dr Jacob Asher, Paul Holmes, Anna Hyde, Dea Belazi (Encore! EP293), Brennan Bilberry, Dr Vikas Saini and Judith Garber, David Muhlestein

The Right Price: A Value-Based Prescription for Drug Costs

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I hope you listened to episode 399, which was Part 1 of this two-part exploration of my manifesto, meaning my aims and my path or framework to achieve those aims. Regarding the first part of my manifesto, episode 399 from two weeks ago, here’s the tl;dl (too long, didn’t listen) version; but please go back and listen to that show (Part 1) because it’s about you—and it’s a compliment and a thank you, and you deserve both.

Just to quickly recap, Part 1 of my manifesto is that I started this show because I want to, and wanted to, provide information to those in the healthcare industry trying to do the right thing by patients, to get you the insights that you might need to pull that off, to create a Coalition of the Willing, as I’ve heard it called. When we get reviews like the one from Megan Aldridge, a self-proclaimed Relentless Health Value binge listener, I feel very gratified because it makes me feel like I’m chipping away at this mission and in a non-boring way. Thank you, Megan.

Along these lines, there was also a recent review from Mallory Sonagere, who says she listens to learn new things and to be a little sharper at how she approaches her day job.

And just one more I’ll mention: I loved the review from Mark Nixon calling Relentless Health Value the best healthcare podcast out there.

Every review like this I take as validation that maybe I can count some measure of success toward achieving the mission to empower others on their journeys to make it better for patients or to transform the healthcare industry.

But this whole endeavor to create a manifesto is also borne out of me struggling personally to figure out what “having personal integrity” in this business actually means when it comes to deciding what to do and what not to do, when it comes to deciding who or what to try to help or support or who or what to step away from either passively or actively. I mean, how this podcast gets funded is my business partner and I pay for it with money from our consulting business and from some tech products that we have on offer. Who do we choose to take on as clients, and what are we willing to do for them or help them with? These are questions that literally keep me up at night.

And this is what this episode, Part 2, is all about. It’s about my struggle and how I attempt to navigate my own path forward.

And holy shnikeys, it’s tough to find a path, especially when you have the sort of perspective that I’ve wound up with over these past however many years. It can feel like no matter what I do, there’s negatives as it relates to the Quadruple Aim. You raise one of the quadrants, and something else for somebody else certainly has the potential to be negatively impacted.

We cannot forget here in the short term, but, for sure, often in the longer term as well, it’s a zero-sum game. Every dollar someone takes in profit under the banner of improving health or even saving money is a dollar that someone else paid for. Is the amount of profit fair? Where’d that money come from? Is there COI (conflict of interest), and if so, what’s the impact? I think hard about things like this.

An inescapable fact is that there has been a financialization of the healthcare industry, and that includes everybody who also gets sucked into the healthcare industry whether they want to be or not (ie, patients/members and plan sponsors and, oftentimes, physicians and other clinicians, too).

But the financialization of healthcare means that most everybody at the healthcare industry party has a self-interest to either make money or save money. And sometimes the saving money means saving money for themselves, not necessarily anything that is ever gonna accrue to patients or members.

Now let’s say I’m trying to determine if I want to take on a new client or decide if I personally want to promote or do something or other. This self-interest that abounds all around matters here because it means it is often very tough to find some kind of “pure” initiative to hitch your wagon to.

The crushing reality that we all face is you gotta earn a living. The other reality is that often the person that benefits from the thing you want to do (ie, the patient) is not gonna pay for it. And frequently, physician organizations won’t either. If everybody was lining up to pay to get something fixed, the problem would not be a problem, after all. But the only way your moral compass is the only moral compass in play is if you’re doing whatever you’re doing for free, really, or by yourself—and thus you are not encumbered by anybody else or any self-interest beyond your own … and your own motives are the only motives that you can control. I hear all the time initiatives and coalitions and advocacy organizations and even research funded by grants … these things also get bashed as suspect because who’d that money come from and whose “side” are the funders on.

Nikhil Krishnan wrote on LinkedIn the other day (and I’m gonna do a little bit of editing, but yeah). He wrote:

“Patients have low trust in healthcare because they think every stakeholder is incentivized not in their best interest. Many patients think the hospitals want to keep them sick, the [carriers and plan sponsors] don’t want to pay their claims, the drug companies want to keep them on their meds, etc. And we can’t pretend like that … isn’t true.”

Every party, every stakeholder has some measure of self-interest. They have to; otherwise, they’d be out of business. It’s all a matter of degrees. No big group, no entire category gets to stand on the high ground here when you think like a patient. There’s great hospitals and great people who work at hospitals, and then there’s people doing things that cause a strikingly large percentage of patients to fear going to the hospital for clinical and/or financial reasons. Pick any other stakeholder and I’d tell you the same thing. Any other stakeholder. It’s basically up to us as individuals to do the right thing. In every sector of the healthcare industry, there’s good eggs and there’s bad eggs and there’s eggs in the middle just doing their day jobs as instructed. Personally, I want to be a good egg, and that’s what my manifesto is all about.

Let me dig into this a bit further for just a sec and then I’ll continue with my personal manifesto for how I find my own path of integrity through all of this confusion.

Here’s another anecdote. Stuff like this I make myself crazy thinking about: I was listening to a podcast, and one of the guests said, “I wanted to get my MPH [Master of Public Health] because I felt a personal calling to be altruistic.” Then, 120 seconds later, he says something like, “So then, when it came time to pick my internship, I hunted around to find the one that paid the most money—and that’s how I wound up working for an HMO in the ’90s.”

Consider how that strikes you. How do you feel about that guy right now, who, by the way, has gone on to support some very interesting and probably impactful initiatives? There’s this commonly used phrase, “Let’s do well by doing good.”

So, back to that HMO intern. Let’s just say we all agree that these HMOs were not unconflicted organizations. We all know they had a reputation for putting profits over members, and a reason they went out of business was because they denied care. They refused to pay claims for patients who had AIDS. And it turns out that the friends and families of people with AIDS are incredibly well organized and sued the crap out of the HMOs, which may have expedited their demise.

You know what the intern was doing at the HMO? He was helping them with data analytics, and his personal goal was to use that data to improve patient outcomes.

So, okay … here’s the thought experiment: Do we want this HMO taking money that they’re gonna take anyway and then not adding the value that they potentially could add with their data because they don’t have any smart, dedicated, highly compensated interns working there to keep the ship pointed in a decent direction? I mean, I guess if I know I’m gonna spend a dollar as a member of that plan, I’d prefer to get as much as possible for my dollar that is already being spent. Maybe from that perspective, this guy is doing well by doing good. You see how this gets messy when you take a theoretical statement and then apply everyone’s real-world prejudices and predilections to it.

Here’s a last point to ponder, and this is another thought experiment … so, just heads up and then I’ll get to the point here: Say you are asked to help with a program run by a Medicare Advantage (MA) plan to provide those in need of transportation a ride to their annual wellness exam. Do you help?

Those who listen to this show will fully understand there’s a lot of self-interest involved in getting patients to the annual wellness exam because … risk adjustment. Also, star ratings. Listen to the show with Betsy Seals (EP375 and EP387) if you need the full story here. Short version is, MA plans can’t upcode, either fairly or aggressively (if they are so inclined), if the patients don’t show up for their annual physical. So, there’s a lot of money for them at stake. But, then again, are physicals important for patients? Do they improve patient care and health? If we think yes, then again, is this doing well by doing good to help patients get to their appointments?

After literally years of asking myself questions like this—and most of them were not thought experiments—I came up with my manifesto. And there are three parts to it, and I will go through each of them. But here’s my manifesto in full:

If the thing results in a net positive for patients, then I will do it. The timeframe is short-term or medium-term. And the assumption is that it will take a village and I am not alone in my efforts to transform healthcare or do right by patients.

Here’s how I think about the first part of my manifesto: If the thing results in a net positive for patients, then I’ll do it. And keep in mind, I could talk about this for seven hours; so everything I’m saying is oversimplified to some degree and has as many nuances as there are stars in the sky.

So, to calculate the net-positive impact, I think through what good the thing could do and weigh that against the negatives. And there are always negatives because, most of the time, the work that I do anyway has to get paid for by somebody and that somebody has some self-interest. Self-interest means that they are attaining something that furthers their business goals.

Let me list two major upside/downside contemplations:

How much good does the thing actually do for patients? I think about this. What’s the value here? Is it a little? Is it a lot? Will this thing be a distraction for clinicians, because time is often the most precious currency? If we’re talking about some kind of navigation or utilization management, what’s the reason someone wants to do this? Is the reason clinically and, for reals, evidence driven? Or are we predominantly doing this to enrich shareholders or save plan sponsors money in ways that are not a win-win for patients in the clinic right now trying to get cancer treatments for their kid? I try to think like a patient and be as impartial as possible.
Money. Where’s the money for this thing coming from, and who wins in this particular initiative (ie, is it a win-win and patients win something worthwhile)? Now, the company doing the funding has got to win, too; otherwise, they wouldn’t fund the thing. That’s where it gets subjective, and, as aforementioned, do I care if the company in question wins if the patient wins, too? Or is this company so damn evil at its core that I am willing to sacrifice the opportunity to do a good thing for patients in order to not have anything to do with said possible funding entity. Or am I cutting off my nose to spite my face because this is a really important thing for patients and this particular company is the only one that’s gonna fund it? Because tragedy of the commons or whatever else.

Again, this gets dicey really fast. Let me poorly paraphrase a little exchange I saw on LinkedIn the other day that had me completely preoccupied during my work-from-home midday walk around the block for at least three days. Somebody wrote (maybe that Master of Public Health intern), “Given how intractable it feels to me to try to reduce healthcare spend, I think I’m going to try to help patients get more value out of the dollars that are currently being spent by them or on their behalf.”

Do you think that’s a worthy goal? Well, not everyone does. Somebody in T-minus 8 seconds responded, “That’s a toxic way of thinking. Everyone who is not actively working to reduce healthcare spend by putting patients in cash-pay models is part of the problem.”

This is a good segue into the second part of my manifesto.

The first part is: If the thing results in a net positive for patients, then I’ll do it.

Here’s the second part: The timeframe is short-term or medium-term. And here’s what I mean by that. My main focus is helping patients right now. This is what this has to do with the aforementioned exchange on LinkedIn wherein someone was trying to figure out how to get more out of the dollars we’re currently spending and someone else said that’s toxic, because we should rip it all down and build a better model.

There’s incremental change, and then there’s disruptive change. These two things are not mutually exclusive. Apparently, Mr. This Is Toxic doesn’t agree with me, but as I said in the last episode, there’s that Buckminster Fuller quote: “You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.” And sure, I like to aspire to that as much as the next person. But does aspiring to a big hairy goal mean completely forgoing any incremental ways that patients can be helped immediately, like right now?

If you ask me—and you’re listening to this, so you de facto asked me—incremental change will probably actually support and beget disruptive change. So, incremental versus disruption is not a battle royale. These things are not diametrically opposed. They’re probably actually aligned. I could go on a tangent here to explain why, but I’m not going to … except to say tipping points.

But forget about that for a sec. Here’s the more basic question: If all parties are interested in transforming healthcare, legit, how does someone trying to do it incrementally, or improve value for patients right now, in any way negatively impact someone trying to be disruptive and/or trying to change financial models?

Keep all this in mind and now let me get back to my manifesto. I’m worried about patients, and I’m worried about them largely right now, short term to medium term. So, if I have the opportunity to help a patient—and I think about my two grandmothers (God rest their souls) here, but both of them would have died in the healthcare system multiple times in avoidable ways had my family not been there advocating for them—if I have the opportunity to help a patient, I will do so as long as I believe that the impact is a net positive in the shorter term.

Disruption is a longer-term operation. Some have said it’s a generational change. When I see stuff like Toxicity Guy wrote on LinkedIn, I really try to understand what his point is, as I always try to understand what people’s points are. Could he be arguing that no one should work to improve care right now or try to maximize what we get for the bucks that we’ve already been shelling out? And, if so, for what reason … so that what happens? So that resentment about poor-quality care builds up to a boiling point such that everybody shuns the status quo and moves to a new care model and financial models faster? Is that the aim of Toxicity Guy? To force a let-them-eat-cake moment for the purposes of triggering a faster revolution? I’ve probably thought about this guy’s motives and his potential impact harder than he has. In my manifesto, in my worldview, I don’t let grandmas suffer right now so that someone else has a better narrative, even if I am in full support of what that person is trying to do and the mission that they are on, which, by the way, is a longer-term one.

This gets me to the third part of my manifesto: The assumption is that transforming the healthcare industry will take a village and I am not alone.

When I state this outright, it’s gonna seem self-evident; but sometimes it’s hard to not push blame here like Toxicity Guy, so I say this sort of in his defense.

Here’s the point of contemplation: There’s maybe four big parts of the healthcare industry at a minimum. We have those trying to fix SDoH (social determinants [or drivers] of health). We have those trying to fix medical morbidity (ie, are patients on evidence-based pathways and taking meds appropriately, limiting polypharmacy side effects/cascades). Once a patient is in the healthcare system, what happens then? Then we have those working hard to improve behavioral/mental health. And lastly, everything going on with what I’m gonna call FDoH (financial determinants of health)—patients making decisions or having decisions made for them due to financial implications for them or for somebody else.

Lots of stuff rolls up under these categories, but even just listing out these four things, we got a hell of a lot of work to do to improve the lot of patients and taxpayers and make it easier to do business in this country.

I always try to keep in mind that it will take a village. Just because someone is working on getting patients housing or eating better does not imply that they don’t care about employers struggling to curb claims billing waste, fraud, and abuse—and vice versa. It’s just not everybody can do everything. For me personally, I tend to focus my attention on helping as many patients as possible get on what would be for them the optimal treatment plan or best care pathway.

That does not mean I’m anti-someone working on getting more competition in the payer space. Nor does it mean I’m against trying to curb the price of overpriced (as per ICER [Institute for Clinical and Economic Review]) pharmaceutical products or legislate to rein in hospitals doing stuff that, in my book, they should not be doing. I am all for getting all of these things done. I just do not have the bandwidth or the depth of expertise to do everything myself. I would suspect that no one does.

As my grandma used to say (and anyone who attended a slumber party seance in eighth grade might know), many hands make light work. You get 15 girls each holding out but two fingers, and you can lift up your friend, no problem.

When I keep in mind that it takes a village, it helps me curtail the tendency to become paralyzed in my quest to help patients because I can see a potential problem it might create somewhere else in the industry or somewhere else down the line. I have to trust that one of my fellow villagers is holding down that end of the fort.

Here’s a quote from J. Michael Connors, MD, that he wrote in his newsletter: “When you point one finger, three are pointing back at you … It’s like everything you learned in kindergarten seems to be so applicable to our approach to healthcare. Sadly, the game of finger pointing and pushing blame on others is killing real innovation in healthcare.”

This is so real, which is why inherent in my manifesto here is my efforts to remember we are all on the same team (all the good eggs, anyway). That it takes a village, that there will be some things that some people are doing that I maybe don’t fully agree with. There might be groups who don’t accomplish much. There are certain people doing well (ie, doing self-interested things) but, at the same time, creating a better place for patients. As long as, in general, we are all following the same North Star, we’ll achieve much more spending our time focused on our own missions and not worrying about what other people are doing. And when I say “not worrying about what other people are doing,” I mean people in the “good egg” village. I do not mean I intend to stop calling out conflicted and net-negative self-interested behavior, because this is what some people in the village should hopefully have their eyes on and get busy working against.

The village here, it’s a Venn diagram. At the point where other people’s circles intersect with my mission or what I think would be better for patients, these are the people I can work with and collaborate with. These are the people that I’d take their business or I’d try to help them if I can.

My manifesto is to determine when something is a positive for patients and then to find others who will win as a result of that thing happening. Then I can study why this is a win for those others, which is always going to be some self-interested why. And then I can think through what the negatives are if their self-interest comes to fruition. Is it still a net positive? If yes, proceed.

Look, this making it better for patients, this transforming healthcare, it is hard, dispiriting work. It’s a long slog. I’d like to suggest we encourage each other. Can we be the wind beneath each other’s wings when we find a kindred spirit? Can we focus on the points of intersection and spend our energy deepening what’s going on there?

So again, here’s my manifesto: If the thing results in a net positive for patients, then I’ll do it. The timeframe I’m concerned about … short-term, medium-term. The assumption is that it will take a village to transform healthcare and I am not alone.

I feel kind of exhausted having finished that. But let me ask you this: What is your manifesto? If you have one or if you have thoughts on this, go to our Web site and click on the orange button to leave a voice message. My hope is to do an upcoming show sharing what you think.

For more information, go to aventriahealth.com.

03:16 “It’s a zero-sum game.”

03:26 Is the amount of profit fair?

03:37 What is an inescapable fact of the healthcare industry?

03:54 What does the financialization of healthcare mean?

04:19 Why does the self-interest in healthcare matter?

06:18 “It’s basically up to us as individuals to do the right thing.”

10:03 What is the first part of Stacey’s manifesto?

10:18 How does Stacey calculate the net positive of an impact?

10:41 What are two major upsides/downsides that Stacey contemplates?

13:31 Why are incremental change and disruptive change not mutually exclusive?

17:40 “I always try to keep in mind that it will take a village.”

19:19 Why finger pointing is killing innovation in healthcare.

For more information, go to aventriahealth.com.

Our host, Stacey Richter, discusses our #healthcarepodcast and where she sees the path moving forward. #healthcare #podcast

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Dawn Cornelis (Encore! EP285), Stacey Richter (EP399), Dr Jacob Asher, Paul Holmes, Anna Hyde, Dea Belazi (Encore! EP293), Brennan Bilberry, Dr Vikas Saini and Judith Garber, David Muhlestein, Nikhil Krishnan (Encore! EP355)

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Well, this episode became extremely relevant again after that Cigna case bubbled up in the news.

Here’s the “too long, didn’t read” version:

Attorneys filed a class action lawsuit against Cigna, alleging that the carrier is overcharging for lab services or did overcharge for lab services. The plaintiff is an individual member of a Cigna plan.

The complaint tells a pretty wild story. On the Explanation of Benefits (EOB) that this member received for lab services, the amount billed was over $17,000. My understanding is, this member went to Labcorp to get those lab services.

Cigna claimed it had negotiated a discount of over $14,000 for those lab services, meaning the remaining balance was something like $2700.

OK … good news, I guess. Instead of the lab services costing $17,000, they cost $2700 to the plan and member. Except Cigna said to this member that they were only gonna pay $471 on the member’s behalf. This left the member with the responsibility to fork out over $2000 in deductible and coinsurance payments. I’m rounding the numbers here for brevity.

So, in sum, member’s told she owes $2000+ out of pocket for charges that were allegedly originally over $17,000.

Now, a couple things: The cash price for an uninsured customer at Labcorp for the same services was $449, according to the complaint. Also, weirdly, on the Explanation of Benefits, Cigna allegedly said that the lab services provider was not Labcorp. It was “Health Diagnostic Lab” (or everything I just said in all caps with some letters missing) instead of the actual provider Labcorp.

Then the plot thickens …

The lawsuit alleges that this “HLTH DIAG LAB” is a pseudonym for Cigna Healthcare of Arizona and that this Cigna affiliate used their pseudonym to create a fake invoice. This is also a quote from the complaint.

Bottom line, and this is the real point I wanna make here, the actual out of pocket to the payer was something less than $500, $600, you would think. But it appears that the plan was hoping to get almost 5x that out of the plan member. And had this plan member met her deductible that year, I would speculate that this 5x would have come out of the pocket of the plan sponsor. Either way, 5x margin? That’s some pretty sweet returns.

Look, the point I’m making here isn’t about this particular case. It’s about the totality of the thing. This case just got a whole bunch of attention because, as Julie Selesnick put it on LinkedIn recently, “This case … hits all the high notes—overcharging, keeping the spread, fraudulent billing.”

But think about this for a second. You think this was an isolated incident? That someone in Arizona had a brainstorm to juice their quarterly earnings and set up a whole company to jack up one person’s lab payments? I don’t know. What do you think?

As Lee Lewis mentioned on LinkedIn, while this case has a lot going on, a member getting charged $2500 for what should cost $450 or whatever … he wrote, “I’ve seen worse.”

I say all this to say: Plan sponsors? Hi there. Are you getting your claims data, and are you having it audited for stuff like this? And by whom are you having your claims data audited for stuff like this? And that’s not a rhetorical question. I mean, here we have a well-respected payer opening up (allegedly) a reseller of lab services sending allegedly fake invoices. That’s one way to vertically integrate, I guess.

Here’s another way you can vertically integrate that maybe we all should be aware of: companies that provide audit services that many plan sponsors use to check if claims have been paid properly. Those same auditing companies, these same companies oftentimes have another book of business besides their auditing claims for plan sponsors work. They also work with provider organizations doing revenue optimization. Right. They help providers maximize their revenue, revenue that is coming from … claims they send plan sponsors.

Sometimes when I talk about this stuff, I feel like I’m in a cartoon—like that meme with all the Spider-Men pointing at each other and nobody knows who is actually Spider-Man because everybody is dressed up in the same costume pointing and saying the other guy is the one causing the problems here.

As Dawn Cornelis says in this episode today, approximately 30% of healthcare spending (ie, healthcare payments) are some combination of fraud, waste, and/or abuse. It’s a $1-billion-a-day problem.

In this episode, we dig into the three main issues that Dawn tends to find when looking at the claims that were going to hit the checkbook of a plan sponsor as per their payer or TPA (third-party administrator):

Claims that were not paid correctly: Turns out, 5% to 10% of claims just aren’t paid right. There’s a whole motley crew of errors that can transpire, but bottom line, the bill was for $10 and somehow the plan sponsor was gonna pay $15. Or they double paid.
Things that, if we knew about them, we could do better in the interest of the member: Jeff Hogan put this really well on LinkedIn the other day. He wrote, “Today’s purchaser fiduciary needs great analytics to prioritize the needs of their members … including wasteful and abusive vendors, site of care, cost/quality variation in health systems.” Do labs that the plan is being charged $2500 instead of $450 go here or in the next problematic category? I’m not sure.
Claims that are just wrong: They should never have been sent in the first place.

We also talk about kind of a different issue entirely: the hidden fees that are buried in some of these payer contracts, which felt like a reprise, frankly, of the conversation I had with Paul Holmes a few weeks ago in episode 397 talking about PBM (pharmacy benefit manager) contracts and all the hidden fees and, ultimately, probably costly provisions buried in them that plan sponsors are on the hook for—a lot of times very unknowingly.

You can learn more at claiminformatics.com or by emailing Dawn at d.cornelis@claiminformatics.com.

Dawn Cornelis is a professional in healthcare cost containment with 30+ years of dedication to combatting improper payments, fraud, waste, and abuse. She has led the industry in developing healthcare transparency technology platforms and services. As a result of her efforts, hundreds of millions of dollars of improper payments were delivered through pre- and post-payment technology programs. She is an expert in the field of healthcare claims data, with an emphasis in audit and recovery, and has navigated the payment systems of all of the national healthcare carriers. Furthermore, she approaches each project with integrity and attention to detail while cultivating long-term client relationships.

In 1993, Dawn cofounded the first audit and recovery firm and served for 17 years as the chief operating officer of Claim Recovery Services while representing some of the best Fortune 100 companies. In 2017, Dawn cofounded ClaimInformatics, a healthcare technology company that offers a SaaS-based solution product to support health plans in the marketplace that addresses the new transparency regulations. She developed and trademarked multiple technologies and has a United States Patent Pending named CONTINUITY OF CARE (Publication #20150127370). Dawn currently serves as a member of the Self-Insurance Institute of America’s price transparency committee, which focuses on legislation and education for self-funded entities.

Over the course of her career, Dawn’s efforts have supported national and local organizations spanning financial, healthcare, union, and government sectors. With her years of healthcare knowledge, Dawn is a proven expert, consistently delivering excellence.

06:57 The story in the data.

07:33 Who’s submitting these claims?

08:04 The three problems with the data.

10:54 The varying factor between carrier systems to stop fraud, waste, and abuse.

11:32 Why carriers don’t push for better systems to stop inappropriate dollars.

13:28 The difference between fraud, waste, and abuse.

14:46 “When it becomes the norm, that’s what’s very bothering.”

15:10 The barriers or hurdles in the marketplace.

17:38 What we don’t know about but could do better at when looking at the data.

19:10 “It’s not so much the health system and what they are charging. It’s about … what the contracted rate is agreed to. That’s what drives our costs.”

20:04 “Data’s fixed for itself.”

22:49 Identifying and eliminating fraud.

22:54 The lack of enforcement behind preventing illegal billing.

26:01 How providers ensure they aren’t inadvertently harming employers and patients through billing.

You can learn more at claiminformatics.com or by emailing Dawn at d.cornelis@claiminformatics.com.

Check out our encore #healthcarepodcast with Dawn Cornelis of @claiminformati1 as she discusses saving billions through healthcare billing. #healthcare #podcast #digitalhealth #healthtech #healthcarebilling

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Stacey Richter (EP399), Dr Jacob Asher, Paul Holmes, Anna Hyde, Dea Belazi (Encore! EP293), Brennan Bilberry, Dr Vikas Saini and Judith Garber, David Muhlestein, Nikhil Krishnan (Encore! EP355), Emily Kagan Trenchard

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This week and in episode 400 of Relentless Health Value, at the encouragement of the Relentless Health Value team, I’m gonna do two shows entitled “My Manifesto,” Part 1 and Part 2. In other words, why did I start Relentless Health Value and what’s the goal around here?

I started contemplating this mission to define the mission thinking about how healthcare will ultimately be transformed and my role (if any) in all of this—or, more accurately, your role as a listener of this show and, often enough, someone who has the ability to take action. You there, listening right now, you are the alchemist who will transform the words that you hear here into something tangible. And that is how this show makes a difference. It is through the Relentless Health Value Tribe, and you, whether you realize it or not, are a very special person.

But before I continue along this complimentary vein, let me back up for just one sec and talk about how I realized how special you are to begin with.

It’s a funny thing because I get asked all the time who listens to this show, sometimes with a “Who listens to this show?” vibe. I mean, we talk about complicated topics; and when I say we talk about complicated topics, I mean we hurl ourselves right in the middle of them. Acronyms and 400-level perplexities abound.

I used to say who listens to this show when asked—and this is absolutely true—I used to say that more than 40% of you are senior-level executives with decision-making authority, which might mean you are a doctor or a nurse or other clinician and a leader of some kind, either formally or informally. You could work at a provider organization, a payer, a digital health company (big or small). Maybe you make policy, you’re a researcher, private equity … You’re an EBC (employee benefit consultant) or work in benefits at an employer. Maybe you do something in the population health space. You could be a legislator looking for insight. A journalist. Right? We get around.

But while the audience of this programme is big (very big by some standards), I run across healthcare industry peeps often enough in decision-making roles who listened to half a show one time and decided it wasn’t for them. It took me a long time to put my finger on who listens and who does not, and this was also the moment that I started thinking about our listeners as a tribe.

The people who listen 99% of the time are listening to figure out how to do the right thing for patients or members. They want to know how what they do fits into the larger picture, this larger healthcare ecosystem. And they want to know this for actionable reasons.

I mean, frankly, this is a lot of the reason why I started this show to begin with: because I found myself in a similar situation (still am, truth be told). I started to understand that doing something in healthcare is like a game of pachinko. The action, which might feel like it logically should result in X good thing for patients, bounces around in this black box that is the healthcare ecosystem and may pop out the other side in ways that are the opposite of what was originally intended.

I want to have positive impact, right? All of us do, or you wouldn’t be listening right now.

And that is the common thread that holds us all together—besides, of course, being smart, capable, curious, and incredibly charming individuals. And I say all this with evidence: Every single person I have met who listens to this show on the regular meets all of these criteria.

You are great people, and it is a distinct honor and a privilege to spend time with you every week. I am proud, really proud of what this group of individuals has accomplished. We have moved needles, and we have pushed agendas.

Now, I know you people. You are going to be doing one of two things right now. Twenty percent of you are gonna be smiling and thinking about the program you started or the work that you did and the accolades that followed. Or maybe you’re just simply aware of what you’ve done because you have data, or patients or members or family members thanked you and you saw that look in their eyes and you knew how much what you did meant for them. Or you work for a company that is laser focused on some kind of disruption, and it’s small enough that you can clearly see your impact.

But there’s a lot of you (the majority of you, frankly) I get on the phone with, and you’re less sure if you’ve actually had any impact. You are frustrated—and a little depressed maybe—because you see all this madness and ways patients are harmed all around you. You see maybe decisions that you realize have a deleterious (ie, bad) impact on patients or members. You are now eyes on, and now you feel largely powerless.

I will tell you the same thing that I tell every member of the Relentless Health Value Tribe who says this. I don’t doubt it might be more difficult to see the impact you are having if you work for a larger company or if you work for one of these incumbents, especially when you have a recognition that there might be other departments or other individuals doing things that you may not be fully aligned with. But do not doubt that you have impact and that that impact is meaningful.

I was talking to Larry Bauer, and he told me with a lot of conviction (and he’s one that would know) that you, Relentless Health Value listeners, you are the innovators. You are the ones who spot problems, and you tinker around with available resources and you figure out how to make it just even a little bit better for patients or members.

Think about it this way and just hang with me through this: CEOs do not actually drive what happens in their organizations. The big bosses set up the incentive structures and are the tip of the spear (or whatever that metaphor is) for sure. But an organization’s behavior is decided by 10,000 probably tiny little decisions each and every day … 100,000 decisions by the employees of that organization. It’s the sum of all those micro choices, those micro moments, that determine the impact that that organization has on those it serves.

I saw a meme the other day: “When people travel to the past, they worry about radically changing the present by doing something small. Few people think that they can radically change the future by doing something small in the present.”

Who your boss is doesn’t matter is my point. If you are touching things in the middle of that pachinko game, you have power.

Right? We are all decision makers here, and we are not synonymous with the companies that we work for. We are not the Borg. Would it be nicer and faster if there wasn’t an ongoing financialization of the healthcare industry? If boards of hospitals and private equity and C-suites all would put their “mission before margin” hats on for a change?

Yeah, that would be ideal.

Would it be nice if the disrupters among us had more market penetration? Sure … the good ones, absolutely.

And probably the best path forward is to get ourselves over to a company that’s building a new model to make the current one obsolete, to quote Buckminster Fuller.

But it’s not like it’s an either/or. In addition to having a long-term vision, maybe we can do something in the meantime here. I’d rather that some patients and members get treated some amount of better right now as well as envisioning a new model to make the current one obsolete. We each might be pressing forward, I don’t know, 0.01% at a time; but let’s just consider that 0.01% in this country is 35,000 people plus their families and ~$300 million when it comes to healthcare in the US. Multiply that impact by everybody listening right now—there are thousands of you.

So please do not dismiss the impact that you have, no matter who you work for: thinking critically, considering the larger picture, recognizing the impact that your organization has in big ways and in small ways and then making big and small choices and decisions that are aligned with your values and your integrity. Sometimes people will talk to me about what they want their legacy to be, and this is kinda it.

So, how to deepen that possible impact that any of us might have?

It is always the highlight of my day when I hear that one of you has found somebody else in the RHV Tribe and the two of you (or three of you or four of you) have struck a deal to do something. You’ve collaborated in some way.

The larger organizations everybody might work for … maybe they’re on board or half on board, but again, we are not our companies. I love it when I hear that a physician organization hooked up with somebody at a payer and figured out how to do a pilot or collaborate on something, not going through the official Contact Us forms or whatever but by finding somebody on the same mission in that other organization and then everybody working up the chain in their own organizations from the inside. So many different individuals who work for so many different parts of the healthcare ecosystem listen, and there are lots of synergies to explore, especially if we stop thinking at the organizational level and start thinking about what we individually want to achieve. It’s possible to help each other, to find the overlapping bit of the Venn diagram where interests align and something can get done. And I’ll talk about that more in Part 2.

Here’s from Malcolm Gladwell’s The Tipping Point. He wrote:

“If you want to bring a fundamental change … you need to create a community … where … new beliefs can be practiced and expressed and nurtured.”

This, maybe in sum, is the ultimate goal of Relentless Health Value: to provide that loose-knit community so that those in the Relentless Health Value Tribe who want to can find like-minded people across the industry to work with, the ones who are also just as well informed and understand how this ecosystem knits together—meaning you can more easily work with them to find points of mutual interest that are net positive for patients. There was a point in my podcast career where I thought having a really broad audience of listeners from all across the industry was kind of a problem because it makes it really hard to answer the question, “Who listens to your show?” But now I realize it’s a huge accelerant to our potential impact.

As I was recording this, I realized I probably should do one thing here; and that is at some juncture, I will probably make an RHV Tribe directory or something. So, go over to our Web site and sign up for the weekly email, which you can do on the Web site, because whenever I get around to doing that, I will start with everybody on the mailing list (because I have your email address). I’ll send out a notice or something and ask if you’d like to be part of that directory.

This is Part 1 of my manifesto. Next week (hopefully, if I can get my act together) or, if not, the week after that, I will bring you Part 2.

In the meantime, thank you from the bottom of my heart for being who you are and doing what you do. It is going to be Relentless Health Value listeners who turn this oil tanker of a healthcare industry around. I guarantee it.

For more information, go to aventriahealth.com.

00:47 What is your role as the listener of this show?

01:27 How did Stacey realize how special our listeners are?

01:56 Who are our listeners?

03:15 Why did Stacey start the Relentless Health Value podcast?

04:10 What have the listeners of the Relentless Health Value podcast and its guests accomplished?

05:13 What is Stacey’s advice to listeners that feel powerless?

06:22 “It’s the sum of all those micro choices … that determine the impact that that organization has on those it serves.”

09:22 “There are lots of synergies to explore.”

10:51 Sign up for our weekly email here.

For more information, go to aventriahealth.com.

Our host, Stacey Richter, discusses why she started our #healthcarepodcast. #healthcare #podcast

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Dr Jacob Asher, Paul Holmes, Anna Hyde, Dea Belazi (Encore! EP293), Brennan Bilberry, Dr Vikas Saini and Judith Garber, David Muhlestein, Nikhil Krishnan (Encore! EP355), Emily Kagan Trenchard, Dr Scott Conard

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Yeah, so while the commercial payer marketplace is completely boring, the reasons it’s boring are not.

Let me walk you through this conversation I have in this healthcare podcast with Jacob Asher, MD.

First, we establish that the relative number of each carrier’s commercial members in California don’t seem to change year over year … and this has been true for years. When you rank order carriers by member count, the song remains the same. It’s Groundhog Day. Here’s a link to the 2022 CHCF (California Health Care Foundation) enrollment almanac, which shows for the large group market, Kaiser has captured and retained just over half of enrollees. Anthem comes in next with 14%, Blue Shield gets 9%, and then bringing up the rear we have UHC, Aetna, Cigna, Centene, and all others in descending order splitting the remaining 21%. Hmmm … intriguing, the whole idea that these relative member counts remain so consistent.

Then Dr. Asher and I dissect what is anybody actually doing to cut into the Kaiser market share or try to grab share from the two blues plans, if anything.

Dr. Jacob Asher was a great guy to have this conversation with. He was a practicing head and neck surgeon with Kaiser Permanente, and then he also served on the Permanente Medical Group Board of Directors.

Then he changed careers and became a full-time health plan chief medical officer for, first, Anthem, then Blue Cross, then Cigna, then UHC (UnitedHealthcare). Now he’s “retired” and reflecting back on unsolved and unaddressed issues within healthcare. And we’ve covered one here: Why is the commercial payer market as boring as it appears to be in California?

Now, after I had this conversation with Dr. Asher, I called up Wendell Potter, who everybody already knows (EP384), and Lauren Vela, who everybody also probably already knows, but she has spent her career at various employer coalitions and now works at a big employer transforming their health benefits (and she lives in California). I learned a few things that really helped me frame my thoughts on some of the issues that surfaced in the conversation that I had with Dr. Asher and that you’ll hear today. So, let’s get to it. Why doesn’t the relative market share of the big payers change year over year in California in the commercial space. May I present six reasons:

Everybody I talked to—Dr. Asher, Wendell Potter, Lauren Vela—first thing right out of the gate that practically everybody mentioned is employer inertia. Trying to get an employer to switch carriers is like trying to pull Excalibur from its stone. And right, not so surprising, it’s disruptive and obnoxious for employees and also benefit teams if carriers are switching all the time.
EBCs (employee benefit consultants). They have deals with carriers and others, and they also have a lot of power over employers. Listen to the show with AJ Loiacono (EP379) and Paul Holmes (EP397) for more on this.
As Wendell Potter put it, “The commercial market is [as a whole] stagnant. No real growth nationally. And in many states, the real money for carriers is not in the self-funded market; so they don’t care much about aggressively competing for market share.” Given that chart that just came out the other day showing the insane relative gross margins that carriers are making on Medicare Advantage patients, which is over double other lines of business … yeah, totally.
Just keep this in mind before we barrel into reason #4 here for a stagnant and maybe not exactly competitive market. Kaiser excluded, all of the rest of the California payers have what amounts to largely the same provider network. I’m exaggerating slightly here, but largely the same hospitals, the same consolidated integrated delivery networks.

And one thing that’s pretty clear (not just in California but across the country): Plans who bring the most members get the best prices from these hospitals and other provider organizations. Also, as Dr. Asher mentions in the show today, he never saw an employer buy on quality. Most were far more concerned about discounts. So, right … we have some circular reasoning here or circular logic. The big plans get the best prices, and then, because they have the best prices, they maintain their market share.

But wait … there’s more to this one, and it’s not just big gets you lower prices. Remember from episode 395 with Brennan Bilberry? He talked about the concept of the Most Favored Nation (MFN) anticompetitive clauses in hospital contracts. This concept is also super relevant here for payers as well if you think about it. This MFN Most Favored Nation anticompetitive clause, this is where a big hospital and “big carrier” have a chat … in a back room. The hospital agrees to not give any other carrier a lower price than the “big carrier.”

These MFN clauses are, of course, terrible for competition and plan sponsors and any patient with cost sharing. A lot of states have started to ban, restrict, and limit these clauses.

The DOJ brought a case in Michigan about this, and here’s a great federal government summary of the problem:

“The department and the state of Michigan alleged … that the MFN clauses in [Blue Cross Blue Shield of Michigan’s (BCBSM’s)] contracts with Michigan hospitals decreased competition among health plans. Some … clauses required hospitals to charge competitors more than the hospitals charged BCBSM, often by a specified percentage. Moreover, BCBSM often agreed to raise the prices that it paid hospitals, in part to obtain [the] MFN clauses.”

Oh, hey … I’ll let you raise your price so I can have a Most Favored Nation clause, just as long as I get a lower price, which is higher than it was originally. And this was actually back in 2013. I have no insight at all or knowledge, or I am not suggesting in any way that what was going on in Michigan is going on in California. However, this anticompetitive practice is common enough. If you’re interested in how common, count the lawsuits.

Employers are unaware a lot of times of how they are being charged more than what might be appropriate. And they are largely unaware of options other than Blue Cross, United, Cigna, Aetna … the big payers.
As Dr. Asher talks about and which I never really thought about, Kaiser doesn’t have Medicaid patients. [Correction: Kaiser does have some Medicaid members—just less than others.] And because their network and hospitals to a large extent are closed, they also don’t have uninsured patients to a large extent. So, no charity care to speak of and, therefore (at least as it is posited), they can be cheaper because they don’t have to cost offset. So, their price advantage has a structure element here that could make it even more untouchable.

So, there’s your six reasons. You can start to see basically all of these things solidify into the same thing. It’s less about trying to get new business and more about locking in the existing business. It’s not really a secret that this market is rock hard. Plans realize that. They realize that the cost of keeping an enrollee is cheaper than acquiring a new enrollee. So, carriers focus sales and marketing efforts on holding on to their existing customers, especially the coveted jumbo accounts.

Interestingly (and I was talking about this with Lauren Vela), the more clinical programs a carrier has deployed for an employer, the more the carrier is locked in there. So, the more the clinical value proposition resonates, the more clinical stuff that gets integrated. Changing plans becomes even more disruptive, and employers are even more likely to remain where they are.

So, there’s more to clinical programs than payers catching themselves a little PMPM (per member per month) something something upcharge recurring revenue or trying to get new business. It’s also locking in customer retention.

Is any of this specific to California? Some of it is—like a lot of the Kaiser stuff—but most, not. Meaning a lot of the country doesn’t exactly have a functioning commercial small group or large group marketplace either.

To a certain extent, it’s no wonder big employers don’t change plans that often. Why would they bother, given probably fairly incremental differences between these big payer carriers? I realize I’m scrambling out on a limb here and making assumptions, but to achieve more than incremental improvements, a BUCA (Blue Cross, United, Cigna, Aetna) would need to invest all kinds of resources into being that shining star. And why would they do that when nobody can take down Kaiser? And for all the reasons that we just talked about, it’s a hard row to hoe to grab new clients.

There’s a lot of ramifications to this, but this show can’t be seven hours long.

You can learn more by connecting with Dr. Asher on LinkedIn.

Jacob Asher, MD, completed a residency in otolaryngology–head and neck surgery at the University of California, San Francisco, after receiving degrees from Brown University and the Boston University School of Medicine. Dr. Asher then practiced as an ENT (ear, nose, and throat) surgeon with Kaiser Permanente in Northern California and also served on the board of directors of The Permanente Medical Group, where he focused on physician compensation reform, member satisfaction initiatives, and retirement benefits.

Currently, Dr. Asher is serving as a mentor for the Stanford Master in Medical Informatics program while exploring innovative solutions to healthcare delivery.

10:00 What is the competitive picture of California’s health plans?

11:28 What was everyone doing in order to get market share?

15:07 EP387 with Betsy Seals.

15:22 EP379 with AJ Loiacono and EP397 with Paul Holmes.

15:26 Why is it difficult to take market share?

16:16 Who was Dr. Asher pitching to and why?

18:49 Did employers ever buy plans for quality?

22:43 What does this look like from the payer perspective?

27:01 What improvements have there been to engagement in health plans?

29:07 Have plans gotten better at communicating with employers?

30:38 Why is it hard to compare the Kaiser world to the non-Kaiser world?

33:00 EP390 with Gloria Sachdev, PharmD, and Chris Skisak, PhD.

You can learn more by connecting with Dr. Asher on LinkedIn.

@JacobAsher18 discusses California’s #commercialpayer marketplace on our #healthcarepodcast. #healthcare #podcast

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Paul Holmes, Anna Hyde, Dea Belazi (Encore! EP293), Brennan Bilberry, Dr Vikas Saini and Judith Garber, David Muhlestein, Nikhil Krishnan (Encore! EP355), Emily Kagan Trenchard, Dr Scott Conard, Gloria Sachdev and Chris Skisak

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We could decide to lay off a few people. Reorg something or other. Beat up a vendor. Stop buying the gold paper clips. We also could go over and have a strident conversation with sales leadership about what they can do to jack up their sales revenue. Top line begets bottom line, after all.

But let’s dig into this for a sec, especially for all of us newly minted CFOs because the real ones already did this math.

Say our company spends whatever—we’re a bigger company, and we spend $100 million a year on our drugs. That’s a minimum of $30 million that we got taken for … $30 million a year. That’s a metric load of our cold hard cash that got dumped out back and burned.

But let’s just say this third-party review doesn’t happen. We all go with a “devil may care” about this whole PBM overcharging us by 30% to 40% possibility. And let’s say the PBM contract is, in fact, a ride on the Hot Mess Express, but we don’t know it. Here’s two pretty bad downsides, especially now, this year, since the passage of the CAA (the Consolidated Appropriations Act) at the beginning of 2022.

Here’s a link to an article we discuss about how a school district in Florida is suing their longtime EBC for taking $2 million a year in alleged secret payments.

We also mention an episode with AJ Loiacono (EP379).

Oh, hey … one last thing and new topic. Here’s a cool goings-on: Right now, the March Healthcare Classic is in full swing. Each spring, Josh Berlin’s rule of three team collaborates with other experts to predict which major trend will find itself at the top of the healthcare agenda over the next 12 months.

This year, their selection committee includes Anisha Sood; Danny Brywczynski; David Carmouche, MD; Shaheed Koury, MD; and Stephanie Mercado.

Check it out and weigh in yourself should you choose to do so.

You can learn more by emailing Paul at pbh@williamsbarbermorel.com.

Paul B. Holmes, JD, is a seasoned ERISA lawyer with nearly 40 years of specialization in that field. Paul joined Williams Barber Morel recently, after 31 years with Nixon Peabody LLP and Ungaretti & Harris LLP. Paul has extensive and unique experience in representing large employers and Taft-Hartley welfare funds in their selection, contracting, auditing, and litigation with large pharmacy benefit managers (PBMs).

Paul has logged over 8000 hours during the past four to five years, advising large employers and Taft-Hartley welfare funds managing their prescription drug benefit plans. This work includes active oversight of the request for proposal (RFP) process for selecting a PBM, the negotiation of final PBM contracts (including pricing, rebates, and audit rights), and regular audits of PBM compliance with their contracts.

He was selected, through a peer-review survey, for inclusion in The Best Lawyers in America (2020 and 2021) in the field of Employee Benefits (ERISA) Law.

Paul received his bachelor’s degree from Bradley University and his Juris Doctor degree from the University of Illinois College of Law.

06:06 What are Paul’s usual observations when a PBM contract crosses his desk?

06:57 “If you just sign … one of their model contracts …, you’re probably gonna pay 30% to 40% above market on your drug spend.”

10:35 What is a PBM lawyer? And why is it important to find an ERISA PBM lawyer?

15:37 EP379 with AJ Loiacono.

16:05 Who is on the hook for the cost of the PBM contracts?

20:36 What’s the problem with most ERISA lawyers today?

22:28 Lawsuit about PBM contract.

27:15 What’s Paul’s advice for benefits consultants?

31:11 How much might a plan sponsor be paying their consultant versus what a consultant might be making from a PBM?

You can learn more by emailing Paul at pbh@williamsbarbermorel.com.

Paul Holmes discusses #PBMContracts on our #healthcarepodcast. #healthcare #podcast

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Anna Hyde, Dea Belazi (Encore! EP293), Brennan Bilberry, Dr Vikas Saini and Judith Garber, David Muhlestein, Nikhil Krishnan (Encore! EP355), Emily Kagan Trenchard, Dr Scott Conard, Gloria Sachdev and Chris Skisak, Mike Thompson

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There are two facets of the Humira biosimilar market and launch that Anna Hyde, my guest in this healthcare podcast, talks about. One is market dynamics. The second is provider and patient confidence. These two concepts are tangled up together and cannot be separated.

But let me back up a sec and explain, although Anna Hyde covers this really well and offers context in the interview that follows.

So, first facet: market dynamics. This means fostering competition so the price of something goes down. That is the basis of capitalism. After all, you need competition to get in there and try to steal customers from each other by scuffling over price. In 2023, there’s supposed to be 12 biosimilar products for Humira that come out. So, we’ll see scuffling and lower prices?

Hmmm … maybe not so fast.

Second intertwined facet: provider and patient confidence that the biosimilars are as effective and have similar side effects (ie, there is confidence that the biosimilars are actually, for reals, interchangeable with the so-called reference product [ie, Humira]). Bottom line, if providers and patients are not confident in the biosimilar, then no prescribing is gonna happen.

Couple those provider and patient clinical concerns with a concern about manufacturer financial assistance. If providers and patients are worried that the out of pocket will be too high and the biosimilar manufacturers are not gonna offer any financial assistance, then, again, no confidence, no prescribing.

So, if either or both of these concerns is present and the no prescribing is the result, this vote of no confidence means there will be no or limited uptake of the biosimilars.

And what does the no uptake mean? It means no lower prices. Having competition per se isn’t gonna lower the prices because the monopoly remains the monopoly. It’s having uptake of the competition that will erode the monopoly. It’s having patients who are willing to migrate to the competitive products.

And this is pretty vital here because, right now, there’s a lot of cynicism out there about this biosimilar launch and that it is not really going to lower the cost of these drugs much for plan sponsors. And, you know, is anyone terribly surprised given it sure seems like AbbVie, who is the manufacturer of Humira, still has a lot of dominance in the market? “How do they still dominate the market even though their patent thicket years are officially over?” you might ask.

For one, they have payers over a barrel because members who need the Humira molecule are still 100% on Humira. Thus, AbbVie can still demand contract terms for Humira like the demand that Humira has the lowest patient out of pocket for patients or has an equivalent out of pocket to any formulary biosimilars. And this is currently going on. (Listen to the show with Dea Belazi [Encore! EP293] for why that matters so much from a market dynamics standpoint.)

A second reason why Humira can still dominate the market even after their patent expiry is that plans and PBMs (pharmacy benefit managers) are, as Chris Sloan put it in episode 216, “addicted to rebates”; and Humira offers big rebates, which they will likely increase to match any pricing pressure from biosimilars.

Here’s a quote from the Goodroot white paper on this Humira biosimilars business, which is otherwise known as the “hottest topic in pharmacy.” Goodroot says, “Given the cost-rebate power play—and the monetary loss that PBM[s] ... assume when rebate dollars are removed—we don’t anticipate any significant shift to biosimilars or cost savings as Humira biosimilars become available.”

So ... doom? Not so fast.

The Goodroot white paper continues with this next quote, and this is exactly what Anna Hyde also talks about and gives some historical proof points for, actually. Goodroot says, “There may be a tipping point in biosimilar pricing where the net cost differential will be significant enough to force [plan sponsors/payers] to make their PBMs prefer the biosimilars.”

And then the white paper says exactly what Anna Hyde also says, and which I reiterated moments ago: “[For this tipping point to happen], this significantly lower net price must be coupled with a significant shift in market share to make up for the loss of [the] Humira rebate.” Let me translate that: Provider and patient uptake has to happen here for the prices in this therapeutic category to go down across the board to meet that tipping point.

Anna Hyde gives some great advice, and this advice is all summed up on a landing page on the Arthritis Foundation Web site. This landing page includes advice for health plans, and a big part of that advice is to communicate clearly with physicians and other providers and also, essentially, with members and patients.

Patients cannot find out that they just got switched to a biosimilar when they get a different box in the mail with a different med with a different delivery device that they have never seen before with a needle that’s gonna pop out from some mystery location. This is a Fail (with a capital F) for all kinds of reasons that could ultimately undermine the whole Operation Biosimilar some plan is trying to pull off in an effort to try to lower prices to a tipping point so everybody can save money.

There is evidence to suggest that, over time, biosimilars can reduce costs—maybe a lot. But for this to happen, it’s gonna take really a thoughtful approach filled with bidirectional communication with providers and patients. Cannot forget this step. If everybody’s on the same page, it may take a bit; but market dynamics will eventually kick in and prices will go down across the board. Everybody wins.

My guest today, Anna Hyde, is VP of advocacy and access over at the Arthritis Foundation. She’s a federal lobbyist and helps advance legislation and policies so patients can have better access to affordable medications and specialists.

If you’re looking for more insights into topics we discuss today, I suggest listening to the encore with Dea Belazi (Encore! EP293) about co-pay assistance programs; the show with Chris Sloan (EP216) about how plans get addicted to rebates; and if you really want to take a deep dive, check out this playlist of eight specialty pharmacy episodes. Listen to all of these shows and you will know more than 99% of healthcare insiders about who is kicking back to who and where the dollar is going in the specialty pharmacy market—which is essential background information if you’re planning to evaluate the impact or the potential impact of these biosimilars.

You can learn more by emailing Anna at ahyde@arthritis.org and connect with her on LinkedIn.

Anna Hyde is the vice president of advocacy and access at the Arthritis Foundation. She oversees both the federal and state legislative programs, in addition to grassroots engagement. Her focus is to raise the visibility of arthritis as a public health priority; build support for federal and state legislation that ensures access to affordable, high-quality healthcare; and enhance patient engagement in the policy-making process. Anna previously served as senior director of advocacy and access, managing the federal affairs portfolio and overseeing the state advocacy team.

Prior to joining the Arthritis Foundation in 2014, Anna worked as senior manager for federal affairs at the American Congress of Obstetricians and Gynecologists, where she managed a portfolio of issues, including appropriations, physician workforce, and health IT. She began her health policy career as a Congressional Fellow for Energy and Commerce Committee members, where she drafted legislation and staffed committee activities. Anna received a bachelor’s degree in history from Southern Methodist University and taught junior high and high school history before moving to Washington, DC, in 2007 to pursue a master’s degree in political science from American University.

07:38 What does a successful biosimilar market depend on?

09:07 Why does uptake seem to reduce prices?

10:24 How important is the relationship with the healthcare provider?

11:35 Where are we in getting these biosimilars to market?

13:02 Are there differences between the reference product and biosimilars?

19:26 Why does the way you approach the patient matter?

22:36 Why do providers feel like they don’t have a lot of agency in the biosimilar conversation?

24:50 What should health plans be thinking if they want to go down the biosimilar path?

27:36 “Our goal is to keep a feedback loop such that no patient falls through the cracks.”

28:21 What is the “nocebo” effect?

31:27 What is Anna’s advice to plan sponsors on communicating with providers and plan sponsors?

You can learn more by emailing Anna at ahyde@arthritis.org and connect with her on LinkedIn.

Anna Hyde of @ArthritisFdn discusses the #humira #biosimilar market and launch on our #healthcarepodcast. #healthcare #podcast

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Dea Belazi (Encore! EP293), Brennan Bilberry, Dr Vikas Saini and Judith Garber, David Muhlestein, Nikhil Krishnan (Encore! EP355), Emily Kagan Trenchard, Dr Scott Conard, Gloria Sachdev and Chris Skisak, Mike Thompson, Dr Rishi Wadhera (Encore! EP326)

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Well, this episode is suddenly incredibly relevant again just with all the stuff going on with co-pay maximizers. If you’re gonna understand maximizers, though, you really have to start here.

In a nutshell, this whole thing is a battle royale between co-pay cards and patient assistance programs offered by pharma companies versus co-pay accumulators and co-pay maximizers deployed by health plans and PBMs (pharmacy benefit managers).

I just want to start by getting everyone grounded on a few really key points.

#1: Drug abandonment is a thing. Patient goes into the pharmacy to pick up their Rx and the out of pocket is too expensive, so they leave without their drug. This can happen on the first fill, like, “Oh, wow, I guess I don’t really need that new drug my doctor just told me I should pick up.” Or it can happen downstream, like in January when, all of a sudden, a deductible kicks in. But in all cases, we have a patient getting sticker shock on the out of pocket for a med and then going without the drug … or pill splitting or rationing or doing other things to save money.

#2: How PBMs shake rebates out of pharma manufacturers is to use what I just said (that whole abandonment possibility) as a leverage point. Pharma goes into a PBM that controls access for drugs for, I don’t know, 100 million lives. The PBM says, “Hey, you, Pharma! If you want to be on our formulary, you gotta kick out this much in rebates.”

Pharma says, “No, that is too much rebate. I cannot pay it.”

PBM says, “Well, then … OK, you’re not on formulary or you are poorly positioned on formulary. And let me translate what that means. Now the out of pocket for your drug will be so expensive that patients are gonna walk out of the pharmacy without your drug because I, the PBM, have control over patient out of pocket and I will make it very expensive.”

From a pharma’s standpoint, all those patients that aren’t picking up the drug … that means a loss of market share. And that market share can translate into a lot of lost revenue for the pharma company.

And thus begins the whole war of the co-pays/out of pockets. So now, let’s fast-forward through the past, say, 10-plus years. It’ll be like one of those movie montages with the action sped up so fast you don’t need words to see what’s going on … except this is an audio podcast, so I guess you do need words.

Alright, so this is what happens next: Pharma starts raising its prices combined with there’s more super expensive specialty pharmacy drugs. Reaction by the PBMs to this was to try to get more aggressive with Pharma demanding increasingly high rebates and other concessions, keeping in mind the prize and leverage point that the PBMs offered Pharma to secure those PBM rebates was lower co-pays or out of pockets for patients.

Again, it’s a well-known fact that the higher the patient out of pocket, the lower the market share of the drug because the higher the patient cost, the more patients abandon at the pharmacy counter. It’s the old supply and demand curve at work.

At a certain point here in all of this, the pharma companies start to get really pissed about their dwindling net prices as rebates start going up and up and their market share kind of doesn’t because the PBMs are keeping the money and maybe not passing it along to plan sponsors or patients. It’s a zero-sum game fight over the money, and Pharma feels like the PBMs are getting more than their share.

And they’re pretty smart, these pharma manufacturers. So, Pharma comes up with a Houdini move to escape PBMs holding Pharma hostage for rebates by using their control over how much patients pay or don’t pay at the pharmacy counter.

Fasten your seatbelts and let the games begin.

Pharma decided to hand out co-pay discount cards. Then Pharma doesn’t have to pay PBM rebates to get lower patient out-of-pocket costs. They can finesse lower patient out-of-pocket costs all by themselves. Take that, PBMs!

Except now, the PBMs see this—and they raise. Enter co-pay accumulators and also co-pay maximizers.

For this part of the extravaganza of game theory at its finest, I’m gonna let Dea Belazi, PharmD, MPH, my guest in this episode, explain further.

However, one more thing to point out before we begin. In the olden days, this whole war of who has leverage over who transpired in the context of small molecule drugs in competitive markets a lot of times. So, like Lipitor versus Crestor and the brands all cost, like, $100 a month and, maybe, there was a generic equivalent. If the health plan made it too expensive for a patient to get one of those drugs, they usually made another one in the same class attractive financially. So, the patient had (theoretically, at least) options; and the stakes were also a lot lower. The dollar volumes that we’re talking about here were a lot lower.

Now this same war is being fought on the specialty side of the house, where drugs cost thousands or tens of thousands a month and the patient may have but one option. So, if it’s made to be financially toxic for a patient to get that one drug, the patient has to choose between their family’s health and dipping into their 401k in order to afford their out-of-pocket costs. Or going bankrupt. Or dying. And when I say “or dying,” that is not hyperbole. There are studies that clearly show the mortality rates for patients who have trouble affording their meds are worse.

In these cases, Pharma can be, sort of authentically, a hero who steps in and helps patients who are functionally uninsured because they can’t afford the co-pays and deductibles that their plan sponsors have put in place to actually use the insurance that they are paying handsome premiums to have. Pharma can step in and help via these co-pay discount cards or coinsurance programs or through patient assistance programs helping those with lower incomes.

So, there’s no question in the short term that when a patient desperately needs a drug and their insurance is insufficient, a pharma manufacturer can be a knight in shining armor financially.

But only if this were so simple, like this is some kind of spaghetti western with the good guys and the bad guys.

Now let’s think about this co-pay/out-of-pocket assistance offered by Pharma with a longer timeframe or a more systemic timeframe in mind.

How is it that Pharma can have prices that are as high as we all know they are? Right?! It’s because enough patients don’t abandon the med at the pharmacy counter or, these days, in the infusion clinic. So, the lower Pharma can drive the patient out of pocket for a really expensive drug, the more they have a certain amount of impunity to raise the drug prices.

This is a lot of the argument against price caps on out of pockets just in general, by the way. They matter for patients. They save lives. But they also have the consequence of kind of getting rid of what is often seen as a big control point checking pharma prices from zinging even higher than they already are.

Bottom line, we have a catch-22 on our hands—and the patient is stuck in the middle. If you’re a patient and you need your miracle drug (and a lot of patients call these drugs their miracle drugs), Pharma is your hero … at least right now. However, Pharma is also now able to raise their prices even more next year; and now you really need their out-of-pocket support because the price of the drug is so high your employer/taxpayers can’t afford the rising drug spend and even more cost gets shifted onto patients. It becomes like Stockholm syndrome.

But again, no white hats and black hats here. This whole thing is one of those incomprehensible art house films with lots of plot twists and in every other scene, you start to feel for the character you just hated 10 minutes ago … because while Pharma is getting busy raising prices, you have PBMs and nothing-for-nothing plan sponsors also up to their own machinations. Like, hey, here’s one that’s quite a marvel: PBM double-dipping. If the PBM can get Pharma to pay the patient deductible and then also get the patient to pay the patient deductible … Hmmm … By the way, that was a backdoor introduction to accumulators.

And then later on, maximizers showed up on the scene. I just want to say that with maximizers, not all are created equal. I can certainly see their value for patients when they are deployed by companies and plan sponsors as part of their benefit designs with an explicit goal of helping members and the plan itself (nothing for nothing) afford expensive drugs it’s clear that the patients need.

But … I have to say, and I’m not well versed enough yet in how this maximizer business has evolved to comment on whether some of what is going on is still a net positive for some members and patients.

Some of these PBMs have opened up entirely separate maximizer companies, which, for sure, they are upcharging employer plan sponsors to use. And the whole point of these separate entities is to get as much cash out of Pharma as possible while they, I don’t know, may or may not pass that cash on as savings to patients and members. I need to do a show on this coming up.

There’s a new bill in the House, by the way. It’s called the HELP Copays Act, which I don’t think is just aimed at accumulators. If you didn’t understand what I just said, you will after you listen to this episode.

With that, here’s Dea Belazi. Dea is president and CEO over at AscellaHealth. He is a pharmacist by training who has worked for Pharma, and then he worked at a health plan, spending a lot of time in the PBM space. In other words, he’s seen this tangled web from pretty much every angle. We kick right into the conversation talking about accumulators.

You can learn more at ascellahealth.com.

Dea Belazi, PharmD, MPH, has led the development and management of AscellaHealth’s global specialty pharmacy benefit and healthcare services for nearly a decade. As a visionary and architect of change, leading the AscellaHealth shift from pharmacy benefit management to specialty pharmacy solutions, he has played a key role in the company, achieving a staggering four-year growth of more than 1556%.

Previously, he served as a senior executive and played a key role in the growth and expansion of PerformRx, a PBM owned by Keystone First Health Plan. Additionally, Dea held a leadership position at FutureScripts, an Independence Blue Cross company that was sold to Catamaran.

A respected industry professional and thought leader, Dea is often invited as a reviewer for multiple medical journals and holds a seat on the board of directors for numerous healthcare-related companies. Based on his impressive career and growing reputation, he was chosen to serve on FierceHealthcare’s Editorial Advisory Council.

Dea was most recently recognized as an Ernst & Young Entrepreneur of the Year 2022 Greater Philadelphia Award Finalist; he is also a 2022 Philadelphia Titan and a 2021 Philadelphia Business Journal Most Admired CEO honoree.

Dea holds a PharmD from the University of Rhode Island. He completed his dissertation at Brown University, earned a Master of Public Health from Johns Hopkins University, and served as a post-doc health outcomes research Fellow at Thomas Jefferson University.

11:06 “The concept of co-pay accumulators wasn’t just a … PBM thought, but it also came from their customers, whether it was health plans or employer groups.”

15:50 “[This is] literally a math problem based on, ‘Do I spend it now? Do I spend it later?’”

17:20 What reason do employers and payers have for doing this?

21:13 “This is another mechanism for payers to push down additional cost to both the patient and now the pharma company.”

22:24 EP241 with Vinay Patel.

22:59 “I don’t think accumulators are really forcing Pharma to be more competitive.”

25:06 How co-pay maximizers are different from co-pay accumulators.

28:09 Who doesn’t like co-pay accumulators and maximizers?

30:01 How patient advocacy groups are a different model.

32:10 What is the biggest challenge facing employers right now?

You can learn more at ascellahealth.com.

Dea Belazi of @AscellaHealth discusses #copayaccumulators and #copaymaximizers on our #healthcarepodcast. #healthcare #podcast #digitalhealth #healthtech #copay

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Brennan Bilberry, Dr Vikas Saini and Judith Garber, David Muhlestein, Nikhil Krishnan (Encore! EP355), Emily Kagan Trenchard, Dr Scott Conard, Gloria Sachdev and Chris Skisak, Mike Thompson, Dr Rishi Wadhera (Encore! EP326), Ge Bai (Encore! EP356)

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Thanks, shurx, for this review on iTunes entitled “Prepare to Learn.” Shurx wrote:

“[RHV] provides key insight from experts that you won’t find anywhere else. It paints the picture of how our healthcare is tangled, and who benefits because of it. Whether it’s drug pricing, PBM shenanigans, hospital billing, or market trends that are challenging the status quo, this podcast is worth your time. I’ve shared many of the episodes with my pharmacy colleagues who have replied, ‘I didn’t know that’s how it worked.’ Now they do thanks to Stacey and her team.”

I wanted to kick off this particular show with this review because today we are again digging into the business of hospital care in this country. That’s actually how Sanat Dixit, MD, MBA, FACS, put it on LinkedIn recently. He said some of the hospitals these days aren’t in the healthcare business; they’re in the hospital care business. And when I say some hospitals, I mean some people in decision-making roles at some hospitals.

There was an opinion piece in the New York Times the other day by Eric Reinhart, and here’s my highlight from his essay. He writes, “But the burnout rhetoric misses the larger issue in this case: What’s burning out health care workers is less the grueling conditions we practice under, and more our dwindling faith in the systems for which we work.”

Relentless Health Value is here so that our Relentless Tribe has the information that you need to influence what goes on in some of the boardrooms where some of these decisions are being made. With that, let’s move on.

You know why my guest, Brennan Bilberry, got into his current line of work battling hospital chain anticompetitive practices? He got into it because this behavior, which is normalized in healthcare, would never be tolerated in any other sector of the economy. No one would get away with it because these anticompetitive practices are, hey, anticompetitive. They spell the death of functioning markets.

We kick off our conversation, Brennan and I, going through the typical hospital system consolidation playbook and how anticompetitive practices are kinda part of the typical gig here. It’s quite clever, by the way, for hospital system executives to think this way. I mean, it’s illicit and, some would say, unethical but clever if your main metric is revenue maximization. Anticompetitive contract terms are, after all, a flywheel. You consolidate to get enough market power to effectively force everyone to sign your anticompetitive contracts. And then step two: After that, you break out your anticompetitive contract terms spatula and you scrape out any remaining competition from your area. Which leads you to step three: Rub your hands together and raise prices and donate to politicians so legislation becomes even less likely. And then step four: Continue to raise your prices. Don’t you love it when a plan comes together?

In this healthcare podcast with Brennan Bilberry, we talk about four contract terms that any self-respecting anticompetitive hospital contract should include and how each of them restricts competition unfairly and causes higher prices for communities, taxpayers, patients, employers … basically everybody, including people who work at the health system, who wind up needing medical care.

In a nutshell, here’s the four anticompetitive contract terms that we dig into in this episode:

All-or-nothing contracting, wherein a hospital system says if you want us in your network, you must include every single facility that we have in your network and at the monopoly-level prices we demand, even in areas that might be competitive. There is a reason why a hospital system might be all hachi machi to buy a rando not super profitable hospital in a rural area. The payer must include that hospital in their network then because of network adequacy or whatever. And then from then on, all of their care settings are now in network—even the lower-quality ones—and all of them at the highest prices. And there’s no price negotiation that’s possible after that.
Anti-steering and anti-tiering clauses: This means that a payer/ASO (administrative services organization)/TPA (third-party administrator)/plan sponsor cannot steer members to lower-cost or higher-quality hospitals, nor can it offer benefit designs that have tiers (ie, lower co-pays if a member goes to specified high-value hospitals). So, any chance of using consumerism or navigation as a way to get members to better places is just eviscerated by this little move.
Pricing gag clauses: It’s when contract terms prohibit an ASO/TPA from telling its plan sponsor customers or members what the price of services are before (or sometimes even after) the service is rendered, claiming it’s important to not let employers or patients know these costs because revealing actual prices will [checks notes] cause hospital prices to go up. I’m speechlessly mystified by this logic, but OK … I only have a bachelor’s in economics.
Contract terms that restrict other providers in the market: So, a dominant hospital uses admitting privileges or referrals or other leverage to effectively control other providers in the market, including providers who are ostensibly independent. So, while the market may look dynamic, it is really not.

Some links to interesting articles and posts and other episodes related to this topic:

Definitely listen to the shows with Mike Thompson (EP389) and also the one with Chris Skisak and Gloria Sachdev (EP390). We talk about market dynamics and hospital legislation in these two shows, which are, frankly, the best ways to get rid of hospital systems’ ability to hold their communities and other local providers hostage with some of this strong arming.

Here’s a link to an article I was thinking about while recording this show about Daran Gaus’s hypothesis for how mergers will impact hospital prices.

And here’s a link to an article about how commercial prices for outpatient visits were 26% higher for patients receiving care at a health system than those visiting non-system physicians and hospitals.

Another episode I mentioned when Brennan and I discussed the consequences of some of these anticompetitive contract terms is the one with Cora Opsahl (EP373). I also reference the episode with Dale Folwell, treasurer in North Carolina (EP249).

One last link is to the conversation I had with Dr. Scott Conard (EP391), where the local hospital bought a local ACO (accountable care organization) physician organization and the community paid an additional $100 million to the hospital the following year.

You can learn more at fairmarklaw.com.

Brennan Bilberry is a founding partner of Fairmark Partners, LLP, a law firm focused on fair competition issues, especially in the healthcare industry. Fairmark has filed numerous antitrust cases against dominant hospital systems, seeking to tackle anticompetitive practices that lead to higher prices for businesses, consumers, and unions.

Brennan is a native of Montana and South Dakota and has lived in Washington, DC, for the past 15 years.

06:16 What happens after a hospital consolidates?

07:23 What does an anticompetitive system look like when a hospital consolidates?

10:13 Tricia Schildhouse on LinkedIn.

10:35 What are some anticompetitive “tricks” that hospitals employ?

12:37 The Sutter case in northern California.

14:50 What can you do if you’re forced to engage in an all-or-nothing contract with a hospital system?

18:31 The Atrium case in North Carolina.

19:36 EP373 with Cora Opsahl.

21:33 What are price gag clauses?

23:08 How are legacy gag clauses designed to prevent scrutiny in litigation?

24:04 EP249 with Dale Folwell.

26:08 How do hospital restrictions on other providers create an anticompetitive environment?

27:23 EP391 with Scott Conard, MD.

29:48 EP389 with Mike Thompson or EP390 with Gloria Sachdev and Chris Skisak.

You can learn more at fairmarklaw.com.

@brbilberry discusses #hospital #anticompetitive practices on our #healthcarepodcast. #healthcare #podcast #hospitals #hospitalsystems #anticompetitivepractices

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Dr Vikas Saini and Judith Garber, David Muhlestein, Nikhil Krishnan (Encore! EP355), Emily Kagan Trenchard, Dr Scott Conard, Gloria Sachdev and Chris Skisak, Mike Thompson, Dr Rishi Wadhera (Encore! EP326), Ge Bai (Encore! EP356), Dave Dierk and Stacey Richter (INBW37), Merrill Goozner, Betsy Seals (EP387), Stacey Richter (INBW36), Dr Eric Bricker (Encore! EP351), Al Lewis, Dan Mendelson, Wendell Potter, Nick Stefanizzi, Brian Klepper (Encore! EP335), Dr Aaron Mitchell (EP382), Karen Root, Mark Miller, AJ Loiacono, Josh LaRosa, Stacey Richter (INBW35), Rebecca Etz (Encore! EP295), Olivia Webb (Encore! EP337), Mike Baldzicki

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You would think that hospitals with the most money would offer the most charity care—trickle down and all of that. If my health system is big and I have lots of money and profitable commercial patients, I can stuff more dollar bills into the charitable donation balance sheet bucket, right?

Except, in general, it’s a fairly solid no on that.

Let’s talk about some of my takeaways from the conversation that I had with Vikas Saini, MD, and Judith Garber from the Lown Institute. During the conversation, there’s also mention of a powerhouse of a New York Times article.

So, let’s circle up on but a few of the more interesting (according to me) reasons why some rich hospitals fail to offer the level of charity care that you might think they could or should:

#1: Chasing commercial contracts because they are very profitable means building in areas where there are frankly not a whole lot of poor people. You see hospital chains doing this all of the time and saying at the 2023 JPM (J.P. Morgan) conference that they intend to do more of it, opening up in a fancy suburb with no affordable housing.

When this happens, there is just less opportunity to offer charity care. The need for financial aid in that ZIP code is just less.

#2: The Ambulatory Surgical Center (ASC) movement, which is weird to say because, in other respects, I’m a big fan. There are a lot of services and surgeries moving out of the hospital into ambulatory surgical centers or just the outpatient setting, and this is going on for a bunch of reasons, including Medicare and employers being very on board with this to save facility fees.

But here’s a consequence: Surgeons and other docs are now not in the hospital. So, indigent patient shows up in the emergency room and needs an emergency surgery or some intervention. But wait … those physicians and their teams are no longer in the hospital. And now the hospital doesn’t have the “capability or the capacity” to serve that patient. I heard from a surgeon the other day, and when he’s on call at his hospital, he’s getting patients shipped to him on the regular from hospitals in other states.

Now, about this “oh, so sorry … we can’t possibly help you so we’re gonna stick you in an ambulance and take you to another state” plan of action. I called up emergency room expert Al Lewis. He told me that if this “ship ’em out” is being done routinely as a pattern by hospitals who have an ER, you could call it evidence of an EMTALA (Emergency Medical Treatment and Labor Act) violation on several levels. You can’t have an emergency room and then routinely not be able to handle emergencies, especially when the emergencies you can’t handle always seem to be of a certain kind and for a certain kind of patient.

Speaking of violations, one more that reduces the need and level of charity care is canoodling with ambulance companies to take the poor people to some other hospital and the rich people to your hospital, which was allegedly transpiring in New Jersey, based on a recent lawsuit.

#3: [play some foreboding music here] This last one is the big kahuna underlying reason why some very rich hospitals may not offer the level of charity care which you’d think they would. This was superbly summed up by Tricia Schildhouse on LinkedIn the other day. She knew a physician leader who would go around saying, “Non-profit and for-profit is a tax position, not a philosophy.”

Bottom line, this whole thing boils down to what has been normalized as OK behavior at some of these rich hospitals. You have people in decision-making roles taking full advantage of their so-called tax position to jack up their revenues—revenues which they have no interest in frittering away on charitable causes. Why would they do that when they can use the money to, I don’t know, stand up a venture fund or make Wall Street investments?

Don Berwick’s latest article in JAMA is entitled “The Existential Threat of Greed in US Health Care.” And, yeah … exactly.

Back to that New York Times article that we talk about in this healthcare podcast, here’s what it says about a hospital in Washington State. It says:

“The executives, led by [the hospital’s CFO] at the time, devised … a program called Rev-Up.

“Rev-Up provided [the hospital’s] employees with a detailed playbook for wringing money out of patients—even those who were supposed to receive free care because of their low incomes.”

All of this being said, there are hospitals out there who are, in fact, living up to their social contract and serving their communities well with very constrained resources. You also have hospitals just in general working within some really whack payment models that we have in this country, which easily could be a root cause precipitating this suboptimal-ness.

Dr. Saini and Judith Garber mention three direct solves for hospital charity shortfalls and also the larger context of the issue.

So, there’s, of course, better reporting and better auditing, which is pretty nonexistent in any kind of standardized way right now. I also really liked one of the solutions that Dr. Saini mentions on the show: Maybe instead of all the hospitals doing their own charity care thing, they all should pool their money regionally and then put a community board in charge of distributing it. That way, if there is a hospital in an area where the charity care is really needed, even if the rich hospital nearby doesn’t have a facility there, they can help fund this care that their larger community really needs—including, by the way, public health needs, which is currently a big underfunded problem.

As mentioned earlier, I am speaking with Vikas Saini, MD, and Judith Garber. Dr. Saini is president of the Lown Institute. Judith Garber is a senior policy analyst there. They’ve studied hospitals from a number of dimensions, not just charity care.

You can learn more at lowninstitute.org and lownhospitalsindex.org.

Vikas Saini, MD, is president of the Lown Institute. He is a clinical cardiologist trained by Dr. Bernard Lown at Harvard, where he has taught and done research. Dr. Saini leads the Institute’s signature project, the Lown Institute Hospitals Index, the first ranking to measure hospital social responsibility. The Index, first launched in July 2020, evaluates hospitals on equity, value, and outcomes and includes never-before-used metrics such as avoiding overuse, pay equity, and racial inclusivity.

In his role at the Lown Institute since 2012, Dr. Saini led the development of the Right Care series of papers published by The Lancet in 2017, convened six national conferences featuring world-renowned leaders in healthcare, and guided other Lown Institute projects such as the “Shkreli Awards.” Dr. Saini also serves as co-chair of the Right Care Alliance, a grassroots network of clinicians, patient activists, and community leaders organizing to put patients, not profits, at the heart of healthcare.

Prior to the Lown Institute, Dr. Saini was in private practice in cardiology for over 15 years on Cape Cod, where he also founded a primary care physician network participating in global payment contracts. He also co-founded Aspect Medical Systems, the pioneer in noninvasive consciousness monitoring in the operating room with the BIS device.

Dr. Saini is an expert on the optimal medical management of cardiologic conditions, medical overuse, hospital performance and evaluation, and health equity. He has spoken and presented research at professional meetings around the world and has been quoted in numerous print media, on radio, and on television.

Judith Garber is a senior policy analyst at the Lown Institute. She joined the Lown team in 2016, after receiving her Master of Public Policy degree from the Heller School of Social Policy. Her research interests include hospital community benefit policy, overuse and value-based care, and racial health disparities. She has authored several white papers, journal articles, op-eds, and other publications on these topics. Judith previously worked at the Aspen Institute Financial Security Program, the Midas Collaborative, and Pearson Education. She has a bachelor’s degree in American studies and political science from Rutgers University.

06:50 Why does America need socially responsible hospitals?

08:23 What standards are hospitals beholden to with their charitable spending?

08:47 “It’s the honor system, essentially.”—Dr. Saini

11:38 What is fair share spending?

13:43 Which hospitals are paying their fair share?

15:05 Why do hospitals that are financially more strapped tend to give back to their communities more?

17:25 Why is it hard for hospitals with the most privately insured patients to do the most for their community?

18:56 “These outcomes … are the outcomes of the [current system].”—Dr. Saini

21:23 “A key problem here is [that] systems have gotten so big.”—Dr. Saini

22:30 What’s the solution to fixing the problem with hospital charity care?

23:52 EP374 with Dave Chase.

29:21 What would be the level of acceptance with changing the system as it stands with hospitals?

You can learn more at lowninstitute.org and lownhospitalsindex.org.

@DrVikasSaini and @JudiTheGarber of @lowninstitute discuss #hospitalcharitycare on our #healthcarepodcast. #healthcare #podcast #hospitals

Recent past interviews:

Click a guest’s name for their latest RHV episode!

David Muhlestein, Nikhil Krishnan (Encore! EP355), Emily Kagan Trenchard, Dr Scott Conard, Gloria Sachdev and Chris Skisak, Mike Thompson, Dr Rishi Wadhera (Encore! EP326), Ge Bai (Encore! EP356), Dave Dierk and Stacey Richter (INBW37), Merrill Goozner, Betsy Seals (EP387), Stacey Richter (INBW36), Dr Eric Bricker (Encore! EP351), Al Lewis, Dan Mendelson, Wendell Potter, Nick Stefanizzi, Brian Klepper (Encore! EP335), Dr Aaron Mitchell (EP382), Karen Root, Mark Miller, AJ Loiacono, Josh LaRosa, Stacey Richter (INBW35), Rebecca Etz (Encore! EP295), Olivia Webb (Encore! EP337), Mike Baldzicki, Lisa Bari

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Hey, thanks so much to kwebs14 for your super nice review on iTunes the other day. Kwebs wrote:

[I have] learned so much, shared so many episodes with colleagues, clients … and gained so much value from regularly listening to [Relentless Health Value]. … Thank you … for providing the platform for so many that believe that we can consistently do better in healthcare.

Thanks much for writing this. I think our Relentless Tribe is a unique group, and every day of every week I admire your willingness to hear some things that might be pretty hard to hear because they may hit pretty close to home. Dr. Benjamin Schwartz was talking about the podcast on LinkedIn the other day, and he said he doesn’t always agree with guests or the discussion but he always learns something and each episode stimulates and challenges his thoughts and opinions.

Yes … to all of this. This is our goal in a nutshell: to help those who want to do better in healthcare to have the insight, the information, the other side of the story, the differing opinion, whatever you need to conceive of the action that you want to take. So, thank you so much to everybody who listens. You are the ones who are going to make a difference, and I thank you from the bottom of my heart for doing what you do every day for patients and communities.

Alright, so in this healthcare podcast, we are going to answer an FAQ—a listener question I have gotten a lot lately in various forms. Let me common denominator the inquiry:

What does it mean to be clinically integrated, and how does a provider organization/practice/CIN (clinically integrated network) know if they are actually clinically integrated or not? Also, the corollary to this question, which is how do CINs—or anybody, really—know if they are clinically integrated enough to start thinking about taking on downside risk?

I asked David Muhlestein this question, and then we talk about his answer for 25 minutes. So, like most things in healthcare, it is filled with nuance; but if I was going to oversimplify his answer in one sentence, it’s this: Did the practice change how they are practicing medicine in order to drive predetermined outcomes?

This is the litmus test for whether care is integrated. Did practice patterns change within participating entities from whatever they were before to a new way of working? Did the team(s) reorient with a goal to attain some documented patient outcomes, be those outcomes patient satisfaction and/or clinical endpoints and/or functional endpoints?

If no sort of fundamental change happened, probably it’s a no on the clinical integration question.

Another litmus test question I’ve also heard is this: Is the practice looking to get paid more for successes they’ve already had in upside risk arrangements with kind of little or no desire to transform the practice into a new practice model? If yes, then again, it’s gonna be a no on the clinical integration question.

The thing is with all of this … well, let me quote Dr. John Lee, who said this pretty succinctly on LinkedIn recently. He said, “Downside risk fundamentally changes how you have to think as a physician and how you manage your patient cohort. You start thinking about team-based care and using analytics.”

Yes … interesting. The point Dr. Lee is making — which is kind of inferred, actually, in the listener questions, so let me just state the obvious, which is so obvious it could easily be overlooked — if you are able to take on downside risk and succeed, you’re probably clinically integrated. If you’re not, you probably aren’t.

Said another way (this might get a little chicken and egg-y), do you clinically integrate so that you can get the kind of risk-based contracts that enabled Iora, for example, to represent 5% of One Medical’s patient base and 50% of its revenue? I have heard similar profitability stories about ChenMed and Oak Street. They all have capitated downside risk accountable care contracts. And have you seen what some of their leadership teams are minting? Obviously, the capitated downside risk when you’re integrated gig can be highly profitable.

But ... seems like also the community and outcomes are kind of great. Are they doing well by doing good? I’ll grant you I might be convinced based on what I’ve seen. Galileo is another one. Cityblock.

But the fundamental question is, do you integrate first and then go after the contracts? Or is it best to wait until there’s a decent accountable opportunity on offer and then, sufficiently incented, change the practice?

I do not know. I do know, however, what Scott Conard, MD, said in episode 391. I will poorly paraphrase. He said that if better patient outcomes are desired, there must be clinical integration and practice pattern changes. He said his practice went ahead and instituted these changes to improve patient care and did so within a pretty full-on FFS (fee-for-service) environment.

My conclusion with all of this? It takes strong leadership with team-building skills and a strong family/community-centric mission to pull off a successful foray into accountable care with downside risk. These same talented and mission-driven leaders probably could manage to improve patient care and lower costs in an FFS environment as well. The converse of this is also likely true: Weak and ineffectual leaders can make a quadruple nothing burger mess in even the best VBC (value-based care) model. Yes … lots to unpack there. I am interested in your thoughts.

In this episode, as mentioned, I am speaking with David Muhlestein, who is the chief research and innovation officer with Health Management Associates, or HMA. He has spent the past decade-plus studying ACOs (accountable care organizations) and value-based care, trying to understand what works, what doesn’t, and how you change the business models to be successful under these new models of payment.

Here is a short version of David’s advice to clinically integrate and be ready for downside risk:

· Step 1: Understand where you are—this includes doing a very clear-eyed self-assessment.

· Step 2: Assess the needs of your patient population and focus on things where your capacity meets the needs of the population that you serve in the most impactful way.

· Step 3: Take the outcome of step 2—which is basically whatcha gonna do to fix the most consequential problems that your patients have—and identify the processes by which you will do this.

· Step 4: Do not boil the ocean. Start with a subset of patients and figure out the exact plan to do better to manage that population—easier said than done, of course. (Betsy Seals, by the way said something along these exact same lines in the shows giving advice to Medicare Advantage plans. And Karen Root [EP381] also alludes to something similar as she talks about how to socialize innovation. So clearly, this advice can be universalized.)

You can learn more by emailing David at dmuhlestein@healthmanagement.com and by connecting with him on LinkedIn.

David Muhlestein, PhD, JD, is chief research and innovation officer for Health Management Associates (HMA). He is responsible for the firm’s self-directed research and supports strategic planning and innovation.

David’s research and expertise center on healthcare payment and delivery transformation, understanding healthcare markets, and evaluating how the broader healthcare system is changing. He is a self-identified data nerd and regularly speaks and writes about healthcare system evolution.

David joined HMA via its acquisition of Leavitt Partners in 2021, where he was the chief strategy and chief research officer.

Additionally, David is a visiting policy fellow at the Margolis Center for Health Policy at Duke University, adjunct assistant professor at The Ohio State University College of Public Health, and a visiting fellow at the Accountable Care Learning Collaborative. He previously served as adjunct assistant professor of The Dartmouth Institute (TDI) at the Geisel School of Medicine at Dartmouth College.

David earned his PhD in health services management and policy, JD, MHA, and MS from The Ohio State University and a BA from Brigham Young University.

07:57 What does it mean to be clinically integrated?

10:23 How does changing practice patterns count as becoming clinically integrated?

11:11 How do you change the delivery of care to get better outcomes?

12:05 What does it mean to see better outcomes when becoming clinically integrated?

14:46 EP176 with Dr. Robert Pearl.

17:42 “Their structure is dictating what they are going to prioritize.”

19:02 “How do you care for the patients that have yet to come and see you?”

20:16 EP391 with Scott Conard, MD.

22:38 “When you’re integrated, you realize you’re not alone.”

25:50 Why does clinically integrating require a significant mindset change?

28:55 What does this country need to do from a policy perspective for this change?

30:24 EP326 with Rishi Wadhera, MD, MPP.

You can learn more by emailing David at dmuhlestein@healthmanagement.com and by connecting with him on LinkedIn.

@DavidMuhlestein of @HMAConsultants discusses #integratedcare on our #healthcarepodcast. #healthcare #podcast #digitalhealth

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Nikhil Krishnan (Encore! EP355), Emily Kagan Trenchard, Dr Scott Conard, Gloria Sachdev and Chris Skisak, Mike Thompson, Dr Rishi Wadhera (Encore! EP326), Ge Bai (Encore! EP356), Dave Dierk and Stacey Richter (INBW37), Merrill Goozner, Betsy Seals (EP387), Stacey Richter (INBW36), Dr Eric Bricker (Encore! EP351), Al Lewis, Dan Mendelson, Wendell Potter, Nick Stefanizzi, Brian Klepper (Encore! EP335), Dr Aaron Mitchell (EP382), Karen Root, Mark Miller, AJ Loiacono, Josh LaRosa, Stacey Richter (INBW35), Rebecca Etz (Encore! EP295), Olivia Webb (Encore! EP337), Mike Baldzicki, Lisa Bari, Betsy Seals (EP375)

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This week, I am with my Aventria team on-site at one of our clients. We are holding a full-day workshop to help our client figure out who all across the healthcare industry they will need to get aligned with to achieve greater success in the market and how to handle all of these inevitably conflicting interests strategically and also potentially from a messaging standpoint.

I’m one of the subject matter experts who gets to pipe up during the part where we talk about all of these market dynamics, what everybody is up to, and who is going to want what so the client team can do their thing and get paid for it. Anyway, I say all this to say that this week, I am pretty darn busy but also thrilled to encore this episode with Nikhil Krishnan, founder of Out-Of-Pocket, and one of our most popular episodes in the past 12 months.

My guest in this healthcare podcast is Nikhil Krishnan, who is the founder of the Out-Of-Pocket newsletter. I was talking with Nikhil, and we identified—or, more accurately, he identified—five business models of digital health. What makes each model distinct is a few factors. If you weren’t in the healthcare industry, you’d probably expect that I’m going to say that the biggest factor a business model must hinge on must have something to do with patient outcomes or care or something that has something to do with the hopes and lives of patients. Except no. Mostly, our models do not define themselves by attributes of their patients, except on one dimension: who is paying their bills.

Who is paying has enormous downstream consequences that I don’t think people outside of healthcare, or even people inside of healthcare sometimes, really appreciate. It’s because of all of the perverse incentives. It’s a tangled web we weave.

For example, let’s just say you’re a start-up founder trying to cook up your unique selling proposition. You can’t just decide you’re gonna lower costs and improve patient care as general constructs. Because let’s just say you do that—that’s your USP (lower costs and improve patient care)—and then you try to sell your thing to Medicare Advantage plans or large provider organizations.

Oh, right … Medicare Advantage plans or even commercial ones—they don’t care about the total cost of care. Neither do provider organizations unless they take on sufficient risk to care, and many do not.

In fact, as came out in that JAMA article the other day, it could be construed that entities such as these carrier health plans have a perverse incentive to see total costs of care go up. So right, you naively (you’re the start-up founder again in this case study, don’t forget) trot into some administrator’s office with a great something or other to reduce total costs of care—and you’ll get cast out upon your petard on the quick.

Every single day of the year in my world, I see people make this same mistake over and over again: not tailoring their product market fit to any particular market, with the recognition that some in this healthcare industry have a vested interest to see costs going up and some have a vested interest in costs going down. Either way, if we’re talking about large organizations here and even some small ones, the money wins over patient care. So sad to have to say that, but listen to EP351 with Dr. Eric Bricker and you’ll get all the context you need on that point.

Here’s the thing, though. I don’t know about you, but I can’t tell you how many digital health start-ups I run across where I look at their decks or have a conversation with a founder, and I ask who their customer is. Is it employers or health plans or … ? And they don’t know. They’re gonna figure this out later. I don’t get how to successfully do that. I’m indubitably wrong here given all of the pivots I hear about that seem to go OK, but the prospect of completely redefining my operational goals and operations and market positioning at some point in the future seems like a daunting and avoidable prospect.

I would be remiss not to mention, however, the number of really good mission-driven healthcare companies out there really trying hard to figure out how to create a sustainable business, a fair profit, while at the same time serving patients really well. There are companies adding value commensurate with the dollars that they come by, and I certainly applaud everything that they are doing.

At the same time, given all this, here’s a message for all of you VCs and private equity etc—people with money—out there. Let me quote Dr. Vivek Garg here (@vgargMD on Twitter): “If you’re financing care delivery without board-level focus on clinical outcomes, you’re part of the problem.”

So, let’s talk about these five business models that health and healthcare start-ups eventually settle themselves into after they figure out who their customer is. Nikhil Krishnan, my guest today, and I discuss how they can be financially viable and if we think they’ll actually be able to provide superior patient outcomes.

[Trumpets play here] In no particular order, this is what we’ve got for our five business models:

Completely avoiding incumbents, creating a cash-pay ecosystem
Better middleware (being the pipes, as I’ve heard so many times these past couple of weeks)
Companies serving incumbents either by being a virtual front door for them or disrupting the competitive landscape somehow
Joint ventures
Old-school digital health who are now incumbents in their own space

My guest in this episode, Nikhil Krishnan, has a bunch of things going on. He might be best known for his newsletter, Out-Of-Pocket Health, which you should certainly subscribe to. He’s also working on a healthcare 101 crash course to teach newcomers about the Wild West we call American healthcare. Besides all of this, Nikhil does some early-stage investing.

You can learn more at outofpocket.health and with Nikhil’s upcoming course.

Nikhil Krishnan is the founder/thinkboi at Out-Of-Pocket, where he’s trying to make the business of healthcare more easily understandable and (hopefully) entertaining. He runs a newsletter (yes, yet another one) and an online healthcare community and does some digital health investing on the side. He’s “extremely online,” and you can find him firing off obscure healthcare memes plus the occasional insight on Twitter at @nikillinit.

06:20 What are the different models of digital health?

08:05 What are the different motives for cash-pay digital health models?

13:54 “One of healthcare’s original sins is that every solution deployed has been a custom solution for the end user.”

14:19 How willing will these companies be to share their data with third parties?

18:07 “I don’t think selling tech to large incumbents is going to move the needle.”

21:14 “These companies, most of them are actually getting extra money for the more expensive stuff.”

22:58 How did joint-venture digital health business models come about?

26:37 Why do you see partnerships more on the payer/provider side?

27:29 Who are the old-school digital health companies that could be considered incumbents?

29:36 Why do so many digital health start-ups have a hard time pinpointing who will pay for their services?

32:10 “The ability to go through the idea maze is way faster now.”

34:55 “The field is wide open to help teach people how healthcare works.”

You can learn more at outofpocket.health and with Nikhil’s upcoming course.

@nikillinit discusses #digitalhealth on our #healthcarepodcast. #healthcare #podcast

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Emily Kagan Trenchard, Dr Scott Conard, Gloria Sachdev and Chris Skisak, Mike Thompson, Dr Rishi Wadhera (Encore! EP326), Ge Bai (Encore! EP356), Dave Dierk and Stacey Richter (INBW37), Merrill Goozner, Betsy Seals (EP387), Stacey Richter (INBW36), Dr Eric Bricker (Encore! EP351), Al Lewis, Dan Mendelson, Wendell Potter, Nick Stefanizzi, Brian Klepper (Encore! EP335), Dr Aaron Mitchell (EP382), Karen Root, Mark Miller, AJ Loiacono, Josh LaRosa, Stacey Richter (INBW35), Rebecca Etz (Encore! EP295), Olivia Webb (Encore! EP337), Mike Baldzicki, Lisa Bari, Betsy Seals (EP375), Dave Chase

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Or, still talking about things that are relevant to patient health but which don’t naturally tuck into an EHR system’s native architecture, maybe we have social workers and nutritionists and all kinds of people who are not doctors or nurses or PAs (physician assistants) in this mix. Most of the time, these people don’t even have access to the EHR. I mean, what percentage of things that are going to impact a person’s health outcomes can be classified as traditional patient encounters that EHRs were designed to document? I mean, you’ve got your scheduler who wants to tell the transportation company something about a patient. Anything RPM. Where’s the caregiver or the family in that garden-variety patient interaction?

In sum, what is happening between codes getting written in patient health records? Where’s all that information going? I mean, what order set are you gonna use to get all that in and out of the system?

Am I saying anything revolutionary that many of you don’t already know extremely well? No, I am not. But I am shining the spotlight on it to challenge what might have become a sort of default position at provider organizations today, which is to make the EHR the one ring to rule them all, which might be something to consider revising strategically.

My guest in this healthcare podcast, Emily Kagan Trenchard, makes a super point about all of this that I haven’t heard made so succinctly or so eloquently. Emily puts it this way: She says just integrating into the EHR as a reflex without contemplation is kind of the olden days. She talks about identifying the core functionalities, the centers of gravity that are needed to bring together providers and patients and everybody else in the mix. Then you find the best systems—call them platforms if you want. But if, at a fundamental level, you have a technology designed for one thing and you’re trying to shoehorn it to do something else and this something else is a critical business function, maybe this is something to think about at the highest levels.

Of course, it goes without saying that these platforms have to work together (obviously); but you kind of gotta get the right platform for the right job.

Now, to make one point clear as glass, what we are not talking about here is cobbling together a bunch of point solutions. What we are talking about is getting the fundamentals, the core architecture here, solidified. Pam Arora talks about this at length in episode 246. She’s the CIO at Texas Children’s. Pam Arora says that if a health system doesn’t get its technology infrastructure rock solid, if that infrastructure is janky in any way, then everything built on top of it will require duct tape and workarounds and probably not go as well as planned.

On the show today, Emily Kagan Trenchard continues that theme. She talks about the four platforms that she feels are very necessary to underpin or be the chassis to best support helping providers and others help patients and people in and out of the clinic. She calls each platform a tentpole. These four platforms are:

The EHR
A CRM (customer relationship manager). And, by the way, when Emily says CRM, she’s talking about more than software. It’s more like a philosophy or a whole approach around relationship building with patients/people/customers.
A cloud platform for data and analytics
A data exchange

So, let’s talk about the WIIFM (the “what’s in it for me?”) here for health systems to get a move on. When Merrill Goozner was on the show a few weeks ago (EP388), he says that when patients and employers and taxpayers start crying uncle on both healthcare prices as well as just bad friction-filled experiences and also when, at the same time, technology and new competitors move in on the supply side, he says what’s gonna happen then is older incumbents like hospitals could find themselves getting their lunches eaten. So, probably intuitively as well as intellectually, health systems really getting their technology clearly optimized to support their communities, their patients, and their providers might seem to be mission critical, especially as we contemplate the stuff that Mike Thompson was talking about in episode 389 about how there is increasingly data out there which identifies hospitals who are very inefficiently run.

And so, if at a very basic level a hospital has misaligned tech that’s requiring a lot of workarounds and stuff, which is another way to say wasting a lot of staff time, having the right technology deployed in the right way will certainly ground efforts to be effective and also help compete with some of these lurking entities who are looking to take a piece of the $3 or $4 trillion healthcare industry in this country—of which hospitals account for something like $1 trillion. And as Eric Bricker, MD, says in episode 351, this is why hospitals have a big red target on their back.

By the way, I interviewed Emily Kagan Trenchard at NODE.Health’s Annual Digital Medicine Conference in New York City this past December—always a great conference. Emily is SVP and chief of consumer digital solutions over at Northwell Health. Northwell, in case you haven’t heard of this health system, is very large: 21 hospitals, 850 outpatient clinics, 300,000 patients a year. Yeah, it’s big.

You can learn more at northwell.edu and connect with Emily on LinkedIn.

As senior vice president, chief of consumer digital solutions, for New York State’s largest health system, Northwell Health, Emily leads teams that push the limits of how we use technology to make healthcare seamless and steeped in humanity while keeping the company competitive at a time of radical change. She is a big believer that innovation is an ongoing process, not just a box to check, and launched Northwell’s first UX department to ensure that patient perspectives and needs drove the design of digital tools and systems.

Prior to joining Northwell, Emily led Web systems for New York City’s Lenox Hill Hospital, where she drove the development of many early consumer health tools, including the first-ever implementation of the Zocdoc scheduling platform for a hospital.

Emily holds a master’s degree in science writing from Massachusetts Institute of Technology and a bachelor’s degree from the University of California at Berkeley.

07:55 How does customer digital solutions fit into the larger technology infrastructure in healthcare?

09:54 “Where else do you have centers of gravity that you should respect in the architecture?”

10:11 “There is a constellation of need here.”

11:51 “We interact with way more than just patients.”

14:28 “We have to be able to understand the network of relationships in a population.”

15:11 How do EHRs and CRMs interact as two tentpoles in healthcare?

17:32 “The question is, where does a human being work?”

19:54 How are patients staying on a nonfragmented care journey in a proactive way?

23:46 “Anybody who’s a consumer of our digital offerings has a relationship with us.”

29:33 “The medicine is being practiced not only on our physical bodies but on our digital bodies.”

You can learn more at northwell.edu and connect with Emily on LinkedIn.

@ektrenchard of @NorthwellHealth discusses #EHRs and #CRMs on our #healthcarepodcast. #healthcare #podcast #EHR #CRM

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Dr Scott Conard, Gloria Sachdev and Chris Skisak, Mike Thompson, Dr Rishi Wadhera (Encore! EP326), Ge Bai (Encore! EP356), Dave Dierk and Stacey Richter (INBW37), Merrill Goozner, Betsy Seals (EP387), Stacey Richter (INBW36), Dr Eric Bricker (Encore! EP351), Al Lewis, Dan Mendelson, Wendell Potter, Nick Stefanizzi, Brian Klepper (Encore! EP335), Dr Aaron Mitchell (EP382), Karen Root, Mark Miller, AJ Loiacono, Josh LaRosa, Stacey Richter (INBW35), Rebecca Etz (Encore! EP295), Olivia Webb (Encore! EP337), Mike Baldzicki, Lisa Bari, Betsy Seals (EP375), Dave Chase, Cora Opsahl (EP373)

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Nevertheless, in this healthcare podcast, we are going rogue; and I am talking with Scott Conard, MD, who shares his personal story. You may ask why I decided to go this route for this particular episode, and I will tell you point blank that Dr. Conard’s experience, his narrative, is like the perfect analogue (Is analogue the right word [allegory, composite example]?). His story just sums up in a nutshell what happens when a PCP (primary care provider) does the right thing, manages to improve patient care for real, and then at some point gets sucked into the intrigue and gambits and maneuvering that is, sadly, the business of healthcare in the United States today.

Before we kick in, I just want to highlight a statement that Scott Conard makes toward the end of the show. He says:

A few notable notes from Dr. Scott Conard’s journey and words of wisdom that I will just highlight up front here:

He says that as a PCP, you actually can produce high-value care in a fee-for-service model … if you think differently and you change practice patterns. I have heard this from others as well, including most recently David Muhlestein, PhD, JD, who says this in an upcoming episode. Now here’s a surefire way to fail at that, though: Be a physician who is getting asked to basically do everything a patient needs done alone and by themselves with little or no help and being told to do all of this within a seven-minute visit. This surefire way to not do well also could mean working on a team that’s a team in name only because it’s more of a marketing thing than an actual thing. As Dr. Scott Conard says later in this episode, healthcare organizations must embrace the art of medical leadership. So, I guess that’s a spoiler alert there.

In the case study that we talk about today, the local health system managed to raise healthcare spend in North Texas by $100 million year over year. Employers and employees in North Texas, communities, wound up paying $100 million more year over year in healthcare one particular year.

You can learn more by emailing Dr. Conard at scott@scottconard.com.

05:26 What triggered Scott’s career journey?

06:02 What caused Scott to rethink what is good primary care?

06:42 Why did Scott realize that he is actually a risk-management expert as a primary care doctor rather than someone who treats symptoms?

07:56 Encore! EP335 with Brian Klepper, PhD.

08:24 How did Scott’s practice change after this realization?

08:35 What is a “Whole-Person Risk Score”?

09:39 Scott’s book, The Seven Numbers (That Will Save Your Life).

11:37 “You start to move from a transactional model to a relationship model.”

14:02 Did Scott have any risk-based contracts?

14:39 Why is it so important to look at total cost of care and not just primary care cost?

19:39 Scott’s book, The Art of Medical Leadership.

20:44 EP381 with Karen Root.

29:14 Why did Scott move over to help corporations?

31:42 EP364 with David Muhlestein, PhD, JD.

32:22 “Everybody thought they were honoring their fiduciary responsibility, and the incentives are completely misaligned.”

33:02 EP384 with Wendell Potter.

33:15 “It’s the system that’s broken; it’s not bad people.”

You can learn more by emailing Dr. Conard at scott@scottconard.com.

@ScottConardMD discusses #privateequity on our #healthcarepodcast. #healthcare #podcast #PCP #patients

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Gloria Sachdev and Chris Skisak, Mike Thompson, Dr Rishi Wadhera (Encore! EP326), Ge Bai (Encore! EP356), Dave Dierk and Stacey Richter (INBW37), Merrill Goozner, Betsy Seals (EP387), Stacey Richter (INBW36), Dr Eric Bricker (Encore! EP351), Al Lewis, Dan Mendelson, Wendell Potter, Nick Stefanizzi, Brian Klepper (Encore! EP335), Dr Aaron Mitchell (EP382), Karen Root, Mark Miller, AJ Loiacono, Josh LaRosa, Stacey Richter (INBW35), Rebecca Etz (Encore! EP295), Olivia Webb (Encore! EP337), Mike Baldzicki, Lisa Bari, Betsy Seals (EP375), Dave Chase, Cora Opsahl (EP373), Cora Opsahl (EP372)

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If you go to the Sage Transparency dashboard Web site, you get a really graphical representation of the prices that any given hospital actually needs to charge so that they break even. You can see precisely which hospitals are operating on thin margins and which ones are not.

You might be thinking, “Okay, so ... what’s the big deal about this? Why is the Sage Transparency information so meaningful? Aren’t hospitals (most of them) providing their financial statements already?”

Well, let’s discuss. First of all, we have the main hospital lobbying organization coming out with press releases such as this one saying (here’s some quotes): “Hospitals have incurred serious losses …” “The vast majority of America’s hospitals [are] in serious financial jeopardy …”

Combine quotes like these (and there are many) with some of the funny stuff going on in some (not all) hospital financial reporting—like counting investment losses from their venture funds, not counting endowments or their big trusts in the math, paying C-suites way more than the average doctor or worker, or all of the varied things that get counted or overcounted as charity care or community benefit—yeah, these hospital balance sheets are too often as much of a PR campaign as the PR campaigns. When you dig into them, you find some very wealthy organizations dressing up in Tiny Tim Cratchit pants and leaning on a crutch … at least whenever the cameras are rolling.

So, where are patients in all of this? Chris Deacon linked to a Qualtrics study recently. It seems that in 2020, 48% of people deferred care as a result of the pandemic. In 2022, 43% deferred care because of cost—48% from the pandemic, 43% deferred due to cost this past year … wow!

There are patients saying, “Hey, I have this giant thing growing on my arm. Is it melanoma? I don’t know, but I do know if I go to the doctor, I’ll be $600 in the hole … so I’ll wait.”

It doesn’t matter how many medical advancements are made when almost half of the patients are making decisions like this, including patients with so-called “good” insurance.

Look, no one would or is arguing that hospitals aren’t vital. They are essential. Hospitals can be amazing places where lives get saved. Amazing doctors and clinicians work in hospitals. But putting everything I just said together, let me summarize a textbook hospital chain one-two punch.

The halo effect many hospitals enjoy is massive, and those administrators who choose to can take advantage of that halo for financial gain. When hospitals’ administrators cannot manage to curtail their own spending and then demand that their communities foot the bills, then the good that a hospital can do starts to go bad.

If you are a legislator, you might want to be paying attention to all of this. And when I say might be wanting to pay attention, I mean pretty much you want to be paying attention to all of this. With all of the data that is now available to especially more sophisticated employers, some companies are not building offices or plants in areas which are known to have healthcare prices that are multiples over what they should be. That might be in your legislative district or state.

Healthcare prices can be the largest cost for employers after payroll. Starbucks famously spends more on healthcare than they do on coffee beans. Nearly 8 of 10 employers considered healthcare costs a significant threat to affordability.

So, too high hospital prices are a community problem at the chamber of commerce as well as at the family and the patient level.

After you listen to this show, go back and listen to the one last week with Mike Thompson (EP389) if you haven’t already. It adds some context that you might want to have. Also stay tuned for a show coming up where we talk about just all of the anticompetitive stuff that some of these hospital system administrators have decided to subject their communities to.

In this healthcare podcast, I have two titans of employer coalition building on the episode. Gloria Sachdev from the Employers’ Forum of Indiana, who was instrumental in standing up the Sage Transparency dashboard that we talked about last week and we’ll discuss a little bit more this week. Gloria is a pharmacist, which I did not know. She also sits on the board for the National Alliance of Healthcare Purchasers Coalition and Hoosiers for Affordable Healthcare.

Also on the show is the one and only Chris Skisak, who leads the Houston Business Coalition on Health. He also speaks for the state of Texas through his role with Texas Employers for Affordable Healthcare.

You can learn more at txeahc.org and houstonbch.org.

You can also check out the Employers’ Forum of Indiana Web site as well as sagetransparency.com.

Gloria Sachdev, PharmD, serves as president, CEO, and board chair of the Employers’ Forum of Indiana. She also serves as adjunct associate professor at Purdue College of Pharmacy. Forum initiatives focus on hospital price and quality transparency, value-based health benefit and payment strategies, and health policy. She serves as a member of the Board of Governors for the National Alliance of Healthcare Purchaser Coalitions and as board vice chair for Hoosiers for Affordable Healthcare.

Dr. Sachdev received her bachelor of science and doctor of pharmacy degrees from the University of Oklahoma and completed a primary residency at the VA in Madison, Wisconsin. Thereafter, she practiced in primary care physician offices managing patients with chronic diseases for 12 years, followed by consulting in the space of incorporating clinical pharmacists into team-based care for 6 years. She retired from Purdue College of Pharmacy after 15 years but still teaches a few classes for fun.

Chris Skisak, PhD, is the executive director of the Houston Business Coalition on Health, a multi-stakeholder but employer-centric 501(c)(3) focused on improving the cost, quality, and consumer experience in healthcare delivery. He is also the executive director of Texas Employers for Affordable Healthcare, a legislative advocacy organization focused on creating a competitive healthcare delivery ecosystem. Dr. Skisak also serves on the boards of directors of the National Alliance of Healthcare Purchasing Coalitions and Texas Business Group on Health. He serves on the leadership councils for Houston Cities Changing Diabetes, Houston Health Equity Collaborative, and Center for Houston’s Future. He had previously worked 25 years with Houston Fortune 50 energy companies in a variety of population health management positions. He is originally from Chicago and attended the University of Illinois. He received his master of science degree and PhD from the University of Texas School of Public Health.

06:04 How could the healthcare market correct itself?

08:27 EP334 with Sunita Desai, PhD.

09:38 What strategies are needed to make changes in the healthcare market?

10:13 What can be done with respect to market forces?

12:33 What needs to happen in regard to healthcare legislation?

13:03 Gloria’s ideas for legislation.

15:44 Why is it important to allow physicians to be independent again?

17:41 EP373 with Cora Opsahl.

18:21 Chris’s thoughts on legislation.

22:51 Why is it important that employers become present in the legislative process?

26:48 What has been immensely helpful to better understand hospital financials?

31:08 EP385 with Dan Mendelson.

31:16 EP379 with AJ Loiacono.

32:11 Why is transparency foundational for healthcare market change?

You can learn more at txeahc.org and houstonbch.org.

You can also check out the Employers’ Forum of Indiana Web site as well as sagetransparency.com.

@GloriaSachdev and @ChrisSkisak discuss #hospitalpricing and #legislation on our #healthcarepodcast. #healthcare #podcast #healthcarelegislation

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Mike Thompson, Dr Rishi Wadhera (Encore! EP326), Ge Bai (Encore! EP356), Dave Dierk and Stacey Richter (INBW37), Merrill Goozner, Betsy Seals (EP387), Stacey Richter (INBW36), Dr Eric Bricker (Encore! EP351), Al Lewis, Dan Mendelson, Wendell Potter, Nick Stefanizzi, Brian Klepper (Encore! EP335), Dr Aaron Mitchell (EP382), Karen Root, Mark Miller, AJ Loiacono, Josh LaRosa, Stacey Richter (INBW35), Rebecca Etz (Encore! EP295), Olivia Webb (Encore! EP337), Mike Baldzicki, Lisa Bari, Betsy Seals (EP375), Dave Chase, Cora Opsahl (EP373), Cora Opsahl (EP372), Dr Mark Fendrick (Encore! EP308)

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For the past few shows and in a few coming up, we are circling our wagons around a theme: In healthcare in this country, there are two teams. One team is employers, taxpayers, patients … those trying to keep healthcare prices down. Then on the other team, we have those looking for healthcare prices to continue to go up, meaning, as just one example, some health systems and some hospitals.

There was a New York Times article recently, and Peter Hayes wrote an interesting comment about it on LinkedIn. He wrote:

“This article is troubling on so many levels and clearly demonstrates that patient health and well-being are not the top priority of many in healthcare leadership in our hospitals. Unfortunately, it is much more about patient revenue than patient health. … The non-profit status of our health facilities is a huge hidden tax and wealth transference from every taxpayer that is estimated to be about $39 billion annually.”

Look, for sure, not talking about everybody in healthcare leadership here, and increasingly I’m kinda thinking we need to maybe have more than one word for hospitals and their leadership because lumping them all together into a homogenous blob is really unfair to those rural and safety net organizations contending with all kinds of adversities—which is very, very different in circumstance to those so-called “well-resourced” hospital chains in suburban markets really raking in the cash and virtue signaling in very well-resourced press campaigns.

And the irony of this whole thing is that a reason hospitals (that want to) get away with doubling down on profit-centric business models is actually their nonprofit status.

This is a major loophole. If you are a nonprofit, you get to be excluded from some of the powers of the FTC (Federal Trade Commission), for example. But then there’s also the lack of financial discipline, as Mike Thompson puts it in the show today.

These nonprofit organizations have never had to run efficiently. They have never been asked to justify the new building or the other adds to their infrastructure that ultimately increase their costs of doing business in ways that, on the whole, might not benefit patient care.

And I say “might not benefit patient care” fairly confidently because there is absolutely no correlation between high prices and high quality in healthcare. In fact, it can just as easily be the opposite.

But if you overbuild and you buy too many MRI machines or whatever, then you gotta feed the beast. And then the downward spiral starts, and the anticompetitive, financially toxic behavior really kicks into high gear—which, again, is tough to regulate because our laws and legislation expect nonprofits to, you know, behave like nonprofits.

In this healthcare podcast, I am thrilled to speak with Mike Thompson, who is the CEO and president of the National Alliance of Healthcare Purchasers. Interestingly, Mike is an actuary by background; and I am sure that that has come in handy as more and more data is becoming available for purchasers and also regulators.

The National Alliance has created a playbook to help employers get a fair price from hospitals.

In short, the playbook’s five strategies to do so include (1) looking up what the fair commercial price is for your local hospital, which is really easy to see if you go to dashboard.sagetransparency.com. This Sage Transparency dashboard was created by the Employers’ Forum of Indiana. Not to drown you in acronyms, but the Sage Transparency dashboard very elegantly combines RAND data showing what hospitals are actually charging employer plans and compares that to what’s called the NASHP commercial break-even price. NASHP is the National Academy for State Health Policy, who crunched a lot of numbers to figure out this commercial break-even price.

Once you know the fair commercial price for hospitals in your area, then one way to go could be (2) using an RBP (reference-based pricing) strategy and paying based on the fair commercial price plus a markup.

Another strategy is to (3) start monitoring your ASO/TPA (administrative services organization/third-party administrator) carefully and see that they are paying this fair price and getting performance guarantees to hold them accountable to do so.

Yet another strategy is to (4) gang up with other employers in coalitions, which is often necessary, given how much market power some of these hospitals have consolidated and all the anticompetitive practices they’ve managed to tuck into their FTC-exempt quiver.

And last is to (5) regulate through legislation.

One point that Mike makes very clear is that if nonprofit hospitals cannot remain true to their mission and if they are also not subject to market dynamics, that’s a lose-lose for their communities. At that point, a very viable option is to regulate them like utilities. This is also what I talk about next week with Chris Skisak and Gloria Sachdev.

The sad part about this whole thing is that hospitals and communities really should be sitting on the same side of the table working together to improve the health and well-being of their communities. And that should include—according to me, at least—keeping financial toxicity in check, especially just given everything we know for sure about how financial toxicity negatively impacts patient health.

Oh, hey, here’s a thing: Turns out I had a fever when I recorded this show, so yeah, Mike deserves a little extra kudos for very eloquently just going with it when occasionally my questions sort of ended without, you know, actually asking a question.

You can learn more at nationalalliancehealth.org.

Michael Thompson is the president and CEO of the National Alliance of Healthcare Purchaser Coalitions (National Alliance), the only nonprofit, purchaser-led organization with a national and regional structure dedicated to driving health and healthcare value across the country.

Prior to joining the National Alliance, Mike was a Principal at PricewaterhouseCoopers (PwC) for 20 years. He is a nationally recognized thought leader for business health strategies and health system reform. Mike has worked with major employers and other stakeholders on sustainable cost reduction, integrated health, wellness and consumerism, retiree health, private health exchanges, and health reform. Known for developing and promoting collaborative cross-sector health industry initiatives, Mike participated on the steering board of the World Economic Forum’s “Working toward Wellness” initiative and co-founded the Private Exchange Evaluation Collaborative. Prior to PwC, Mike served as an executive with diverse roles with Prudential Healthcare for over 17 years.

Mike is a Fellow of the Society of Actuaries, serving on the Health Practice Council, and chairs the Medicare Sub-Committee of the American Academy of Actuaries. He is board president of the Innovation and Value Initiative. He is also widely recognized as a leading national advocate for mental health and well-being and was past president of the New York City chapter of the National Alliance for Mental Illness.

05:37 Check EP372 with Cora Opsahl; EP358 with Wayne Jenkins, MD; EP388 with Merrill Goozner; and EP346 with Peter Hayes for a deep dive.

05:48 Why should an employer health plan be concerned about how much area hospitals are spending?

07:01 How are hospitals quantifying their prices?

08:10 “I think we’re not paying a fair price is the end game.”

10:45 How do we bring rigor back into the market?

11:12 What is NASHP?

15:10 What does the NASHP commercial breakeven take into account?

18:24 Why are hospitals conflicted when it comes to building a health system based on value and health?

20:17 Why is the onus on hospitals to defend the way they’ve spent the money they have?

21:58 “Where there are market dynamics, we typically see prices in that fair price range.”

25:06 What can employers do from a market standpoint, a program design point, and a policy standpoint?

27:11 What is the National Alliance of Healthcare Purchaser Coalitions playbook?

30:15 Why is changing the dynamics in the press important to changing hospital pricing?

33:02 How fundamental is the employer’s role in making sure that they’re paying a fair price for the healthcare services their employees are receiving?

You can learn more at nationalalliancehealth.org.

@IWLMikeT of @ntlalliancehlth discusses #hospitalpricing on our #healthcarepodcast. #healthcare #podcast #hospitals #healthcarepricing

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Dr Rishi Wadhera (Encore! EP326), Ge Bai (Encore! EP356), Dave Dierk and Stacey Richter (INBW37), Merrill Goozner, Betsy Seals (EP387), Stacey Richter (INBW36), Dr Eric Bricker (Encore! EP351), Al Lewis, Dan Mendelson, Wendell Potter, Nick Stefanizzi, Brian Klepper (Encore! EP335), Dr Aaron Mitchell (EP382), Karen Root, Mark Miller, AJ Loiacono, Josh LaRosa, Stacey Richter (INBW35), Rebecca Etz (Encore! EP295), Olivia Webb (Encore! EP337), Mike Baldzicki, Lisa Bari, Betsy Seals (EP375), Dave Chase, Cora Opsahl (EP373), Cora Opsahl (EP372), Dr Mark Fendrick (Encore! EP308), Erik Davis and Autumn Yongchu (EP371)

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HRRP stands for Hospital Readmissions Reduction Program, by the way.

I wanted to encore this episode with Dr. Rishi Wadhera because it’s a great representation of a common root cause reason why quality metrics sometimes don’t end well in real life. This root cause is otherwise known as Goodhart’s Law, and we dig into Goodhart’s law later on in this healthcare podcast.

But the actual and ultimate impact of HRRP is also a pretty good representation of the consequences, what happens, when you create a blunt-force policy that assumes hospitals with very different circumstances are the same.

Before we kick in to the episode, I asked Dr. Wadhera, my guest today as aforementioned, if there’d been any updates regarding HRRP since this show originally aired last year; and he told me that two key pieces have come out this past month in JAMA journals calling out CMS (Centers for Medicare & Medicaid Services) to move on from/retire this policy:

A Decade of Observing the Hospital Readmission Reductions Program—Time to Retire an Ineffective Policy

Readmission Reduction as a Hospital Quality Measure: Time to Move on to More Pressing Concerns?

Thanks so much to Dr. Steve Schutzer and also BoneDoc66 for your really nice reviews this past month. So appreciated … thank you so much!

And here is your encore.

Today’s guest is Rishi Wadhera, MD, MPP. Dr. Wadhera authored a retrospective analysis in the BMJ about the HRRP, which we will talk about in this healthcare podcast. Dr. Wadhera is a cardiologist at Beth Israel Deaconess Medical Center. He also has a master’s in public policy at the Harvard Kennedy School of Government and also a master’s in public health from the University of Cambridge.

But here’s the larger epiphany that pertains to all value-based care and all quality metrics which Dr. Wadhera brings up in this healthcare podcast and which my nerd heart could not love more: Goodhart’s Law. This law is the root of so very many problems. Goodhart’s Law is this (which I learned from Dr. Wadhera): “When a measure becomes a target, it ceases to be a good measure.” In other words, when we set a goal, people will try to take a shortcut to the goal, regardless of the consequences. And sometimes the consequences, paradoxically, are to do worse at the goal. Maybe because bean counters and admins and maybe even goal-oriented clinicians themselves will go right to the end goal, inadvertently skipping a whole bunch of (it turns out) rate-critical steps. For example, teaching to the test may not lead to students who deeply understand a subject.

And anyone trying to achieve value-based care success, improve quality, form collaborations, or make sales might want to remember that old proverb, “Sometimes the shortest way home is the long way around.”

You can learn more at Dr. Wadhera’s Harvard Catalyst profile and the Beth Israel Deaconess Medical Center Web site.

Rishi K. Wadhera, MD, MPP, MPhil, is an assistant professor of medicine at Harvard Medical School, a cardiologist at Beth Israel Deaconess Medical Center (BIDMC), and the associate program director of the cardiovascular medicine fellowship at BIDMC. He is also health policy and equity researcher at the Richard A. and Susan F. Smith Center for Outcomes Research in Cardiology.

Dr. Wadhera received his MD from the Mayo Clinic School of Medicine as well as an MPhil in public health as a Gates Cambridge Scholar from the University of Cambridge. He completed his internal medicine residency and cardiovascular medicine fellowship at Brigham and Women’s Hospital in Boston. During this time, he also received a master’s in public policy (MPP) at the Harvard Kennedy School of Government, with a focus on health policy.

Dr. Wadhera’s research spans questions related to healthcare access, quality, and disparities, as well as understanding how local, state, and national policy initiatives impact care delivery, health equity, and outcomes. Dr. Wadhera has published more than 80 articles to date, and he receives research support from the National Heart, Lung, and Blood Institute (NHLBI) and the National Institutes of Health (NIH)

03:30 What was the Hospital Readmissions Reduction Program intended to do?

05:22 Why did the Centers for Medicare & Medicaid (CMS) think some readmissions were preventable?

06:02 “The spirit of the Hospital Readmissions Reduction Program was to incentivize hospitals to improve … discharge planning, transitions of care, and post-discharge follow-up and care.”

06:58 How has research in the last few years changed the thoughts on the effectiveness of the Hospital Readmissions Reduction Program?

08:16 “The 30-day readmission measure—it’s an incomplete measure.”

11:48 “I think patients … are smart, and they know what’s going on.”

13:34 “What’s happening is, we’re just increasing the number of times they need to come back to the ER within that 30-day period.”

13:55 “The weird thing about the HRRP is that when it evaluates hospitals’ 30-day readmission rates, it’s a yes-no phenomenon.”

15:03 “What CMS does is, it risk adjusts … and that is what we should be doing.”

18:30 “This program has been incredibly regressive.”

19:04 “Poverty, neighborhood disadvantage, housing instability—these factors are out of hospitals’ control.”

21:50 “Blunt policies like this that are rolled out nationally probably elicit mixed behavioral responses.”

22:06 “It just makes no sense to take resources away from hospitals.”

22:32 EP295 with Rebecca Etz, PhD.

23:47 What’s the way to improve quality of care globally?

25:37 “CMS’s approach to improving quality of care has really anchored … [that] to payment.”

26:08 “It’s time for us to rethink what our approach to quality improvement should be.”

29:22 “Policy makers have an obligation to rigorously test the impact of these types of policies before they roll them out nationally.”

31:41 Can you scale healthcare nationally?

You can learn more at Dr. Wadhera’s Harvard Catalyst profile and the Beth Israel Deaconess Medical Center Web site.

@rkwadhera of @BIDMChealth discusses #HRRP on our #healthcarepodcast. #healthcare #podcast #digitalhealth #vbc #hospitalreadmission

What was the Hospital Readmissions Reduction Program intended to do? @rkwadhera of @BIDMChealth discusses #HRRP on our #healthcarepodcast. #healthcare #podcast #digitalhealth #vbc #hospitalreadmission

Why did CMS think some readmissions were preventable? @rkwadhera of @BIDMChealth discusses #HRRP on our #healthcarepodcast. #healthcare #podcast #digitalhealth #vbc #hospitalreadmission

“The spirit of the Hospital Readmissions Reduction Program was to incentivize hospitals to improve … discharge planning, transitions of care, and post-discharge follow-up and care.” @rkwadhera of @BIDMChealth discusses #HRRP on our #healthcarepodcast. #healthcare #podcast #digitalhealth #vbc #hospitalreadmission

How has research in the last few years changed the thoughts on the effectiveness of the Hospital Readmissions Reduction Program? @rkwadhera of @BIDMChealth discusses #HRRP on our #healthcarepodcast. #healthcare #podcast #digitalhealth #vbc #hospitalreadmission

“The 30-day readmission measure—it’s an incomplete measure.” @rkwadhera of @BIDMChealth discusses #HRRP on our #healthcarepodcast. #healthcare #podcast #digitalhealth #vbc #hospitalreadmission

“What CMS does is, it risk adjusts … and that is what we should be doing.” @rkwadhera of @BIDMChealth discusses #HRRP on our #healthcarepodcast. #healthcare #podcast #digitalhealth #vbc #hospitalreadmission

“Blunt policies like this that are rolled out nationally probably elicit mixed behavioral responses.” @rkwadhera of @BIDMChealth discusses #HRRP on our #healthcarepodcast. #healthcare #podcast #digitalhealth #vbc #hospitalreadmission

“It just makes no sense to take resources away from hospitals.” @rkwadhera of @BIDMChealth discusses #HRRP on our #healthcarepodcast. #healthcare #podcast #digitalhealth #vbc #hospitalreadmission

What’s the way to improve quality of care globally? @rkwadhera of @BIDMChealth discusses #HRRP on our #healthcarepodcast. #healthcare #podcast #digitalhealth #vbc #hospitalreadmission

“It’s time for us to rethink what our approach to quality improvement should be.” @rkwadhera of @BIDMChealth discusses #HRRP on our #healthcarepodcast. #healthcare #podcast #digitalhealth #vbc #hospitalreadmission

Can you scale healthcare nationally? @rkwadhera of @BIDMChealth discusses #HRRP on our #healthcarepodcast. #healthcare #podcast #digitalhealth #vbc #hospitalreadmission

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Ge Bai (Encore! EP356), Dave Dierk and Stacey Richter (INBW37), Merrill Goozner, Betsy Seals (EP387), Stacey Richter (INBW36), Dr Eric Bricker (Encore! EP351), Al Lewis, Dan Mendelson, Wendell Potter, Nick Stefanizzi, Brian Klepper (Encore! EP335), Dr Aaron Mitchell (EP382), Karen Root, Mark Miller, AJ Loiacono, Josh LaRosa, Stacey Richter (INBW35), Rebecca Etz (Encore! EP295), Olivia Webb (Encore! EP337), Mike Baldzicki, Lisa Bari, Betsy Seals (EP375), Dave Chase, Cora Opsahl (EP373), Cora Opsahl (EP372), Dr Mark Fendrick (Encore! EP308), Erik Davis and Autumn Yongchu (EP371), Erik Davis and Autumn Yongchu (EP370)

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This show was one of the most popular episodes in the past 12 months. So, here it is again for your listening pleasure.

Mostly this whole episode is about the so-called “Big Three” PBMs that provide between the three of them pharmacy benefit services for 95% of insured Americans. PBM stands for pharmacy benefit manager, and the Big Three PBMs being ESI, otherwise known as Express Scripts; OptumRx, which is a part (a big profitable part) of UnitedHealth Group; and then also CVS. Yes, CVS is not just for your retail pharmacy needs; they are also a huge pharmacy benefit manager.

Now, we get to the GoodRx part of our story. If you don’t know how GoodRx works, I would strongly encourage you to go back and listen to “An Expert Explains” with Dr. Ge Bai from last year (AEE13). That said, here’s the super short semi-reductive version to keep us all level set here. If you already know how GoodRx works, you can skip forward about four minutes.

So, first of all, let’s all understand that GoodRx’s business model only exists because the pharmacy supply chain dominated by these three big PBMs that we just talked about is such a cluster. GoodRx profits from that dysfunction. So, as I said, here’s the short version of how they do that. It all hinges on so-called spread pricing, and this is what I mean by that.

Patient goes into pharmacy with a prescription for generic drug X. The patient has insurance—good news! Pharmacist checks the computer and sees that this patient should be charged, I don’t know, $50 for drug X. The patient’s insurance carrier picks up, say, $30 of the $50 cost; and the patient is left with, say, a co-pay of $20.

Who did that little math there in the computer? The PBM (the pharmacy benefit manager) did that math. That’s their thing, these PBMs. They adjudicate claims. That’s what this math is called. Anybody who goes into a pharmacy with a prescription, it’s the PBM on the back end who figures out how much the patient owes and how much their insurance will pay and what the patient responsibility is, etc.

Goodness, you might say. How much are the PBMs being paid to perform this useful service? Turns out, it’s free. That’s right … the Big Three PBMs do all this adjudication for free. No charge to plan sponsors. Isn’t that nice?

Except it’s actually not free if you dig into it. The PBM is certainly getting paid by means of arbitrage. They’re taking a little something something out of the middle of every single transaction. Here’s what that looks like in the example aforementioned. Recall the patient’s insurance paid $30, and the patient themselves paid $20.

The question is, how much did that drug cost the PBM? Remember, that’s commerce: Buy low, sell high, and all that. You buy something, and then you sell it for more than you bought it for.

OK, so we’re talking about a generic drug here. They’re cheap (usually). So, let’s just say drug X costs, I don’t know, $5. The PBM pays the pharmacy $5 for that generic script—and you can see how much money the PBM just made right there. The patient and their plan sponsor got charged $50, and the PBM’s cost of goods was $5. Multiply that profit margin by the billions of generic prescriptions in this country that run through insurance, and you have a tidy little business model there. UHG, the parent company of OptumRx, made $24 billion in profit in 2021. Not all of that was from generic drug arbitrage (ie, taking advantage of spread pricing), but some of it was. And $24 billion is an awfully big amount when you consider whose paychecks all those pennies were lifted from.

PBM services are anything but free. PBMs are collecting massive windfalls in the so-called spread between what the patient and the plan pay and what the PBM is actually buying those drugs for.

Here’s another wrinkle: When a PBM contracts with a pharmacy, part of their contractual terms is that the pharmacy’s list price for drugs cannot be lower than a certain amount usually having something to do with the PBM’s rates. So, pharmacy list prices become artificially high as a result, meaning that cash-pay patients who just wander into a pharmacy and try to pay cash pay an artificially high price.

Into this mess swoops GoodRx with a killer idea. They see all that money on the table that PBMs are cleaning up in that spread. They want a piece of that action. And in the beginning, PBMs were fully on board with this. They were fully on board because the market GoodRx was going after was the uninsured market, meaning untapped turf for PBMs. And because PBMs make so much money off of each transaction, PBMs are always hungry for more transactions (the Big Three PBMs, anyway). They love more transactions. The more more more with the transactions, the more more more with the money.

So, GoodRx goes to the PBMs and says, “Hey … if a cash-pay patient shows up in a pharmacy, what price would you charge them for you to adjudicate that claim? You know how much money you have to pay the pharmacy, so what can the patient price be? What spread are you willing to accept? GoodRx will take a little off the top, but you can keep your spread on this new frontier of patients that you haven’t historically had access to because … uninsured. Oh, by the way, we, GoodRx … we’re gonna go around to all your competitors, too (just saying)—the other two PBMs—and we’re gonna show their prices, too, in our GoodRx app at different pharmacies. So, you’re gonna have to compete with other PBMs in this model.”

This is why GoodRx cash prices for generics are so very very often less than what the patient will pay if they use their insurance. In the GoodRx app, PBMs have competition. So, by not using their insurance, patients often pay less for generic drugs—which, by the way, are 90% of the scripts written in this country—and also, as an added bonus, patients don’t have to jump through all the weird and arduous prior auths or step therapies or other hurdles that a PBM might toss in the mix. So, from a patient perspective, using GoodRx could save money, save time, and you could get your drugs faster because you don’t have to wait around for some prior auth to go through.

But this was not what PBMs had originally thought they were signing up for. They were working with GoodRx to gain new market share from the uninsured market, not lose market share to more and more patients forgoing their insurance, meaning forgoing shelling out to the PBM their spread on the transaction.

Cue my conversation today with Dr. Ge Bai. Ge Bai, PhD, CPA, is a professor of accounting at Johns Hopkins Carey Business School and a professor of health policy and management at Johns Hopkins Bloomberg School of Public Health.

In this healthcare podcast, Ge Bai and I discuss the reactions of the Big Three PBMs to consumers getting all consumer-y when it comes to buying their generic drugs—despite the fact that, in my interview with Dr. Sunita Desai (EP334), she said that studies have shown that 67% of patients are unaware that they might be able to get a better price by not using their insurance and shopping around on GoodRx or Amazon or at a cost-plus pharmacy like Blueberry in Pittsburgh or Mark Cuban’s new thing. Despite that, it means 33% (one-third) of patients are aware that they can price shop and potentially get a better price not using their insurance on generic drugs; and apparently, it’s making some people at some PBMs nervous.

Check the ESI (Express Scripts) blog post about their new prescription benefit that automatically applies discounts. Hmmm … sounds like a defensive play to me? What do we make of this? That’s my first question to Dr. Ge Bai in this episode.

Also, if you’re really intrigued by generic drug goings-on, go back and listen to the show with Dr. Steven Quimby (EP344) when you have a chance. It’s about the high cost of generic drugs, and we go deep into supply chain machinations.

You can learn more on Ge’s Web site at Johns Hopkins University. You can also connect with her on LinkedIn.

Ge Bai, PhD, CPA, is professor of accounting at the Johns Hopkins Carey Business School and professor of health policy and management at the Johns Hopkins Bloomberg School of Public Health. She is an expert on healthcare pricing, policy, and management. Dr. Bai has testified before the House Ways and Means Committee, written for the Wall Street Journal, and published her studies in leading academic journals such as the New England Journal of Medicine, JAMA, JAMA Internal Medicine, Annals of Internal Medicine, and Health Affairs. Her work has been widely featured on ABC, CBS, NBC, Fox News, CNN, and NPR and in the Los Angeles Times, New York Times, Wall Street Journal, Washington Post, and other media outlets and used in government regulations and congressional testimonies.

08:39 What is ESI doing by automatically applying discounts to generic drugs?

09:53 Why are PBMs losing money when consumers don’t use their benefit?

10:40 “GoodRx disrupted the ongoing game.”

10:58 How are PBMs using the Amazon discount card to discourage their patients from moving away from using their benefits?

12:07 Amazon pricing versus GoodRx pricing.

12:44 How much money is a PBM really making?

13:54 EP344 with Steven Quimby, MD.

14:24 EP334 with Sunita Desai, PhD.

14:37 How is future fear playing into the PBM business model?

16:49 Is there a negative consequence to subtracting from the bottom line in a PBM model?

17:44 “I think to have strong PBMs does not mean necessarily bad things for patients.”

19:33 What happens if everyone uses Amazon for drugs?

22:33 If every PBM gets their own discount cards, what will happen?

25:32 “We are actually witnessing a potential sea change.”

26:19 How do cost-plus pharmacies factor into the current market?

29:09 Is a profit shortfall inevitable?

29:28 “PBMs have to give a slice of their profit back to consumers. That’s just reality.”

30:05 Can anything be done on the PBM side to generate a higher margin in the generic space?

31:34 “Naive plan sponsors are a big problem.”

You can learn more on Ge’s Web site at Johns Hopkins University. You can also connect with her on LinkedIn.

@GeBaiDC of @JohnsHopkins discusses #PBMs on our #healthcarepodcast. #healthcare #podcast #healthcarepricing

What is ESI doing by automatically applying discounts to generic drugs? @GeBaiDC of @JohnsHopkins discusses #PBMs on our #healthcarepodcast. #healthcare #podcast #healthcarepricing

Why are PBMs losing money when consumers don’t use their benefit? @GeBaiDC of @JohnsHopkins discusses #PBMs on our #healthcarepodcast. #healthcare #podcast #healthcarepricing

“GoodRx disrupted the ongoing game.” @GeBaiDC of @JohnsHopkins discusses #PBMs on our #healthcarepodcast. #healthcare #podcast #healthcarepricing

How are PBMs using the Amazon discount card to discourage their patients from moving away from using their benefits? @GeBaiDC of @JohnsHopkins discusses #PBMs on our #healthcarepodcast. #healthcare #podcast #healthcarepricing

Amazon pricing versus GoodRx pricing. @GeBaiDC of @JohnsHopkins discusses #PBMs on our #healthcarepodcast. #healthcare #podcast #healthcarepricing

How much money is a PBM really making? @GeBaiDC of @JohnsHopkins discusses #PBMs on our #healthcarepodcast. #healthcare #podcast #healthcarepricing

How is future fear playing into the PBM business model? @GeBaiDC of @JohnsHopkins discusses #PBMs on our #healthcarepodcast. #healthcare #podcast #healthcarepricing

Is there a negative consequence to subtracting from the bottom line in a PBM model? @GeBaiDC of @JohnsHopkins discusses #PBMs on our #healthcarepodcast. #healthcare #podcast #healthcarepricing

“I think to have strong PBMs does not mean necessarily bad things for patients.” @GeBaiDC of @JohnsHopkins discusses #PBMs on our #healthcarepodcast. #healthcare #podcast #healthcarepricing

What happens if everyone uses Amazon for drugs? @GeBaiDC of @JohnsHopkins discusses #PBMs on our #healthcarepodcast. #healthcare #podcast #healthcarepricing

If every PBM gets their own discount cards, what will happen? @GeBaiDC of @JohnsHopkins discusses #PBMs on our #healthcarepodcast. #healthcare #podcast #healthcarepricing

“We are actually witnessing a potential sea change.” @GeBaiDC of @JohnsHopkins discusses #PBMs on our #healthcarepodcast. #healthcare #podcast #healthcarepricing

How do cost-plus pharmacies factor into the current market? @GeBaiDC of @JohnsHopkins discusses #PBMs on our #healthcarepodcast. #healthcare #podcast #healthcarepricing

Is a profit shortfall inevitable? @GeBaiDC of @JohnsHopkins discusses #PBMs on our #healthcarepodcast. #healthcare #podcast #healthcarepricing

“PBMs have to give a slice of their profit back to consumers. That’s just reality.” @GeBaiDC of @JohnsHopkins discusses #PBMs on our #healthcarepodcast. #healthcare #podcast #healthcarepricing

Can anything be done on the PBM side to generate a higher margin in the generic space? @GeBaiDC of @JohnsHopkins discusses #PBMs on our #healthcarepodcast. #healthcare #podcast #healthcarepricing

“Naive plan sponsors are a big problem.” @GeBaiDC of @JohnsHopkins discusses #PBMs on our #healthcarepodcast. #healthcare #podcast #healthcarepricing

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Dave Dierk and Stacey Richter (INBW37), Merrill Goozner, Betsy Seals (EP387), Stacey Richter (INBW36), Dr Eric Bricker (Encore! EP351), Al Lewis, Dan Mendelson, Wendell Potter, Nick Stefanizzi, Brian Klepper (Encore! EP335), Dr Aaron Mitchell (EP382), Karen Root, Mark Miller, AJ Loiacono, Josh LaRosa, Stacey Richter (INBW35), Rebecca Etz (Encore! EP295), Olivia Webb (Encore! EP337), Mike Baldzicki, Lisa Bari, Betsy Seals (EP375), Dave Chase, Cora Opsahl (EP373), Cora Opsahl (EP372), Dr Mark Fendrick (Encore! EP308), Erik Davis and Autumn Yongchu (EP371), Erik Davis and Autumn Yongchu (EP370), Keith Hartman

View Details

We have done three inbetweenisodes so far on healthcare stakeholder collaboration. In sum, there are two major issues that patients have with our healthcare industry, and both can only be solved for if healthcare stakeholder collaboration happens:

Patients falling into care gaps and winding up with bad downstream consequences
Patients not being able to afford their care

This show, we are moving on to talk about an actionable solution here to the care gap problem—the very ubiquitous issue of patients with some pretty serious health issues who remain either undiagnosed or not on optimal treatment or follow-up. Our team at Aventria Health has a big success story that I would love to share relative to care gaps and how to think about solving for them at the local, regional, and national level.

Spoiler alert here: What we’re talking about in this healthcare podcast, which we call our Groundswell Solution™, improved the usage of best-practice clinical guidelines for patients with end-stage liver disease by 23% nationally. Also keep in mind that what is fast becoming a major factor in developing liver disease is obesity, and the incidence of liver disease is growing.

As aforementioned, we are talking about an Aventria Health Group Groundswell Solution, which is the idea of getting diverse stakeholders who are enthusiastic to be empowered as part of a team to help solve for gaps in care and really improve patient outcomes. It definitely takes a village, and if we can find ways where different organizations can work together to contribute and leverage strengths along shared priorities, then great things can really happen.

Before we kick in to the show here, let me bring up the miracle of the commons. This is cool. This was a term that was coined by Elinor Ostrom. Ostrom, by the way, won the Nobel Prize for this work. She saw how humans have such an amazing capacity to work together through what she called design principles and come up with some really unique and inspiring solutions that benefit everybody.

You can connect with Stacey and Dave on LinkedIn.

If you are interested in contributing to Groundswell, please complete this short questionnaire.

Dave and Stacey are co-presidents of Aventria Health Group, a consultancy working with clients who endeavor to form collaborations with payers, providers, Pharma, employer organizations, or patient advocacy groups. They are also co-presidents of QC-Health, a benefit corporation finding cost-effective ways to improve the health of Americans.

Dave is a 30-year veteran helping clients work at the intersection of payers, providers, pharmacy, Pharma, and medical device companies. He is an accomplished strategist, providing innovative customer marketing, access, quality, and health intervention solutions for large clients and has directed the development of numerous industry-leading campaigns in primary care and specialty markets. Dave has helped dozens of clients achieve top rankings in their respective categories. He is also an active member of the Pharmacy Quality Alliance.

03:03 How can areas of improvement be flagged in such a fragmented patient care journey?

04:06 What is “the miracle of the commons”?

04:54 How is the miracle of the commons being used at Aventria and QC-Health?

07:51 What is Groundswell, and how does it utilize the miracle of the commons?

11:13 “Is the answer, then, to drive more knowledge and more awareness?”—Dave

11:35 “What about using technology to provide curated, highly targeted information that can support them at the point of care?”—Dave

13:25 “You want to identify where these gaps are across the full spectrum of the journey.”—Dave

15:08 “This is something that is not commonly happening on its own.”—Dave

16:40 “Done in the right way, people are excited … to improve care and improve outcomes.”—Dave

18:50 “Our aim is really to meet people and teams where they are.”—Stacey

19:35 “You don’t have to know how or why or where—merely that I think this outcome is not what it could be. That’s the place to start.”—Dave

20:01 “You have to understand the different goals of the different stakeholders.”—Dave

21:14 “If we can do the right things the right way, then we can serve many masters.”—Dave

You can connect with Stacey and Dave on LinkedIn.

If you are interested in contributing to Groundswell, please complete this short questionnaire.

Our host, Stacey, and Co-President Dave Dierk discuss the miracle of the commons on our #healthcarepodcast. #healthcare #podcast

How can areas of improvement be flagged in such a fragmented patient care journey? Our host, Stacey, and Co-President Dave Dierk discuss the miracle of the commons on our #healthcarepodcast. #healthcare #podcast

What is “the miracle of the commons”? Our host, Stacey, and Co-President Dave Dierk discuss the miracle of the commons on our #healthcarepodcast. #healthcare #podcast

How is the miracle of the commons being used at Aventria and QC-Health? Our host, Stacey, and Co-President Dave Dierk discuss the miracle of the commons on our #healthcarepodcast. #healthcare #podcast

What is Groundswell, and how does it utilize the miracle of the commons? Our host, Stacey, and Co-President Dave Dierk discuss the miracle of the commons on our #healthcarepodcast. #healthcare #podcast

“Is the answer, then, to drive more knowledge and more awareness?” Our host, Stacey, and Co-President Dave Dierk discuss the miracle of the commons on our #healthcarepodcast. #healthcare #podcast

“What about using technology to provide curated, highly targeted information that can support them at the point of care?” Our host, Stacey, and Co-President Dave Dierk discuss the miracle of the commons on our #healthcarepodcast. #healthcare #podcast

“You want to identify where these gaps are across the full spectrum of the journey.” Our host, Stacey, and Co-President Dave Dierk discuss the miracle of the commons on our #healthcarepodcast. #healthcare #podcast

“This is something that is not commonly happening on its own.” Our host, Stacey, and Co-President Dave Dierk discuss the miracle of the commons on our #healthcarepodcast. #healthcare #podcast

“Done in the right way, people are excited … to improve care and improve outcomes.” Our host, Stacey, and Co-President Dave Dierk discuss the miracle of the commons on our #healthcarepodcast. #healthcare #podcast

“Our aim is really to meet people and teams where they are.” Our host, Stacey, and Co-President Dave Dierk discuss the miracle of the commons on our #healthcarepodcast. #healthcare #podcast

“You don’t have to know how or why or where—merely that I think this outcome is not what it could be. That’s the place to start.” Our host, Stacey, and Co-President Dave Dierk discuss the miracle of the commons on our #healthcarepodcast. #healthcare #podcast

“You have to understand the different goals of the different stakeholders.” Our host, Stacey, and Co-President Dave Dierk discuss the miracle of the commons on our #healthcarepodcast. #healthcare #podcast

“If we can do the right things the right way, then we can serve many masters.” Our host, Stacey, and Co-President Dave Dierk discuss the miracle of the commons on our #healthcarepodcast. #healthcare #podcast

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Merrill Goozner, Betsy Seals (EP387), Stacey Richter (INBW36), Dr Eric Bricker (Encore! EP351), Al Lewis, Dan Mendelson, Wendell Potter, Nick Stefanizzi, Brian Klepper (Encore! EP335), Dr Aaron Mitchell (EP382), Karen Root, Mark Miller, AJ Loiacono, Josh LaRosa, Stacey Richter (INBW35), Rebecca Etz (Encore! EP295), Olivia Webb (Encore! EP337), Mike Baldzicki, Lisa Bari, Betsy Seals (EP375), Dave Chase, Cora Opsahl (EP373), Cora Opsahl (EP372), Dr Mark Fendrick (Encore! EP308), Erik Davis and Autumn Yongchu (EP371), Erik Davis and Autumn Yongchu (EP370), Keith Hartman, Dr Aaron Mitchell (Encore! EP282)

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In this healthcare podcast, I have Merrill Goozner on the show talking about his prognostications for the future of healthcare in this country and how, realistically, it could be engineered so that the healthcare industry rightsizes itself relative to our GDP. Merrill offers three glide paths to this end.

Okay … so, let’s break this down some.

First, Merrill talks about the full impact of huge numbers of patients/people in this country who are scared to seek medical attention. They are afraid to play the game at the end when the bill comes in the mail and they open it up having no idea what it is going to be. It’s a magical mystery guessing game of luck and chance where losers go bankrupt. This is not a victimless situation we have going on here in this country. All these deaths of despair and life expectancy going down … this is unprecedented.

So now, we’re level-set on the stakes.

Interestingly, Merrill plots out the aspiration for healthcare spending in exactly the same way that David Muhlestein, PhD, JD, did in episode 364. The goal, according to both of them, isn’t to reduce healthcare spending per se. That would be nie near impossible to pull off in the real world, but we could work on holding healthcare cost increases below the rate of GDP growth. Optimal might be healthcare costing, say, 13% of GDP like it does in Switzerland instead of upwards of 20% ($1 out of $5) getting stuffed in the pockets of a healthcare entity or their shareholders. Fifty percent of that, by the way, is being paid for by the government, the other 50% largely coming out of the wages of employees either directly or indirectly.

Okay … so, what is the lightning-in-the-bottle moment where we clip in for this journey toward rightsizing healthcare prices? Merrill says it’s a combo of patients and employers and taxpayers crying uncle at the same time that technology and new competitors move in on the supply side and start to chip away at older incumbents like hospitals, especially hospitals who have broken their social contract with their communities—and there I’m paraphrasing some terminology Vikas Saini, MD, uses in an upcoming episode on hospitals and their embarrassing levels of charity care.

So, it’s harnessing forces on the demand side of the equation and on the payment side of the equation, coupled with goings-on on the supply side. With all of this going on, Merrill says that, in this crucible of transformation, we could get better care for lower costs.

To accomplish that, he says step 1 is for the team for healthcare costs going down—employers taxpayers, government policy makers—gang up, create a value alliance, and work together. These allies then tell the healthcare industry, “Look, gang … ixnay on the growth rates you’ve been accustomed to in the past. Period. You are going to need to deal with that, so get used to it.” That is kind of where all of this starts.

Merrill mentions three glide paths that will help up get from here to there, and he names the three:

Accountable care—essentially putting providers at risk, giving them budgets that they are responsible to work within
Paying for value. We have PCPs who deliver a lot of value. We should pay ’em more. We should also put docs on salary like they do at Mayo and some of these other leading Centers of Excellence.
All-payer pricing, which we do get into. They have this now in Maryland. It’s basically when everybody pays the same price for the same service.

Merrill says this all kind of rolls up into removing the incentives that reward low-value care. That can be really expensive. I’m paraphrasing here.

I’m sure for many of you, Merrill Goozner needs no introduction. He’s been the editor in chief of Modern Healthcare. He wrote a book on the drug industry. He was a reporter for many years before that and also did public interest work.

Thank you to Hugh Sims, MD, MBA, for his support and insight!

You can learn more at GoozNews. You can also read his book on the drug industry, The $800 Million Pill.

Merrill Goozner served as editor in chief of Modern Healthcare from 2012 to 2017 and, as editor emeritus, continued to write the magazine’s weekly column until April 2021. In October 2020, he launched GoozNews.substack.com, where he continues to write about healthcare, the environment, and other subjects.

Prior to joining Modern Healthcare, his journalism career spanned nearly 40 years as an editor, writer and journalism educator. In 2004, he authored The $800 Million Pill: The Truth Behind the Cost of New Drugs. He previously served as a foreign, national, and chief economics correspondent for the Chicago Tribune (1987-2000) and a professor of journalism at New York University (2000-2003). He has contributed to numerous lay press and scientific publications over the course of his career, ranging from the New York Times to the Journal of the National Cancer Institute.

He earned his master’s degree in journalism from Columbia University in 1982 and his bachelor’s degree in history from the University of Cincinnati in 1975. The University of Cincinnati named him a Distinguished Alumni in 2008 and inducted him into its Journalism Hall of Fame in 2016.

06:24 How is the rise of the high-deductible plan affecting the nation’s health?

07:20 What is one of the big issues not being discussed in America today?

08:33 What kind of tipping point is in store for hospitals in this decade?

09:01 What two trends are we going to see in healthcare in the coming decade?

10:50 What are the ways in which the changes in healthcare go well, and what pitfalls do we need to look out for?

11:14 “[This] is about what is sustainable and what is not sustainable.”

12:35 “Healthcare is misnamed. It’s sick care.”

13:12 Why do we need to talk more about who gets sick in this country?

13:51 “Pricing is part of the problem, but volume is the other part [of the problem].”

15:40 “The world is gonna change, you’re gonna change, and we’re gonna provide you a glide path … because this is what we need as a society.”

17:20 What should be the overall goal for healthcare spend?

18:45 EP364 with David Muhlestein, PhD, JD.

19:40 Why do we need to address physician pay?

25:31 Why does the single pricing system create equality?

30:11 EP363 with David Scheinker, PhD.

30:34 EP370 with Erik Davis and Autumn Yongchu.

30:55 What are the three glide paths for the future of healthcare?

You can learn more at GoozNews. You can also read his book on the drug industry, The $800 Million Pill.

@_GoozNews discusses the future of #healthcare on our #healthcarepodcast. #podcast

How is the rise of the high-deductible plan affecting the nation’s health? @_GoozNews discusses the future of #healthcare on our #healthcarepodcast. #podcast

What is one of the big issues not being discussed in America today? @_GoozNews discusses the future of #healthcare on our #healthcarepodcast. #podcast

What kind of tipping point is in store for hospitals in this decade? @_GoozNews discusses the future of #healthcare on our #healthcarepodcast. #podcast

What two trends are we going to see in healthcare in the coming decade? @_GoozNews discusses the future of #healthcare on our #healthcarepodcast. #podcast

What are the ways in which the changes in healthcare go well, and what pitfalls do we need to look out for? @_GoozNews discusses the future of #healthcare on our #healthcarepodcast. #podcast

“[This] is about what is sustainable and what is not sustainable.” @_GoozNews discusses the future of #healthcare on our #healthcarepodcast. #podcast

“Healthcare is misnamed. It’s sick care.” @_GoozNews discusses the future of #healthcare on our #healthcarepodcast. #podcast

Why do we need to talk more about who gets sick in this country? @_GoozNews discusses the future of #healthcare on our #healthcarepodcast. #podcast

“Pricing is part of the problem, but volume is the other part [of the problem].” @_GoozNews discusses the future of #healthcare on our #healthcarepodcast. #podcast

“The world is gonna change, you’re gonna change, and we’re gonna provide you a glide path … because this is what we need as a society.” @_GoozNews discusses the future of #healthcare on our #healthcarepodcast. #podcast

What should be the overall goal for healthcare spend? @_GoozNews discusses the future of #healthcare on our #healthcarepodcast. #podcast

Why do we need to address physician pay? @_GoozNews discusses the future of #healthcare on our #healthcarepodcast. #podcast

Why does the single pricing system create equality? @_GoozNews discusses the future of #healthcare on our #healthcarepodcast. #podcast

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Betsy Seals (EP387), Stacey Richter (INBW36), Dr Eric Bricker (Encore! EP351), Al Lewis, Dan Mendelson, Wendell Potter, Brian Klepper (Encore! EP335), Dr Aaron Mitchell (EP382), Karen Root, Mark Miller, AJ Loiacono, Josh LaRosa, Stacey Richter (INBW35), Rebecca Etz (Encore! EP295), Olivia Webb (Encore! EP337), Mike Baldzicki, Lisa Bari, Betsy Seals (EP375), Dave Chase, Cora Opsahl (EP373), Cora Opsahl (EP372), Dr Mark Fendrick (Encore! EP308), Erik Davis and Autumn Yongchu (EP371), Erik Davis and Autumn Yongchu (EP370), Keith Hartman, Dr Aaron Mitchell (Encore! EP282), Stacey Richter (INBW34)

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Here’s a big thing that Betsy Seals makes clear in this show: Big companies can be successful in Medicare Advantage (MA)—and I mean success in all of its financial glory—because they have experience and the scale and also the specialized departments who keep track of all kinds of intricacies that are rate critical to MA success. Specifically, things Betsy Seals talks about as critical success factors, for example, are having relationships with brokers and health systems and other provider organizations. She also makes it clear how much local market knowledge is necessary. A benefit design working great in one local market might be a medical trend disaster in another area with different levels of social determinants of health (SDoH) or different disease patterns, so scaling into new areas isn’t a matter of just cutting and pasting. History has shown it’s easy enough to go down in a flaming ball of unanticipated medical trend and/or OIG/DOJ scrutiny.

So, this is one thing that big MA carriers can get right and potentially, for sure, benefit patients in their plans. Now I say this knowing full well that there’s a brouhaha afoot in which there are some who are really pro-MA and there are some who are really not. In this show with Betsy Seals today, we do not get into this (ie, Do patients in MA plans fare better than patients in traditional Medicare?). But I have a point to make, and I’m just gonna make it here.

Like most “Is this better than that?” questions in healthcare, there is not one answer; and anyone running around espousing pretty much anything as a broad-stroke holy grail is pretty much full of it—and I would say that as a general statement. Whether MA is better than traditional Medicare depends on who the patient is and also which MA plan we’re talking about here.

So, starting on the “not a fan” side of the house, Wendell Potter has said (with evidence) that if a patient is toward the end of his or her life or acutely ill or needs to go to an NCI-designated cancer center, it could easily be deduced that traditional Medicare is going to be better.

On the other hand, there seems to be evidence, including a recent JAMA article by Ravi Parikh, MD, MPP, and Ezekiel Emanuel, MD, PhD, that concludes MA produces a 22% to 26% reduction in costs compared to MSSP (Medicare Shared Savings Program) arrangements. And this is across just a general patient population of all age ranges, if I’m reading the study right. The great results that are discussed in that JAMA article are what can happen when payers and providers align to tackle SDoH and preventative stuff and are willing to go out into the community to curb potentially avoidable downstream acute events.

David Carmouche, MD, by the way, on episode 343 talked at length about this. But there are variables here, and let me mention one of them: how good the Medicare Advantage plan is at risk-based contracting with physician groups. How good are they at putting patients into accountable relationships with provider organizations who are getting paid to keep patients healthy, meaning the MA plan is offering budget-based prospective payment contracts to physician groups? This is the case in that Ochsner/JAMA article example that Dr. David Carmouche was talking about. Ochsner, the health system in Louisiana, and MA plans were working together; and both assumed risk for this population.

Susan Dentzer, president and CEO over at America’s Physician Groups (APG), does a great job at covering a bunch of these topics on the Race to Value podcast.

Another thing that will impact care quality is how good the plan leadership is at balancing patient care and shareholder demand for profit.

Bottom line, it is not productive to be indiscriminately pie-eyed about pretty much anything in healthcare or throw babies out with bathwater on a regular basis. As Ge Bai, PhD, CPA, has said on this show (and others have said), there’s no angels and no devils in healthcare. Everybody is some combination of both. And, in general, the only reason anybody does anything in healthcare is because it appeals to their self-interest. So, not working with some other healthcare stakeholder because we perceive them as greedy or “industry” or whatever is gonna mean that nobody is working with anybody. Just keep your eyes wide open, check the math, and in your contracts, get actual dollar amounts and not discounts.

In this healthcare podcast, as mentioned a few times now, I am speaking with Betsy Seals. Betsy Seals is CEO and cofounder of Rebellis Group, a managed care consulting firm working with Medicare Advantage plans.

Oh, and one acronym alert before we dive in here: SNP stands for special needs plan. A special needs plan is a Medicare Advantage coordinated care plan that is specifically designed to provide targeted care and limit enrollment to special needs individuals. So, a special needs individual could be any one of the following:

An institutionalized individual
A dual eligible, meaning somebody who has Medicare and Medicaid
An individual with a severe or disabling chronic condition, as specified by CMS

SNPs are becoming a bit of thing in the MA space this year, and Betsy talks about this trend.

You can learn more at rebellisgroup.com.

Betsy Seals is the CEO and cofounder of Rebellis Group, a consulting firm established to provide advisory and hands-on services to Medicare Advantage Organizations (MAOs) and their subcontractors. Betsy is a nationally recognized leader in the managed care industry with over 20 years of experience.

Betsy brings to the table a solid mix of leadership and business acumen, as well as regulatory and strategic knowledge within the managed care landscape. Betsy’s expertise is focused in the areas of mergers and acquisitions, compliance, sales and marketing, strategy, supplemental benefit landscape, innovative benefit design that address social determinants of health, and health plan operations.

Prior to founding Rebellis Group, Betsy served as the chief consulting officer for Gorman Health Group (GHG). In this role, Betsy managed the Medicare consulting practice, including implementation of strategic initiatives, development of new practice areas, and oversight of day-to-day consulting operations.

Prior to her role as chief consulting officer, Betsy served as senior vice president, compliance operations, where she assisted MAOs and Part D sponsors to attain and maintain compliance with the Centers for Medicare & Medicaid Services (CMS) regulations and guidance by conducting risk assessments, preparing organizations for CMS audits, performing mock CMS audits, and creating and implementing internal and delegated entity oversight programs.

Before joining GHG, Betsy worked for MAOs, where she served in customer service and compliance with responsibility for creation and implementation of oversight programs, CMS audit preparation, implementation of internal corrective action plans, and the day-to-day management of compliance operations. Betsy has also worked as a CMS subcontractor to conduct CMS Compliance Program audits.

06:16 Is Medicare Advantage still a cash cow?

06:42 Why should Medicare Advantage be the most lucrative line of business?

07:07 “If there weren’t a lot of money in it, nobody would do it.”

07:29 What should you know before jumping into the Medicare Advantage market?

14:04 What issues do upstarts overlook when getting into Medicare Advantage?

17:07 What is one of the next areas that Betsy thinks CMS will crack down on?

18:24 “Look at the data.”

19:53 “I think there’s a lot of lessons that you could see over the past years in the industry.”

20:52 “That’s what we see a lot of times is expansion without enough due diligence and thought put behind it.”

21:02 Why don’t common business models always work in healthcare businesses?

22:29 What are the new key trends coming out of the Medicare Advantage space?

26:04 Why is it important to bring in your clinicians when entering a dual market?

27:52 What’s going on in the chronic conditions space?

32:14 What’s necessary to the infrastructure with any kind of SNP product?

32:56 What’s Betsy’s forecast for the future of Medicare Advantage?

You can learn more at rebellisgroup.com.

@betsyseals of @GroupRebellis discusses #medicareadvantage on our #healthcarepodcast. #healthcare #podcast

Is Medicare Advantage still a cash cow? @betsyseals of @GroupRebellis discusses #medicareadvantage on our #healthcarepodcast. #healthcare #podcast

Why should Medicare Advantage be the most lucrative line of business? @betsyseals of @GroupRebellis discusses #medicareadvantage on our #healthcarepodcast. #healthcare #podcast

“If there weren’t a lot of money in it, nobody would do it.” @betsyseals of @GroupRebellis discusses #medicareadvantage on our #healthcarepodcast. #healthcare #podcast

What should you know before jumping into the Medicare Advantage market? @betsyseals of @GroupRebellis discusses #medicareadvantage on our #healthcarepodcast. #healthcare #podcast

What issues do upstarts overlook when getting into Medicare Advantage? @betsyseals of @GroupRebellis discusses #medicareadvantage on our #healthcarepodcast. #healthcare #podcast

What is one of the next areas that Betsy thinks CMS will crack down on? @betsyseals of @GroupRebellis discusses #medicareadvantage on our #healthcarepodcast. #healthcare #podcast

“Look at the data.” @betsyseals of @GroupRebellis discusses #medicareadvantage on our #healthcarepodcast. #healthcare #podcast

“I think there’s a lot of lessons that you could see over the past years in the industry.” @betsyseals of @GroupRebellis discusses #medicareadvantage on our #healthcarepodcast. #healthcare #podcast

“That’s what we see a lot of times is expansion without enough due diligence and thought put behind it.” @betsyseals of @GroupRebellis discusses #medicareadvantage on our #healthcarepodcast. #healthcare #podcast

Why don’t common business models always work in healthcare businesses? @betsyseals of @GroupRebellis discusses #medicareadvantage on our #healthcarepodcast. #healthcare #podcast

What are the new key trends coming out of the Medicare Advantage space? @betsyseals of @GroupRebellis discusses #medicareadvantage on our #healthcarepodcast. #healthcare #podcast

Why is it important to bring in your clinicians when entering a dual market? @betsyseals of @GroupRebellis discusses #medicareadvantage on our #healthcarepodcast. #healthcare #podcast

What’s going on in the chronic conditions space? @betsyseals of @GroupRebellis discusses #medicareadvantage on our #healthcarepodcast. #healthcare #podcast

What’s necessary to the infrastructure with any kind of SNP product? @betsyseals of @GroupRebellis discusses #medicareadvantage on our #healthcarepodcast. #healthcare #podcast

What’s Betsy’s forecast for the future of Medicare Advantage? @betsyseals of @GroupRebellis discusses #medicareadvantage on our #healthcarepodcast. #healthcare #podcast

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Stacey Richter (INBW36), Dr Eric Bricker (Encore! EP351), Al Lewis, Dan Mendelson, Wendell Potter, Brian Klepper (Encore! EP335), Dr Aaron Mitchell (EP382), Karen Root, Mark Miller, AJ Loiacono, Josh LaRosa, Stacey Richter (INBW35), Rebecca Etz (Encore! EP295), Olivia Webb (Encore! EP337), Mike Baldzicki, Lisa Bari, Betsy Seals (EP375), Dave Chase, Cora Opsahl (EP373), Cora Opsahl (EP372), Dr Mark Fendrick (Encore! EP308), Erik Davis and Autumn Yongchu (EP371), Erik Davis and Autumn Yongchu (EP370), Keith Hartman, Dr Aaron Mitchell (Encore! EP282), Stacey Richter (INBW34), Ashleigh Gunter

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We got two new reviews this week on the podcast, which I was thrilled to see. The first was from, it turns out, Dave Chase from Health Rosetta, who wrote that “with so many people in healthcare practicing ‘innovation theater’ and bloviating versus driving real change, it’s a breath of fresh air to listen to Relentless Health Value.” Thank you so much for saying that, Dave. We try really hard to get guests who are actually doing great things such as yourself.

And then there’s another review from mattiw2002, who says, “For anyone trying to stay abreast of developments in the healthcare space, there’s none better than … Relentless Health Value.”

Thank you so much to the two of you who took the time to write a review—could not appreciate it more.

There have been two inbetweenisodes this year where I get deep into the why behind the “why collaborate.” And when I say collaborate, what I mean is anybody in the healthcare industry working together with and for the patients that we’re supposed to be serving here. It’s creating alignment amongst stakeholders around what’s best for the patient.

Here is the nutshell version of the two previous shows. First point: Patients fall into one care gap after another. You hear this from any PCP you talk to who’s working in a care setting when there’s little, if any, collaboration effort on the front end to ensure a non-fragmented patient journey. So then, all these care gaps wind up getting surfaced, which, by the way—let’s not forget this—these care gaps were there all along negatively affecting patient outcomes. It’s just, in the past, we didn’t know about them. But now that we know about them, it becomes the fee-for-service PCPs’ job to mop up all the care gaps while the faucet is still running.

So, that’s the situation analysis, and if we’re going to put an end to this, it means that payers have to align with providers and give enough incentive for those providers to create a non-fragmented patient journey (ie, making sure that the care gaps don’t happen to begin with). This also means providers need to talk amongst themselves and collaborate.

Keep in mind that a multi-morbid Medicare patient sees something like 5 to 13 doctors, on average, depending on what study you look at … 13! If anybody thinks that a patient can see 13 doctors not collaborating with each other and coordinating care and not wind up with some polypharmacy adverse event or materially conflicting advice … I don’t know. Call me. I just do not understand how consistent excellence in patient outcomes or patient care even could be achieved. That whole cliché the left hand doesn’t know what the right hand is doing? That’s a cliché for a reason, and I seriously suspect the entire field of medicine isn’t weirdly excluded from it.

So, first point: Collaboration/alignment is required amongst healthcare stakeholders for patients to get decent outcomes, especially patients with multiple chronic conditions. Payers gotta pay for the right stuff, and providers have to coordinate care. Otherwise, you wind up with all of the care gaps that PCPs currently working in systems with fragmented patient journeys are seeing.

Here’s the second point from earlier episodes: Financial toxicity is clinical toxicity. Patients are forgoing care they need and not taking drugs they need because they cannot afford them. This is not speculation. Trilliant Health just released a report that showed this. Healthcare utilization, if you subtract COVID care and behavioral health, might be permanently down. Other reports speculated that by 2030, a leading cause of death might be nonadherence due to cost concerns. Wayne Jenkins, MD, in episode 358, talks about a whole constellation of negative effects when patients can’t afford care; and yeah … here we are. Patients cannot afford their care. They cannot afford premiums, deductibles, out-of-pockets. These are insured patients a lot of times we’re talking about here. Also, this is not a “Medicaid” problem, as Dan Mendelson put in episode 385.

So, go back and listen to the earlier shows for the who and the what and the why of the above and much more context; but nothing I’ve just said is stuff that I personally would regard as my personal opinion. There is one study after another that bears all this out. There is just one anecdote after another. Fragmented patient care and care that is way more expensive than a patient can afford is going to result in outcomes that are not, let’s just say, super.

Alright, all of this being said, does then aligning payers and providers, and providers collaborating with each other and coordinating care … if these things are done, do patient outcomes improve? Do care gaps reduce? Are patients more satisfied with their care? Said another way, when physician practices get paid to deliver health and not paid for sick care, does patient health actually improve?

Why, yes. Yes, it does. Why do I say this?

First of all, this very much seems to be the conclusion of CMS. Here’s from the Center for Medicare & Medicaid Innovation (CMMI). They released a report updating their strategic vision for implementing value-based care. One of the key new strategies focuses on creating greater care coordination between primary care doctors and specialists.

What might be some of the success stories that precipitated the CMMI focusing their strategy on exactly what I’ve been running around squawking about for one to three years now?

The ChenMed Case Study: ChenMed focuses on the most vulnerable patients and dramatically improves access for those patients, which has led to a 30% to 50% reduction in hospitalizations. They published there’s been a 20% to 30% reduction of stroke. They’ve doubled six-month cancer survival rates and, in some cases, reduced heart failure readmissions by 50%, 70%, up to 90%. They see evidence that they are extending lives five or more years. How? By the providers being aligned with the payers and then also making sure that there is very coordinated care going on there.
Johns Hopkins has a paper in JAMA that concluded that a care coordination model can be associated with improved outcomes, including substantial cost reduction.
I was talking to Larry Bauer from FMEC, the Family Medicine Education Consortium; and he sent me probably a 40-page PDF of really great patient results when care is coordinated and payers are aligned to pay for health. As just one example, Dr. Daniel Hoefer from Sharp HealthCare, they have created what they call their Transitions program. And the idea is by moving aggressive care upstream via community-based palliative medicine, they have proven that the vast majority of people never need to see the inside of a hospital during the last year-ish of their life. The revolving door of hospitalization should be considered an archaic residual of a bygone era, as they put it. Again, this is very well-coordinated care with payer alignment.
Do patients actually want this stuff? Before I get into our evidence here, just let me remind you that Kaiser is a payvider with a narrow network and also that Centivo is an innovative TPA (third-party administrator) pulling together narrow networks. On the podcast the other week, Dan Mendelson (EP385) from Morgan Health said that 40% of new employees are choosing lower-premium plans with either Kaiser or Centivo benefit designs. They are choosing lower-cost plans just as much for the lower premiums as for the care coordination and the “I don’t want anybody between me and my doctor” messages. This is what happens when payers and providers are aligned. Nobody gets in the middle there. Heard a similar story from Nick Stefanizzi (EP383) from Northwell Direct. They’re doing direct contracting with customers like Whole Foods. Everybody I talk to here is surprised how many employees are electing these kinds of plans. So, yeah …
The Nuka System of Care in Alaska (EP312), where I get into this with Doug Eby, MD, MPH, CPE, in great detail. But wow, just wow there. With the Nuka ecosystem, they went from basically a failing mess into the health system that many consider to be the best or one of the best in the country at something like half the price per patient than in mainland US. They have this whole thing where they integrate specialty care into primary care. They have established an agreed-upon referral patterns and also an agreed-upon way to work with specialists that very much involves PCPs talking to specialists so that the whole person, the whole patient can be considered. They structure their whole program around paying for health and getting paid for health. Also, Nuka has a 96% patient satisfaction rate. So again, patients are certainly on board with this.

If I was gonna sum up these five examples, I would certainly say that any physician practices looking to take better care of patients, rediscover clinical excellence and focus … get aligned with payers (CMS or otherwise). That’s step one and certainly easier said than done. After that, work to collaborate with fellow providers. All of these entities that we just talked about who can brag about their patient outcomes and care quality are doing both of the stuff that we just talked about: aligning and collaborating with payers and other providers.

They are also, at the same time, folding three other things into their strategy. And this other stuff is required because you kinda can’t align with payers and you can’t collaborate unless you’re doing these three things at the same time: standardizing best-practice care, getting and using data, and using good technology in conjunction with that data. All of this in the service of this last thing, which is turning transactions into relationships. Human relationships. Relationships with patients. As Rebecca Etz, PhD, and her team at The Larry A. Green Center have shown quite crisply (discussed in episode 295), no relationship with a patient means worse outcomes for patients. End of sentence. But then there’s also having relationships with colleagues and relationships with other docs who have patients in common. It is really tough to coordinate care without relationships, and it’s also not very fulfilling.

Alright, moving on to another question: Are doctors happy in these models where payers are paying for health and where it’s a must-have to coordinate across the continuum of care? Well, I can tell you a couple of things. ChenMed has been named to Newsweek’s “Most Loved Workplaces” list. Nuka System has a 93% employee satisfaction rating. Considering that elsewhere one out of two family practice docs are burned out, this is pretty striking in contrast.

Also, here’s another quote from a physician leader about good accountable care where health is being paid for. He said, “This has changed our physicians’ lives … the idea that we can get paid to actually take care of people. To actually have data to send people to the best for follow-up care, who we know will continue and contribute to the patients’ well-being in the same way. Burnout reduces here because burnout is moral injury in a cheap Halloween costume.”

I’m really sorry I can’t remember who said that because it’s a great quote and so true.

Larry Bauer from FMEC also told me the other day that DPC (Direct Primary Care) conferences have never had a session on burnout. Larry says he tells people if they want to see what 350 happy primary care docs look like, they need to come to a DPC summit. They’re happy as clams. Now, while DPC isn’t the “be entirely responsible for downstream costs” kind of accountable care, what is going on in DPC is, these docs are accountable to their patients and for the care that they are providing.

Here’s another anecdote which I think, in sum, adds up to a “yes” if the question is “Do docs really like this stuff?” I had a long conversation with Scott Conard, MD, the other day about his work with clinics in Queens. What I learned was, these clinics, they used to have waiting rooms overflowing with patients who had been waiting the entire day to be seen and just ... it wasn’t good for anybody. Fast-forward a few years—high-risk patients get seen fast, and there’s time for care coordination. Patients are happy; outcomes are better.

But here is why I inferred that the docs are happy in this model: There was a new office manager. New office manager starts trying to go back to the old way, the “normal” way that practices are run. And it was mutiny on the bounty. No way no how were those docs going back. I took that as a pretty solid testimonial if I ever heard one.

So, I don’t know if anybody has done any sort of global physician satisfaction studies to determine if physicians who are in pay-for-health models where they’re collaborating with one another are happier and less burned out than doctors in the current fee-for-service (FFS) environment. But I can tell you that if somebody did do this, there’s gonna be one really big confounding factor … and this is what it is: There’s a world of difference between a well-functioning accountable care model and a very terrible one.

I have had a series of (as I said earlier) pretty heartbreaking, honestly, conversations with PCPs around the country who think value-based care pretty much sucks. For the big why on this, listen to the show with Dan O’Neill (EP359). But in short, in “not quite there yet” value-based care models, one’s still in the two canoes messy middle (ie, they’ve got one foot in the value-based care world and one foot firmly in the FFS world). Life can get really hard for PCPs especially because they get the worst of both. They get to be care gap cowboys and cowgirls while, at the same time, having to do all of the FFS coding; and they still have seven-minute visits and RVU targets. There’s not really great population health. Nobody’s figured out how to defragment the care journey. And then there’s the whole measurement industrial complex that gets piled on top of their day. I cannot stress this enough.

Alright, so let’s just check off our last big question here for the money motivated. This especially comes up when talking with especially specialists, who are doing very well, thank you very much—financially, I mean—in the current FFS status quo. So, let’s not avoid the elephant in the room.

Is taking on risk, getting paid for value, being accountable to deliver great results, deliver health … is it worth it from a financial standpoint? Alright, let’s take a look at this.

Here’s from show 343 with David Carmouche, MD, when he was at Ochsner. He said, “Anything that we can do to convert the effective reimbursement in the Medicare space to something greater than Medicare fee-for-service rates, we think that this is in our best interest. So, we have gone very heavy into moving as much of our Medicare business into risk as we can. And we will take full capitation under a couple of Medicare advantage contracts.” So, that includes primary care as well as specialist care.
Let’s talk about One Medical for a moment. Five percent of One Medical members account for 51% of the company’s revenue. You know which 5% account for that 51% of revenue? Right, the at-risk ones that are part of the Iora value-based medical group with a capitated model. That is a pretty strong financial endorsement there.
There’s a whole show with Brian Klepper, PhD (EP335), about why private equity is willing to pay $55,000 per patient in a capitated model. So, some actuaries somewhere think this is a very financially sound way to go. I am not sure if I would die on this hill, but I’d also say there’s likely a downside to making zero effort on the accountable care front and banking on FFS being a forever cash cow.

Everything I’ve just said, not a secret. Not at all. You see CMS moving in the “making providers accountable” direction. I already mentioned this and what CMMI is up to. But this is very much an overall strategy. Currently, 44% of traditional Medicare beneficiaries with parts A and B are in a care relationship with some accountability for quality and total cost of care. CMS aims to boost that number to 60% by 2024 and 100% by 2030.

In sum across the industry, it looks like 19.6% of healthcare payments were risk-based in APMs (Alternative Payment Models) that include upside and downside. This is a couple points higher than in 2020, but it’s not like it’s skyrocketing. So, that might be a curb to our enthusiasm.

However, in 2022 here, looking forward to 2023, you know who besides CMS is going heavy on trying to pay for health and not sick care? I have never seen my entire career more CEOs of Fortune 500 companies—CEOs!—who are actively taking a role in their employee health benefits. I think it’s because they can’t afford not to at this point. Again, financial toxicity is very, very real for employed individuals.

Here’s something that Jeff Hogan called out from a McKinsey report: “VBC [value-based care] models that show promise in the employer context include high-performance provider networks with cost- and quality-based metrics, episode-based payments for standardized patient-care journeys … , and risk-based contracts for end-to-end management of high-cost conditions.”

You know what all those things have in common that I just rattled off? Only high-performing docs are in network—and this includes specialists.

I say all this to say, I don’t know, if I were a practitioner of healthcare and I knew that all this data was floating around about my practice patterns and given that doctors that don’t perform well as per that data are being excluded from networks … I don’t know, just given all of the signs that are pointing in a risk-based direction, learning to take on risk just seems like—I was never a Boy Scout, but the whole “Be prepared” seems pretty sound advice right now, especially given how long it takes to get good at this.

For more information, go to aventriahealth.com.
To listen to the playlist of the mentioned episodes, click here.

05:03 When physician practices get paid to deliver health and not paid for sick care, does patient health actually improve?

05:46 What is the ChenMed Case Study?

06:26 Can a care coordination model be associated with improved outcomes, including substantial cost reduction?

06:38 Are there examples of really great patient results when care is coordinated and payers are aligned to pay for health?

07:29 Do patients actually want this stuff?

07:46 Are employees choosing lower-cost plans just as much for the lower premiums as for the care coordination and the “I don’t want anybody between me and my doctor” messages?

08:29 What is the Nuka System of Care in Alaska?

09:25 “I would certainly say that any physician practices looking to take better care of patients, rediscover clinical excellence and focus … get aligned with payers (CMS or otherwise). That’s step one and certainly easier said than done.”

10:45 Are doctors happy in these models where payers are paying for health and where it’s a must-have to coordinate across the continuum of care?

11:16 “This has changed our physicians’ lives … the idea that we can get paid to actually take care of people. To actually have data to send people to the best for follow-up care, who we know will continue and contribute to the patients’ well-being in the same way. Burnout reduces here because burnout is moral injury in a cheap Halloween costume.” —Physician leader

13:25 “There’s a world of difference between a well-functioning accountable care model and a very terrible one.”

13:59 “Life can get really hard for PCPs especially because they get the worst of both. They get to be care gap cowboys and cowgirls while, at the same time, having to do all of the FFS coding; and they still have seven-minute visits and RVU targets.”

14:43 Is taking on risk worth it from a financial standpoint?

16:05 “There’s likely a downside to making zero effort on the accountable care front and banking on FFS being a forever cash cow.”

17:11 “I have never seen my entire career more CEOs of Fortune 500 companies—CEOs!—who are actively taking a role in their employee health benefits. I think it’s because they can’t afford not to at this point. Again, financial toxicity is very, very real for employed individuals.”

17:54 “Only high-performing docs are in network—and this includes specialists.”

For more information, go to aventriahealth.com.
To listen to the playlist of the mentioned episodes, click here.

Our host, Stacey, discusses #collaboration on our #healthcarepodcast. #healthcare #podcast

When physician practices get paid to deliver health and not paid for sick care, does patient health actually improve? Our host, Stacey, discusses #collaboration on our #healthcarepodcast. #healthcare #podcast

What is the ChenMed Case Study? Our host, Stacey, discusses #collaboration on our #healthcarepodcast. #healthcare #podcast

Can a care coordination model be associated with improved outcomes, including substantial cost reduction? Our host, Stacey, discusses #collaboration on our #healthcarepodcast. #healthcare #podcast

Are there examples of really great patient results when care is coordinated and payers are aligned to pay for health? Our host, Stacey, discusses #collaboration on our #healthcarepodcast. #healthcare #podcast

Do patients actually want this stuff? Our host, Stacey, discusses #collaboration on our #healthcarepodcast. #healthcare #podcast

Are employees choosing lower-cost plans just as much for the lower premiums as for the care coordination and the “I don’t want anybody between me and my doctor” messages? Our host, Stacey, discusses #collaboration on our #healthcarepodcast. #healthcare #podcast

What is the Nuka System of Care in Alaska? Our host, Stacey, discusses #collaboration on our #healthcarepodcast. #healthcare #podcast

“Are doctors happy in these models where payers are paying for health and where it’s a must-have to coordinate across the continuum of care?” Our host, Stacey, discusses #collaboration on our #healthcarepodcast. #healthcare #podcast

“There’s a world of difference between a well-functioning accountable care model and a very terrible one.” Our host, Stacey, discusses #collaboration on our #healthcarepodcast. #healthcare #podcast

Is taking on risk worth it from a financial standpoint? Our host, Stacey, discusses #collaboration on our #healthcarepodcast. #healthcare #podcast

“There’s likely a downside to making zero effort on the accountable care front and banking on FFS being a forever cash cow.” Our host, Stacey, discusses #collaboration on our #healthcarepodcast. #healthcare #podcast

“Only high-performing docs are in network—and this includes specialists.” Our host, Stacey, discusses #collaboration on our #healthcarepodcast. #healthcare #podcast

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Dr Eric Bricker (Encore! EP351), Al Lewis, Dan Mendelson, Wendell Potter, Brian Klepper (Encore! EP335), Dr Aaron Mitchell (EP382), Karen Root, Mark Miller, AJ Loiacono, Josh LaRosa, Stacey Richter (INBW35), Rebecca Etz (Encore! EP295), Olivia Webb (Encore! EP337), Mike Baldzicki, Lisa Bari, Betsy Seals (EP375), Dave Chase, Cora Opsahl (EP373), Cora Opsahl (EP372), Dr Mark Fendrick (Encore! EP308), Erik Davis and Autumn Yongchu (EP371), Erik Davis and Autumn Yongchu (EP370), Keith Hartman, Dr Aaron Mitchell (Encore! EP282), Stacey Richter (INBW34), Ashleigh Gunter, Doug Hetherington

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This episode was one of the most popular episodes in the past 12 months. Since it aired, there was a show with Kevin Schulman, MD (EP366), that added some context, which I would recommend, and also one with David Muhlestein, PhD, JD (EP364). Those two shows and this one are a good three-pack.

And hey, here’s something new that we’re going to try out. Coming up in December, Dr. Bricker and I will host a smallish virtual chat to discuss the topics covered in this episode. It will be a conversation, not a presentation, so therefore the “why” behind the “smallish.” If you are kinda thinking this is something that you’d like to do, go to our Web site and scroll down to the “Join the Relentless Tribe.” When we get our act together, we’ll send out the details for how to sign up in a future email. I’m thinking it will be very cool to get a chance for the great people who support our show enough to actually get a weekly email to talk amongst ourselves!

In this healthcare podcast, I’m speaking with Eric Bricker, MD, about how so many entities in healthcare are getting up in other people’s business and swimming in other people’s traditional lanes. We kick off the conversation talking about the payer, PBM, and hospital system horizontal consolidation that has transpired over the past decades (that’s plural). Horizontal consolidation is pretty much the easiest way to decimate all competition in your own swim lane so that you can charge more and not worry so much about patient/customer/member experience because the patients/customers/members have no better alternative. They effectively have nowhere, or few other places at best, to go if they leave you.

So, what’s the impact of horizontal consolidation? Commercial insurance costs have gone up 4x the rate of other benchmark goods and services.

Let’s spend a moment, shall we, on the human impact of all this extreme consolidation. The impact is your sister, your neighbor, your son, your friend. So many feel so much pressure financially in our country today because of healthcare costs. Even families earning significantly more than median household income are forgoing care because of costs. This was in a recent paper. (The authors are Alyce S. Adams, Raymond Kluender, Neale Mahoney, Jinglin Wang, Francis Wong, and Wesley Yin.)

But the direct observable financial toxicity resulting from high healthcare patient costs is really only the tip of the iceberg here. As Dave Chase from Health Rosetta has said a million times already, high healthcare costs have a multitude of effects on employers, big and small. One big one is, if healthcare costs more, then there’s less money for salaries. Dave, citing lots of evidence, has long attributed wage stagnation in this country to accelerating healthcare costs, which became even more rampant during periods of industry consolidation. Dave Chase leads Health Rosetta, by the way.

Here’s another human toxicity: Listen to episode 337 with Oliva Webb on the impact on her life as a result of the undeniably and unquestionably common non-excellent treatment by the PBMs and SPPs that she has to deal with. Because, as Dr. Bricker also says, no competition means basically not a whole lot of concern about patient experience. Why should a for-profit business spend money to improve something when there’s nothing really to be gained for them financially to do so? I mean, the best a patient can do most of the time is hop from the frying pan into the fire. That’s what happens when there’s no competition or no real competition. Also consider the burned-out clinicians who have to get stuck in the middle of this nobody-really-cares-at-the-monopoly customer service paperwork quagmire.

By the way, here’s a sidebar that might come as a surprise to some people, but please take this in the spirit with which it’s intended. All of us innovators and lifelong learners, we want to update our beliefs when the facts show us an updated conclusion. So, I have learned that all of this consolidation was going on long before the ACA (Affordable Care Act). My point here is to please look into this well-documented trend line before reflexively tweeting that the ACA drove consolidation. Dr. Bricker and others like Dr. Mai Pham have told me that, in their opinion, low interest rates, cheap debt, and a desire to eliminate competition are wildly powerful drivers of consolidation.

Anyway, about eight minutes into the interview with Dr. Bricker, if you’re one of the ones who knows all you care to know about horizontal consolidation, we get into vertical integration, vertical consolidation—and this is where things get interesting. And when I say interesting, I mean it in a “we live in interesting times” kind of way.

The vertical consolidation conversation segues into whose swim lane that the digital health and other innovators or, dare I say, disrupters are diving into and whose lunch they are aiming to eat.

Dr. Bricker probably needs no introduction. He is the force behind AHealthcareZ, which you can find online, on Twitter, YouTube, and LinkedIn. He has worked as a clinician, in healthcare finance. If that weren’t enough, he’s also been an entrepreneur—a very successful entrepreneur, I might add. He started one of the first healthcare navigation firms.

You can connect with Dr. Bricker on Twitter at @DrEricB and on LinkedIn.

Eric Bricker, MD, is an internal medicine physician and former cofounder and chief medical officer of Compass Professional Health Services. Compass is a healthcare navigation service that grew to 2000+ clients, including T-Mobile, Southwest Airlines, and Chili’s/Maggiano’s restaurants. Compass was acquired by Alight Solutions in July 2018. Alight is a 10,000-person employee benefits and HR outsourcing company that separated from Aon in 2017.

Dr. Bricker has since started AHealthcareZ.com, with 300+ healthcare finance videos with approximately 120,000 views per month across all platforms. In 2022, he became medical director of SimplePay Health, an alternative health plan that empowers employees with high-quality care, concierge support, and easily understood payment. He is also the author of Healthcare Money Campfire Stories.

05:50 What is this “megatrend” happening in healthcare right now?

07:11 How has consolidation changed the healthcare landscape?

09:41 What is vertical integration within healthcare?

11:07 Why doesn’t inorganic growth benefit patients?

12:52 “What is best for the patient does not necessarily make the most money.”

14:02 “It’s not that it’s above the law … it is just intentionally obscured.”

18:16 “Healthcare is glacial. It is slow.”

22:36 “The largest source of healthcare costs is hospitals.”

25:00 EP330 with John Marchica.

28:20 “What have the historical priorities been of the administrators of those hospitals?”

28:35 “Every hospital CFO knows that they need sick people.”

29:21 EP343 with David Carmouche, MD.

30:01 “The payment change has to come first.”

31:19 “The money wins.”

33:16 “You’ve got to put the financial incentives in place … to make people actually behave the way that they should.”

You can connect with Dr. Bricker on Twitter at @DrEricB and on LinkedIn.

@DrEricB discusses #healthcare’s changing landscape on our #healthcarepodcast. #podcast #digitalhealth

What is this “megatrend” happening in healthcare right now? @DrEricB discusses #healthcare’s changing landscape on our #healthcarepodcast. #podcast #digitalhealth

How has consolidation changed the healthcare landscape? @DrEricB discusses #healthcare’s changing landscape on our #healthcarepodcast. #podcast #digitalhealth

What is vertical integration within healthcare? @DrEricB discusses #healthcare’s changing landscape on our #healthcarepodcast. #podcast #digitalhealth

Why doesn’t inorganic growth benefit patients? @DrEricB discusses #healthcare’s changing landscape on our #healthcarepodcast. #podcast #digitalhealth

“What is best for the patient does not necessarily make the most money.” @DrEricB discusses #healthcare’s changing landscape on our #healthcarepodcast. #podcast #digitalhealth

“It’s not that it’s above the law … it is just intentionally obscured.” @DrEricB discusses #healthcare’s changing landscape on our #healthcarepodcast. #podcast #digitalhealth

“Healthcare is glacial. It is slow.” @DrEricB discusses #healthcare’s changing landscape on our #healthcarepodcast. #podcast #digitalhealth

“The largest source of healthcare costs is hospitals.” @DrEricB discusses #healthcare’s changing landscape on our #healthcarepodcast. #podcast #digitalhealth

“What have the historical priorities been of the administrators of those hospitals?” @DrEricB discusses #healthcare’s changing landscape on our #healthcarepodcast. #podcast #digitalhealth

“Every hospital CFO knows that they need sick people.” @DrEricB discusses #healthcare’s changing landscape on our #healthcarepodcast. #podcast #digitalhealth

“The payment change has to come first.” @DrEricB discusses #healthcare’s changing landscape on our #healthcarepodcast. #podcast #digitalhealth

“The money wins.” @DrEricB discusses #healthcare’s changing landscape on our #healthcarepodcast. #podcast #digitalhealth

“You’ve got to put the financial incentives in place … to make people actually behave the way that they should.” @DrEricB discusses #healthcare’s changing landscape on our #healthcarepodcast. #podcast #digitalhealth

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Al Lewis, Dan Mendelson, Wendell Potter, Brian Klepper (Encore! EP335), Dr Aaron Mitchell (EP382), Karen Root, Mark Miller, AJ Loiacono, Josh LaRosa, Stacey Richter (INBW35), Rebecca Etz (Encore! EP295), Olivia Webb (Encore! EP337), Mike Baldzicki, Lisa Bari, Betsy Seals (EP375), Dave Chase, Cora Opsahl (EP373), Cora Opsahl (EP372), Dr Mark Fendrick (Encore! EP308), Erik Davis and Autumn Yongchu (EP371), Erik Davis and Autumn Yongchu (EP370), Keith Hartman, Dr Aaron Mitchell (Encore! EP282), Stacey Richter (INBW34), Ashleigh Gunter, Doug Hetherington, Dr Kevin Schulman

Healthcare Money Campfire Stories: 16 Lessons in the Business of Healing

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First of all, let me thank those of you who have left a podcast review in 2022. There was one from Best Healthcare Podcast Around on Apple Podcasts the other day that thanked Relentless Health Value for being singularly responsible for providing a 400-level education in so many complex areas of healthcare, which I personally really appreciated because we aspire to be a master class in healthcare industry strategy, such that those looking to do right by patients understand the dynamics well enough to succeed.

This also echoed a review from February of this year that said that Relentless Health Value distills complex healthcare issues into a highly intuitive and highly accessible narrative that helped the reviewer’s Fortune 500 company get everybody in the C-suite the understanding needed to confidently make some pretty key healthcare-related decisions.

Thanks so much to those of you who left a review for taking the time. As I have said on earlier shows, we really have a Relentless Tribe here working hard to make the healthcare industry in this country much more accountable to the patients that we serve.

And you leaving a rating and a review might be the best thing that you can do if you’re into helping us achieve our mission, because the ratings are so entwined with helping others find the show. If you consider yourself a listener who has gained value from this show and you haven’t yet left a review or a rating, could I ask that you do me a favor and do so? If you don’t know how to do that, there are instructions here for how to do so.

In this healthcare podcast, I am talking with Al Lewis. Al has been on the show before. One thing I did not realize about Al is that he went to Harvard Law School. Today we are discussing using the Quizzify Consent Form in the emergency room. This Quizzify Consent Form quite simply gives patients convenient ways to remember the exact and specific words they need to write on any financial forms they are presented with and told to sign in the emergency room. These words negate a hospital system or ER staffing firm’s claims that the patient agreed in a blanket statement to pay whatever they are charged.

In the past (ie, before the surprise billing legislation that went into effect at the beginning of 2022), this Quizzify Consent Form helped prevent the old $11,000 COVID test somebody got in the emergency room or the million-dollar heart attack. For more on the legislation itself, listen to the show with Loren Adler (EP307).

While it is far from perfect in a few respects, on the whole, the No Surprises Act is good for patients. It’s been terribly bad news, however, for certain private equity–backed ER staffing organizations who used surprise billing as a business model, meaning specifically—and maybe there’s others, but Team Health and Envision are certainly the big dogs here.

This wasn’t any sort of cloaked-in-the-shadows secret, by the way, as far as business models for these two entities. I recall one of them saying without equivocation that the No Surprises Act would be very detrimental to their business. And it turns out, they were right. Here’s from Fierce Healthcare, quoting Moody’s: “Envision ‘faces significant social risk’ due to ‘significant negative publicity relating to the patients … receiving surprise medical bills’ and will remain financially challenged by the No Surprises Act.” Moody’s downgraded Envision’s corporate debt, suggesting that they are at risk of going bankrupt over the next 12-18 months.

To further attenuate my sympathies, both of these companies, Team Health and Envision, cut doctors’ pay during the first COVID-19 wave while simultaneously spending millions on political ads to protect surprise billing practices. Anyway, sad … not sad.

Getting back on track here, the good news in all of this is that patients don’t have to worry about surprise bills either by private equity–backed entities or just your run-of-the-mill hospital down the street who, pre–No Surprises Act, were not opposed to a little surprise billing action of their own or not opposed enough to do anything about out-of-network docs sending these bills in a lot of cases.

But the No Surprises Act doesn’t make going to the ER a safe space from a financial standpoint for patients or their employers, and this is what I talk about today with Al Lewis. This whole conversation reminded me of something that David Contorno has said more than once: Every hospital bill, every physician bill is a surprise bill if the patient does not know ahead of time what the charges will be. You’ve listened to this podcast before and heard guest after guest talk about how payers … frankly not so good at negotiating with hospitals, most of whom have emergency rooms. (Listen to EP346 with Peter Hayes, for example.) If you’re a patient and you go to the ER, you’re gonna see this lack of great negotiating in all of its glory. So, for example, if a payer “negotiated” $10,000 for an emergency MRI or CT scan or some other test or service and the patient has cost sharing, yeah, that patient just got hit with a very, very big bill. Or the whole upcoding thing.

This whole thing is what I talk about with Al Lewis today: post–No Surprises Act, what’s happening in emergency rooms and how can we protect patients/members/employees from excessive financial toxicity that is still rampant when it comes to going to the emergency room in many cases.

Al talks about how the employers can really help employees and members protect themselves from profiteering hospitals or physician staffing companies the patient doesn’t even realize are gonna be sending bills.

You can get and learn more about the Quizzify Consent Form as well as Quizzify’s Doctor Visit PrepKits here.

Another episode along these lines to listen to is EP328 with Marshall Allen.

You can get the free version of the card by emailing al@quizzify.com.

You can also connect with Al by emailing al@quizzify.com, visiting the Web site at quizzify.com, on LinkedIn, or on Twitter at @quizzify and @whynobodybeliev.

Al Lewis wears multiple hats, both professionally and also to cover his bald spot.

Hat #1: Employee Health Literacy. He is the founder and “quizmeister-in-chief” of Quizzify, whose mission is to help companies teach their employees to utilize health care services appropriately, using a format best described as “Jeopardy meets Choosing Wisely meets Comedy Central.” Quizzify is the only vendor authorized to display the Harvard Medical School “Veritas” shield and has received excellent reviews from users.

Quizzify is also well known for its ER Sticker Shock Prevent Consent, which has been endorsed by Dr. Marty Makary and Dave Chase, among others. It can be taped to an insurance card, used as a stand-alone card, or downloaded into your Apple or Google Wallet and will “pop up” when you enter an ER. It limits ER bills (both in- and out-of-network) to 2x Medicare, which is less than half of most “negotiated” rates.

His quiz-specific background includes authorship of the best-selling Newsweek Presents the Ultimate Trivia Game, which Games magazine lauded as having the best questions of any trivia game; hosting two quiz shows on Boston network affiliates; and appearing on Jeopardy.

Hat #2: Outcomes Measurement. As an author, his critically acclaimed category best-selling book on outcomes measurement, Why Nobody Believes the Numbers, chronicling and exposing the innumeracy of the health management field, was named digital health book of the year in Forbes. Cracking Health Costs, written in conjunction with Walmart alum Tom Emerick, was also a trade best seller.

He was the cofounder of the World Health Care Congress’s Validation Institute.

His expertise in outcomes measurement got him named one of the unsung heroes changing healthcare forever.

He graduated Phi Beta Kappa with honors from Harvard, where he taught economics as well. He also graduated from Harvard Law School, albeit with no honors that time—other than winning their annual trivia contest, of course.

06:34 What is the evolving problem around surprise bills?

07:08 What are the two issues with the No Surprises Act?

9:13 Why are ER bills in network still so high?

17:27 How does the Quizzify Consent Form work for patients with insurance who unexpectedly visit the hospital?

20:50 “They’re basically saying, ‘We don’t abide by federal law.’ Good luck with that.”

22:20 “The better question is, why aren’t other vendors copying it?”

23:56 How would Quizzify affect the hospital bottom line if employers start utilizing it as part of their employee healthcare?

27:35 Is there any potential downside to Quizzify?

You can get the free version of the card by emailing al@quizzify.com.

You can also connect with Al by emailing al@quizzify.com, visiting the Web site at quizzify.com, on LinkedIn, or on Twitter at @quizzify and @whynobodybeliev.

@whynobodybeliev of @Quizzify discusses #erbilling and the #nosurprisesact on our #healthcarepodcast. #healthcare #podcast

What is the evolving problem around surprise bills? @whynobodybeliev of @Quizzify discusses #erbilling and the #nosurprisesact on our #healthcarepodcast. #healthcare #podcast

What are the two issues with the No Surprises Act? @whynobodybeliev of @Quizzify discusses #erbilling and the #nosurprisesact on our #healthcarepodcast. #healthcare #podcast

Why are ER bills in network still so high? @whynobodybeliev of @Quizzify discusses #erbilling and the #nosurprisesact on our #healthcarepodcast. #healthcare #podcast

How does the Quizzify Consent Form work for patients with insurance who unexpectedly visit the hospital? @whynobodybeliev of @Quizzify discusses #erbilling and the #nosurprisesact on our #healthcarepodcast. #healthcare #podcast

“They’re basically saying, ‘We don’t abide by federal law.’ Good luck with that.” @whynobodybeliev of @Quizzify discusses #erbilling and the #nosurprisesact on our #healthcarepodcast. #healthcare #podcast

“The better question is, why aren’t other vendors copying it?” @whynobodybeliev of @Quizzify discusses #erbilling and the #nosurprisesact on our #healthcarepodcast. #healthcare #podcast

How would Quizzify affect the hospital bottom line if employers start utilizing it as part of their employee healthcare? @whynobodybeliev of @Quizzify discusses #erbilling and the #nosurprisesact on our #healthcarepodcast. #healthcare #podcast

Is there any potential downside to Quizzify? @whynobodybeliev of @Quizzify discusses #erbilling and the #nosurprisesact on our #healthcarepodcast. #healthcare #podcast

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Dan Mendelson, Wendell Potter, Brian Klepper (Encore! EP335), Dr Aaron Mitchell (EP382), Karen Root, Mark Miller, AJ Loiacono, Josh LaRosa, Stacey Richter (INBW35), Rebecca Etz (Encore! EP295), Olivia Webb (Encore! EP337), Mike Baldzicki, Lisa Bari, Betsy Seals (EP375), Dave Chase, Cora Opsahl (EP373), Cora Opsahl (EP372), Dr Mark Fendrick (Encore! EP308), Erik Davis and Autumn Yongchu (EP371), Erik Davis and Autumn Yongchu (EP370), Keith Hartman, Dr Aaron Mitchell (Encore! EP282), Stacey Richter (INBW34), Ashleigh Gunter, Doug Hetherington, Dr Kevin Schulman, Scott Haas

Why Nobody Believes the Numbers: Distinguishing Fact from Fiction in Population Health Management

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If you listened to the show with Dan O’Neill (EP359), you would know this already. But let me tell you: If you’re a provider, even a provider very confident in your office’s ability to confer better patient health, you will still have a super hard time getting off the fee-for-service (FFS) hamster wheel.

Why? Because it’s hard to find payer contracts out there which will reward you (the provider) for actually taking care of your patients and to be accountable for the value of healthcare that you deliver. This is a tangled web we weave because, despite some payers offering risk-based contracts, a lot of times there’s some IPA (independent physician association) or other “holder of the actual payer contract” who does not pass along these contract terms. These IPAs or health systems even sometimes just keep paying docs or provider offices FFS even if they themselves have a risk-based or capitated or value-based-of-any-kind agreement.

If I actually kept track of the issues raised in the emails I receive from docs, there’s one thing that I would likely find amongst the most frequently cited points of consternation: Physicians or practices or CINs (clinically integrated networks) or ACOs (accountable care organizations) want contracts where they can do right by patients. These are the good docs. These are the ones burned out and suffering from moral injury because physicians, PAs (physician assistants), nurses, clinicians who actually follow up and coordinate care and spend time making accurate diagnoses instead of cramming in more procedures … these are the clinicians who want to do the right thing and are also the ones who are getting dinged on performance reports and paid less.

Bottom line here, for a physician practice to transform itself from an FFS machine cranking out volume but not necessarily health or care, the office has to have a high enough percentage of their patients in value-based arrangements to make it actually feasible to transform. It is only when they hit a tipping point of enough volume, enough patients in risk-based contracts that they can afford to be accountable for their results. At that point, yeah, everybody wins—doctors, patients, actually the entire community wins because when a local practice transforms, all of their patients tend to benefit at some level from the new processes and procedures and standardizations and pop health systems that get put in place.

Expand availability of accountable care models to improve the care experience, quality, and affordability at a local level. For a deep dive on this, listen to the show with Dave Chase (EP374).
Invest in the data access needed to assess health outcomes. For a deep dive on this, listen to the show with Cora Opsahl (EP372).
Align employees’ health benefits with pop health outcomes. For a deep dive on this, listen to the show with Mark Fendrick, MD (Encore! EP308).
Prioritize care models that can meet employees wherever they are. For a deep dive on the DEI (diversity, equity, and inclusion) aspect of this, listen to the show with Monica Lypson, MD, MHPE (EP322).
Make care navigation a central part of the benefits package and experience. I am looking for an expert to take a deep dive on care navigation who does not work for a care navigation company. Hit me up if you know someone (again, who does not work for a care navigation company).

You can learn more at the Morgan Health Web site.

Dan Mendelson is the chief executive officer of Morgan Health at JPMorgan Chase & Co. He oversees a business unit at JPMorgan Chase focused on accelerating the delivery of new care models that improve the quality, equity, and affordability of employer-sponsored healthcare.

Mendelson was previously founder and CEO of Avalere Health, a healthcare advisory company based in Washington, DC. He also served as operating partner at Welsh Carson, a private equity firm.

Before founding Avalere, Mendelson served as associate director for health at the Office of Management and Budget in the Clinton White House.

Mendelson holds a Bachelor of Arts degree from Oberlin College and a Master of Public Policy (MPP) from the Kennedy School of Government at Harvard University.

05:53 Why did Dan direct his article about health benefits at CEOs?

06:56 What does an accountable care model mean to a self-insured employer?

08:50 “This alignment of value will never work … if the 150 million Americans … getting their health insurance through their employer are not also aligned in the same way.”

12:21 “We’re offering them a higher level of service.”

12:32 “Everything that we do is intended to be scalable and not just for us.”

13:01 “We have an obligation to do better for our employees.”

15:44 “Employers need to understand, the only way to get outstanding care is locally.”

18:21 Encore! EP206 with Ashok Subramanian and EP358 with Wayne Jenkins, MD.

19:10 Why is getting quantitative metric data important?

19:42 Encore! EP308 with Mark Fendrick, MD.

21:50 “This is a much broader vision of accountable care than … primary care.”

23:41 “Until everything is aligned, the employer is just not going to be providing an optimal product.”

24:32 “There are substantial issues with … health equity, and employers are paying for the care of 150 million Americans in this country.”

26:15 Is digital health access important for creating meaningful relationships between patients and providers?

30:43 What is the myth that employers need to tackle?

31:10 Why is care navigation important for employees?

32:37 EP334 with Sunita Desai, PhD.

You can learn more at the Morgan Health Web site.

@dnmendelson of @JPMorgan discusses #selfinsuredemployers on our #healthcarepodcast. #healthcare #podcast

Why did Dan direct his article about health benefits at CEOs? @dnmendelson of @JPMorgan discusses #selfinsuredemployers on our #healthcarepodcast. #healthcare #podcast

What does an accountable care model mean to a self-insured employer? @dnmendelson of @JPMorgan discusses #selfinsuredemployers on our #healthcarepodcast. #healthcare #podcast

“This alignment of value will never work if the 150 million Americans getting their health insurance through their employer are not aligned in the same way.” @dnmendelson of @JPMorgan discusses #selfinsuredemployers on our #healthcarepodcast. #healthcare #podcast

“We’re offering them a higher level of service.” @dnmendelson of @JPMorgan discusses #selfinsuredemployers on our #healthcarepodcast. #healthcare #podcast

“Everything that we do is intended to be scalable and not just for us.” @dnmendelson of @JPMorgan discusses #selfinsuredemployers on our #healthcarepodcast. #healthcare #podcast

“We have an obligation to do better for our employees.” @dnmendelson of @JPMorgan discusses #selfinsuredemployers on our #healthcarepodcast. #healthcare #podcast

“Employers need to understand, the only way to get outstanding care is locally.” @dnmendelson of @JPMorgan discusses #selfinsuredemployers on our #healthcarepodcast. #healthcare #podcast

Why is getting quantitative metric data important? @dnmendelson of @JPMorgan discusses #selfinsuredemployers on our #healthcarepodcast. #healthcare #podcast

“This is a much broader vision of accountable care than … primary care.” @dnmendelson of @JPMorgan discusses #selfinsuredemployers on our #healthcarepodcast. #healthcare #podcast

“Until everything is aligned, the employer is just not going to be providing an optimal product.” @dnmendelson of @JPMorgan discusses #selfinsuredemployers on our #healthcarepodcast. #healthcare #podcast

“There are substantial issues with … health equity, and employers are paying for the care of 150 million Americans in this country.” @dnmendelson of @JPMorgan discusses #selfinsuredemployers on our #healthcarepodcast. #healthcare #podcast

Is digital health access important for creating meaningful relationships between patients and providers? @dnmendelson of @JPMorgan discusses #selfinsuredemployers on our #healthcarepodcast. #healthcare #podcast

What is the myth that employers need to tackle? @dnmendelson of @JPMorgan discusses #selfinsuredemployers on our #healthcarepodcast. #healthcare #podcast

Why is care navigation important for employees? @dnmendelson of @JPMorgan discusses #selfinsuredemployers on our #healthcarepodcast. #healthcare #podcast

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Wendell Potter, Brian Klepper (Encore! EP335), Dr Aaron Mitchell (EP382), Karen Root, Mark Miller, AJ Loiacono, Josh LaRosa, Stacey Richter (INBW35), Rebecca Etz (Encore! EP295), Olivia Webb (Encore! EP337), Mike Baldzicki, Lisa Bari, Betsy Seals (EP375), Dave Chase, Cora Opsahl (EP373), Cora Opsahl (EP372), Dr Mark Fendrick (Encore! EP308), Erik Davis and Autumn Yongchu (EP371), Erik Davis and Autumn Yongchu (EP370), Keith Hartman, Dr Aaron Mitchell (Encore! EP282), Stacey Richter (INBW34), Ashleigh Gunter, Doug Hetherington, Dr Kevin Schulman, Scott Haas, David Muhlestein

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Here’s a Milton Friedman quote: “There is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits so long as it [that entity] stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.”

Okay, so this is Friedman, Milton Friedman, pretty much the most influential advocate of free market capitalism, stating quite clearly that an entity’s greatest responsibility lies in the satisfaction of its shareholders. His nod to social responsibility or ethics of any kind comes at the end there, where he says that for free market capitalism to function, there must be open and free competition and no fraud.

So, let’s compare this to what’s going on in the payer space in the healthcare industry. First off, there was just a chart in the New York Times the other day where pretty much every major payer except one got a check in a box for being accused of fraud. Interestingly, if you look in the comments section of that article, people posted links where that one outlier was being accused of fraud. So, I’m not sure what’s up with that, but yeah, let’s just conclude that there’s fraud in the payer space.

On to Friedman’s requirement for open and free competition. As we all know, there are a few very powerful, very big, consolidated entities who control the vast majority of the market with both regulatory capture as well as the capital to continue to buy more and more adjacent businesses, as well as any threatening upstarts and just close them down.

As I often hear said, we’re gonna wind up with single-payer healthcare but maybe not the single payer most people are thinking of. If anyone thinks that in the highly consolidated payer space there is open and free competition, send me a note. I’d love to hear from you. I mean, even if what I’ve just said is 50% or 75% true, we’re still outside of Friedman’s definition of functional free market capitalism in the payer space.

I wanna shift gears now to discuss the rules of the game, and this is really the topic of today’s podcast. Friedman said in that quote above that there are rules of the game that entities abide by. Therefore, these rules of the game are inarguably consequential. And in this healthcare podcast we’re talking about how these rules of the game echo when it comes to payers—companies that are publicly traded on Wall Street with shareholders.

So, that’s your spoiler for where this episode is headed. But before we go there, let me just say one or two things to the many listeners who I would consider certainly part of our Relentless Tribe who also work for payers. If you work for a payer, you have a few options. One of them is to do as much social good as you can to offset even a little piece of the not so good going on.

The other is to help those working elsewhere in the organization to understand the full impact of their actions and the hope that they figure out a way to be less financially toxic to members. You have already taken the first step, because simply by listening to the show, you see the problems with clear eyes.

The larger question, though, is this: Is it possible to do well by doing good vis-à-vis leveraging the power of market forces to efficiently help patients, even if shareholders are demanding otherwise? Well, it ain’t working out so great so far, just comparing us to the rest of the world. But the more white hats we have, the better.

So, keep advocating for patients in the belly of the beast, and there’s always a whistle around to blow should it come to that. Meanwhile, let’s focus our clear eyes on where we are from a patient’s eye view—just briefly here, because we’ve discussed this all before in great depth.

Here’s some stats to a Commonwealth Fund issue brief. In the first half of 2020, first quarter, one out of four adults in employer plans were functionally uninsured due to high out-of-pocket costs or high deductibles. Listen to the show with Wayne Jenkins, MD (EP358), for a deep dive on the human consequences of having insurance but not being able to afford to use it.

We’re in a place in this country where the majority (67%) of adults who reported medical bill or debt problems was insured when that care was provided. That’s from Kaiser Family Foundation. There’s 100 million Americans with medical debt. These numbers are staggering.

What’s the why with all of this? It’s our dysfunctional healthcare benefits market. Listen to the show with Kevin Schulman, MD (EP366), for more on this at the systemic level. But today we’re talking about one entity in this dysfunction, which are payers, insurance carriers. I invited Wendell Potter on the show to ask him to explain how for-profit payers contribute to our dysfunction, creating inequality and wage stagnation.

You see this happening as well as I do, right? On one hand, we have entities claiming all kinds of worthy and beautiful things in press releases and maybe even doing pilot programs—pilots, which are great, and I wish they did more of them and scaled them more broadly, but then premiums go up the following year … again.

Being blunt here, it’s hard to attain broad success in improving health outcomes or improving disparities in care when getting and/or using their healthcare benefits is toxic financially and disproportionately impacts lower-income communities. The reality is, private payers have not been able to bring costs of care down. What they have done instead is settle more and more out of pockets with patients or with taxpayers or with employers.

Speaking of more and more out-of-pocket costs, although this is not the focus of the show, I am not giving consolidated health systems a pass here, obviously. But in this episode, we’re focusing on why payers behave as they do contributing to the dysfunctional healthcare benefit system in this country.

I could not have been more thrilled to have an opportunity to speak with Wendell Potter. His name most likely precedes him. But in brief, for much of his early career, Wendell Potter was a health insurance executive. After 20 years, he left his job after a crisis of conscience. Wendell testified before then-Senator Rockefeller’s Commerce Committee at a hearing about how healthcare companies actually operate. From there, he went on to write books and ultimately to start the Center for Health & Democracy.

You can learn more by following Wendell and signing up for his newsletter at wendellpotter.substack.com.

Wendell Potter has more than four decades of experience as a communications professional, including a career as a reporter and a communication executive at the country’s largest health insurers. After seeing firsthand how strategic PR and lobbying are used unfairly to tilt the scales toward corporate interests against the people’s interests, Wendell left his corporate career to advocate for meaningful healthcare reform. He made headlines in 2009 when he disclosed in Congressional testimony how insurance companies, as part of their efforts to boost profits, have contributed to spiraling healthcare costs and the growing number of Americans without health insurance. Since then, he has spoken at more than 200 public forums and authored the award-winning New York Times bestseller Deadly Spin: An Insurance Company Insider Speaks Out on How Corporate PR Is Killing Health Care and Deceiving Americans. He is also the author of Obamacare: What’s in It for Me? What Everyone Needs to Know About the Affordable Care Act. His latest book, which he wrote with Nick Penniman, is Nation on the Take: How Big Money Corrupts Our Democracy and What We Can Do About It.

Wendell leads two nonprofit advocacy organizations, Business Leaders for Health Care Transformation and the Center for Health & Democracy that convenes the Lower Out-of-Pocket NOW Coalition that pushes for reforms that lower and cap out-of-pocket costs in the United States.

07:01 What is the medical loss metric?

10:04 “The reality is, insurers have been jacking up premiums … for a long time.”

11:19 “It’s a short-term game.”

14:10 “You’re seeing that these companies are not doing a very good job … of controlling costs because they don’t have the incentive.”

16:37 Why are payers hammering the individual PCPs?

17:40 Why does a Wall Street publicly traded payer care what their medical cost is as long as their premiums are higher?

20:07 EP366 with Kevin Schulman, MD.

22:32 How do payers ensure that they’re controlling utilization?

25:40 “It’s death by a thousand cuts.”

31:42 “Just like independent practice physicians are endangered, so are community pharmacists.”

33:11 Who runs our healthcare system?

You can learn more by following Wendell and signing up for his newsletter at wendellpotter.substack.com.

@wendellpotter of @cforhd discusses #healthcareshareholders on our #healthcarepodcast. #healthcare #podcast #healthpayers

What is the medical loss metric? @wendellpotter of @cforhd discusses #healthcareshareholders on our #healthcarepodcast. #healthcare #podcast #healthpayers

“The reality is, insurers have been jacking up premiums … for a long time.” @wendellpotter of @cforhd discusses #healthcareshareholders on our #healthcarepodcast. #healthcare #podcast #healthpayers

“It’s a short-term game.” @wendellpotter of @cforhd discusses #healthcareshareholders on our #healthcarepodcast. #healthcare #podcast #healthpayers

“You’re seeing that these companies are not doing a very good job … of controlling costs because they don’t have the incentive.” @wendellpotter of @cforhd discusses #healthcareshareholders on our #healthcarepodcast. #healthcare #podcast #healthpayers

Why are payers hammering the individual PCPs? @wendellpotter of @cforhd discusses #healthcareshareholders on our #healthcarepodcast. #healthcare #podcast #healthpayers

Why does a Wall Street publicly traded payer care what their medical cost is as long as their premiums are higher? @wendellpotter of @cforhd discusses #healthcareshareholders on our #healthcarepodcast. #healthcare #podcast #healthpayers

How do payers ensure that they’re controlling utilization? @wendellpotter of @cforhd discusses #healthcareshareholders on our #healthcarepodcast. #healthcare #podcast #healthpayers

“It’s death by a thousand cuts.” @wendellpotter of @cforhd discusses #healthcareshareholders on our #healthcarepodcast. #healthcare #podcast #healthpayers

“Just like independent practice physicians are endangered, so are community pharmacists.” @wendellpotter of @cforhd discusses #healthcareshareholders on our #healthcarepodcast. #healthcare #podcast #healthpayers

Who runs our healthcare system? @wendellpotter of @cforhd discusses #healthcareshareholders on our #healthcarepodcast. #healthcare #podcast #healthpayers

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Nick Stefanizzi, Brian Klepper (Encore! EP335), Dr Aaron Mitchell (EP382), Karen Root, Mark Miller, AJ Loiacono, Josh LaRosa, Stacey Richter (INBW35), Rebecca Etz (Encore! EP295), Olivia Webb (Encore! EP337), Mike Baldzicki, Lisa Bari, Betsy Seals (EP375), Dave Chase, Cora Opsahl (EP373), Cora Opsahl (EP372), Dr Mark Fendrick (Encore! EP308), Erik Davis and Autumn Yongchu (EP371), Erik Davis and Autumn Yongchu (EP370), Keith Hartman, Dr Aaron Mitchell (Encore! EP282), Stacey Richter (INBW34), Ashleigh Gunter, Doug Hetherington, Dr Kevin Schulman, Scott Haas, David Muhlestein, David Scheinker

Obamacare: What's in It for Me?: What Everyone Needs to Know About the Affordable Care Act

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The show on direct contracting with Doug Hetherington (EP367) and also the one with Katy Talento (EP350), both of these experts have said that if an employer direct contracts with a provider organization, in general, the employer gets about 20% savings over the status quo. This makes sense—just cut out the middleman with an MLR (medical loss ratio) of plus or minus about 15% and you’re at three-quarters of the way there.

You might be thinking, “Well, maybe not so fast here, because then wouldn’t FFS (fee-for-service) rates go up? Is it not Slide 1 on most carriers’ sales decks how great they are at leveraging their vast buying power to negotiate discounts with hospitals?” Hmmm … if you think this, you’re about to be shook.

Turns out, carriers are not so good at negotiating rates with hospitals. For more on this topic, follow Leon Wisniewski on LinkedIn. Or check out an article entitled “Hospital prices vary widely, often higher with insurance than cash, The New York Times finds.”

The big concerns for employers looking to direct contract, I think, are going to be threefold. And right now, I’m just speaking in general. This has nothing to do with the conversation that follows. But I think the three big concerns are this:

Let’s say the employer gets actual fee-for-service rates that are 20% less than average carrier negotiated rates. So, great … but will utilization go up if the wolf is watching the henhouse, so to speak? Especially if PCPs are owned by the hospital system and incented, as many are, to drive downstream utilization. It’s been estimated that PCPs can drive $1,000,000+ of revenue when they refer in network to profitable service lines. What happens when this is unfettered, meaning no third party to do prior auth stuff for utilization management, for example?

Some employers, for sure, could and certainly do hire a third party to do utilization management; but sometimes one of the contractual requirements of a health system direct contract is an easing of, let’s just say, at least the most aggressive PA (prior auth) requirements. So now, all of a sudden, are more plan members getting more services that, even at a 20% discount, add up to a greater total spend?

A counterpoint: I’ve heard more than one person who would know say that most PA programs don’t actually do a whole lot except defer spend at best. Here’s a quote from Scott Haas. He said, “The only value I have observed of the prior authorization process is the accumulation of data that is required of the stop-loss industry to establish known risk for them to laser risk. Cost shifting at its best. Other than that, I have rarely observed value to the patient, provider, or the plan sponsor.”

One thing I am noticing is that those providers offering direct contracts are aware of this whole line of questioning and fear of the health system driving overutilization because incentives and might be doing things (the health system looking to direct contract) to mitigate those fears. Some are discussed later in this podcast.

So, I don’t know about whether plan sponsor spend would net-net go up if you get rid of PAs and profit-driven utilization management or go up enough to offset all of the admin costs and care gaps that crappy prior auths or prior auth processes slam patients and providers with.

Big concern for employers (besides even if the price goes down will utilization go up—and then what’s the net effect of that?): Will the provider’s PPO (preferred provider organization) network be too narrow if I go with a direct contract with a health system, either legally running afoul of network adequacy rules or run afoul of employees just getting pissed off because their doctors are no longer in network? I guess there’s a bunch of ways you can do things if you are a plan sponsor that might mitigate this, but I could still see it certainly being a concern.
By aligning the plan sponsor with the provider, including getting all the data and just from a pop health perspective being able to align around priorities, does care quality, preventative care stuff, social determinants of health, and equity concerns … does this stuff actually start to improve patient health? There are plenty of examples—some that Nick Stefanizzi talks about in this podcast, including a great one with Whole Foods—where this is certainly the case.

But as we in healthcare all know, not all cases are the same. As soon as any party in the mix starts trying to maximize their revenue with little regard to its impact on patients and clinicians, things can go south.

For example, just speaking in general here, but I might bring up the whole “remember consolidating health systems?” They promised all kinds of care quality improvements as a result of owning the entire patient journey and consolidating data and … yeah, not so much with that. As we know, hospital systems who consolidated have no greater or better quality on the whole as unconsolidated health systems, despite the fact that their prices went up a lot.

Now, I just have to say, this is not a parallel situation. When the health system consolidated, it was just providers consolidating, which may have actually exacerbated relationships with plan sponsors and payers as opposed to driving greater alignments. So, as I said, not a parallel situation.

I think the point that I’m making is just because better patient care is theoretically possible doesn’t necessarily mean it will happen when there are profits at stake. However, when incentives do align and true collaborations can occur amongst payers and providers or amongst any of the other stakeholders along the patient journey … yeah, some great stuff can happen.

As I mentioned earlier, I am talking with Nick Stefanizzi, who is CEO over at Northwell Direct, which is Northwell’s stand-alone, for-profit entity looking to direct contract with employers and their TPAs (third-party administrators). The board of Northwell, meaning the tax-exempt hospital system mother ship, that same board also oversees Northwell Direct. Northwell Direct has two main categories of product offerings. One is that they offer on-site and virtual clinics for employers. The other is that they offer a network to direct contract with.

According to Nick Stefanizzi, a health system can offer significant price reductions because—and this mirrors a lot, as I mentioned earlier, what Doug Hetherington (EP367) and Katy Talento (EP350) said in earlier episodes—you can get rid of a ton of administrative burden that payers place on hospital systems, plus you get rid of the middleman carrier profit margins, plus the health system can drive additional volume, I’m assuming to profitable service lines with profitable commercial patients … patients who are profitable despite the 20% cut because, yes, commercial rates are still way higher than Medicare even if you cut 20% off the top. It’s also, as Nick talks about in this episode, more possible to do value-based things and care for populations because there’s plan sponsor/provider alignment and far better data capture.

You can learn more at northwelldirect.northwell.edu.

Nick Stefanizzi is the chief executive officer of Northwell Health’s direct-to-employer organization, Northwell Direct, which supports businesses through a full spectrum of customized employer health services. Prior to joining Northwell Direct, Nick served as chief administrative officer and later as interim chief executive officer of Formativ Health, a for-profit joint venture aimed at enhancing the patient and provider experience of and access to care. Nick also spent over eight years in various leadership roles within the Northwell Health system, focused on human resources (HR), organizational effectiveness, talent management, and HR technology. He was a leader within the health system’s ambulatory network of over 450 physician offices and ambulatory locations, where he was responsible for the direct development, coordination, and administration of central administrative services, as well as the integration of the health system’s network of clinical joint ventures. He also served as the chief of staff for the health system’s chief information officer. Nick received a degree in international relations from Boston University and his MBA in healthcare administration from Hofstra University.

07:22 What do Northwell Health’s main services look like?

08:05 How does Northwell Health save their clients 20%?

12:53 “Look, it is a selective network.”

13:22 What are the factors that allow Northwell Health to provide this 20% discount?

13:36 How does getting rid of the payer help the patient and provider relationship and reduce costs?

17:00 Why Northwell Health is selective, not narrow, in their network.

18:28 How does Northwell Health operationalize their direct network?

19:39 “Communication and change management and engagement.”

22:17 “Providers also want to be a part of this. They also have ideas.”

23:04 Where does the TPA fit into this model?

25:05 EP127 with Kris Smith, MD, MPP.

25:54 What are Northwell Health’s must-haves for their TPA partners?

30:27 What’s different about Northwell Health’s approach?

You can learn more at northwelldirect.northwell.edu.

Nick Stefanizzi of @NorthwellHealth discusses #directcontracting on our #healthcarepodcast. #healthcare #podcast #healthsystems

What do Northwell Health’s main services look like? Nick Stefanizzi of @NorthwellHealth discusses #directcontracting on our #healthcarepodcast. #healthcare #podcast #healthsystems

How does Northwell Health save their clients 20%? Nick Stefanizzi of @NorthwellHealth discusses #directcontracting on our #healthcarepodcast. #healthcare #podcast #healthsystems

“Look, it is a selective network.” Nick Stefanizzi of @NorthwellHealth discusses #directcontracting on our #healthcarepodcast. #healthcare #podcast #healthsystems

What are the factors that allow Northwell Health to provide this 20% discount? Nick Stefanizzi of @NorthwellHealth discusses #directcontracting on our #healthcarepodcast. #healthcare #podcast #healthsystems

How does getting rid of the payer help the patient and provider relationship and reduce costs? Nick Stefanizzi of @NorthwellHealth discusses #directcontracting on our #healthcarepodcast. #healthcare #podcast #healthsystems

“Communication and change management and engagement.” Nick Stefanizzi of @NorthwellHealth discusses #directcontracting on our #healthcarepodcast. #healthcare #podcast #healthsystems

“Providers also want to be a part of this. They also have ideas.” Nick Stefanizzi of @NorthwellHealth discusses #directcontracting on our #healthcarepodcast. #healthcare #podcast #healthsystems

Where does the TPA fit into this model? Nick Stefanizzi of @NorthwellHealth discusses #directcontracting on our #healthcarepodcast. #healthcare #podcast #healthsystems

What are Northwell Health’s must-haves for their TPA partners? Nick Stefanizzi of @NorthwellHealth discusses #directcontracting on our #healthcarepodcast. #healthcare #podcast #healthsystems

What’s different about Northwell Health’s approach? Nick Stefanizzi of @NorthwellHealth discusses #directcontracting on our #healthcarepodcast. #healthcare #podcast #healthsystems

Brian Klepper (Encore! EP335), Dr Aaron Mitchell (EP382), Karen Root, Mark Miller, AJ Loiacono, Josh LaRosa, Stacey Richter (INBW35), Rebecca Etz (Encore! EP295), Olivia Webb (Encore! EP337), Mike Baldzicki, Lisa Bari, Betsy Seals (EP375), Dave Chase, Cora Opsahl (EP373), Cora Opsahl (EP372), Dr Mark Fendrick (Encore! EP308), Erik Davis and Autumn Yongchu (EP371), Erik Davis and Autumn Yongchu (EP370), Keith Hartman, Dr Aaron Mitchell (Encore! EP282), Stacey Richter (INBW34), Ashleigh Gunter, Doug Hetherington, Dr Kevin Schulman, Scott Haas, David Muhlestein, David Scheinker, Ali Ucar

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This show was one of the most popular episodes in the past 12 months, so enjoy this encore while I am in Chicago moderating a panel on pharmacy benefit management at the WTW Conference Board.

But while I have you, I just wanted to thank everyone for listening. You really are a part of our Relentless Tribe, and I could not thank you enough for your commitment to doing the right thing for patients and for this country—and that dedication is evidenced by you listening as often as you do to Relentless Health Value. Our show has the largest following of individuals who are truly pushing hard for patients over profits, and since, according to LinkedIn anyway, 40% of our listeners are at the “highest level of seniority in their organization,” I’m guessing that we have the muscle to do this thing. Thanks for being part of the Relentless Tribe and for all that you do.

In this healthcare podcast, I’m talking with Brian Klepper. If you haven’t heard of him, Brian’s a longtime healthcare analyst and former CEO of the National Business Coalition on Health.

This interview takes off like a shot, as most of my conversations with Brian Klepper do. We’re talking about primary care and its various iterations. We start out with Exhibit A—the HMO version of primary care from the ’90s. This is a great comparator to really get a handle on what’s going on today. During the heyday of HMOs (back in the ’90s), primary care was basically a glorified gatekeeper kind of doing two things. On one hand, they were restricting access. It wasn’t an accident that it was really hard to get an appointment with a PCP.

On the other hand, it also wasn’t an accident that, once you got there, the PCP only had 7 minutes to spend with you, which basically meant that you left with an appointment to see a specialist at, of course, the health system that probably had just bought that PCP practice. Everybody’s happy then, right?

Specialist volume goes up, they make a ton of money for the health system, plans make a ton of money because they make a percentage of total healthcare spend … Oh right, everybody’s happy except the patient who can’t get care and the PCP who can’t do their job.

By the way, for more information on why the ’90s version of the HMO industry crashed and burned, listen to my conversation with Alex Jung on this exact topic. A big part of the “why” really actually took me by surprise.

But back to primary care … Today, in broad strokes, we have three kinds of PCPs. And when I say three kinds of PCPs, we’re not really counting urgent cares or what amounts to urgent cares in that mix—meaning, not counting a lot of the retail clinics because they don’t really manage patient care like you’d hope a PCP would manage care. Last I checked, none of them were managing much more than an episodic visit. You can’t manage a chronic condition in 15 minutes.

So, like I said, there’s three kinds of PCPs that are around today; and let’s call the first kind the original PCP. This version of the PCP office is primarily fee for service (FFS). Maybe they have a couple of capitated contracts. But the distinguishing factor isn’t really what their payer mix is. It’s that they’re not taking on much risk or any risk of real consequence.

Second, we have direct primary care doctors. This group tends to cut out insurers and work directly with either employers or patients themselves. They take a monthly fee, and, in general, a patient can see them however much they need to. Again, no risk or little risk is assumed here beyond the primary care services themselves that are rendered.

Third, we have what Brian calls industrialized primary care—or some people call it advanced primary care, or APC—but I’d probably call it something different. I’d call it “taking risk for the full continuum of care” primary care. Maybe I wouldn’t even call it primary care at all because this third category really is starting to color outside of the lines of primary care.

This third iteration requires many things to accomplish. It requires an unimpeachable relationship with the patient; you cannot be successful with this otherwise. It requires great virtual/digital capabilities. It also requires data—data to help ensure that care gaps are filled but also to make sure that patients are referred to high-quality, high-value specialists downstream who will actually create outcomes. It also includes optimizing specialty pharmaceutical usage, for example. Brian gets into this and how a state employee health plan is on track to save $1.3 billion in this fashion.

Brian believes that this third iteration of primary care—this APC industrialized primary care—is the third leg of a three-legged stool that is needed to transform healthcare. If you must know, the second leg is identification and the use of high-performing specialty services; and the third is value-based reimbursement environment.

Most of the second half of this conversation with Brian is about why there’s just a flurry of investment into various forms of these advanced or just maybe even regular primary care models and how they might evolve moving forward. I ask Brian about Carbon Health and their recent claim that they can do primary care with about 25% to 30% EBITA, even at Medicare FFS rates. So, there’s that.

One last thing: We’ll be posting an “Ask an Expert” with Brian Klepper, where he gives the backstory about how the RUC—that AMA committee—basically killed primary care. So, come back for that show after you’re done with this one. It’s a plot full of intrigue, that’s for sure.

You can learn more by emailing Brian at bklepper@worksitehealthadvisors.com.

Brian Klepper, PhD, is principal of Worksite Health Advisors and a nationally prominent healthcare analyst and commentator. He speaks, writes, and advises extensively on the management of clinical and financial risk, on high-performance healthcare, and on realizing the potential of primary care.

05:59 Is the HMO model of primary care a good model?

08:36 “Industrialized medicine is exciting.”

09:44 What does primary care have the opportunity to do?

10:06 “The problem that goes along with that is that now immense amounts of money are being infused into primary care organizations.”

11:00 Where does direct primary care and advanced primary care fit into this model?

14:19 “At the end of the day, what primary care really needs to be about is … the management of life issues as well.”

14:48 EP295 with Rebecca Etz, PhD.

15:03 “Better relationships quantifiably translate to better care.”

22:21 “Almost nobody in healthcare wants any of this to happen.”

24:30 Why the huge amounts of money being invested into primary care is actually a big problem.

28:43 “We should be able to get wildly better health outcomes for about 40% to 45% of the money that we’re currently spending.”

You can learn more by emailing Brian at bklepper@worksitehealthadvisors.com.

@bklepper1 discusses #primarycare on our #healthcarepodcast. #healthcare #podcast #digitalhealth #pcp

Is the HMO model of primary care a good model? @bklepper1 discusses #primarycare on our #healthcarepodcast. #healthcare #podcast #digitalhealth #pcp

“Industrialized medicine is exciting.” @bklepper1 discusses #primarycare on our #healthcarepodcast. #healthcare #podcast #digitalhealth #pcp

What does primary care have the opportunity to do? @bklepper1 discusses #primarycare on our #healthcarepodcast. #healthcare #podcast #digitalhealth #pcp

“The problem that goes along with that is that now immense amounts of money are being infused into primary care organizations.” @bklepper1 discusses #primarycare on our #healthcarepodcast. #healthcare #podcast #digitalhealth #pcp

Where does direct primary care and advanced primary care fit into this model? @bklepper1 discusses #primarycare on our #healthcarepodcast. #healthcare #podcast #digitalhealth #pcp

“At the end of the day, what primary care really needs to be about is … the management of life issues as well.” @bklepper1 discusses #primarycare on our #healthcarepodcast. #healthcare #podcast #digitalhealth #pcp

“Better relationships quantifiably translate to better care.” @bklepper1 discusses #primarycare on our #healthcarepodcast. #healthcare #podcast #digitalhealth #pcp

“Almost nobody in healthcare wants any of this to happen.” @bklepper1 discusses #primarycare on our #healthcarepodcast. #healthcare #podcast #digitalhealth #pcp

Why the huge amounts of money being invested into primary care is actually a big problem. @bklepper1 discusses #primarycare on our #healthcarepodcast. #healthcare #podcast #digitalhealth #pcp

“We should be able to get wildly better health outcomes for about 40% to 45% of the money that we’re currently spending.” @bklepper1 discusses #primarycare on our #healthcarepodcast. #healthcare #podcast #digitalhealth #pcp

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Dr Aaron Mitchell (EP382), Karen Root, Mark Miller, AJ Loiacono, Josh LaRosa, Stacey Richter (INBW35), Rebecca Etz (Encore! EP295), Olivia Webb (Encore! EP337), Mike Baldzicki, Lisa Bari, Betsy Seals (EP375), Dave Chase, Cora Opsahl (EP373), Cora Opsahl (EP372), Dr Mark Fendrick (Encore! EP308), Erik Davis and Autumn Yongchu (EP371), Erik Davis and Autumn Yongchu (EP370), Keith Hartman, Dr Aaron Mitchell (Encore! EP282), Stacey Richter (INBW34), Ashleigh Gunter, Doug Hetherington, Dr Kevin Schulman, Scott Haas, David Muhlestein, David Scheinker, Ali Ucar, Dr Carly Eckert

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I saw a Tweet from Farzad Mostashari, MD, the other day; and I’m gonna rewrite it in the context of today’s show:

This is why we can’t have nice things! As soon as someone comes up with something that might accomplish some good things when done in moderation and with good intent, it gets exploited for revenue maximization.

I have to admit, this conversation with Aaron Mitchell, MD, MPH, and actually the one with Mark Miller, PhD (EP380), from two episodes ago were both kind of painful for me—and let me tell you why. It’s the same reason I find conversations painful about hospitals or leading cancer centers or even some self-insured employers and EBCs (employee benefit consultants): It hurts my heart when some percentage of healthcare industry peeps who have the opportunity to produce so much good in the world instead choose to do stuff that is financially or otherwise toxic.

But let me get to the point of today’s show. Dr. Aaron Mitchell and I are talking about conflicts of interest (COI), and we’re talking about COI in the payments that are made from Pharma to physicians. COI might mean when physicians are paid in a way that skews their clinical decision-making. Nobody wants to be the patient of a physician with skewed decision-making, after all. That’s the “why” of this whole discourse.

Now, let’s get into two important points re: skewed decision-making. Any payment that skews decision-making is, in fact, considered no bueno by the current writing of the AKS, the anti-kickback statute. Second, almost any payment, direct or indirect, turns out, skews physician decision-making.

It’s not just getting paid the big bucks to make a speech or consult or whatever. Getting a modest free lunch can also have the same effect. Prescribing is affected. That’s what the data show and what the recent paper that Dr. Aaron Mitchell and his colleagues published in the Journal of Health Politics, Policy and Law articulates. Their paper is titled “Industry Payments to Physicians Are Kickbacks: How Should Stakeholders Respond?”

So, hmmm. Much to cogitate upon in what I just said, which is what the conversation with Dr. Aaron Mitchell that follows is all about. But let me offer up a few spoilers and maybe some additional thoughts.

First of all, some “Are payments COI and kickbacks?” contemplations are pretty black and white. We start out the conversation in this healthcare podcast talking about the recent Biogen incident, I guess I’ll call it, which is sadly not an outlier. Biogen never admitted any wrongdoing here. But if what they are accused of doing is true, this could be considered not a gray area. This is black-and-white COI—unquestionably should not happen.

But where things get a little bit more open to interpretation and require some consideration and thoughtfulness is if we’re trying to weigh the gray in the middle between black and white. Here, what needs to be thought through is the aggregate good versus the aggregate bad of Pharma paying physicians to do stuff or buying things for them. If Pharma needs help during its clinical trials to figure out a breakthrough therapy and they want to talk to leading experts in a specialty, that’s maybe a good thing so that they can get a drug that actually works well for patients.

So is—and this is me talking, not Dr. Mitchell—but I could see that Pharma helping to figure out ways to educate clinicians about the best ways to help patients suffering with real diseases that nobody else is making any effort to do anything about at a national scale … it could help humans live better lives if Pharma takes the advice of the right thought leaders and helps to disseminate their teachings.

Maybe physician societies could fill this role, but a lot of times, who needs educated are not the actual doctors in the society in question. It’s other doctors the patient is seeing who don’t realize the root cause is a GI problem or CKD (chronic kidney disease) until the patient needs a liver transplant or “crashes” into dialysis in the ER.

But irrespective of the validity of my musings here, the point is to quantify the in-aggregate “good” that might happen as a result of Pharma paying appropriate clinical experts appropriate amounts.

Contrast that aggregate good against some not so good. Study findings that Pharma can drive up not only Rx’s (prescriptions) for its own drugs but also drugs in general when they buy stuff for doctors or pay doctors. Patient populations get overmedicated when compared to a baseline as a result. Too many patients get diagnosed and treated for some condition that they may not actually have. Too many expensive me-too drugs get prescribed at big unnecessary costs to patients, taxpayers, and employers. When I say costs to patients, by the way, I also might be implying a clinical overtone here as much as a financial one, because there’s almost no drug that comes without side effects.

So, what are some solutions that Dr. Aaron Mitchell mentions in this episode, or I that bring up, if we are trying to steer physician payments into the aggregate good zone and out of the bad COI zone? Here we go, and these are not necessarily in the order in which they are discussed:

Keep an eye on practice patterns and overall costs. This might make physicians aware when their clinical decision-making is getting swayed, so to speak.
Get payers involved. Listen to this whole episode for the “how” and “why” here, but if anyone has a visceral reaction to this, here’s one possible positive from a physician standpoint: It could be a way to get rid of a lot of PAs (prior auths). If a doc’s practice pattern is average, on trend, and/or they do not take industry dollars, then they get what amounts to a PA gold card. With that carrot, a doc may have less inclination to let their prescribing decisions sway and/or take pharma dollars.
The federal government can get involved in a few ways that Dr. Mitchell talks about. One of them is a direct ban on all payments. Or maybe they could just clarify what is okay and what is not okay, since what is listed as COI in the current AKS is also currently considered an industry norm.
Asking providers themselves to pay attention and self-regulate and to, for example, not accept speaking gigs where they are paid to talk to an empty room or “consult” on topics that really they should know they’re not thought leaders in.

You can learn more at Dr. Mitchell’s personal profile on the Memorial Sloan Kettering Cancer Center Web site.

You can also connect with Dr. Mitchell on Twitter at @TheWonkologist.

Aaron Mitchell, MD, MPH, is a practicing medical oncologist and health services researcher. He is an assistant attending at Memorial Sloan Kettering Cancer Center in the department of epidemiology and biostatistics. His research focuses on understanding how the financial incentives in the healthcare system affect physician practice patterns and care delivery to cancer patients. He cares for patients with prostate and bladder cancer.

07:32 How does the recent whistleblower case serve as a good example of what shouldn’t be permissible in Pharma?

11:23 “There’s a little bit of a disconnect between what the law currently says and maybe the ideal world that we would want.”

11:56 Dr. Aaron Mitchell’s paper in the Journal of Health Politics, Policy and Law, titled “Industry Payments to Physicians Are Kickbacks: How Should Stakeholders Respond?”

14:37 How should stakeholders react to this new legislation?

17:56 What is the aggregate benefit versus risk of these payments to doctors?

19:53 BMJ paper by Tyler Greenway and Joseph Ross.

23:51 What should providers and the federal government be doing in light of this new legislation?

29:07 “It’s just always so much harder to get to the outcomes because there’s so much more that happens in between the clinical decision and then what the patient’s outcome is down the road.”

30:42 Will innovation be stifled with this new crackdown on kickbacks?

You can learn more at Dr. Mitchell’s personal profile on the Memorial Sloan Kettering Cancer Center Web site.

You can also connect with Dr. Mitchell on Twitter at @TheWonkologist.

@TheWonkologist discusses #pharma conflicts and kickbacks on our #healthcarepodcast. #healthcare #podcast #digitalhealth

How does the recent whistleblower case serve as a good example of what shouldn’t be permissible in Pharma? @TheWonkologist discusses #pharma conflicts and kickbacks on our #healthcarepodcast. #healthcare #podcast #digitalhealth

“There’s a little bit of a disconnect between what the law currently says and maybe the ideal world that we would want.” @TheWonkologist discusses #pharma conflicts and kickbacks on our #healthcarepodcast. #healthcare #podcast #digitalhealth

Dr. Aaron Mitchell’s paper in the Journal of Health Politics, Policy and Law, titled “Industry Payments to Physicians Are Kickbacks: How Should Stakeholders Respond?” @TheWonkologist discusses #pharma conflicts and kickbacks on our #healthcarepodcast. #healthcare #podcast #digitalhealth

How should stakeholders react to this new legislation? @TheWonkologist discusses #pharma conflicts and kickbacks on our #healthcarepodcast. #healthcare #podcast #digitalhealth

What is the aggregate benefit versus risk of these payments to doctors? @TheWonkologist discusses #pharma conflicts and kickbacks on our #healthcarepodcast. #healthcare #podcast #digitalhealth

What should providers and the federal government be doing in light of this new legislation? @TheWonkologist discusses #pharma conflicts and kickbacks on our #healthcarepodcast. #healthcare #podcast #digitalhealth

“It’s just always so much harder to get to the outcomes because there’s so much more that happens in between the clinical decision and then what the patient’s outcome is down the road.” @TheWonkologist discusses #pharma conflicts and kickbacks on our #healthcarepodcast. #healthcare #podcast #digitalhealth

Will innovation be stifled with this new crackdown on kickbacks? @TheWonkologist discusses #pharma conflicts and kickbacks on our #healthcarepodcast. #healthcare #podcast #digitalhealth

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Karen Root, Mark Miller, AJ Loiacono, Josh LaRosa, Stacey Richter (INBW35), Rebecca Etz (Encore! EP295), Olivia Webb (Encore! EP337), Mike Baldzicki, Lisa Bari, Betsy Seals (EP375), Dave Chase, Cora Opsahl (EP373), Cora Opsahl (EP372), Dr Mark Fendrick (Encore! EP308), Erik Davis and Autumn Yongchu (EP371), Erik Davis and Autumn Yongchu (EP370), Keith Hartman, Dr Aaron Mitchell (Encore! EP282), Stacey Richter (INBW34), Ashleigh Gunter, Doug Hetherington, Dr Kevin Schulman, Scott Haas, David Muhlestein, David Scheinker, Ali Ucar, Dr Carly Eckert, Jeb Dunkelberger (EP360)

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I was at the PanAgora Pharma Customer Experience (CX) Summit earlier this summer. Let me tell you one of my big takeaways. Many at pharma companies who are trying to convince their organizations of the need to be provider- and/or patient-centric are having a tough go of it. Heard that coming from every direction. Seems there are quite a few pharma organizations out there who are not actually customer/patient-centric. Say it isn’t so. Turns out, they continue to be pretty darn brand-centric whether or not anyone besides the CX team and the most successful KAMs (key account managers) realize this hard truth.

You see this lack of customer centricity and, et cetera et cetera, there are certainly other things going on here; but you see the lack of customer centricity manifesting, right? You see the pharma reps that get kicked out of hospital systems because the perception is they add little if any value and “waste doctors’ time; all they do is shove detail aids in our faces.” Heard that recently. You see manufacturers in the news getting fined, very publicly, by the OIG (Office of Inspector General) or the DOJ (Department of Justice) for doing stuff that is not really patient-centric by a long shot.

For those of you working at pharma companies looking to do the right thing by patients, looking to be patient- or customer-centric for reals, a couple of reality checks here which you might be able to use to spark transformation at your organization. You saw, for the first time ever, legislation allowing Medicare to negotiate for drugs to pass into law, as well as the inflation rebate. Listen to the show last week with Mark Miller, PhD (EP380), for the “why did that happen right now” full story, but the short version is this: People, voters, patients, physicians, taxpayers, policy makers … all of them are questioning the value that Pharma brings for the money being spent. I am being blunt, I know; but so is this here referendum that just happened. If you’re trying to spark change and you need a story arc that has a carrot and a stick to inspire transformation at your organization, I’m just dropping this here for you.

In today’s environment, bottom line, being brand-centric instead of customer-centric diminishes trust. Look, this doesn’t just pertain to Pharma; this is a message for the whole industry. But there is certainly a way to do well by doing good, and how that starts is helping provider organizations and patients improve patient outcomes as the primary goal. Being innovative to that end.

Leaders must communicate a compelling vision that also includes a realistic assessment of what it’s gonna take to reach that vision and offer hope and the promise that the hard work and inevitable problems will all be worth it.
Systems thinking—a consideration of the systems and the people who will need to be a part of the transformation, thinking through what is likely to go wrong and proactively planning for it
Identify the right entry point. This should be a micro-journey or a quick win so that the team can score a victory and get through the messy middle that exists in any transformation or rollout. Triple points if you can find a micro-moment that has some emotionality connected to it from your customers’ perspective or patient perspective. If you can fix a so-called moment that matters, it really matters. Consider starting by looking into call center logs, finding a common complaint, and fixing it. Do it this way and it’s harder for anybody to complain that the status quo is so super amazing and tell you to talk to the hand.
Determine how you are going to measure what your quick win accomplished, as well as your whole larger transformational effort.
Ensure you have a full story arc here that shows the before and the after that clearly articulates that the before (the status quo) is problematic and that we have to, with urgency, get to the after.
Never forget that we’re working with human beings here and not, as they say, rational economic actors.

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It’s been said that healthcare in this country will not be transformed because of some incremental government policy, nor will this industry transform because of some tech company who techs the crap out of healthcare.

It’s been said that the only way the healthcare industry in this country is going to fundamentally change is vis-à-vis a seismic shift in the way Americans view the healthcare industry in their understanding of what is going on and the extent to which it directly impacts lives. You and I, all of us, have heard pundits say every year for a decade (at least) that this revolution is a-comin’ and that this year … no más. Americans cannot afford to pay any more in premiums or out of pocket. We have reached the brink.

And year after year, we’ve discovered that, in fact, Americans as patients, members, and taxpayers can pay more and are willing to do so. Well, maybe right now we are actually cresting the chop. Medicare can now negotiate drug prices legislation. Maybe it’s a bit of a watershed moment here. In this healthcare podcast, I’m talking with Mark Miller, PhD, EVP of healthcare at Arnold Ventures; and this is what we talk about today: the why now—the why, all of a sudden, after years of talking and griping and nothing happening, how right now, what constellation of factors transpired that enabled Medicare drug price negotiation to become law.

You need to listen to the show to get the context, but here’s the seven main reasons by my counting that Mark Miller talks about in this episode:

The sensitivity of the public to just healthcare costs in general, Pharma being an easy-to-spot component of those healthcare costs
Sensitivity of policy makers to Pharma’s R&D claims, and non-industry-sponsored information coming out that tempers some of those research and development claims that Pharma has been making
Sensitivity that innovation isn’t a homogenous broad stroke when it comes to new drugs. There’s a difference between breakthrough innovations versus me-too-type drugs. Consider some new combination drug that’s, I don’t know, two generics and costs $2000 a month. There’s eyes on that kind of stuff, and if Pharma’s reputation travels in an industry-wide block, this compounds our #3 point here.
Sensitivity of innovation in the future versus people getting access right now to today’s innovations. If too many people (ie, voters) can’t get access to today’s meds, it’s a reach to expect them to worry too much about their future selves where, in all likelihood, they are thinking that they still wouldn’t have access to the drugs.
The landscape shifted, but pharma talking points did not—and the result was labeled “tone deaf” by some.
Voters wanted aggressive actions as a result of the aforementioned constellation of factors, and a majority of Congress people responded and either voted yes or didn’t protest overly hard, even if they didn’t.
Patient voices became more sophisticated. While they still might have issues with PBMs (pharmacy benefit managers) and/or insurance carriers, there’s a growing perception that the story here is more nuanced and Pharma is in that mix.

This is what we talk about in this episode: the why now, exactly and specifically. So thrilled to have had this conversation with Mark Miller, who has had, and continues to have, such a storied career.

In brief, Mark Miller ran MedPAC (Medicare Payment Advisory Commission) for 15 years. That’s a big deal. He also has held other roles at CMS and the Urban Institute. Now, Mark is at Arnold Ventures, as aforementioned, which is a philanthropic organization. He oversees Arnold’s work in healthcare.

One last thing: The legislation that just passed also includes a few other parts that impacts drugs. A big one is limiting the catastrophic Medicare Part D out-of-pockets to beneficiaries to $2000. And then there’s also an inflation rebate. So, there’s a rebate back to Medicare if Pharma raises its prices faster than the inflation rate.

You can learn more at arnoldventures.org. Mark E. Miller, PhD, leads Arnold Ventures’ work to lower the cost and improve the value of healthcare. He has more than 30 years of experience developing and implementing health policy, including prior positions as the executive director of the Medicare Payment Advisory Commission, assistant director of Health and Human Resources at the Congressional Budget Office, deputy director of health plans at the Centers for Medicare and Medicaid Services, health financing branch chief at the Office of Management and Budget, and senior research associate at the Urban Institute.

04:45 Why did Medicare’s ability to negotiate on drug pricing happen now?
06:35 What’s different about the drug market today that allowed Medicare to gain the ability to negotiate drug pricing?
12:08 How has innovation played into drug price negotiations?
12:40 “If you limit profits, you can end up limiting innovation.”
14:03 Why was the distinction between more drugs and innovative drugs important to changing the landscape of the drug market?
15:49 More versus new and future versus now in the drug market.
19:59 “As the landscape was shifting, Pharma didn’t shift with it.”
23:00 How did voters change the landscape in drug pricing?
24:39 “Pharma did not have exclusive control over the patients’ voice.”
29:59 “The industry would largely like to just stick with the patents that they have.”
30:16 “Of course, it’s competition that ultimately drives innovation.”
31:30 “This is an exquisitely complicated market.”

You can learn more at arnoldventures.org.

@MarkMiller_DC discusses #medicare #drugprices on our #healthcarepodcast. #healthcare #podcast

Why did Medicare’s ability to negotiate on drug pricing happen now? @MarkMiller_DC discusses #medicare #drugprices on our #healthcarepodcast. #healthcare #podcast

What’s different about the drug market today that allowed Medicare to gain the ability to negotiate drug pricing? @MarkMiller_DC discusses #medicare #drugprices on our #healthcarepodcast. #healthcare #podcast

How has innovation played into drug price negotiations? @MarkMiller_DC discusses #medicare #drugprices on our #healthcarepodcast. #healthcare #podcast

“If you limit profits, you can end up limiting innovation.” @MarkMiller_DC discusses #medicare #drugprices on our #healthcarepodcast. #healthcare #podcast

Why was the distinction between more drugs and innovative drugs important to changing the landscape of the drug market? @MarkMiller_DC discusses #medicare #drugprices on our #healthcarepodcast. #healthcare #podcast

More versus new and future versus now in the drug market. @MarkMiller_DC discusses #medicare #drugprices on our #healthcarepodcast. #healthcare #podcast

“As the landscape was shifting, Pharma didn’t shift with it.” @MarkMiller_DC discusses #medicare #drugprices on our #healthcarepodcast. #healthcare #podcast

How did voters change the landscape in drug pricing? @MarkMiller_DC discusses #medicare #drugprices on our #healthcarepodcast. #healthcare #podcast

“Pharma did not have exclusive control over the patients’ voice.” @MarkMiller_DC discusses #medicare #drugprices on our #healthcarepodcast. #healthcare #podcast

“The industry would largely like to just stick with the patents that they have.” @MarkMiller_DC discusses #medicare #drugprices on our #healthcarepodcast. #healthcare #podcast

“Of course, it’s competition that ultimately drives innovation.” @MarkMiller_DC discusses #medicare #drugprices on our #healthcarepodcast. #healthcare #podcast

“This is an exquisitely complicated market.” @MarkMiller_DC discusses #medicare #drugprices on our #healthcarepodcast. #healthcare #podcast

Recent past interviews:

Click a guest’s name for their latest RHV episode!

AJ Loiacono, Josh LaRosa, Stacey Richter (INBW35), Rebecca Etz (Encore! EP295), Olivia Webb (Encore! EP337), Mike Baldzicki, Lisa Bari, Betsy Seals (EP375), Dave Chase, Cora Opsahl (EP373), Cora Opsahl (EP372), Dr Mark Fendrick (Encore! EP308), Erik Davis and Autumn Yongchu (EP371), Erik Davis and Autumn Yongchu (EP370), Keith Hartman, Dr Aaron Mitchell (Encore! EP282), Stacey Richter (INBW34), Ashleigh Gunter, Doug Hetherington, Dr Kevin Schulman, Scott Haas, David Muhlestein, David Scheinker, Ali Ucar, Dr Carly Eckert, Jeb Dunkelberger (EP360), Dan O’Neill, Dr Wayne Jenkins

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This show with AJ Loiacono is different than others you may have heard with him because in this healthcare podcast, we are not talking about PBMs (pharmacy benefit managers). We’re talking about brokers and EBCs (employee benefit consultants).

The CAA went into effect last December (December 2021), and contrary to what some people have said or may believe, it is in force right now. The field memo went out on 12/31/2021. So, the CAA is the rule right now.

So, in sum, the CAA is in effect right now. Penalties can be levied right now against plan sponsors. For a deep dive into the CAA, listen to the show with Christin Deacon (EP342) from last year.

What’s the process if I’m an employer plan sponsor? Step 1: Request in writing the dollars that your EBC or broker is making off of you. Similar to the advice that you’ll hear often on this show, ask for actual dollars, not a percentage of this or that. Ask for how much money did you (broker or EBC) make off each program that you recommended to us, and what did that total up to. Once you make that request, the EBC/broker/TPA (whoever you’re asking) has 30 or 90 days to respond, depending on who you ask. But if they do not respond, then you, the employer, should report them to the Department of Labor.

AJ Loiacono has been on this podcast before talking about PBMs, and in this episode he delivers, talking about the shenanigans of some brokers and how the jig is now up. AJ is the CEO of Capital Rx, which is a PBM 2.0, as they call it.

To see how the CAA is playing out, you can read about one real-life example of a school district’s lawsuit against an insurance consultant.

You can learn more at cap-rx.com and find resources through law firms. Anthony J. “AJ” Loiacono is the co-founder and CEO of Capital Rx, one of the fastest-growing health technology companies in America. He has over 20 years of experience in pharmacy benefits, finance, and software development. AJ’s mission is to create the first efficient market for prescription prices and provide employer groups with the highest standard of patient care. AJ has spent his career studying the pharmaceutical supply chain and producing engineering solutions that have continually redefined the pharmacy benefit industry to achieve this goal.

Prior to Capital Rx, AJ was a co-founder of Truveris, where he served for eight years as CEO, CIO, and board member, leading the company to record growth (Deloitte FAST 500 and Crain’s Fast 50). Before Truveris, AJ co-founded SMS Partners, a joint venture with Realogy (RLGY), and in 2010 exited the partnership with a buyout. In his first venture, AJ started Victrix, a pharmaceutical supply chain consultancy, and successfully sold the company to Chrysalis Solutions in 2007. AJ is a graduate of Manhattanville College, where he studied finance while playing varsity soccer and rugby.

06:03 Who can get in trouble for mismanaging employee funds?
06:31 Who can begin the cycle for annual review?
07:53 “When you talk about conflicts of interest, they’re everywhere.”
13:17 “You’re paying for access.”
13:38 Why is it important to request that they disclose direct and indirect compensation?
14:08 What are the layers to these hidden fees and compensations?
18:17 What is a reasonable fee for a good plan admin?
19:32 “I think people need to step back and say, ‘How many different ways are they getting compensated?’”
24:57 “The compensation is not just unreasonable, but if they were to move it, they would lose access to an entire column of revenue.”
25:13 “For every good broker consultant, there’s a horrible individual lurking out there and it’s easy to figure out: Ask for them to disclose their fees.”
28:14 “You can’t win if you can’t even pay the house fee to come in.”
31:42 Why do you need to ask for disclosure, and what do you need to ask specifically?
32:27 What are some of the characteristics of a good plan consultant?

You can learn more at cap-rx.com and find resources through law firms.

AJ Loiacono of @cap_rx discusses #ebcs, #brokers, and #plansponsors on our #healthcarepodcast. #healthcare #podcast #digitalhealth

Who can get in trouble for mismanaging employee funds? AJ Loiacono of @cap_rx discusses #ebcs, #brokers, and #plansponsors on our #healthcarepodcast. #healthcare #podcast #digitalhealth

Who can begin the cycle for annual review? AJ Loiacono of @cap_rx discusses #ebcs, #brokers, and #plansponsors on our #healthcarepodcast. #healthcare #podcast #digitalhealth

“When you talk about conflicts of interest, they’re everywhere.” AJ Loiacono of @cap_rx discusses #ebcs, #brokers, and #plansponsors on our #healthcarepodcast. #healthcare #podcast #digitalhealth

“You’re paying for access.” AJ Loiacono of @cap_rx discusses #ebcs, #brokers, and #plansponsors on our #healthcarepodcast. #healthcare #podcast #digitalhealth

Why is it important to request that they disclose direct and indirect compensation? AJ Loiacono of @cap_rx discusses #ebcs, #brokers, and #plansponsors on our #healthcarepodcast. #healthcare #podcast #digitalhealth

What are the layers to these hidden fees and compensations? AJ Loiacono of @cap_rx discusses #ebcs, #brokers, and #plansponsors on our #healthcarepodcast. #healthcare #podcast #digitalhealth

What is a reasonable fee for a good plan admin? AJ Loiacono of @cap_rx discusses #ebcs, #brokers, and #plansponsors on our #healthcarepodcast. #healthcare #podcast #digitalhealth

“I think people need to step back and say, ‘How many different ways are they getting compensated?’” AJ Loiacono of @cap_rx discusses #ebcs, #brokers, and #plansponsors on our #healthcarepodcast. #healthcare #podcast #digitalhealth

“The compensation is not just unreasonable, but if they were to move it, they would lose access to an entire column of revenue.” AJ Loiacono of @cap_rx discusses #ebcs, #brokers, and #plansponsors on our #healthcarepodcast. #healthcare #podcast #digitalhealth

“For every good broker consultant, there’s a horrible individual lurking out there and it’s easy to figure out: Ask for them to disclose their fees.” AJ Loiacono of @cap_rx discusses #ebcs, #brokers, and #plansponsors on our #healthcarepodcast. #healthcare #podcast #digitalhealth

“You can’t win if you can’t even pay the house fee to come in.” AJ Loiacono of @cap_rx discusses #ebcs, #brokers, and #plansponsors on our #healthcarepodcast. #healthcare #podcast #digitalhealth

Why do you need to ask for disclosure, and what do you need to ask specifically? AJ Loiacono of @cap_rx discusses #ebcs, #brokers, and #plansponsors on our #healthcarepodcast. #healthcare #podcast #digitalhealth

What are some of the characteristics of a good plan consultant? AJ Loiacono of @cap_rx discusses #ebcs, #brokers, and #plansponsors on our #healthcarepodcast. #healthcare #podcast #digitalhealth

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Josh LaRosa, Stacey Richter (INBW35), Rebecca Etz (Encore! EP295), Olivia Webb (Encore! EP337), Mike Baldzicki, Lisa Bari, Betsy Seals (EP375), Dave Chase, Cora Opsahl (EP373), Cora Opsahl (EP372), Dr Mark Fendrick (Encore! EP308), Erik Davis and Autumn Yongchu (EP371), Erik Davis and Autumn Yongchu (EP370), Keith Hartman, Dr Aaron Mitchell (Encore! EP282), Stacey Richter (INBW34), Ashleigh Gunter, Doug Hetherington, Dr Kevin Schulman, Scott Haas, David Muhlestein, David Scheinker, Ali Ucar, Dr Carly Eckert, Jeb Dunkelberger (EP360), Dan O’Neill, Dr Wayne Jenkins, Liliana Petrova

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Okay, so … telehealth for Medicare patients. Currently, there’s payment parity, meaning a clinician gets paid the same amount for a Medicare patient visit regardless of whether that patient comes in the office or has a telehealth encounter. Right? Or did that end already? And if it didn’t end, how much longer will payment parity continue? Also, is it the same for commercial and Medicaid patients? Congress makes rules for Medicare patients, but is it Congress that makes the rules for commercial and/or Medicaid telehealth reimbursement rates? Or how do those reimbursement decisions get made?

What about the doing telehealth across state lines thing … the idea that if I’m a doc in New York, I can take a telehealth appointment with a patient in Arizona even though I am technically not licensed in Arizona? And who’s in charge of that?

Yeah, I went into today’s conversation with Josh LaRosa, VP at Wynne Health Group, with a lot of questions.

As you may suspect, this program is about telehealth. But just to level set on what we’re not talking about, this interview does not dissect the “should we use the telehealth or should we not” question; and it does not get into best practices or equity concerns. For that info, listen to the show with Christian Milaster (EP320) or Liliana Petrova (EP357) or Ali Ucar (EP362) or Ian Tong, MD (EP347).

Also, we are not talking about the politics, per se, of who’s for telehealth and who’s against it. We also aren’t drilling too far into the telehealth fraud cases that are coming to light right now, but of course we cannot resist talking about them a little bit.

So, let me tell you what Josh LaRosa and I are, in fact, talking about in this healthcare podcast. We’re specifically discussing the near-term future of CMS reimbursement for telehealth and the allowed so-called “flexibilities” for telehealth. We talk about a few of the why’s behind why are policy makers doing some of the stuff that they are doing. And then we chat about the when, how long some of the new flexibilities and reimbursements that were permitted originally during the pandemic will continue. We touch on the Cerebral incident (I guess maybe you’d call it) and the potential DEA or legislative actions that may result from that as well.

An interesting point that we dig into for a couple minutes is this one: Do not forget that the whole telehealth reimbursement debate (do I wanna call it?)—Should we cover it? Should we not cover it? And for how much?—this whole debate is part of a bigger debate. A much bigger debate, actually: the fee-for-service vs the not-fee-for-service debate. That’s the larger context of all of this, and I think it’s often overlooked.

Nobody anywhere is limiting how often a practice who wants to use telehealth as part of some kind of risk-based or capitated thing can use telehealth. Why? Because in a capitated or bundle arrangement, from a Medicare trust fund perspective at least, telehealth visits are not equivalent to additional spend or additional volume. In a non-FFS environment, there’s little chance of fraud also, really. Also, patient safety—arguably, probably—becomes much more of a practice concern. It gets a lot less rewarding to do unsafe things over telehealth when you don’t get automatically paid to do them … and also paid to fix the problems that resulted from the unsafe things, which is the perverse beauty of FFS that we’re all so familiar with.

Acronym alert! PHE stands for public health emergency. A public health emergency is the thing the government declares, for example, during a pandemic.

You can learn more at wynnehealth.com or by following on Twitter and LinkedIn. Josh LaRosa, MPP, is a vice president at Wynne Health Group, focusing primarily on regulatory affairs with a focus on the US Food & Drug Administration (FDA) and Centers for Medicare & Medicaid Services (CMS). His interests lie in delivery reform and innovations in payment and care delivery models. Josh also supports the firm’s Public Option Institute, which studies the emergence of public option programs at the state level.

Prior to Wynne Health Group, Josh consulted for the CMS Innovation Center, where he worked to implement, monitor, and spread learning garnered from the center’s high-profile demonstration projects, most recently including the national primary care redesign effort, Comprehensive Primary Care Plus (CPC+).

Josh holds a Master of Public Policy from the University of Virginia’s Frank Batten School of Leadership and Public Policy. He also completed his undergraduate studies at the University of Virginia, graduating cum laude with a BA in political philosophy, policy, and law.

04:09 What is the story with telehealth policy right now?
06:08 What kind of flexibilities did HHS allow with telehealth after the pandemic?
09:46 Are we still under these pandemic flexibilities for telehealth?
12:15 Why isn’t the government just making greater access to telehealth permanent?
18:24 How does telehealth lend itself to the risk of overspending when dealing with an FFS model?
21:13 Does telehealth fit into the new CMS fee schedule?
22:55 How do states factor into the future of telehealth?
24:40 What is Arizona doing specifically to improve and ensure the future of telehealth?
30:56 What’s next in store for telehealth at the congressional level?

You can learn more at wynnehealth.com or by following on Twitter and LinkedIn.

@josh_larosa of @WynneHealth discusses #telehealth on our #healthcarepodcast. #healthcare #podcast #digitalhealth

What is the story with telehealth policy right now? @josh_larosa of @WynneHealth discusses #telehealth on our #healthcarepodcast. #healthcare #podcast #digitalhealth

What kind of flexibilities did HHS allow with telehealth after the pandemic? @josh_larosa of @WynneHealth discusses #telehealth on our #healthcarepodcast. #healthcare #podcast #digitalhealth

Are we still under these pandemic flexibilities for telehealth? @josh_larosa of @WynneHealth discusses #telehealth on our #healthcarepodcast. #healthcare #podcast #digitalhealth

Why isn’t the government just making greater access to telehealth permanent? @josh_larosa of @WynneHealth discusses #telehealth on our #healthcarepodcast. #healthcare #podcast #digitalhealth

How does telehealth lend itself to the risk of overspending when dealing with an FFS model? @josh_larosa of @WynneHealth discusses #telehealth on our #healthcarepodcast. #healthcare #podcast #digitalhealth

Does telehealth fit into the new CMS fee schedule? @josh_larosa of @WynneHealth discusses #telehealth on our #healthcarepodcast. #healthcare #podcast #digitalhealth

How do states factor into the future of telehealth? @josh_larosa of @WynneHealth discusses #telehealth on our #healthcarepodcast. #healthcare #podcast #digitalhealth

What is Arizona doing specifically to improve and ensure the future of telehealth? @josh_larosa of @WynneHealth discusses #telehealth on our #healthcarepodcast. #healthcare #podcast #digitalhealth

What’s next in store for telehealth at the congressional level? @josh_larosa of @WynneHealth discusses #telehealth on our #healthcarepodcast. #healthcare #podcast #digitalhealth

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Stacey Richter (INBW35), Rebecca Etz (Encore! EP295), Olivia Webb (Encore! EP337), Mike Baldzicki, Lisa Bari, Betsy Seals (EP375), Dave Chase, Cora Opsahl (EP373), Cora Opsahl (EP372), Dr Mark Fendrick (Encore! EP308), Erik Davis and Autumn Yongchu (EP371), Erik Davis and Autumn Yongchu (EP370), Keith Hartman, Dr Aaron Mitchell (Encore! EP282), Stacey Richter (INBW34), Ashleigh Gunter, Doug Hetherington, Dr Kevin Schulman, Scott Haas, David Muhlestein, David Scheinker, Ali Ucar, Dr Carly Eckert, Jeb Dunkelberger (EP360), Dan O’Neill, Dr Wayne Jenkins, Liliana Petrova, Ge Bai

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Late in May of this year, three-ish months ago, I did an inbetweenisode that explores the “why with the no collaboration” amongst healthcare stakeholders and what the lack of collaboration signifies. That episode got a lot of traction and engagement.

This episode that follows is a pretty good approximation of a presentation that I made at the MTVA (Moving to Value Alliance) symposium that happened in Connecticut this past June. If you listened to the earlier show about collaboration, this one is slightly different, shorter, and more to the point.

So, let’s start here: When you listen to any patient with a chronic condition talk about their challenges with the healthcare industry—and yes, if a patient has a chronic condition, more often than not, that is what they will talk about, their challenges …

I went on Twitter just now, and it took me literally 13 minutes to collect what I’m going to say are 300+ Tweets written by patients and their caregivers complaining about their chronic care journey. That’s the sad part. I don’t mean to kick this off talking about problems; however, if you’re gonna solve for something, it is important to understand what problem you are solving for. You do not want to be a solution looking around for a problem.

So, let’s fix this, this rampant problem problem that chronic care patients seem to have.

Many of the patient challenges in the 300 Tweets that I just collected can be grouped into two major categories. And these two major challenge groups can really only be solved for with collaboration amongst healthcare stakeholders. So, let’s dig in here.

The first major patient challenge is what I’m gonna call the care gap problem.

I was talking to someone at a provider organization the other day, and she had 8000 known care gaps with patients and [insert overwhelm here]. And these were just the care gaps that showed up on somebody’s radar because they added up to a quality metric, which is sometimes the definition people use for what is a care gap.

But if we think about all the other holes in patient care, the typical care gaps that are identified probably come not even close to the total number of actual care gaps: patients who can’t see their specialist because they can’t get ahold of their records from the local health system or no coordination of care. Coordination is probably another synonym for collaboration. This is a huge deal. People literally die because their clinician cannot get their biopsy results or whatever from somebody else. That’s a care gap as deep as a grave.

Or patients who keep showing up in the ER because they aren’t getting the help or the meds or the accurate diagnoses or the treatment plan that they need to stay out of the ER ... My grandfather had heart failure. At the end of his life, he was probably in the ER once a month. It was sad and painful and expensive and totally unnecessary. But his PCP didn’t seem to be collaborating with the specialists, and the ER I don’t think was telling anybody what was going on. Right? Or patients who can’t get a drug they need approved by their insurance, so they wind up in crisis. Crappy prior auth processes create care gaps. All of these things are gaps in care.

Carly Eckert, MD (EP361), was on the podcast; and she made a crucial point for me. In fact, I tried to get her to come on the podcast originally to talk about care gaps and closing care gaps; but she categorically refused. Chronic care management, she said, should not be a game of whack-a-mole. It may be better than nothing, a game of whack-a-mole; but it is certainly not ideal.

Chronic care management by care gap is like cooking with a fire extinguisher. If we want to eliminate care gaps for reals, let’s just not have care gaps.

So, how do you go about not having care gaps, then? The goal should be to craft a non-fragmented patient journey. Let’s figure out what a great care journey looks like ahead of time and then try to keep the patient on it. That is the best way to eliminate care gaps: proactively. You don’t have them.

Immediately, because I am a person of action, I went into my filing cabinet; and I actually found an example of a patient journey map amongst my papers that I had worked on years ago. You have probably seen one of these and may have some of your own patient journey maps tucked away in a binder in your office somewhere. Most people have them. There are a few things that they all have in common, irrespective of the disease state or the organization or anything. The things that they have in common are they are complicated flowcharts with a lot going on. Besides just being complicated, the other thing that patient journey maps all have in common is that there are multiple parties mentioned with roles in that patient journey. You’re gonna have a PCP, a specialist or two, a hospital, a payer, a pharma company more than likely, a PBM maybe, maybe a community organization …

Here’s a quote that kinda sums that up from Dr. William Bestermann: “Improving chronic disease management is an enormous problem that requires multiple stakeholders coming together to combine new science, new systems, and new payment models in a comprehensive solution. No one person or organization can make progress that matters. The problem is too big.”

Is this obvious? I think it’s pretty obvious. But yet, collaboration in general at the organizational level is less than common. With uncommon exceptions, you not only don’t have multiple providers working together but—heaven forbid!—you have payers and providers or other entities working together.

But just taking this back to the thrust of this conversation, the first major patient challenge can only be solved for with collaboration to create a non-fragmented patient journey, which reduces care gaps by avoiding care gaps in the first place. So, collaboration is a rate critical for a non-fragmented patient journey to eliminate care gaps that patients have big issues with.

So now, let’s move on now to the second big problem category that chronic care patients were Tweeting about in those Tweets that I collected: They can’t afford their care. This crisis of affordability is a huge patient challenge that, it’s not the only thing, but we can’t solve for it without being collaborative, without having collaborative relationships along the patient journey.

I don’t really want to get into how much healthcare prices have skyrocketed, but healthcare prices have been inflating at 4x the cost of everything else. This causes mental health issues; it causes stress. There’s a show with Wayne Jenkins from Centivo where we dig into this deeply. Listen to EP358.

It is inarguable at this point that financial toxicity is clinical toxicity. I have a folder on my computer where I chuck references for this statement, and at this point, I probably have 400 studies and articles that all say the same thing in different ways with different patient populations. Most of these patients are insured. By the way, just because you have insurance doesn’t mean that you can afford to use it. And patients who cannot afford their care have worse clinical outcomes. Period. End of sentence.

Minor sidebar because I was really like head exploding emoji this morning: I saw somebody in a forum today lashing out at patients suffering with crippling medical debt saying that these people really should take some personal responsibility for the financial choices that they have made. WTH? The entity not taking responsibility for people losing their life savings and their homes simply because they had the fortune of getting sick or injured, the entity that should be taking some responsibility here is a broken, profit-driven healthcare industry.

Let me just add some fidelity to what I mean when I say “the healthcare industry,” which really should take some responsibility here for the financial toxicity that they themselves are creating. Consider that a lot of medical debt is of a balance bill nature and the people being pursued generally signed a contract which they did not understand the consequences of, because most of them had “insurance” and they certainly weren’t given a quote up-front so that they could make a rational economic choice.

So, let’s add some fidelity: How do we make healthcare more affordable? Or how do we make the charges not a complete surprise at a minimum? How do we do that?

Lots of ways, big and small, are required; but let’s talk about one of them: Navigate patients to high-quality providers charging a fair price. Navigate patients to providers who do not do low-value things and who have practice patterns that are aligned with evidence-based medicine (ie, get employers and providers to direct contract, especially in non-FFS ways, especially as it relates to primary care where there are measurable outcomes or quality). ACOs or CINs (clinically integrated networks) who know how to refer to high-value specialists or hospitals is another example of a collaboration that can help with affordability. Some health plans and TPAs (third-party administrators) are starting to get really data-driven about how they go about this. Point being, to coordinate care to or amongst high-value providers, multiple parties have to be involved (ie, collaboration).

So, in sum, we talked about two common and major patient problems, which are probably not a surprise to anyone listening. The two are a lack of coordinated care (patients falling into gigantic care gaps) and then also a lack of affordability.

We know how to solve for both of these issues. Defragment care and steer patients to high-quality provider organizations/hospitals/CoEs with competitive prices. Collaborate in these two ways. So, why are so few doing it, then?

You can always count on me to say the quiet part out loud, so here we go: The business model of most, many, lots of healthcare organizations, both for-profit and tax-exempt, is revenue maximization. As Kevin Schulman, MD, said on the podcast (EP366), it’s not A or B; we have a dysfunctional healthcare benefits system in this country.

But nonetheless, if we want to identify a root cause for why with the no interoperability, why with the info blocking to prevent network leakage, why with the no collaboration … it’s not a technical problem at its core. It’s not a HIPAA concern, really, at its core. It’s a business case problem.

And I don’t say this as any sort of castigation. I say this because it’s actionable information. Tiptoeing around a thing that we all know just clutters our ability to come up with a solution that is actually going to work. Really understanding a pretty big root cause behind why needed collaborations don’t happen is necessary. This level of introspection is required for those who are mission driven to find others who are similarly mission driven to get a collaboration over the line.

But the good news is success stories abound. It’s my belief the healthcare industry won’t be transformed in one giant turn of some flywheel. It’s gonna be transformed one local market at a time. And there’s a lot of great stuff happening in local markets. Listen to the show with Dave Chase (EP374) for a bunch of examples. There’s a show with Cora Opsahl (EP372) that has some great examples of this. There’s the one with Doug Hetherington (EP367). We also have a show coming up in October with Nick Stefanizzi from Northwell Direct.

All of these great examples are stakeholders harnessing the power of collaboration to defragment patient journeys and get patients into high-value care settings so that the overall cost of care is in range for employers, taxpayers, patients, and American families. I’m so excited, honestly, about that because the healthcare industry is a legacy that we will leave behind to children and grandchildren. I have a vision in my head about what I want the healthcare industry to look like in 25 years. Maybe you do, too. Listen to the show with David Muhlestein, PhD, JD (EP364), for more on that.

But the point is, if this vision is going to come true, we need to—like, right now—start building the roadmap to get to that goal. And a lot of this involves facilitating collaboration. Actually collaborating, for reals. There’s real momentum behind that in organizations such as the Moving to Value Alliance in Connecticut, where I originally gave a version of this same talk.

Thanks, by the way, to Steve Schutzer, MD, for moderating the collaboration panel that I was a part of at aforementioned MTVA symposium. Not only is he a great moderator, but he also has done a great service for patients through his ability to get a whole bunch of surgeons—who are pretty competitive as a general rule—to collaborate and form a Center of Excellence.

For more information, go to aventriahealth.com. Each week on Relentless Health Value, Stacey uses her voice and thought leadership to provide insights for healthcare industry decision makers trying to do the right thing. Each show features expert guests who break down the twists and tricks in the medical field to help improve outcomes and lower costs across the care continuum. Relentless Health Value is a top 100 podcast on iTunes in the medicine category and reaches tens of thousands of engaged listeners across the healthcare industry.

01:41 What are the two major patient challenges in chronic patient care that can only be solved by collaboration?
01:56 What is the “care gap” problem?
03:19 “Crappy prior auth processes create care gaps.”
03:25 EP361 with Carly Eckert, MD. 04:00 How do you eliminate care gaps proactively?
06:46 EP358 with Wayne Jenkins. 08:21 What is one way to make healthcare more affordable?
09:49 Why aren’t more healthcare entities collaborating?
10:04 EP366 with Kevin Schulman, MD. 11:13 EP374 with Dave Chase. 11:18 EP372 with Cora Opsahl. 11:22 EP367 with Doug Hetherington. 11:25 Upcoming episode with Nick Stefanizzi.
12:00 EP364 with David Muhlestein, PhD, JD.

For more information, go to aventriahealth.com.

Our host, Stacey Richter, discusses #collaboration on our #healthcarepodcast. #healthcare #podcast

What are the two major patient challenges in chronic patient care that can only be solved by collaboration? Our host, Stacey Richter, discusses #collaboration on our #healthcarepodcast. #healthcare #podcast

What is the “care gap” problem? Our host, Stacey Richter, discusses #collaboration on our #healthcarepodcast. #healthcare #podcast

“Crappy prior auth processes create care gaps.” Our host, Stacey Richter, discusses #collaboration on our #healthcarepodcast. #healthcare #podcast

How do you eliminate care gaps proactively? Our host, Stacey Richter, discusses #collaboration on our #healthcarepodcast. #healthcare #podcast

What is one way to make healthcare more affordable? Our host, Stacey Richter, discusses #collaboration on our #healthcarepodcast. #healthcare #podcast

Why aren’t more healthcare entities collaborating? Our host, Stacey Richter, discusses #collaboration on our #healthcarepodcast. #healthcare #podcast

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Rebecca Etz (Encore! EP295), Olivia Webb (Encore! EP337), Mike Baldzicki, Lisa Bari, Betsy Seals (EP375), Dave Chase, Cora Opsahl (EP373), Cora Opsahl (EP372), Dr Mark Fendrick (Encore! EP308), Erik Davis and Autumn Yongchu (EP371), Erik Davis and Autumn Yongchu (EP370), Keith Hartman, Dr Aaron Mitchell (Encore! EP282), Stacey Richter (INBW34), Ashleigh Gunter, Doug Hetherington, Dr Kevin Schulman, Scott Haas, David Muhlestein, David Scheinker, Ali Ucar, Dr Carly Eckert, Jeb Dunkelberger (EP360), Dan O’Neill, Dr Wayne Jenkins, Liliana Petrova, Ge Bai, Nikhil Krishnan

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I wanted to resurface this episode because when it originally aired over a year ago, the topic may have been ever so slightly ahead of its time. Look, here we are right now with everybody trying to do three big things relative to measuring PCP (primary care provider) performance:

Come up with a fair measure for PCP performance.
Account for diverse populations with diverse risks so that some docs don’t get dinged because their patient populations have lots of comorbidities or behavioral health challenges or live in food deserts, or any one of the other social determinants of health.
Not make measuring performance a total procedural nightmare.

Right? We want fair measures, we want to account for equity issues essentially, and we want this whole measurement fandango to be as easy as possible.

Enter Rebecca Etz, PhD, and The Larry A. Green Center with a really well-validated “instrument,” as she calls it, to measure primary care performance. I can think of more than one PCP frankly right off the top of my head who would be thrilled to be measured using this methodology. Even more so because it’s one thing that’s simple and not a jumble of numerators with various mix-and-match denominators.

PCPs are really important to population health. Primary care is the foundation of any well-functioning health system, I am sure many listening to this podcast know well. For the Triple Aim to happen, patients really need access to robust primary care. This has been affirmed by almost anyone who looks into it. And yet, in this country, our system sort of anemically supports our primary care colleagues.

As a general statement, poking and prodding and procedures are compensated at a far higher rate than anything requiring cognitive services. What a PCP or a pediatrician mainly does all day is really cognitive. It’s listening and thinking and counseling and coordinating.

But here is maybe an underappreciated point: If we’re going to measure PCP performance, then we need the right measures to measure that performance. You might be doing this measurement as a basis for incentives or maybe for continuous improvement programs. Either way, if you don’t have the right measures, then maybe great primary care is under-rewarded or your continuous improvement process is counterproductive—you’re incenting the wrong things, you get the wrong activity. And to add to that, PCPs (ie, practices) can spend upwards of $40,000 a year of uncompensated time trying to add and subtract and tote up the difference in all these varied and potentially inapplicable measurement standards coming at them from all manner of directions.

My guest in this healthcare podcast is Rebecca Etz, PhD. Dr. Etz and the team over at The Larry A. Green Center have worked hard to create a set of 11 performance measures for primary care. These measures went through the wringer as far as their creation and validation. These 11 measures take into account what patients want, what primary care clinicians (including pediatricians, nurse practitioners, and others) think is most important and possible to provide, and what payers want to pay for. These 11 measures are aligned across the three stakeholders, and they are actionable.

Rebecca Etz, PhD, is associate professor of family medicine and codirector of The Larry A. Green Center, which is in Richmond, Virginia, at the Virginia Commonwealth University.

You can learn more at green-center.org. Rebecca S. Etz, PhD, is an associate professor of family medicine and population health at Virginia Commonwealth University (VCU) and codirector of The Larry A. Green Center—Advancing Primary Health Care for the Public Good. Dr. Etz has deep expertise in qualitative research methods and design, primary care measures, practice transformation, and engaging stakeholders. Her career has been dedicated to learning the heart and soul of primary care through three main lines of inquiry: (1) bridging the gap between the business of medicine and the lived experience of the human condition, (2) making visible the principles and mechanisms upon which the unique strength of primary care is based, and (3) exposing the unintended, often damaging consequences of policy and transformation efforts applied to primary care but not informed by primary care concepts. As a member of the VCU Department of Family Medicine and Population Health and previous codirector of the ACORN practice-based research network, Dr. Etz has been the principal investigator of several federal and foundation grants, contracts, and pilots, all directed toward making the pursuit of health a humane experience. Recent research activities have included studies in primary care measures, behavioral health, simulation modeling, care team models, and adaptive use of health technologies. Dr. Etz currently leads the fielding of a weekly survey regarding the response to and impact of COVID-19 on US primary care practices. She also serves on the National Academies of Medicine consensus study, “Implementing High-Quality Primary Care.”

04:58 Why is primary care one of the “best-kept secrets” of better health outcomes?
09:45 “Measures are a form of communication.”
09:58 “If the way that you are assessed does not actually match up with the work you do or what you find to be important, it’s pretty demoralizing.”
12:48 “It is the outcome of healthcare, but it is not the same thing as quality.”
17:18 “It creates a financial incentive to hit a target by any means necessary.”
18:53 “We incentivize people to have good outcomes, and what that means is that electronic medical records are no longer simply databases that tell us what the health of the population is. They are databases that tell us what is the optimal picture that a clinician is able to paint of their patients.”
21:54 “Primary care is a relational field.”
23:02 “How does this relate to cost and utilization?”
27:45 How has the measure of PCPs in the time of COVID held up?
28:03 What measure performs worse in the time of COVID?
29:59 EP270 with Dave Chase and EP272 with Guy Culpepper, MD.

You can learn more at green-center.org. Rebecca Etz of @GreenCenterOrg discusses #primarycare performance on this week’s #healthcarepodcast. #healthcare #podcast #digitalhealth #healthtech #pcp

“Measures are a form of communication.” Rebecca Etz of @GreenCenterOrg discusses #primarycare performance on this week’s #healthcarepodcast. #healthcare #podcast #digitalhealth #healthtech #pcp

“If the way that you are assessed does not actually match up with the work you do or what you find to be important, it’s pretty demoralizing.” Rebecca Etz of @GreenCenterOrg discusses #primarycare performance on this week’s #healthcarepodcast. #healthcare #podcast #digitalhealth #healthtech #pcp

“It is the outcome of healthcare, but it is not the same thing as quality.” Rebecca Etz of @GreenCenterOrg discusses #primarycare performance on this week’s #healthcarepodcast. #healthcare #podcast #digitalhealth #healthtech #pcp

“It creates a financial incentive to hit a target by any means necessary.” Rebecca Etz of @GreenCenterOrg discusses #primarycare performance on this week’s #healthcarepodcast. #healthcare #podcast #digitalhealth #healthtech #pcp

“Primary care is a relational field.” Rebecca Etz of @GreenCenterOrg discusses #primarycare performance on this week’s #healthcarepodcast. #healthcare #podcast #digitalhealth #healthtech #pcp

How has the measure of PCPs in the time of COVID held up? Rebecca Etz of @GreenCenterOrg discusses #primarycare performance on this week’s #healthcarepodcast. #healthcare #podcast #digitalhealth #healthtech #pcp

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Olivia Webb (Encore! EP337), Mike Baldzicki, Lisa Bari, Betsy Seals (EP375), Dave Chase, Cora Opsahl (EP373), Cora Opsahl (EP372), Dr Mark Fendrick (Encore! EP308), Erik Davis and Autumn Yongchu (EP371), Erik Davis and Autumn Yongchu (EP370), Keith Hartman, Dr Aaron Mitchell (Encore! EP282), Stacey Richter (INBW34), Ashleigh Gunter, Doug Hetherington, Dr Kevin Schulman, Scott Haas, David Muhlestein, David Scheinker, Ali Ucar, Dr Carly Eckert, Jeb Dunkelberger (EP360), Dan O’Neill, Dr Wayne Jenkins, Liliana Petrova, Ge Bai, Nikhil Krishnan, Shawn Rhodes

View Details

This encore episode seemed really apropos at this moment in time, since we’ve just basically published a course in the specialty pharmacy ecosystem, including who all of the various stakeholders are and what their vested interests are. Weirdly, in many of the episodes in the series/course, you’ll find the word patient in short supply. And that’s not a weird oversight in our podcast production. It is actually an egregious oversight in the specialty pharmacy market, an oversight with real human consequences, which I talk about with Olivia Webb in this encore. Check out a playlist of all of the specialty pharmacy episodes that comprise our series here.

If you listen to them all, let me know; and also let me know what you think and, I don’t know, maybe we’ll create a special certificate for you because at that point you will know more than 99.9% of the industry (even industry insiders) if you listen to the whole thing.

Here’s the cold hard truth: The whole specialty pharmacy operational model is not built to serve patients, a fact that becomes crystal clear when you’re a patient. Instead, the specialty pharmacy model is, rather, pretty blatantly dedicated to the power struggle for revenue and captive patient populations.

It’s war between providers and the whole PBM/insurer/specialty pharmacy vertical consolidations. Employers and pharma manufacturers are, of course, on the battlefield as well.

What is a drug that qualifies to be a specialty pharmacy drug? Usually, these drugs are complicated to store, dispense, to use, and/or they’re expensive—generally, really expensive. Lots of zeros, completely unaffordable to pay cash for them as an individual. No one is using a GoodRx card and not using their insurance to pay for these puppies. They can cost as much as a house.

Biologics, for example, usually considered specialty drugs—lots of cancer and immunology therapies, injectable medications, IV/infused medications—all these are usually considered specialty drugs. There’s no one definition of a specialty drug. It’s more that someone somewhere decided to not run the drug through your traditional retail pharmacy for any number of reasons.

The problem with the current status quo, wherein the patient gets tossed around while everybody fights over them, is that some basic needs are not being met—like if a patient asks the person administering the drug maybe even a pretty simple question about the drug or its side effects. It’s way more likely than it should be that the nurse or whomever doesn’t know the answer.

Not knocking nurses here at all but definitely knocking a system that allows that to happen. I mean, really now. We’re injecting a six-figure therapy in someone’s arm that will impact their body in a myriad of maybe frightening ways, some of which are a problem and some of which are not. Said another way, there’s a really good financial and clinical use case for making sure that we’re patient-centric at a specialty pharmacy point of service—if you care about the patient and cost efficiency, that is. But I guess therein lies the root cause of the trouble.

In this healthcare podcast, I’m talking with Olivia Webb about what it would take and be like to create a “patient-first specialty pharmacy,” as she has coined the term—a specialty pharmacy dedicated to patients not only having a half-decent experience but also one that might actually create better patient outcomes. Olivia Webb is author of the Acute Condition newsletter. I would certainly recommend subscribing.

One last thing: If you’re following the whole PBM/insurer/specialty pharmacy vertical integration skullduggery, keep an eye on a bunch of lawsuits against these combined entities (three examples here, here, and here) alleging that they are doing some not super upright and honest things with their massive market power. (Say it isn’t so!)

You can learn more at acutecondition.com. Olivia Webb is a healthcare strategist and writer. She publishes the newsletter Acute Condition, as well as working on other content across the healthcare and biotech ecosystem. She previously worked at Massachusetts General Hospital and Advisory Board Company.

04:43 Why did Olivia start thinking about a patient-centric specialty pharmacy?
06:05 “There’s really no layer on top of it to make it look nice.”
06:55 “You’re kind of dealing with this vertical stack that doesn’t really deal with patients frequently.”
07:07 Is the specialty model more patient friendly or less?
07:39 What would a patient-centric specialty pharmacy look like?
08:29 “There’s a lot of fragmentation; there’s a lot of friction.”
08:42 What’s unique to specialty pharmacy prescriptions?
11:09 Why can infusion centers be a high-drama place?
12:44 What’s “the question” around specialty pharmacy?
13:11 Who has the vested interest in ensuring patients take their medications correctly in specialty pharmacy?
15:08 “It’s really just a unique area of healthcare where the people that I think of as the good guys and the bad guys completely flips.”
16:34 Why might the time be ripe for disruption in the specialty pharmacy area?
20:26 “There’s no one with a clear incentive to cap the prices.”
20:39 What are the barriers in specialty pharmacy?
21:01 “The patient just isn’t at the center, the financial incentive, in any direction.”
29:44 “I think people who are designing these things need to see how patients are actually doing it.”
30:13 “I think there’s a lot of money here; I think this market is going to only increase in size.”
30:32 “I think you need scale.”
30:42 AEE15 with David Carmouche, MD, of Ochsner.

You can learn more at acutecondition.com.

@OliviaWebbC of the #acutecondition newsletter discusses #patientfirst #specialty on our #healthcarepodcast. #healthcare #podcast #digitalhealth

Why did Olivia start thinking about a patient-centric specialty pharmacy? @OliviaWebbC of the #acutecondition newsletter discusses #patientfirst #specialty on our #healthcarepodcast. #healthcare #podcast #digitalhealth

“There’s really no layer on top of it to make it look nice.” @OliviaWebbC of the #acutecondition newsletter discusses #patientfirst #specialty on our #healthcarepodcast. #healthcare #podcast #digitalhealth

“You’re kind of dealing with this vertical stack that doesn’t really deal with patients frequently.” @OliviaWebbC of the #acutecondition newsletter discusses #patientfirst #specialty on our #healthcarepodcast. #healthcare #podcast #digitalhealth

Is the specialty model more patient friendly or less? @OliviaWebbC of the #acutecondition newsletter discusses #patientfirst #specialty on our #healthcarepodcast. #healthcare #podcast #digitalhealth

What would a patient-centric specialty pharmacy look like? @OliviaWebbC of the #acutecondition newsletter discusses #patientfirst #specialty on our #healthcarepodcast. #healthcare #podcast #digitalhealth

“There’s a lot of fragmentation; there’s a lot of friction.” @OliviaWebbC of the #acutecondition newsletter discusses #patientfirst #specialty on our #healthcarepodcast. #healthcare #podcast #digitalhealth

What’s unique to specialty pharmacy prescriptions? @OliviaWebbC of the #acutecondition newsletter discusses #patientfirst #specialty on our #healthcarepodcast. #healthcare #podcast #digitalhealth

Why can infusion centers be a high-drama place? @OliviaWebbC of the #acutecondition newsletter discusses #patientfirst #specialty on our #healthcarepodcast. #healthcare #podcast #digitalhealth

What’s “the question” around specialty pharmacy? @OliviaWebbC of the #acutecondition newsletter discusses #patientfirst #specialty on our #healthcarepodcast. #healthcare #podcast #digitalhealth

Why might the time be ripe for disruption in the specialty pharmacy area? @OliviaWebbC of the #acutecondition newsletter discusses #patientfirst #specialty on our #healthcarepodcast. #healthcare #podcast #digitalhealth

“It’s really just a unique area of healthcare where the people that I think of as the good guys and the bad guys completely flips.” @OliviaWebbC of the #acutecondition newsletter discusses #patientfirst #specialty on our #healthcarepodcast. #healthcare #podcast #digitalhealth

“The patient just isn’t at the center, the financial incentive, in any direction.” @OliviaWebbC of the #acutecondition newsletter discusses #patientfirst #specialty on our #healthcarepodcast. #healthcare #podcast #digitalhealth

“I think people who are designing these things need to see how patients are actually doing it.” @OliviaWebbC of the #acutecondition newsletter discusses #patientfirst #specialty on our #healthcarepodcast. #healthcare #podcast #digitalhealth

“I think there’s a lot of money here; I think this market is going to only increase in size.” @OliviaWebbC of the #acutecondition newsletter discusses #patientfirst #specialty on our #healthcarepodcast. #healthcare #podcast #digitalhealth

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Mike Baldzicki, Lisa Bari, Betsy Seals (EP375), Dave Chase, Cora Opsahl (EP373), Cora Opsahl (EP372), Dr Mark Fendrick (Encore! EP308), Erik Davis and Autumn Yongchu (EP371), Erik Davis and Autumn Yongchu (EP370), Keith Hartman, Dr Aaron Mitchell (Encore! EP282), Stacey Richter (INBW34), Ashleigh Gunter, Doug Hetherington, Dr Kevin Schulman, Scott Haas, David Muhlestein, David Scheinker, Ali Ucar, Dr Carly Eckert, Jeb Dunkelberger (EP360), Dan O’Neill, Dr Wayne Jenkins, Liliana Petrova, Ge Bai, Nikhil Krishnan, Shawn Rhodes, Pramod John (EP353)

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Members taking specialty drugs represent about 2% of any given employer’s population but often consume as much as 30% of an employer’s total cost of care. As Pramod John, PhD, in EP353 has said, this isn’t just small companies we’re talking about here. Some of the largest employers in the US are dropping big bucks on specialty drugs, and they are obviously overpaying and don’t need to.

No employer or plan really need pay any more than the pharmacy’s acquisition price plus a reasonable professional fee. But so many employers pay way more than that.

Let’s just keep in mind that specialty pharmacy spend extends beyond just pharmacy spend. Medical claims for pharma drugs that are infused, for example, can be more than 50% of an employer or plan’s specialty pharmacy spend. What I’m talking about now is buy and bill–type stuff where a hospital or physician practice bills for an infused pharmaceutical product under a patient’s medical benefit. Listen to EP370 with Autumn Yongchu and Erik Davis about how some hospitals, for example, are managing to charge employers 6x the cost of specialty meds to infuse them and also EP365 with Scott Haas about PBM shenanigans.

So, currently, specialty pharmacy spend is big; but it’s grown bigger every single year. Every year, employers and the government/taxpayers alike spend more and more on these really expensive drugs.

As you can see, there are billions and billions of dollars on the specialty pharmacy table here. Also, as you certainly know if you’ve listened to the recent series of specialty pharmacy shows that we’ve done lately, it’s kind of a war out there.

There are multiple healthcare industry stakeholders trying to capture all of the money. If you can get your hands on a specialty pharmacy patient and manage their care—or, probably more pointedly, manage to bill for their care—it can be incredibly profitable.

This show kind of wraps up some loose ends for me. In this healthcare podcast, I’m speaking with Mike Baldzicki, who is chief brand officer over at AscellaHealth. A majority of Mike’s background is in specialty pharmacy infusion, capabilities with an array of different healthcare companies. So, he is a great guy to wrap up some of these loose ends with.

On the show today, we discuss how many/the percentage of self-funded employers who have taken their specialty pharmacy business from the “Big Three” or “Big Five” PBMs, how many of them have actively started steering their members and managing their benefit carefully. I talk with Mike about what these employers are doing and how they are doing it.

From there, the conversation, of course, naturally flows into preventing hospitals from rapaciously buying and billing, which then segues into a discussion about hospital strategy … because if you can’t do your buy-and-bill thing for a whole bunch of your patients, then it makes sense for you to do two things strategically: (1) stand up your own specialty pharmacy and/or (2) set up your own network of infusion centers. Mike and I talk about this.

We also discuss how much trying to get a specialty pharmacy drug sucks for most patients, which I deeply investigated in EP337 with Olivia Webb.

Also in this episode, you can hear me contend that maybe if Pharma and payers enter into outcomes-based contracts, maybe patients would be better served. It’s kind of the pharmacy version of the whole “let’s pay for value, not volume” thing. I ask Mike how many pharma outcomes-based contracts are out there in the wild, for reals.

All of this and more … but you gotta listen to the podcast.

Oh, by the way, acronym alert: SPP stands for specialty pharmacy provider.

You can learn more at ascellahealth.com. Michael J. Baldzicki, CRCM, is chief brand officer (CBO) at AscellaHealth. As CBO, Mike supports the AscellaHealth Family of Companies comprehensive business strategy to increase brand awareness, boost perceived value, and improve lines of services in the marketplace. He is responsible for oversight of their Family of Companies based on sales and marketing to finance, client services, and specialty pharmacy strategies throughout the organization that drive strategic business initiatives. Within his roles, he enhances the success of the strategic projects and applies business development, contract negotiations, network advancement, and marketing and outreach strategies that cultivate opportunities for AscellaHealth and their Family of Companies.

With more than 24 years of experience, Mike held roles in senior executive management within the specialty pharmacy supply group, pharmaceutical and biotech industry of managed markets, group purchasing organizations, specialty wholesale, and integrated delivery networks. He assumed roles within the pharmaceutical organization such as Bristol Myers Squibb, Enzon BioTech, Novo Nordisk, Baxter BioScience, as well as roles within the distribution channel of AmerisourceBergen specialty groups, BioMatrix Specialty and Infusion Rx, Diplomat/BioRx Specialty Pharmacy, CareCentrix Medical Infusion, Asembia GPO, Axelacare Infusion, to other manufacturer and specialty pharmacy home infusion companies.

Mike is active in the biotech community and is council advisor of the Council of Strategic Healthcare Advisors (CSHA), an advisor/faculty member of the Academy of Managed Care Pharmacy (AMCP) for Specialty Pharmacy Advisory Group & Biosimilars Partnership Forum, NCPDP Specialty Pharmacy Stakeholder Action Group, Self-insured Institute of America (SIIA) advisor, National Alliance of Healthcare Purchaser Coalitions, and was 2014 Editorial Board Member for Specialty Pharmacy Times.

Mike holds a bachelor’s degree in business management and a Certificate in Clinical Research Compliance and Management (CRCM). He has completed programs in leadership development at Harvard University, Brooks Group, Miller Heiman Account Management, and MD Anderson Center Cancer Courses.

04:27 Is it a conflict of incentives to worry about the cost of million-dollar pharmaceuticals?
06:24 “Really, does it make sense to carve up my specialty pharmacy benefit … away from my typical PBM model?”
06:48 What’s the trend line with moving away from the big PBMs?
07:20 Specialty pharmacy episodes.07:53 How does a small PBM contract with Pharma?
08:34 EP365 with Scott Haas.10:15 EP337 with Olivia Webb.11:32 “We’re still lacking the overall insight to data.”
12:15 “When you have insight and good data, then you can start really driving the plan language and cover requirements.”
13:07 “It is a frustrating game because … the large PBMs that have traditionally managed an employer’s spend … doesn’t give them the data that’s needed.”
13:48 What’s going on with outcomes-based contracts?
14:16 What’s the importance of aligning reimbursement around value instead of volume?
14:57 “The issue is, how real is the data?”
19:24 EP370 with Erik Davis and Autumn Yongchu.20:36 Are hospital-based specialty pharmacies teaming up with big PBMs?
22:01 “It’s market ownership.”
29:17 EP369 with Keith Hartman, RPh.30:43 “These are real scenarios that are happening in the self-insured planned sponsor market.”
30:59 “Employers really should start recognizing organizations that take more of an integrated and thoughtful approach.”

You can learn more at ascellahealth.com.

Mike Baldzicki of @AscellaHealth discusses #specialtypharma, #PBM, #hospitals, #employers, and #pharma on our #healthcarepodcast. #healthcare #podcast

Is it a conflict of incentives to worry about the cost of million-dollar pharmaceuticals? Mike Baldzicki of @AscellaHealth discusses #specialtypharma, #PBM, #hospitals, #employers, and #pharma on our #healthcarepodcast. #healthcare #podcast

“Really, does it make sense to carve up my specialty pharmacy benefit … away from my typical PBM model?” Mike Baldzicki of @AscellaHealth discusses #specialtypharma, #PBM, #hospitals, #employers, and #pharma on our #healthcarepodcast. #healthcare #podcast

What’s the trend line with moving away from the big PBMs? Mike Baldzicki of @AscellaHealth discusses #specialtypharma, #PBM, #hospitals, #employers, and #pharma on our #healthcarepodcast. #healthcare #podcast

How does a small PBM contract with Pharma? Mike Baldzicki of @AscellaHealth discusses #specialtypharma, #PBM, #hospitals, #employers, and #pharma on our #healthcarepodcast. #healthcare #podcast

“We’re still lacking the overall insight to data.” Mike Baldzicki of @AscellaHealth discusses #specialtypharma, #PBM, #hospitals, #employers, and #pharma on our #healthcarepodcast. #healthcare #podcast

“When you have insight and good data, then you can start really driving the plan language and cover requirements.” Mike Baldzicki of @AscellaHealth discusses #specialtypharma, #PBM, #hospitals, #employers, and #pharma on our #healthcarepodcast. #healthcare #podcast

“It is a frustrating game because … the large PBMs that have traditionally managed an employer’s spend … doesn’t give them the data that’s needed.” Mike Baldzicki of @AscellaHealth discusses #specialtypharma, #PBM, #hospitals, #employers, and #pharma on our #healthcarepodcast. #healthcare #podcast

What’s going on with outcomes-based contracts? Mike Baldzicki of @AscellaHealth discusses #specialtypharma, #PBM, #hospitals, #employers, and #pharma on our #healthcarepodcast. #healthcare #podcast

What’s the importance of aligning reimbursement around value instead of volume? Mike Baldzicki of @AscellaHealth discusses #specialtypharma, #PBM, #hospitals, #employers, and #pharma on our #healthcarepodcast. #healthcare #podcast

“The issue is, how real is the data?” Mike Baldzicki of @AscellaHealth discusses #specialtypharma, #PBM, #hospitals, #employers, and #pharma on our #healthcarepodcast. #healthcare #podcast

Are hospital-based specialty pharmacies teaming up with big PBMs? Mike Baldzicki of @AscellaHealth discusses #specialtypharma, #PBM, #hospitals, #employers, and #pharma on our #healthcarepodcast. #healthcare #podcast

“It’s market ownership.” Mike Baldzicki of @AscellaHealth discusses #specialtypharma, #PBM, #hospitals, #employers, and #pharma on our #healthcarepodcast. #healthcare #podcast

“These are real scenarios that are happening in the self-insured planned sponsor market.” Mike Baldzicki of @AscellaHealth discusses #specialtypharma, #PBM, #hospitals, #employers, and #pharma on our #healthcarepodcast. #healthcare #podcast

“Employers really should start recognizing organizations that take more of an integrated and thoughtful approach.” Mike Baldzicki of @AscellaHealth discusses #specialtypharma, #PBM, #hospitals, #employers, and #pharma on our #healthcarepodcast. #healthcare #podcast

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Lisa Bari, Betsy Seals (EP375), Dave Chase, Cora Opsahl (EP373), Cora Opsahl (EP372), Dr Mark Fendrick (Encore! EP308), Erik Davis and Autumn Yongchu (EP371), Erik Davis and Autumn Yongchu (EP370), Keith Hartman, Dr Aaron Mitchell (Encore! EP282), Stacey Richter (INBW34), Ashleigh Gunter, Doug Hetherington, Dr Kevin Schulman, Scott Haas, David Muhlestein, David Scheinker, Ali Ucar, Dr Carly Eckert, Jeb Dunkelberger (EP360), Dan O’Neill, Dr Wayne Jenkins, Liliana Petrova, Ge Bai, Nikhil Krishnan, Shawn Rhodes, Pramod John (EP353), Pramod John (EP352)

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Interoperability. Let’s just review a few key points that probably everybody listening knows but certainly bear repeating because they matter.

I don’t want to dig into the technical or regulatory details of interoperability. That is above my pay grade. But I want to talk about the really important stuff that maybe doesn’t get talked about a whole lot because you say the word interoperability and it’s like the magic word that transports the unwary into the land of shadow and smoke and mist. It’s like a self-published YA (young adult) novel half the time.

But let’s start here: First of all, consider that a lot of healthcare these days is conceived of as a scattering of micro-moments. It’s not even like we think of patients one at a time. We think about patients one ICD-10 code at a time. And we think about those ICD-10 codes in 20-minute increments whenever a patient happens to show up in clinic. The average Medicare patient these days sees five specialists and more than one PCP a lot of times. So, we’re not only breaking that patient down into codes per minute or something, but this is further broken down by clinician or practice.

Now consider that everybody knows—and when I say everybody knows, I mean it’s inarguable at this point—health happens at the whole-patient level, at the whole-person level, more accurately. It happens at the community level: 80% of patient outcomes are going to derive from what that patient does when they leave the office and whether they are able to and health literate enough to construct a reconciled treatment plan for themselves from the bits and pieces of information they’ve received scattered all over the place. You know in Star Trek when someone gets into the transporter to beam down to a planet and their whole body splinters into a gazillion little pieces? That’s how our healthcare industry treats patients. They are frozen in that moment and rarely, if ever, become whole on the other side.

So, when we talk about interoperability, what we’re really talking about is a means to an end. What we are discussing is creating the ability to treat the whole patient or—Heaven forbid!—consider the whole community because we have enough data that we can accurately and adequately see the whole picture. We are able to avoid prescribing a treatment that is dangerous to the patient, inefficient, duplicative, or low quality—which is what happens over and over again. It’s no amazing surprise that our healthcare industry wastes $1 in $4 we spend and doesn’t net outcomes that are great in almost any respect when compared to other countries.

Let me say this more bluntly, as if that wasn’t already pretty blunt: If I don’t know relevant and important details about my patient, then I cannot consistently deliver care that is high quality, safe, or cost conscious due to service duplication or uncoordinated care. I mean, how is anybody supposed to deliver evidence-based care when a lot of evidence may or may not be missing?

So basically, without interoperability piping in the right patient information, I cannot succeed in any risk-based arrangement, right? If care provided is consistently lower quality, uncoordinated, unsafe, or inefficient, how am I supposed to optimize my care delivery? Said another way, interoperability is essential for anybody who wants to succeed in a value-based arrangement. I need all the data on my patients, and I need it in a way that I can separate the signal from the noise. Of course, getting 40 pages of duplicative SOAP (subjective, objective, assessment, and plan) notes that are semi-accurate and that no one bothers to look at is just unhelpful.

Quick counterpoint: FFS (fee for service) loves siloed data. You know how much money everybody talks about could be saved if we eliminate duplicative services? Well, that’s how much some fee-for-service health system is gonna lose if you make it easy for clinicians to see that the patient already got that CAT scan.

So, in sum, interoperability is essential to high-quality, safe, and efficient care. A mark of a health system or provider practice who is really committed to patient outcomes is going to be their commitment to share data. The world has moved from a “Hey, you’re permitted to share data if you really want to” to a “You are obligated to share your data.” And right now, I am loosely quoting Micky Tripathi, PhD, MPP, who is the ONC’s (Office of the National Coordinator for Health Information Technology) national coordinator and also the guy in charge of TEFCA (Trusted Exchange Framework and Common Agreement) and implementing the provisions against information blocking that was in the Cures Act Final Rule last year.

In this healthcare podcast, I am speaking with the perfect person about interoperability, and that would be Lisa Bari, who is the CEO of Civitas Networks for Health, which is a national collaborative working to improve interoperability in this country to improve health. Since interoperability is a huge topic, what I wanted to understand from Lisa most particularly are: Who are the current roster of players in the interoperability space? Like, what is going on there? Lisa told me that there are four main groups of interoperability folks—EHR (electronic health record) systems; APIs (application programming interfaces); HIEs (health information exchanges), both profit and nonprofit; and then others like clearinghouses, etc—which we talk about in some detail in this episode.

We also discussed Larry Ellison’s bold proclamation that Cerner is going to build one national medical records database. It’s almost like Larry made it through the “welcome to the healthcare briefing” packet that his team gave him and immediately concluded that the interoperability problem is a technology problem, not a business case, fee-for-service, workflow, no universal ID, human, organizational, or government problem. Lisa adds some fidelity there.

Also, TEFCA … we talk about what it is and what it’s not. Short version: It’s a framework so that no one can say they won’t share data lest they get in trouble in some way. At the same time, it’s not gonna solve, as Lisa puts it, “the last mile of interoperability,” meaning it’s not going to put the right information in the right clinician’s hands at the right time. It just governs getting data from one organization to another organization but kinda has nothing to do with the clinical workflow, so to speak.

The Civitas Networks for Health annual conference, by the way, is coming up on August 21-24 if you are interested in going.

You can learn more at civitasforhealth.org. Lisa Bari, MBA, MPH, is the inaugural CEO of Civitas Networks for Health, a national nonprofit member- and mission-driven organization that was previously known as the Network for Regional Health Improvement and the Strategic Health Information Exchange Collaborative. Civitas counts over 100 multi-stakeholder-governed regional health improvement collaboratives and health information exchanges as members and creates national opportunities for education and community building between its members, policy makers, and business partners. Their upcoming conference (August 21-24, 2022, in San Antonio or via livestream) focuses on the theme of data collaboratives and information exchanges creating the critical infrastructure for health equity. Previously, Lisa was the health IT and interoperability lead at the CMS Innovation Center, working on primary care innovation model policy, and additionally has a background in health IT marketing and strategy. She holds an MBA from Purdue University and a Master of Public Health in health policy from the Harvard TH Chan School of Public Health and serves on the boards of directors of HealthCare Access Maryland and the Zorya Foundation.

06:30 How does value-based care depend on interoperability?
07:38 Why is it really important to exchange information at the right time with the right purpose?
08:00 What is one of the easiest low-hanging fruit to achieve in value-based care?
09:42 What are the four kinds of companies getting into the interoperability space?
11:51 “As we know, there’s sort of technical interoperability … and then there’s semantic interoperability.”
12:59 Where are we right now with EHR basic interoperability?
15:33 Who should ACOs hire to get the right data at the right time?
17:00 Why is it important to delineate the different types of HIE?
22:09 What can ACOs assure with interoperability?
22:59 Is the demand among ACOs for interoperability there?
24:04 “If you’re in value-based care, you better care about what’s happening outside of the healthcare setting.”
24:36 EP108 with Chris Klomp.26:25 “Every couple of years, someone talks about creating the ultimate database to rule them all. … It hasn’t happened yet, and I don’t think it’s going to happen.”
26:56 “The difficult thing about healthcare data … interoperability … is an organizational and a governance problem.”
28:49 “You’ve gotta start with the incentives … and then you do have to say … ‘We are not gonna hoard any more data.’”
29:10 What is TEFCA, and how does it fit into this interoperability conversation?
32:17 “I think partners are trying to solve for value and outcomes.”

You can learn more at civitasforhealth.org.

@lisabari of @civitas4health discusses #interoperability on our #healthcarepodcast. #healthcare #podcast #digitalhealth

How does value-based care depend on interoperability? @lisabari of @civitas4health discusses #interoperability on our #healthcarepodcast. #healthcare #podcast #digitalhealth

Why is it really important to exchange information at the right time with the right purpose? @lisabari of @civitas4health discusses #interoperability on our #healthcarepodcast. #healthcare #podcast #digitalhealth

What is one of the easiest low-hanging fruit to achieve in value-based care? @lisabari of @civitas4health discusses #interoperability on our #healthcarepodcast. #healthcare #podcast #digitalhealth

What are the four kinds of companies getting into the interoperability space? @lisabari of @civitas4health discusses #interoperability on our #healthcarepodcast. #healthcare #podcast #digitalhealth

“As we know, there’s sort of technical interoperability … and then there’s semantic interoperability.” @lisabari of @civitas4health discusses #interoperability on our #healthcarepodcast. #healthcare #podcast #digitalhealth

Where are we right now with EHR basic interoperability? @lisabari of @civitas4health discusses #interoperability on our #healthcarepodcast. #healthcare #podcast #digitalhealth

Who should ACOs hire to get the right data at the right time? @lisabari of @civitas4health discusses #interoperability on our #healthcarepodcast. #healthcare #podcast #digitalhealth

Why is it important to delineate the different types of HIE? @lisabari of @civitas4health discusses #interoperability on our #healthcarepodcast. #healthcare #podcast #digitalhealth

What can ACOs assure with interoperability? @lisabari of @civitas4health discusses #interoperability on our #healthcarepodcast. #healthcare #podcast #digitalhealth

Is the demand among ACOs for interoperability there? @lisabari of @civitas4health discusses #interoperability on our #healthcarepodcast. #healthcare #podcast #digitalhealth

“If you’re in value-based care, you better care about what’s happening outside of the healthcare setting.” @lisabari of @civitas4health discusses #interoperability on our #healthcarepodcast. #healthcare #podcast #digitalhealth

“Every couple of years, someone talks about creating the ultimate database to rule them all. … It hasn’t happened yet, and I don’t think it’s going to happen.” @lisabari of @civitas4health discusses #interoperability on our #healthcarepodcast. #healthcare #podcast #digitalhealth

“The difficult thing about healthcare data … interoperability … is an organizational and a governance problem.” @lisabari of @civitas4health discusses #interoperability on our #healthcarepodcast. #healthcare #podcast #digitalhealth

“You’ve gotta start with the incentives … and then you do have to say … ‘We are not gonna hoard any more data.’” @lisabari of @civitas4health discusses #interoperability on our #healthcarepodcast. #healthcare #podcast #digitalhealth

What is TEFCA, and how does it fit into this interoperability conversation? @lisabari of @civitas4health discusses #interoperability on our #healthcarepodcast. #healthcare #podcast #digitalhealth

“I think partners are trying to solve for value and outcomes.” @lisabari of @civitas4health discusses #interoperability on our #healthcarepodcast. #healthcare #podcast #digitalhealth

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Betsy Seals (EP375), Dave Chase, Cora Opsahl (EP373), Cora Opsahl (EP372), Dr Mark Fendrick (Encore! EP308), Erik Davis and Autumn Yongchu (EP371), Erik Davis and Autumn Yongchu (EP370), Keith Hartman, Dr Aaron Mitchell (Encore! EP282), Stacey Richter (INBW34), Ashleigh Gunter, Doug Hetherington, Dr Kevin Schulman, Scott Haas, David Muhlestein, David Scheinker, Ali Ucar, Dr Carly Eckert, Jeb Dunkelberger (EP360), Dan O’Neill, Dr Wayne Jenkins, Liliana Petrova, Ge Bai, Nikhil Krishnan, Shawn Rhodes, Pramod John (EP353), Pramod John (EP352), Dr Eric Bricker

View Details

Medicare Advantage (MA), otherwise known as the “money machine,” is often the most profitable parts of many payers’ business lines. Medicare Advantage plans can make a lot of cash if they are good at what they do. Look at any of these large, consolidated carriers’ financial statements to get the magnitude of that statement.

Also, in 2022, Medicare Advantage plans have enrolled 28 million participants between them, which represents 45% of all Medicare beneficiaries. This marks a three-point improvement in penetration over 2021 and a total program enrollment growth of 9%.

All of this is not a secret.

So, what’s happening right now is that this administration is looking carefully at Medicare Advantage plans and what they have been up to. We have had an amping up of government oversight, including regulatory actions and program audits.

In this healthcare podcast, I am speaking with Betsy Seals, who is CEO and cofounder of Rebellis Group, which is a managed care consulting firm working with Medicare Advantage plans.

Betsy says (and this is what we talk about in the interview) that there’s three main areas that the government is currently scrutinizing:

Sales and marketing. There have been these third parties, it seems, these field marketing organizations who were hired to do marketing and sales for some of the Medicare Advantage plans. And because they were third parties, it seems that many of them felt themselves to be excluded from CMS (Centers for Medicare & Medicaid Services) regulations and able to basically mislead prospective members with sales pitches that were highly suspect. Betsy gives some examples of these, and when you hear them, you will see why CMS is cracking down.
Recouping improper payments is another area that CMS is all over. Interestingly, as Betsy Seals says in this interview, this might be one area where the government is actually ahead of private sector plans from a technology and analytic standpoint.

CMS seems to have better analytics capabilities and is better at detecting fraud schemes and improper payments than the plans themselves. These plans are not sophisticated enough to notice stuff that CMS detects when it gets ahold of the plan data.

But as unusual as this situation is where the government is ahead of the business sector, I can’t say I’m shocked. We have had one guest on this show after another talking about just how far in the past some of these health plans are lagging. Dan O’Neill probably said it most eloquently and notably (EP359).

But I digress.

So, recouping improper payments has the eye of CMS. This means two things largely. It means finding “outlier” codes that some MA plan paid for but which are clearly errors and should not have been paid.

Another improper payment is when plans themselves do a little fancy upcoding so that they make more money than they should in their risk-adjustment payments. This has gotten some major attention lately. Let me quote from an OIG (Office of Inspector General) report:

“Our findings raise concerns about the extent to which certain MA companies may have inappropriately leveraged both chart reviews and HRAs [health risk assessments] to maximize risk-adjusted payments. We found that 20 of the 162 MA companies drove a disproportionate share of the $9.2 billion in payments from diagnoses that were reported only on chart reviews and HRAs, and on no other service records.”

The sneaky idea here to get more money than they should from taxpayers is that someone somewhere puts down that a member has major depressive disease because someone somewhere said they did. But the patient clearly doesn’t have major depressive disease because they aren’t getting any treatment for it and nothing anywhere would indicate that they are suffering from a major depressive disease.

So, the plan winds up getting more money from the government to care for a patient who is suffering from major depressive disease, but the patient doesn’t require any additional care because they don’t have major depressive disease. It’s a great way to make some dollars for shareholders that is coming right out of the pockets of taxpayers.

In sum, the #2 area of additional oversight is recouping improper payments either from paying claims that should not have been paid for or by wild upcoding.

This is just kinda like the general sort of compliance oversight that CMS does, meaning grievances and appeals and formulary administration and models of care for SNP plans (special needs plans), compliance program effectiveness—normal stuff like this—which will be interesting given all of the articles coming out right now about how patients on Medicare Advantage plans are less likely to get more costly diabetes treatments and how often there’s denials for cancer care or NCI cancer centers aren’t covered, etc.

One point of note here that’s kind of thought-provoking on a few levels: If you’re an MA plan, it is super important for you to get members in for their annual screenings. For one, CMS requires that you document diagnoses each year; and you need to do this to reduce the chances that CMS will question a treatment being paid for because there’s no underlying diagnosis to support it—and these diagnoses must be re-upped every year. Recall what I was just talking about re: improper payments and fraud schemes. If a patient isn’t diagnosed with something, then why are taxpayers paying for its treatment?

Also risk adjustment ... if you wanna upcode, it’s not a bad idea to have a diagnosis documented in multiple different ways so that when the OIG/CMS/DOJ comes knocking, you can have your ducks in a row. Getting patients in for their annual screenings is how you can safely upcode.

Further, one more reason why getting patients in for annual screenings matters to MA plans, member experience counts for an increasing piece of star ratings. Patients who never see their doctor and never interact with the plan don’t usually give the plan they have nothing to do with stellar marks—and besides that, these members are tough to retain.

Last big deal for an MA plan to get members in for their annual is this is when the doc gets into screening for care gaps, which is also part of star measures. All this about annual screenings is a bit of a sidebar, but it is kind of interesting to contemplate as we get into the conversation today about government oversight. (For a meme on this topic, check out this Tweet from Rik Renard.)

My guest, as I mentioned earlier, is Betsy Seals. Listen to our conversation about how MA plans are in the hot seat right now. Later in the fall, Betsy will be coming back to talk about trends in the Medicare Advantage marketplace.

You can learn more at rebellisgroup.com. Betsy Seals is the CEO and cofounder of Rebellis Group, a consulting firm established to provide advisory and hands-on services to Medicare Advantage Organizations (MAOs) and their subcontractors. Betsy is a nationally recognized leader in the managed care industry with over 20 years of experience.

08:15 What’s happening with sales and marketing in the healthcare industry?
11:04 What’s happening with the focus on recouping improper payments?
13:32 “When you look at the fundamentals of it, these are federal dollars. And what we’re talking about is federal dollars that were paid when they should not have been paid.”
15:39 Are improper claim payments an administrative problem, or something more intentional?
16:20 “The health plan has a responsibility to catch those issues.”
20:10 What are specialty pharmacy prescriptions being scrutinized for?
22:12 “If this is where CMS is headed … the health plan should’ve already been doing this.”
23:58 Why do you see a bigger focus on social determinants of health?
25:54 Do these health plan audits actually have any teeth?
27:01 What is the biggest penalty a health plan can face from an audit?
29:57 “Navigating the Medicare program … was near to impossible. I know the program, and even for me, it was hours and hours and hours and hours on the phone.”

You can learn more at rebellisgroup.com.

@betsyseals of @GroupRebellis discusses #MedicareAdvantage plans on our #healthcarepodcast. #healthcare #podcast #digitalhealth

What’s happening with sales and marketing in the healthcare industry? @betsyseals of @GroupRebellis discusses #MedicareAdvantage plans on our #healthcarepodcast. #healthcare #podcast #digitalhealth

What’s happening with the focus on recouping improper payments? @betsyseals of @GroupRebellis discusses #MedicareAdvantage plans on our #healthcarepodcast. #healthcare #podcast #digitalhealth

“When you look at the fundamentals of it, these are federal dollars. And what we’re talking about is federal dollars that were paid when they should not have been paid.” @betsyseals of @GroupRebellis discusses #MedicareAdvantage plans on our #healthcarepodcast. #healthcare #podcast #digitalhealth

Are improper claim payments an administrative problem, or something more intentional? @betsyseals of @GroupRebellis discusses #MedicareAdvantage plans on our #healthcarepodcast. #healthcare #podcast #digitalhealth

“The health plan has a responsibility to catch those issues.” @betsyseals of @GroupRebellis discusses #MedicareAdvantage plans on our #healthcarepodcast. #healthcare #podcast #digitalhealth

What are specialty pharmacy prescriptions being scrutinized for? @betsyseals of @GroupRebellis discusses #MedicareAdvantage plans on our #healthcarepodcast. #healthcare #podcast #digitalhealth

“If this is where CMS is headed … the health plan should’ve already been doing this.” @betsyseals of @GroupRebellis discusses #MedicareAdvantage plans on our #healthcarepodcast. #healthcare #podcast #digitalhealth

Why do you see a bigger focus on social determinants of health? @betsyseals of @GroupRebellis discusses #MedicareAdvantage plans on our #healthcarepodcast. #healthcare #podcast #digitalhealth

Do these health plan audits actually have any teeth? @betsyseals of @GroupRebellis discusses #MedicareAdvantage plans on our #healthcarepodcast. #healthcare #podcast #digitalhealth

What is the biggest penalty a health plan can face from an audit? @betsyseals of @GroupRebellis discusses #MedicareAdvantage plans on our #healthcarepodcast. #healthcare #podcast #digitalhealth

“Navigating the Medicare program … was near to impossible. I know the program, and even for me, it was hours and hours and hours and hours on the phone.” @betsyseals of @GroupRebellis discusses #MedicareAdvantage plans on our #healthcarepodcast. #healthcare #podcast #digitalhealth

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Dave Chase, Cora Opsahl (EP373), Cora Opsahl (EP372), Dr Mark Fendrick (Encore! EP308), Erik Davis and Autumn Yongchu (EP371), Erik Davis and Autumn Yongchu (EP370), Keith Hartman, Dr Aaron Mitchell (Encore! EP282), Stacey Richter (INBW34), Ashleigh Gunter, Doug Hetherington, Dr Kevin Schulman, Scott Haas, David Muhlestein, David Scheinker, Ali Ucar, Dr Carly Eckert, Jeb Dunkelberger (EP360), Dan O’Neill, Dr Wayne Jenkins, Liliana Petrova, Ge Bai, Nikhil Krishnan, Shawn Rhodes, Pramod John (EP353), Pramod John (EP352), Dr Eric Bricker, Katy Talento

View Details

So, let’s put the last, I don’t know, 300 episodes of Relentless Health Value into perspective here. The USA wastes about $1.5 trillion a year on some combination of paying way too much for low-value care, fraud, and waste—$1.5 trillion down the drain. As my guest, Dave Chase, says in this healthcare podcast, if this was a country, what we waste would be the 11th biggest GDP in the world. We could call it Healthcare-istan.

Meanwhile, outcomes aren’t anything to brag about on the world stage, and 41% of American adults have medical debt in this country. Also, all across the country, people making all kinds of healthcare decisions to save money that are clinically toxic. Financial toxicity is clinical toxicity, right? You know this already. You listen to this show. I just saw yet another study the other day—actually this one about cancer outcomes and how they are appreciably worse when patients are worried about how much money their treatment will cost. And a lot of people in this country—many people with a Part D plan, commercial insurance with big deductibles—there’s a lot of people in this country who cannot afford tens of thousands of dollars in out-of-pocket spend every year.

But let’s change gears and talk about some good stuff, some inroads that are being made. Let’s talk about Rosen Hotels for a moment. Rosen Hotels is a bright spot, for sure, in all of this. They are a leading indicator of what is possible.

Rosen Hotels, which is a hotel chain in Florida, they saved over $450 million in healthcare costs and have healthier, happier employees. They spend 55% less per capita on health benefits despite having an employee population with significant health challenges. They saved so much money that Rosen was able to set up a scholarship fund so that not only kids of employees (and employees themselves) but also kids in the community can go to college. Turnover there is lower. Retention is higher. Employees are healthier. I mean, the ROI of a CEO and a CFO getting engaged and taking back control over their health benefits from third parties? It’s huge. Check out this article about Rosen and also Dave Chase’s TED Talk about Rosen.

My guest today, Dave Chase, says that what they did at Rosen Hotels was actually an inspiration for Health Rosetta, which is the organization that he founded to help employers take control of the out-of-control dysfunctional health benefits market in this country. Dave Chase says that the Health Rosetta community knows something that most don’t (yet). Dave Chase has said that healthcare is fixed/fixable. He said that healthcare actually isn’t expensive. Clinicians only receive $0.27 of every $1 that’s ostensibly spent on healthcare. What is expensive is price gouging, profiteering, administrative bloat, fraud, and inappropriate treatment.

And Dave Chase has also said that we’re already investing more than enough money to not only fund world-class healthcare for everyone but also take all that money from Healthcare-istan and fund what drives 80% of health outcomes (ie, income, education, career opportunities, and clean air and water). There’s so much money that is being wasted in healthcare. But all of this other stuff could be funded if we simply pay what we should be paying. (See Dave Chase’s LinkedIn post to learn more about this.)

Health Rosetta currently has about five million lives stewarded through plans managed by their Health Rosetta advisors. That’s probably another bright spot right there—five million lives.

Another bright spot is the work of the Nuka System in Alaska. Listen to EP312 with Douglas Eby, MD, MPH, CPE. The Nuka System has won award after award for being one of the best health systems in the country, and it serves a challenging patient population for less money than most Medicaid plans.

So, here you have two entities, Rosen Hotels and the Nuka System, dealing with (on a good day) patient populations with multiple chronic conditions, high maternal mortality … At Rosen, 56% of their pregnancies are categorized as high risk, which not only has generational human consequences, of course, but is also a notorious budget-buster, as Dave Chase has said. There’s substance abuse issues. These are patient populations who are doing appreciably better and cost far less than if they were covered by almost any other health plan in this country.

Here’s yet one more bright spot example company, and that’s Pacific Steel. During our conversation, Dave Chase mentioned that the CFO of Pacific Steel said that when they went from spending $8 million in health benefits a year to spending under $3.5 million—basically cutting their healthcare costs in less than half—the CFO said that in order to make that same amount of net income, Pacific Steel would have had to raise their top-line sales revenue by 25% to 30%. So, okay … you’re a CEO, and here’s your choice to appease your shareholders or make your own bonus. Option A: Go out right now and figure out how to sell 30% more. Or Option B: Get your healthcare house in order, which may also improve retention if you do it right. To me, this doesn’t seem like a head-scratcher.

Two things that Dave Chase also brought up during our conversation that I thought were thought provoking. First, change is happening regionally and seems to adhere to the so-called “rule of three,” meaning that if three employers have worked with a qualified employee benefit consultant (EBC) and really fixed up their health benefits, then a cascade will start in that region.

And secondly—and I never thought about this before—we spend over $4 trillion through various health plans (employer, ACA, Medicare, Medicaid), and yet have little to no objective mark of value for how good any given health plan is. The closest thing, as Dave Chase says, might be Medicare Advantage Star Ratings. To address this problem, Health Rosetta invested seven figures to build a Plan Grader™. This really helps employers make sure that the plan they put in place is a win-win the whole way around.

You can learn more at healthrosetta.org or by emailing Dave at dave@healthrosetta.org. Dave Chase leads the mission for Health Rosetta, which is to empower community-owned health plans (COHPs) with the vision of COHPs everywhere. Health Rosetta’s purpose is creating and reinvesting the Health Rosetta Dividend (ie, redeploying the currently wasted $1.5 trillion in healthcare to a higher and better use—the social determinants of health such as income, better food, etc).

Health Rosetta makes health plans local, organic, and sustainable transforming health plans from the number one driver of inflation, poverty, and bankruptcy to drivers of well-being and wealth.

Health Rosetta ends the 30-year heist of stolen income from the working middle class. Health Rosetta plans have restored the American Dream for tens of thousands of people, giving them raises/bonuses and healthcare they can access without fear of bankruptcy. Individuals that had sky-high deductibles and co-pays no longer have that as a barrier (typically they are $0). School districts that once couldn’t give teachers raises or had to have school levies to pay for music, art, and sports programs now have the funds (due to healthcare savings) to pay teachers more, have bigger class sizes, avoid cutting extracurricular programs, and more—all while giving teachers much better care outcomes.

Health Rosetta’s Plan Grader™ assesses the 40 most important attributes of a health plan “prescribing” proven strategies to transition into local, sustainable, world-class health plans.

Health Rosetta community’s transparency set a new industry standard and became the law of the land due to changes in laws that represent the largest change in employee health benefits since 1943.

Through best-selling books, writing for various media outlets, TED Talk, and TV/film, Dave has reached over 10 million people with the goal of engaging, equipping, and empowering a broad grassroots movement designed to restore hope, health, and well-being to our communities. Dave received the Health Value Awards’ Lifetime Achievement for Health Benefits Innovation at the World Health Care Congress.

Prior to Health Rosetta, Dave cofounded Avado, which was acquired by and integrated into WebMD/Medscape, and founded Microsoft’s $3-billion, 28,000-partner healthcare ecosystem.

Outside of work, Dave coaches the next generation of leaders as a high school track and cross-country coach of state champion teams and individuals. Dave was a PAC-12 800 meter and 4×400 competitor. Most importantly, devotion to faith, family, and friends underpin a desire to be a servant leader to the five million lives (and growing) stewarded through the Health Rosetta community.

06:57 Why did Dave Chase start Health Rosetta?
07:42 EP312 with Douglas Eby, MD, MPH, CPE.07:51 How does Health Rosetta deem which health plans are succeeding?
11:07 What are the most important areas and factors for grading health plans?
11:22 EP365 with Scott Haas.11:38 “That $1.5 trillion of waste, how is that possible? Well, it’s all codified in the contracts.”
12:18 “You can’t manage what you can’t measure.”
16:59 “What could be more disruptive than 30 years of wage gains stolen by the status quo health plans?”
17:39 “This is the last major area to modernize inside of corporate America.”
18:15 “This is not small dollars; there’s a tremendous opportunity.”
19:04 “Go back to PBM. That’s the first thing that starts to get at the care delivery side.”
21:52 “Can we even call it primary care if you can’t get in to that doc for weeks?”
25:03 Where does Health Rosetta get their data to assess health plans?
27:00 Who are these self-insured employers, typically?
29:48 “3.5% [is] where the market flips.”
31:57 EP367 with Doug Hetherington.32:03 EP350 with Katy Talento.33:13 “We like to fetishize big in this country.”

You can learn more at healthrosetta.org or by emailing Dave at dave@healthrosetta.org.

@chasedave of @HealthRosetta discusses #healthplans in our #healthcarepodcast. #healthcare #podcast #digitalhealth

Why did Dave Chase start Health Rosetta? @chasedave of @HealthRosetta discusses #healthplans in our #healthcarepodcast. #healthcare #podcast #digitalhealth

How does Health Rosetta deem which health plans are succeeding? @chasedave of @HealthRosetta discusses #healthplans in our #healthcarepodcast. #healthcare #podcast #digitalhealth

What are the most important areas and factors for grading health plans? @chasedave of @HealthRosetta discusses #healthplans in our #healthcarepodcast. #healthcare #podcast #digitalhealth

“That $1.5 trillion of waste, how is that possible? Well, it’s all codified in the contracts.” @chasedave of @HealthRosetta discusses #healthplans in our #healthcarepodcast. #healthcare #podcast #digitalhealth

“You can’t manage what you can’t measure.” @chasedave of @HealthRosetta discusses #healthplans in our #healthcarepodcast. #healthcare #podcast #digitalhealth

“What could be more disruptive than 30 years of wage gains stolen by the status quo health plans?” @chasedave of @HealthRosetta discusses #healthplans in our #healthcarepodcast. #healthcare #podcast #digitalhealth

“This is the last major area to modernize inside of corporate America.” @chasedave of @HealthRosetta discusses #healthplans in our #healthcarepodcast. #healthcare #podcast #digitalhealth

“This is not small dollars; there’s a tremendous opportunity.” @chasedave of @HealthRosetta discusses #healthplans in our #healthcarepodcast. #healthcare #podcast #digitalhealth

“Go back to PBM. That’s the first thing that starts to get at the care delivery side.” @chasedave of @HealthRosetta discusses #healthplans in our #healthcarepodcast. #healthcare #podcast #digitalhealth

“Can we even call it primary care if you can’t get in to that doc for weeks?” @chasedave of @HealthRosetta discusses #healthplans in our #healthcarepodcast. #healthcare #podcast #digitalhealth

Where does Health Rosetta get their data to assess health plans? @chasedave of @HealthRosetta discusses #healthplans in our #healthcarepodcast. #healthcare #podcast #digitalhealth

Who are these self-insured employers, typically? @chasedave of @HealthRosetta discusses #healthplans in our #healthcarepodcast. #healthcare #podcast #digitalhealth

“3.5% [is] where the market flips.” @chasedave of @HealthRosetta discusses #healthplans in our #healthcarepodcast. #healthcare #podcast #digitalhealth

“We like to fetishize big in this country.” @chasedave of @HealthRosetta discusses #healthplans in our #healthcarepodcast. #healthcare #podcast #digitalhealth

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Cora Opsahl (EP373), Cora Opsahl (EP372), Dr Mark Fendrick (Encore! EP308), Erik Davis and Autumn Yongchu (EP371), Erik Davis and Autumn Yongchu (EP370), Keith Hartman, Dr Aaron Mitchell (Encore! EP282), Stacey Richter (INBW34), Ashleigh Gunter, Doug Hetherington, Dr Kevin Schulman, Scott Haas, David Muhlestein, David Scheinker, Ali Ucar, Dr Carly Eckert, Jeb Dunkelberger (EP360), Dan O’Neill, Dr Wayne Jenkins, Liliana Petrova, Ge Bai, Nikhil Krishnan, Shawn Rhodes, Pramod John (EP353), Pramod John (EP352), Dr Eric Bricker, Katy Talento, Stacey Richter (INBW33)

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In this healthcare podcast, I am speaking with Cora Opsahl, who directs the 32BJ Health Fund. This is the second conversation I’m having with Cora (last one was EP372), but these two conversations are not really linear—so listen in whatever order you want to.

Important to know about Cora’s background, in previous roles, she has worked deep in the inner sanctums of the healthcare industry. So, she came to 32BJ armed with a BS meter that’s finely tuned, which is, as I said last week, an unfortunately essential skill for anyone trying to help patients and members relying on them to successfully navigate the healthcare industry.

Here’s a pivotal fact: 56% of total spend at the 32BJ Health Fund goes to hospitals. So, from a “making the juice worth the squeeze” perspective, focusing on hospital prices can have a lot of impact.

This is doubly true because of the seriously huge price variations for the same exact types of services at different hospitals, even in the same local market. Because the 32BJ Health Fund demands and gets all of its own data, it can actually run reports and see the impact and nuances of hospital spend very clearly—unlike, frankly, the majority of employers and unions who have zero clue this is all going on behind their backs because they think some other party is actually the fiduciary and not them, which is false, of course.

So, let’s just linger on this really high hospital prices that are various across a market for one moment. Here’s a Tweet from Rik Renard: “The price of CABG [coronary artery bypass graft] varies more than 10-fold across US hospitals (ranging from $44,824 to $448,038). There was no evidence to suggest that hospitals that charge higher prices provide a better quality of care.”

WHAT?! An employer could pay $44,000, or it could pay $448,000. Seriously? This is why we can’t have nice raises—because some employer spent $400,000 not on raises but on overpriced hospital services. Ugh … so frustrating. When employers, almost willfully at this juncture, turn a blind eye to all of this because they think it might be disruptive, meanwhile they’re worrying about employee retention and trying to figure out how to give raises. Okay, well, here’s a suggestion: Get your healthcare house in order and then you’ll have enough money for raises, but that aside …

In the New York City market, 32BJ used all of the data that we talked about in the last episode (EP372). They used all of that data to deduce, quite crisply, that NewYork-Presbyterian is really, really expensive—even in comparison to other expensive health systems in the New York metro area.

Furthermore, the Fund realized that it could not be sustainable without tackling the challenge of hospital prices. As Cora Opsahl says, “You can’t reduce spend by benefit design alone.” Which reminded me of that famous quote by Uwe Reinhardt, “It’s the prices, stupid.” Which, of course, reminded me of what David Contorno has said a million times, “You can’t pay less for healthcare unless you pay less for healthcare.”

I can’t overemphasize these points and their impact on employers and workers. It’s really hard to be competitive in the global marketplace when shelling out an extra $400,000 here and an extra whatever tens of thousand dollars there for fringe benefits that do not actually add any value from the workers’ standpoint and/or confer any additional health. This is just blatantly throwing money away.

So, there’s gonna be a few health system peeps listening here who will reflexively mutter under their breath a sentence including the terminology “razor-thin operating margin.” It must be an AHA talking point because I talk to a lot of health system people from all over the country, and “razor-thin operating margin” is invariably the term that gets used.

But let’s just dig into that marketing-speak for a moment. While there are some hospitals who assuredly suffered under COVID (or were suffering even before COVID and definitely after), mostly these are rural ones—but let’s not talk about them for a moment. Let’s talk about the large, consolidated health systems who got billions in COVID relief. Are you kidding me with their razor-thin operating margin crocodile tears? Check out “New Study—Hospitals Hike Charges by Up to 18 Times Cost.”

Here’s a few bullet points from that study:

Hospital charges play a major role in mounting healthcare costs, with health expenditures closing in on one-fifth of the gross domestic product (GDP).
Hospital profits/margins have mushroomed by 411% since 1999 to a record $88 billion in 2017.
The rise in charges coincides with growing hospital mergers and acquisitions by large systems. (This is brutally apparent at this juncture.) The result is increased market consolidation, which leads to, again, higher profits and increased charges, not savings for patients as hospital systems often claim.

Listen to the show with Kevin Schulman, MD (EP366). It explains a lot about how these “razor-thin operating margins” and the “oh no, we’re losing money on Medicare, so we must cost shift” manifest if you actually follow the dollar. As Dr. Schulman says, it’s not A; it’s not B. I mean, it’s not like payers aren’t taking their own piece of the action. You just got to look at their stock valuations to see all that going on. We have a dysfunctional health benefits market and a lot of rational actors in that market doing what you’d expect rational economic actors to do.

So anyway, 32BJ sees in their own data that all this is going on with hospitals, and they aim to stop covering a super expensive hospital in their local market, which is just making bad even worse. It was a whole thing to do this, and in this episode, Cora Opsahl relays the dramatic tale.

You can learn more at 32bjhealthfundinsights.org. Cora Opsahl is the director of the 32BJ Health Fund, a self-funded plan that provides affordable, comprehensive, and innovative health coverage to 200,000 union members and their families. During her time at the Health Fund, Cora has led the implementation of multiple benefit changes: removing NewYork-Presbyterian Hospital System and physicians from the network, transitioning to a new pharmacy vendor and pharmacy group purchasing coalition, and implementing an expanded Centers of Excellence program administered by Mount Sinai Hospital System. These efforts are projected to save over $35 million in 2022. Prior to joining the 32BJ Health Fund, Cora spent 12 years with Express Scripts, a pharmacy benefit manager. During her time there, she held a variety of roles, including Medicare Part D, strategy and acquisitions, operations, and account management.

07:02 What motivated the decision for 32BJ to cut NewYork-Presbyterian out of their network?
09:14 How did 32BJ compare their spending at each hospital in their network?
13:01 “We cannot be sustainable as a health fund … without really tackling the challenge of hospital prices.”
13:38 “It is one of the challenges as a self-funded plan that, even having this data, there’s not a lot we can do with it.”
16:10 What is 32BJ Health Fund’s maternity program?
19:34 What is the HEAL Act, and why did 32BJ Health Fund support it?
21:39 “For us, we just don’t feel it’s right that anyone gets to dictate our benefit.”
22:43 EP368 with Ashleigh Gunter.23:34 Why did 32BJ Health Fund reprice their claims using Medicare rates?
24:58 “It really goes to show you how high the commercial prices are in comparison to Medicare.”
25:52 EP366 with Kevin Schulman, MD.

You can learn more at 32bjhealthfundinsights.org.

@CoraOpsahl discusses managing #hospitalpricing on our #healthcarepodcast. #healthcare #podcast #digitalhealth

What motivated the decision for 32BJ to cut NewYork-Presbyterian out of their network? @CoraOpsahl discusses managing #hospitalpricing on our #healthcarepodcast. #healthcare #podcast #digitalhealth

How did 32BJ compare their spending at each hospital in their network? @CoraOpsahl discusses managing #hospitalpricing on our #healthcarepodcast. #healthcare #podcast #digitalhealth

“We cannot be sustainable as a health fund … without really tackling the challenge of hospital prices.” @CoraOpsahl discusses managing #hospitalpricing on our #healthcarepodcast. #healthcare #podcast #digitalhealth

“It is one of the challenges as a self-funded plan that, even having this data, there’s not a lot we can do with it.” @CoraOpsahl discusses managing #hospitalpricing on our #healthcarepodcast. #healthcare #podcast #digitalhealth

What is 32BJ Health Fund’s maternity program? @CoraOpsahl discusses managing #hospitalpricing on our #healthcarepodcast. #healthcare #podcast #digitalhealth

What is the HEAL Act, and why did 32BJ Health Fund support it? @CoraOpsahl discusses managing #hospitalpricing on our #healthcarepodcast. #healthcare #podcast #digitalhealth

“For us, we just don’t feel it’s right that anyone gets to dictate our benefit.” @CoraOpsahl discusses managing #hospitalpricing on our #healthcarepodcast. #healthcare #podcast #digitalhealth

Why did 32BJ Health Fund reprice their claims using Medicare rates? @CoraOpsahl discusses managing #hospitalpricing on our #healthcarepodcast. #healthcare #podcast #digitalhealth

“It really goes to show you how high the commercial prices are in comparison to Medicare.” @CoraOpsahl discusses managing #hospitalpricing on our #healthcarepodcast. #healthcare #podcast #digitalhealth

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Cora Opsahl (EP372), Dr Mark Fendrick (Encore! EP308), Erik Davis and Autumn Yongchu (EP371), Erik Davis and Autumn Yongchu (EP370), Keith Hartman, Dr Aaron Mitchell (Encore! EP282), Stacey Richter (INBW34), Ashleigh Gunter, Doug Hetherington, Dr Kevin Schulman, Scott Haas, David Muhlestein, David Scheinker, Ali Ucar, Dr Carly Eckert, Jeb Dunkelberger (EP360), Dan O’Neill, Dr Wayne Jenkins, Liliana Petrova, Ge Bai, Nikhil Krishnan, Shawn Rhodes, Pramod John (EP353), Pramod John (EP352), Dr Eric Bricker, Katy Talento, Stacey Richter (INBW33), Stacey Richter (INBW32)

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In this healthcare podcast, I am speaking with Cora Opsahl, who directs the 32BJ Health Fund.

So sorry to have to say that, but employers and unions, your employees and members need your help. If you do not help them, then your employees can find themselves defenseless against so many pit traps of financial toxicity and also clinical decision-making that is not made by patients and their clinicians in the service of improving patient outcomes but made by some other party in the service of financial maximization. It is really frightening what goes on in some cases.

I really appreciated this interview with Cora Opsahl, which will be two shows, this week and next week. This whole conversation has been really a big bright spot for me and will provide hope, I think, for any employer/union who is seeking ways to protect their members and patients, the ones on their plans and therefore under their aegis and whom they have a fiduciary responsibility to look out for.

It also should be a bright spot for dedicated clinicians out there suffering under the weight of moral injury because you are expected to do things that you know are not in your patient’s best interest—or not do things, as the case may be.

This whole conversation should put on notice health systems and others who have been really taking advantage of employers who are asleep at the wheel. Change is always really, really slow—until it hits a zeitgeist and then it’s not slow anymore. I just attended the MTVA (Moving to Value Alliance) in Connecticut last month, and there were 30 employers there listening and learning. I hear similar numbers from business coalitions across the country penetrating their local markets (Houston, Indiana, for example). Also, spoiler alert, upcoming conversations with Dave Chase will continue this “yeah, there’s good things happening out there” theme.

So, let’s start here with a little bit more about the 32BJ union and their Health Fund that we’ll hear about in this episode. 32BJ represents about 200,000 members. They are mostly in residential and commercial real estate—so, for example, your doormen, your maintenance workers, your security, your cleaners, amongst others. Members are in about 11 states, but a lot of them are in the New York City metro area. These union members who are in the fund work for over 5000 different employers. The 32BJ Health Fund has zero-dollar premiums. Also, employees have no premium contribution. Wowza on that point—that’s a huge benefit.

Here’s one more thing that I’m gonna say about the 32BJ Health Fund overseen by Cora Opsahl, my guest today. Let’s talk about their amazing leadership, because I do not, nor should anyone else, take exceptional leadership for granted. We have had one guest after another on this podcast who, when asked what it takes to actually attain value for plan members or attain the quadruple aim, what it takes to navigate and overcome bureaucracy and inertia, every one of those thought leaders asked the “What does it take?” question came back with the following included in their list: It takes leadership. Real leadership.

The mark of an exceptional leader is one who can conceive of a big mission statement, a goal to deliver better for their members at lower costs, and also the chops and determination to operationalize that vision.

This operationalization requires brainpower and relentless dedication to untangle the deliberate opacity that some current healthcare stakeholders absolutely rely on as a business strategy. It takes work to get to the bottom of and disarm some deliberately labyrinthine and noncompetitive contract terms.

Let me just pause for a beat on these basically egregious contract terms. Certain healthcare stakeholders seem to consider it somehow their birthright and their privilege to demand that employer and union customers sign on some pretty insane dotted lines—to the detriment of members and employees.

By the way, if anyone is thinking CAA right now, I’m right there with you. Talking about the new Consolidated Appropriations Act that went into effect late 2021, and it’s gonna take a lot of C-suite executives by surprise when they’re named in class action lawsuits. So, there is another impetus to question bad contract terms if anyone at an employer or union needs an additional reason besides the health and safety of employees and members to justify getting their healthcare house under control.

For more on the CAA, the Consolidated Appropriations Act, listen to the show with Christin Deacon (EP342).

But as I mentioned a moment ago, we are breaking this conversation up into two power-packed episodes. This first one gets into everything that the 32BJ Health Fund does with their data. They have lots of data. They demand it. Next week’s show gets into their unprecedented decision to kick a major local health system out of their network. This decision was also a data-driven decision, but it’s a whole other conversation, which is why it is now a whole other episode.

So, besides kicking out overly expensive health systems from their network, here’s other things that 32BJ is currently doing with their data and which other employers and unions may get a few ideas from. If you have the data, you (like 32BJ) can use it to:

Make smart benefit decisions that are validated, not just guesses. Before you decide to do something (add a wellness program etc), be able to model it accurately for how much it will actually cost you—which, spoiler alert, is most of the time not what the vendor will estimate. You have way more data than the vendor does, so you can certainly use it to great effect in this way.
Make sure that the right members are being communicated with so that benefit designs are successful. As Ashleigh Gunter said in EP368, success when changing benefit designs has a lot more to do with communication than many realize.
Create dashboards for leadership that may show trend lines, for example, which could be very helpful to ensure that the fund doesn’t run out of money etc … little things like that.
Figure out how much the fund is spending on various procedures and where. There’s all this talk right now about the crazy variability of prices for the same exact service in the same local market. At one hospital, a colonoscopy could literally cost $10,000; and in another hospital—same quality, same basically everything—that same colonoscopy will be $2000 or $3000. I mean, there’s a 500% delta or something in some of these cases.
Ensure that if a vendor said they were going to do something, that they are actually doing it. This is especially meaningful for point solutions because of the whole squeezing the balloon thing. I can save money in a silo, and you won’t realize that those dollars are getting transferred elsewhere unless you are doing your own math. This is a big deal if you start thinking about how pharmacy benefits are typically siloed from medical benefits. So, if I’m a pharmacy benefit manager, I can talk about how much I’m saving by denying patients drugs without consideration of the medical downstream implications of that.
Ensure you’re not paying a bill and writing a check for more than the bill was for, which is weirdly common. There’s a whole show with Dawn Cornelis (EP285) about this.
32BJ has an engineering team that is creating an app to help members navigate to great doctors with fair prices.

All of these things roll into basically three categories:

Cutting wasteful spending and finding fraud
Making smart benefit decisions
Being able to see trends and forecast the future, which is really helpful for financial solvency etc

As Cora Opsahl says, “I think we [all can] recognize [that] you [cannot] make smart … decisions and be a fiduciary of [a] fund without having [data].”

08:55 How much data does 32BJ Health Fund have, where do they get it, and how do they use it?
10:56 How did 32BJ Health Fund successfully demand their data from 100% of their vendors?
11:45 “We feel it’s really important that we own this information ourselves.”
12:08 “It always concerns me—if a vendor doesn’t want to give you the information, what are they hiding?”
12:34 “It’s not just getting the data; it’s then using the data.”
15:44 “Without data, you’re really just taking a guess; and guesses are never gonna get you where you need to go.”
17:23 EP285 with Dawn Cornelis.17:42 Is the cost of creating a data analytics team worth the cost savings of those data discoveries?
21:07 “The use of data has really built our knowledge.”
22:55 “It’s really important to us that as we make benefit decisions, we’re doing it smartly.”
27:34 EP358 with Wayne Jenkins, MD.27:42 How is 32BJ Health Fund making their data knowledge actionable?
30:14 “If we can figure out how to make telehealth accessible … there may be an opportunity for telehealth … to upset some of these … monopoly systems or low-choice options.”
32:25 “It’s really easy to think that we can solve this problem through benefit design … but in the end … it’s the price.”

You can learn more at 32bjhealthfundinsights.org.

@CoraOpsahl discusses #healthdata on our #healthcarepodcast. #healthcare #podcast #digitalhealth

How much data does 32BJ Health Fund have, where do they get it, and how do they use it? @CoraOpsahl discusses #healthdata on our #healthcarepodcast. #healthcare #podcast #digitalhealth

How did 32BJ Health Fund successfully demand their data from 100% of their vendors? @CoraOpsahl discusses #healthdata on our #healthcarepodcast. #healthcare #podcast #digitalhealth

“We feel it’s really important that we own this information ourselves.” @CoraOpsahl discusses #healthdata on our #healthcarepodcast. #healthcare #podcast #digitalhealth

“It always concerns me—if a vendor doesn’t want to give you the information, what are they hiding?” @CoraOpsahl discusses #healthdata on our #healthcarepodcast. #healthcare #podcast #digitalhealth

“It’s not just getting the data; it’s then using the data.” @CoraOpsahl discusses #healthdata on our #healthcarepodcast. #healthcare #podcast #digitalhealth

“Without data, you’re really just taking a guess; and guesses are never gonna get you where you need to go.” @CoraOpsahl discusses #healthdata on our #healthcarepodcast. #healthcare #podcast #digitalhealth

Is the cost of creating a data analytics team worth the cost savings of those data discoveries? @CoraOpsahl discusses #healthdata on our #healthcarepodcast. #healthcare #podcast #digitalhealth

“The use of data has really built our knowledge.” @CoraOpsahl discusses #healthdata on our #healthcarepodcast. #healthcare #podcast #digitalhealth

“It’s really important to us that as we make benefit decisions, we’re doing it smartly.” @CoraOpsahl discusses #healthdata on our #healthcarepodcast. #healthcare #podcast #digitalhealth

How is 32BJ Health Fund making their data knowledge actionable? @CoraOpsahl discusses #healthdata on our #healthcarepodcast. #healthcare #podcast #digitalhealth

“If we can figure out how to make telehealth accessible … there may be an opportunity for telehealth … to upset some of these … monopoly systems or low-choice options.” @CoraOpsahl discusses #healthdata on our #healthcarepodcast. #healthcare #podcast #digitalhealth

“It’s really easy to think that we can solve this problem through benefit design … but in the end … it’s the price.” @CoraOpsahl discusses #healthdata on our #healthcarepodcast. #healthcare #podcast #digitalhealth

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Dr Mark Fendrick (Encore! EP308), Erik Davis and Autumn Yongchu (EP371), Erik Davis and Autumn Yongchu (EP370), Keith Hartman, Dr Aaron Mitchell (Encore! EP282), Stacey Richter (INBW34), Ashleigh Gunter, Doug Hetherington, Dr Kevin Schulman, Scott Haas, David Muhlestein, David Scheinker, Ali Ucar, Dr Carly Eckert, Jeb Dunkelberger (EP360), Dan O’Neill, Dr Wayne Jenkins, Liliana Petrova, Ge Bai, Nikhil Krishnan, Shawn Rhodes, Pramod John (EP353), Pramod John (EP352), Dr Eric Bricker, Katy Talento, Stacey Richter (INBW33), Stacey Richter (INBW32), Dr Steve Schutzer (Encore! EP294)

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I wanted to remind everyone about this show from last year because it’s becoming increasingly relevant. We have this weird thing going on where everybody seems to be talking about physician incentives and payments and financial implications but so often disregards patient incentives and payments and financial implications.

Consider that we’re at a place in the time-space continuum where it is inarguable that financial toxicity has become clinical toxicity. Patients are increasingly in huge numbers abandoning care, splitting pills, doing all kinds of things to save money that are clinically toxic. And these are patients with “good insurance” that we are talking about here.

So, here’s a role play: Provider organization is actually paying doctors for outcomes. In wanders a patient with a huge deductible. Doc says, “Wow, Patient … so important that you take your insulin or med as directed or get a follow-up on that scary colonoscopy finding.” Patient says, “Sorry, Doc. Can’t afford it.” And the doc gets dinged because the patient outcomes are avoidably poor.

That’s what this show with Dr. Mark Fendrick digs into: aligning patient incentives (aka benefit designs etc) with value-based payments on the provider side. And with that, here’s your encore:

And here I thought I knew a lot about value-based care. In this healthcare podcast, I am speaking with Mark Fendrick, MD, who is the director over at the University of Michigan Center for Value-Based Insurance Design. This conversation is for those of you who already know pretty much about value-based care concepts. If you do not, I’d go back and listen to, say, Encore! EP206, with Ashok Subramanian, before this one.

But two light bulb moments I had in this conversation with Dr. Fendrick:

At the beginning of the year, how many doctors and nurses, inspired to do the right thing, have told their patients with diabetes, say, to go get an eye exam to check for diabetic retinopathy? No one would disagree that this is definitely a good idea. Diabetic retinopathy causes blindness. But here’s the reality of that conversation. Doc says, “Go get an eye exam.” And patient says, “I can’t. My deductible is huge, and I can’t afford it.” So, the patient doesn’t get the follow-up care and winds up in the hospital or blind. And the doctor gets dinged on his or her quality scores. Suboptimal outcomes all around, I’d say. This also happens on the pharmacy side of the equation, but I think a lot of us are a little bit more familiar with that scenario—like type 1 diabetics who can’t afford to pick up their insulin because of a Medicare Part D or commercial deductible that they haven’t met yet. I just never really connected the dots back to the provider getting black marks because their patient has a benefit design that’s not aligned with the quality measures.
In a majority of benefit designs, consumer price sharing is based not on the value of the service but on how expensive the service just happens to be. Wow! So, we’re trying to get our plan members to be consumers and use the power of their wallets to make good healthcare choices. And what we’re really doing is driving them toward cheap things or no care and discouraging them from indulging—and I say that sarcastically—in expensive things. But the expensive things might be the high-value care, and the relatively cheap things might be crap that’s fully unnecessary or harmful and, over a whole population, adds up to a lot of zeros.

Healthcare is not like a consumer market where the expensive things are usually a better version of the cheap things. For all you economists out there, you don’t want the demand curve to be elastic when what’s cheap and what’s expensive has no correlation to quality or necessity. Nobody should be super flabbergasted when a $35 cure-all supplement peddled on YouTube makes some random influencer a millionaire. That’s how supply and demand works.

Much to ponder in this episode.

You can learn more at vbidcenter.org. There’s also a great newsletter you can sign up for there. A. Mark Fendrick, MD, is a professor of internal medicine in the School of Medicine and a professor of health management and policy in the School of Public Health at the University of Michigan. Dr. Fendrick received a bachelor’s degree in economics and chemistry from the University of Pennsylvania and his medical degree from Harvard Medical School. He completed his residency in internal medicine at the University of Pennsylvania, where he was a fellow in the Robert Wood Johnson Foundation Clinical Scholars Program.

Dr. Fendrick conceptualized and coined the term Value-Based Insurance Design (V-BID) and currently directs the V-BID Center at the University of Michigan (vbidcenter.org), the leading advocate for development, implementation, and evaluation of innovative health benefit plans. His research focuses on how clinician payment and consumer engagement initiatives impact access to care, quality of care, and healthcare costs. Dr. Fendrick has authored over 250 articles and book chapters and has received numerous awards for the creation and implementation of value-based insurance design. His perspective and understanding of clinical and economic issues have fostered collaborations with numerous government agencies, health plans, professional societies, and healthcare companies.

Dr. Fendrick is an elected member of the National Academy of Medicine (formerly IOM), serves on the Medicare Coverage Advisory Committee, and has been invited to present testimony before the US Senate Committee on Health, Education, Labor and Pensions; the US House of Representatives Ways and Means Subcommittee on Health; and the US Senate Committee on Armed Services Subcommittee on Personnel.

05:00 Is back surgery high-value care?
05:51 If care is patient to patient, how is high-value care decided upon?
06:40 “Flintstones delivery: We have to move from the sledgehammer to the scalpel.”
11:14 “Almost all of the services that we recommend to reduce cost sharing … do not save money.”
12:30 “I didn’t go to medical school to learn how to save people money.”
17:03 “When a patient and their clinician agree … the patient should be able to get that [service] easily, and the clinician should be paid generously.”
18:01 “When patients and providers are aligned, they do much better.”
19:59 What services are deemed high value, and what services should be pre-deductible?
21:50 “Are primary care visits high value? … The answer is, it depends.”
25:55 What are V-BID’s core pillars to address value-based care?
28:04 How does Dr. Fendrick’s method of value-based care and reimbursement actually enable better consumerism?
29:51 What do providers think about changing reimbursement on low-value and high-value care?
30:58 “We have incentives that are run amok.”
32:12 EP176 with Dr. Robert Pearl.
32:49 “It’s all about incentives.”
33:43 “You do have the funding; you just have to have the courage.”

You can learn more at vbidcenter.org. There’s also a great newsletter you can sign up for there.

Mark Fendrick, MD, of @UM_VBID discusses #valuebasedcare on our #healthcarepodcast. #healthcare #podcast #vbc #digitalhealth

If care is patient to patient, how is high-value care decided upon? Mark Fendrick, MD, of @UM_VBID discusses #valuebasedcare on our #healthcarepodcast. #healthcare #podcast #vbc #digitalhealth

“Flintstones delivery: We have to move from the sledgehammer to the scalpel.” Mark Fendrick, MD, of @UM_VBID discusses #valuebasedcare on our #healthcarepodcast. #healthcare #podcast #vbc #digitalhealth

“Almost all of the services that we recommend to reduce cost sharing … do not save money.” Mark Fendrick, MD, of @UM_VBID discusses #valuebasedcare on our #healthcarepodcast. #healthcare #podcast #vbc #digitalhealth

“I didn’t go to medical school to learn how to save people money.” Mark Fendrick, MD, of @UM_VBID discusses #valuebasedcare on our #healthcarepodcast. #healthcare #podcast #vbc #digitalhealth

“When patients and providers are aligned, they do much better.” Mark Fendrick, MD, of @UM_VBID discusses #valuebasedcare on our #healthcarepodcast. #healthcare #podcast #vbc #digitalhealth

“Are primary care visits high value? … The answer is, it depends.” Mark Fendrick, MD, of @UM_VBID discusses #valuebasedcare on our #healthcarepodcast. #healthcare #podcast #vbc #digitalhealth

“We have incentives that are run amok.” Mark Fendrick, MD, of @UM_VBID discusses #valuebasedcare on our #healthcarepodcast. #healthcare #podcast #vbc #digitalhealth

“You do have the funding; you just have to have the courage.” Mark Fendrick, MD, of @UM_VBID discusses #valuebasedcare on our #healthcarepodcast. #healthcare #podcast #vbc #digitalhealth

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Erik Davis and Autumn Yongchu (EP371), Erik Davis and Autumn Yongchu (EP370), Keith Hartman, Dr Aaron Mitchell (Encore! EP282), Stacey Richter (INBW34), Ashleigh Gunter, Doug Hetherington, Dr Kevin Schulman, Scott Haas, David Muhlestein, David Scheinker, Ali Ucar, Dr Carly Eckert, Jeb Dunkelberger (EP360), Dan O’Neill, Dr Wayne Jenkins, Liliana Petrova, Ge Bai, Nikhil Krishnan, Shawn Rhodes, Pramod John (EP353), Pramod John (EP352), Dr Eric Bricker, Katy Talento, Stacey Richter (INBW33), Stacey Richter (INBW32), Dr Steve Schutzer (Encore! EP294), Lisa Trumble

View Details

So, this is a 400-level episode in specialty pharmacy options for plan sponsors, meaning here are your prerequisites: You gotta know what buy and bill is, and you gotta know what pharmacy bagging is, meaning white bagging, for example. If you do not, I would listen to Encore! EP282 with Aaron Mitchell, MD, MPH, where we go deep on buy and bill. And then listen to EP369 for the skinny on pharmacy bagging. If you already know what buy and bill is and you already know what white bagging is, then not only do you know more than 98% of the people in the healthcare industry, but also, you’re going to get as much out of this conversation with Erik Davis and Autumn Yongchu as I did.

Last week’s show was also with Erik Davis and Autumn Yongchu. Last week, we talked about how some hospitals and cancer centers are managing to ring up up to six times the cost of an expensive-already injected or infused drug through buy and bill. This is why pharmacy bagging became a thing, if we want to talk about this in historical perspective. It’s a direct market response to buy and bill. Hospital systems start making egregious amounts of money marking up drugs that already cost hundreds of thousands of dollars, and their markups are hundreds of thousands of dollars on top of that. Hospital starts making a fortune off of drug markups. Plan sponsors need an alternative, and … enter pharmacy bagging (ie, carving out specialty pharmacy drugs to a PBM [pharmacy benefit manager]).

In this show, we compare the potential benefits and problematic loopholes and/or patient concerns for plan sponsors who are trying to figure out whether to carve out specialty pharmacy benefits to a PBM or grin and bear it with the buy and bill. Or, as another option, whether to steer patients to specific infusion centers or specific provider organizations that might have more favorable contract terms for the plan sponsor. Or, hooking up with a home infusion company, again, who is willing to negotiate terms that might be far better for said plan sponsor than just letting some hospital have their way with employees and the health plan. As another alternative, of course, plan sponsors could consider medical travel, which some certainly are.

My biggest takeaway from this whole conversation and from the episodes that we have had in this, dare I call it, series about pharmacy benefits, starting with the show with Scott Haas (EP365) where we talked about PBM contracts, moving to the show with Dr. Aaron Mitchell (Encore! EP282) where we talked about buy and bill, then going to the show with Keith Hartman (EP369) where we talked about pharmacy bagging, then last week’s show how hospitals manage to buy and bill at 6x the price of these expensive pharmaceuticals … my takeaway from this whole specialty drug extravaganza is that specialty drug procurement is very different than retail drug procurement. Retail drugs, you worry about them en masse at scale almost at the population level. Specialty drugs? You can have one patient on a specialty drug, and that one patient costs as much as the entire rest of the member population combined. So, managing specialty drugs and their administration becomes almost a case-by-case operation. What drug is it? Where is the patient? What options are available? It’s possible to save hundreds of thousands of dollars on that one patient, for that one patient’s care, and get better patient outcomes by getting the right patient on the right drug that is administered in the right setting.

You can learn more by connecting with Erik and Autumn on LinkedIn or by emailing them at erik.davis@usi.com and autumn.yongchu@usi.com. Erik Davis, AAI, CIC, CRM, is senior vice president and principal consultant, managed care and analytics, at USI Insurance Services. He has over 30 years of experience in the insurance and risk management industry. Erik works to create an environment that supports the healthcare risk management goals of an organization while maintaining focus on compliance and financial accountability. He is instrumental in vendor negotiations, data benchmarking, population health strategies, claims analysis, recommendations in plan design, and communication strategies.

In this capacity, Erik has been involved with development of rates, payment structures, and recommendations of changes in processes, policies, and procedures. He has a broad understanding of contract analysis, evaluating risk, auditing for correct payment, and structuring of excess loss and pharmacy programs.

Erik’s experience extends from overall employee benefits consulting to workers’ compensation, as well as managed care organizations in Medicaid, Medicare, and commercial contractual risk arrangements.

Erik earned his bachelor’s degree in economics from Oregon State University. He holds Accredited Advisor in Insurance (AAI), Certified Insurance Counselor (CIC), and Certified Risk Manager (CRM) designations.

Autumn Yongchu is a healthcare operational risk consultant at USI Insurance Services. Autumn works with multiple database platforms to examine data for trends and abnormalities. Using investigative querying, medical coding analysis, and report development, she provides resources that help identify cost control opportunities and assists organizations in strategic business decisions regarding the management of healthcare risks.

Autumn analyzes and interprets healthcare utilization data, allowing the development of initiatives regarding claim and risk management. This includes identifying fiscal and clinical strategies and providing necessary information to develop, design, and implement management initiatives. Autumn also analyzes trends, assists with insurance underwriting, and adjudicates stop-loss claims.

Autumn has an in-depth knowledge of Medicaid and Medicare billing guidelines and payment methodologies.

Prior to joining USI, Autumn was a claims auditor and trainer for a managed care organization which serviced over 100,000 commercial, Medicaid, and Medicare lives. Her responsibilities included contract analysis, claims adjudication, ensuring accurate payment, and identifying and recouping errors.

04:45 Can you actually save money by carving out specialty infused drugs and making them a pharmacy benefit?
06:28 How can plan sponsors use white bagging as leverage to reduce costs from markups?
06:47 Does white bagging save money compared to buy and bill?
07:42 “You also need to understand that with some of these drugs, you’re dealing with very vulnerable people.”—Erik
08:41 EP369 with Keith Hartman, RPh. 11:10 “When your insurance carrier is married to your PBM, it doesn’t matter where the money goes.”—Autumn
11:33 EP365 with Scott Haas. 12:00 “You need to have a collective understanding of every variable … when you’re making those … decisions.”—Erik
14:53 How can comparison shopping save plan sponsors money when it comes to specialty infusion costs?
16:51 How can comparison shopping be a vicious circle in the wrong setting for plan sponsors?
18:43 “That’s part of the problem: It’s not just the plan sponsor not being educated enough; it’s also the consultant … that they believe is supposed to be that isn’t.”—Erik
19:03 How has transparency been used by healthcare systems to keep buyers’ eyes off the ball?
26:55 “It is very case by case, but it comes down to your risk appetite.”—Autumn
28:19 “It’s something that you have to, as a plan sponsor, really continue to monitor throughout the plan year.”—Autumn
28:38 “The more you know, the better equipped you’re gonna be.”—Autumn
29:27 What can employers who are feeling aggressive do?
31:19 “The dollars circle, whether people realize it or not.”—Autumn

You can learn more by connecting with Erik and Autumn on LinkedIn or by emailing them at erik.davis@usi.com and autumn.yongchu@usi.com.

Erik Davis and Autumn Yongchu discuss #buyandbill and #pharmabagging on our #healthcarepodcast. #healthcare #podcast #pharmacy #pharma

Can you actually save money by carving out specialty infused drugs and making them a pharmacy benefit? Erik Davis and Autumn Yongchu discuss #buyandbill and #pharmabagging on our #healthcarepodcast. #healthcare #podcast #pharmacy #pharma

How can plan sponsors use white bagging as leverage to reduce costs from markups? Erik Davis and Autumn Yongchu discuss #buyandbill and #pharmabagging on our #healthcarepodcast. #healthcare #podcast #pharmacy #pharma

Does white bagging save money compared to buy and bill? Erik Davis and Autumn Yongchu discuss #buyandbill and #pharmabagging on our #healthcarepodcast. #healthcare #podcast #pharmacy #pharma

“You also need to understand that with some of these drugs, you’re dealing with very vulnerable people.” Erik Davis and Autumn Yongchu discuss #buyandbill and #pharmabagging on our #healthcarepodcast. #healthcare #podcast #pharmacy #pharma

“When your insurance carrier is married to your PBM, it doesn’t matter where the money goes.” Erik Davis and Autumn Yongchu discuss #buyandbill and #pharmabagging on our #healthcarepodcast. #healthcare #podcast #pharmacy #pharma

“You need to have a collective understanding of every variable … when you’re making those … decisions.” Erik Davis and Autumn Yongchu discuss #buyandbill and #pharmabagging on our #healthcarepodcast. #healthcare #podcast #pharmacy #pharma

How can comparison shopping save plan sponsors money when it comes to specialty infusion costs? Erik Davis and Autumn Yongchu discuss #buyandbill and #pharmabagging on our #healthcarepodcast. #healthcare #podcast #pharmacy #pharma

How can comparison shopping be a vicious circle in the wrong setting for plan sponsors? Erik Davis and Autumn Yongchu discuss #buyandbill and #pharmabagging on our #healthcarepodcast. #healthcare #podcast #pharmacy #pharma

“That’s part of the problem: It’s not just the plan sponsor not being educated enough; it’s also the consultant … that they believe is supposed to be that isn’t.” Erik Davis and Autumn Yongchu discuss #buyandbill and #pharmabagging on our #healthcarepodcast. #healthcare #podcast #pharmacy #pharma

How has transparency been used by healthcare systems to keep buyers’ eyes off the ball? Erik Davis and Autumn Yongchu discuss #buyandbill and #pharmabagging on our #healthcarepodcast. #healthcare #podcast #pharmacy #pharma

“It is very case by case, but it comes down to your risk appetite.” Erik Davis and Autumn Yongchu discuss #buyandbill and #pharmabagging on our #healthcarepodcast. #healthcare #podcast #pharmacy #pharma

“It’s something that you have to, as a plan sponsor, really continue to monitor throughout the plan year.” Erik Davis and Autumn Yongchu discuss #buyandbill and #pharmabagging on our #healthcarepodcast. #healthcare #podcast #pharmacy #pharma

“The more you know, the better equipped you’re gonna be.” Erik Davis and Autumn Yongchu discuss #buyandbill and #pharmabagging on our #healthcarepodcast. #healthcare #podcast #pharmacy #pharma

What can employers who are feeling aggressive do? Erik Davis and Autumn Yongchu discuss #buyandbill and #pharmabagging on our #healthcarepodcast. #healthcare #podcast #pharmacy #pharma

“The dollars circle, whether people realize it or not.” Erik Davis and Autumn Yongchu discuss #buyandbill and #pharmabagging on our #healthcarepodcast. #healthcare #podcast #pharmacy #pharma

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Erik Davis and Autumn Yongchu (EP370), Keith Hartman, Dr Aaron Mitchell (Encore! EP282), Stacey Richter (INBW34), Ashleigh Gunter, Doug Hetherington, Dr Kevin Schulman, Scott Haas, David Muhlestein, David Scheinker, Ali Ucar, Dr Carly Eckert, Jeb Dunkelberger (EP360), Dan O’Neill, Dr Wayne Jenkins, Liliana Petrova, Ge Bai, Nikhil Krishnan, Shawn Rhodes, Pramod John (EP353), Pramod John (EP352), Dr Eric Bricker, Katy Talento, Stacey Richter (INBW33), Stacey Richter (INBW32), Dr Steve Schutzer (Encore! EP294), Lisa Trumble, Jeb Dunkelberger

View Details

I have been on a mission to figure out why some health systems, particularly in the oncology space but not limited to the oncology space, could manage to mark up the price of infused specialty pharmacy drugs up to 6x. Some employers and patients are paying six times the cost of a specialty pharmacy drug in markup for some already incredibly expensive specialty pharmacy drug at some oncology centers. Read more about this in a study by Roy Xiao, MD, and colleagues.

Let’s not forget now or ever that financial toxicity is clinical toxicity. This 6x is exactly how financial toxicity is operationalized. Many patients are charged a coinsurance percentage based on their cost of care, after all; and like 20% of 6x is a huge number, it is a huge bankrupting bill for some patients—maybe many patients. That, plus their premiums go up because, of course, their employers are picking up the remaining 80% of that 600% markup.

Families are already, on average, paying I think it’s $22,000 in premium; and the trend line on that premium growth continues to go up steeply in the 2022-23 projections that I have seen.

Bottom line: This 6x is not a victimless modus operandi is my point.

But what I wanted to know is how they do it, these health systems. Charging 6x the cost of a super expensive specialty pharmacy drug in markup would seem to require some skill, right? And any time I see a Pandora’s box, I have a terrible habit of trying to get in there.

Autumn Yongchu and Erik Davis to the rescue. Today’s show digs into how some health systems and hospitals stack the odds that no one will notice their 6x markups and just pay the bills. Here’s the short version of the playbook, but you’ll need to listen to the show for a more robust explanation.

First off, keep in mind that while Medicare Part B tells hospitals to charge ASP (average sales price) + 6% (ish) when they buy and bill Medicare patients, there is no such guidance for commercial patients. Commercial insurers negotiate a fee off chargemaster rates, and as we all know, those chargemaster prices are, in general, based on absolutely nothing and are, in general, sky-high. So that’s the first thing.

The second thing gets into coding. Let me give you the general idea here, but we talk about this in some depth in the conversation to come.

As you likely know, hospitals get paid by sending bills with codes on them—procedure codes, for example. We the hospital did this procedure, and our charge for this procedure is $4000—so, here you go. Code followed by dollar amount is shown on somebody’s bill or explanation of benefits document.

These procedure codes are standardized across the industry for the most part. It’s not like every health system and/or payer is making up their own. This standardized set of procedure codes is called the Healthcare Common Procedure Coding System, affectionally known as HCPCS. So, if someone starts talking about a HCPCS code, all it means is that the code comes out of that standard set of codes.

Now, J-codes are one kind of code in this common procedure coding system. They are procedure codes that start with a “J.” These J-codes are for procedures involving (usually) specialty pharmacy drugs. A J-code identifies the specialty pharmacy drug that was used in the procedure.

So, you’d think it’d be pretty easy to audit a hospital bill, right? You look at the J-code on the bill; you find the ASP, the average sales price, or whatever of the drug; and then you get out your trusty calculator and you do the math on what the markup is.

And okay, maybe this works sometimes … but the problem is that so very, very often, the hospital doesn’t put the actual drug’s J-code on the bill. There’s this miscellaneous J-code that doesn’t specify the drug used, which is a quite common tactic, it seems. (I learned that in this episode.) Hospital just sticks “Miscellaneous chemotherapy” on a bill with a price after it, and nobody knows what drug was used.

Or the hospital will send a bill that just includes revenue codes. I think about revenue codes as the name of the section of the bill. It’s like on a menu: There’s that section, that headline, that says “Seafood” with a whole list of seafood dishes underneath it. In this example, the Seafood header is like the revenue code; and the J-codes are the actual dishes. Some bills come from the hospital, and all they have on them are the revenue code. There was some seafood. We’re not gonna tell you what dish or how much seafood, but yeah, seafood. The only thing we know about seafood is that there was some and it was very pricy.

Here’s a great example of a bill with some explanations.

The main point here is that how health systems get away, in large part, with charging a whole lot for specialty pharmacy drugs is that their bills roll up charges into these very opaque codes that include lots and lots of stuff that is not broken out.

When I interviewed Marshall Allen (EP328) and we talked about his book Never Pay the First Bill, he said step one in getting an accurate and fair bill is to ask for the line item charges—and now that is totally making sense to me and also why this is so vital.

Just be aware, if you ask for these breakouts, you will likely get a huge box of hard copies. Check out this photo of a literally three-foot pile of printouts that one patient-turned-artist exhibited at an art show recently that I saw. If you don’t have the stamina to sort through all of those pages and pages and pages, you could be subject to 6x or more in markups or billing errors which are all too common and all too expensive. Hospital charges are a huge chunk of any employer’s healthcare spend, after all—over half of it in some cases. These are not small potatoes that we’re talking about. These are bills that bankrupt patients and make premiums go so high that patients cannot afford to get care.

In this healthcare podcast, as mentioned earlier, we have two guests—Erik Davis and Autumn Yongchu—both from USI Managed Care Consulting and both having spent decades deep in the inner workings of the healthcare industry. And the topic of today’s show required that depth of knowledge, for sure.

Autumn has an in-depth knowledge of Medicaid and Medicare billing guidelines and payment methodologies.

07:33 How do hospitals maximize inpatient bills?
08:05 How can hospitals upcode on specialty pharmacy products?
09:44 “It’s really not uncommon to be overbilled and overcharged.”—Autumn
11:11 Why do marked up bill charges actually affect the price commercial payers pay?
12:49 “If your payer’s not double-checking … how do you know that fraud’s happening?”—Autumn
12:52 “If the payer doesn’t have the detail to validate what that drug actually is, then are they really checking?”—Autumn
13:33 Why is it so hard to verify what you’re actually paying for on a hospital bill?
16:28 How do hospitals maximize profit with outpatients?
17:12 “Really it comes down to contracts and how [the] contracts are written.”—Autumn
21:54 “There are … silos within healthcare, and none of them actually talk to each other.”—Autumn
24:56 “There are these rules out there, but there are also big loopholes out there.”—Autumn
26:13 How can hospitals maximize payments for Medicare patients on drugs that have been out for a while?
29:30 “We just have a tendency to assume … that Medicare has a rate for everything, and Medicare doesn’t.”—Autumn
30:32: EP369 with Keith Hartman, RPh.

You can learn more by connecting with Erik and Autumn on LinkedIn or by emailing them at erik.davis@usi.com and autumn.yongchu@usi.com.

Erik Davis and Autumn Yongchu discuss #specialtypharma billing in #healthsystems on our #healthcarepodcast. #healthcare #podcast #hospitalsystems

How do hospitals maximize inpatient bills? Erik Davis and Autumn Yongchu discuss #specialtypharma billing in #healthsystems on our #healthcarepodcast. #healthcare #podcast #hospitalsystems

How can hospitals upcode on specialty pharmacy products? Erik Davis and Autumn Yongchu discuss #specialtypharma billing in #healthsystems on our #healthcarepodcast. #healthcare #podcast #hospitalsystems

“It’s really not uncommon to be overbilled and overcharged.” Erik Davis and Autumn Yongchu discuss #specialtypharma billing in #healthsystems on our #healthcarepodcast. #healthcare #podcast #hospitalsystems

Why do marked up bill charges actually affect the price commercial payers pay? Erik Davis and Autumn Yongchu discuss #specialtypharma billing in #healthsystems on our #healthcarepodcast. #healthcare #podcast #hospitalsystems

“If your payer’s not double-checking … how do you know that fraud’s happening?” Erik Davis and Autumn Yongchu discuss #specialtypharma billing in #healthsystems on our #healthcarepodcast. #healthcare #podcast #hospitalsystems

“If the payer doesn’t have the detail to validate what that drug actually is, then are they really checking?” Erik Davis and Autumn Yongchu discuss #specialtypharma billing in #healthsystems on our #healthcarepodcast. #healthcare #podcast #hospitalsystems

Why is it so hard to verify what you’re actually paying for on a hospital bill? Erik Davis and Autumn Yongchu discuss #specialtypharma billing in #healthsystems on our #healthcarepodcast. #healthcare #podcast #hospitalsystems

How do hospitals maximize profit with outpatients? Erik Davis and Autumn Yongchu discuss #specialtypharma billing in #healthsystems on our #healthcarepodcast. #healthcare #podcast #hospitalsystems

“Really it comes down to contracts and how [the] contracts are written.” Erik Davis and Autumn Yongchu discuss #specialtypharma billing in #healthsystems on our #healthcarepodcast. #healthcare #podcast #hospitalsystems

“There are … silos within healthcare, and none of them actually talk to each other.” Erik Davis and Autumn Yongchu discuss #specialtypharma billing in #healthsystems on our #healthcarepodcast. #healthcare #podcast #hospitalsystems

“There are these rules out there, but there are also big loopholes out there.” Erik Davis and Autumn Yongchu discuss #specialtypharma billing in #healthsystems on our #healthcarepodcast. #healthcare #podcast #hospitalsystems

How can hospitals maximize payments for Medicare patients on drugs that have been out for a while? Erik Davis and Autumn Yongchu discuss #specialtypharma billing in #healthsystems on our #healthcarepodcast. #healthcare #podcast #hospitalsystems

“We just have a tendency to assume … that Medicare has a rate for everything, and Medicare doesn’t.” Erik Davis and Autumn Yongchu discuss #specialtypharma billing in #healthsystems on our #healthcarepodcast. #healthcare #podcast #hospitalsystems

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Keith Hartman, Dr Aaron Mitchell (Encore! EP282), Stacey Richter (INBW34), Ashleigh Gunter, Doug Hetherington, Dr Kevin Schulman, Scott Haas, David Muhlestein, David Scheinker, Ali Ucar, Dr Carly Eckert, Jeb Dunkelberger (EP360), Dan O’Neill, Dr Wayne Jenkins, Liliana Petrova, Ge Bai, Nikhil Krishnan, Shawn Rhodes, Pramod John (EP353), Pramod John (EP352), Dr Eric Bricker, Katy Talento, Stacey Richter (INBW33), Stacey Richter (INBW32), Dr Steve Schutzer (Encore! EP294), Lisa Trumble, Jeb Dunkelberger, Dr Ian Tong

View Details

Last week’s show was an encore episode with Dr. Aaron Mitchell (Encore! EP282), and we talked about buy and bill. To continue our exploration of specialty pharmacy intrigue, let’s talk about so-called “bagging.” I wanted to get an overview of all of the different kinds of specialty pharmacy bagging. Bagging is a big deal. If you have anything to do with trying to control pharmacy costs or the clinical outcomes of specialty pharmacy patients, you too are going to want to understand what’s going on here with bagging.

I was thrilled to have a chance to chat with Keith Hartman, who is my guest in this healthcare podcast. He is the CEO of ContinuumRx. He’s a pharmacist by education and has been in the pharmacy space for over 25 years now, touching just about every aspect of pharmacy from retail operations to long-term care and now, most recently, home infusion. This makes him an ideal person to chat with about this topic. And FYI, it was not easy to find someone to do so to clearly see the actions and reactions going on here because that’s what this is all about: actions and reactions—how any self-respecting market distortion is going to cause a cascade of equal and opposite market distortions.

So, let’s cruise through the whole infused/injected specialty pharmacy historical play-by-play, shall we? It’s like a “Who’s on First?” routine—except very, very not funny. So, here we go. This is, of course, the semi-reductive abridged version; but let’s do this thing.

Once upon a time, the bagging story starts in ye olden days, meaning more than ten years ago, before specialty pharmacy drugs really became the massive profit centers for any party who can manage to get their fingers in the specialty pharmacy cookie jar. In these ancient and halcyon times, brown bagging was kind of a modus operandi. Don’t forget, we’re talking about infused or injectable drugs here, especially ones that need to be infused or injected in the provider’s office.

So, brown bagging means and meant when a specialty pharmacy drug is shipped directly to a patient, or a patient goes and picks up the specialty pharmacy drug at the pharmacy. Doc takes out prescription pad (this is in ye olden days, remember) and writes out the Rx. Patient picks up the drug from the pharmacy, which may be handed to them in a brown bag. Get it? But then they take that “brown bag,” as it were, to their doctor’s office. The doctor takes the drug out of the brown bag and infuses or injects it. I say doctor’s office because many times, in the olden days, that’s where this went down.

And this brown bagging had some issues, for sure; but specialty pharmacy drugs really weren’t all that big of a thing either dollar-wise or frequency-wise.

At some point in our story here, pharma manufacturers start seeing just exactly how much money the market will bear for specialty pharmacy drugs, and the prices of these specialty drugs go through the roof. At the same time, for a bunch of reasons I actually discussed with Dr. Bruce Rector (EP300), a whole bunch of these specialty pharmacy drugs start hitting the market all at once. So, these drugs have skyrocketing prices—and there’s lots of them.

At that point, some (certainly not all, but enough) CFOs at provider organizations were like—wowza, epiphany, light bulb moment—there’s a lot of money that can be made here because buy and bill. In buy and bill, which I talked about last week with Dr. Aaron Mitchell, provider organizations get reimbursed the cost of the drug plus some percentage when they administer it—meaning the more expensive the drug, the more money a provider can make because a percentage of a bigger number is, of course, a bigger number.

Add to that a party-sized container of other provider shenanigans to maximize revenue on specialty pharmacy patients—and that revenue got bigger every single year. A recent report just came out that, on average, for oncology drugs, some providers are making six times the cost of the drug. Six times the cost of a drug that can cost lots of zeros! Just wow—6x! That’s real money. This is winning the lottery every single time a patient needing a specialty drug shows up on your doorstep.

Continuing the tale here, this buy and bill health system extreme greed hits employers in their pocketbooks. And, of course, plan sponsors start desperately seeking relief. Who rides up on a white horse? PBMs (pharmacy benefit managers), of course.

PBMs say that they will negotiate with drug companies and buy the drugs on behalf of the plan sponsors for much cheaper. Then they will ship the drugs purchased to the provider organizations. Thus, the plan sponsor only needs to pay providers to administer the drug, not that and some crazy markup on the drug itself.

Ladies and gentlemen, white bagging has entered the building. White bagging is when the drug is not shipped directly to the patient à la brown bagging. It is when the drug is shipped to the provider.

But wait … there’s more to the story than a grand PBM gesture of goodwill. They see how much money the employers are used to paying providers for these drugs and realize that the PBM only needs to come in with a price that’s less than that, at least at the beginning.

So, over the years, weird stuff starts happening with rebates on the specialty drugs. Listen to the show with Scott Haas (EP365) for more on that. But bottom line, white bagging becomes not exactly a mecca of cost savings. PBMs are, as we all know, not known for their ability to moderate their profitability, after all.

At this point in our story, let’s just pause to say that provider organizations are very, very, very not happy with this whole white bagging intervention. Not only did a piece of the provider’s specialty pharmacy cash cow get snatched by the PBMs, but there are also clinical issues with white bagging that we talk about on the show today. And some of these issues are not BS. Do not get me wrong. They are very real, and I do not want to minimize them.

And so, provider organizations start to stand up their own hospital specialty pharmacies because then at least they can get some of the white bagging cha-ching. See what I mean? Plan sponsor, health plan mandates that the drug be filled in a pharmacy, hospital owns the pharmacy or part of the pharmacy … and now they have so-called clear bagging.

Clear bagging is when one organization owns the pharmacy and the provider who will administer the drug. Clear bagging solves some of the clinical issues with white bagging, and the hospital also gets to take a cut. I’d be remiss not to mention here that some hospitals have worked very hard on their clear-bagging programs and definitely have tried to improve the quality of service here.

You’re going to have to listen to the show to hear about gold bagging and also the latest developments in this whole war employers and patients and taxpayers are fighting with PBMs and hospitals who are fighting with each other over who gets the money. Also, the continuing trend of brown bagging, especially as “in the patient’s home” gets tagged on the end of lots of care delivery like “in bed” gets tagged on the end of lots of fortune cookies.

Next week’s show will dig into how exactly some providers are managing to get the up to 6x the cost of specialty pharmacy drugs when Medicare Part B at least says that they’re only supposed to get ASP [average sales price] + 6% (ish). I just could not figure out how they were managing to get 6x just given that Medicare Part B rule, but yeah, they are—and we’ll learn about that next week.

You can learn more at continuumrx.com. Keith P. Hartman, RPh, is chief executive officer of ContinuumRx and an experienced operating entrepreneur and pharmacy business owner spanning two decades. Keith founded and grew a chain of retail pharmacies, a compounding pharmacy, and two specialty pharmacies along with a long-term care pharmacy. All were built and grown under the guise of operational excellence and produced great results. Some were sold, while others he still owns and provides limited strategic guidance as a member of the board of directors.

Keith graduated from the University of the Sciences with a degree in pharmacy. Today he is still involved mentoring future pharmacists and pharmacy owners.

08:09 What kinds of patients and/or drugs is the concept of bagging relevant to?
08:53 What is brown bagging, and what are the issues with it?
10:28 What is white bagging, and how is it different from brown bagging?
11:30 Who are the key players in pharma bagging?
12:25 Why does a PBM want a specialty drug to go through them?
12:49 From the physician’s perspective, why is buy and bill ideal?
16:46 How does white bagging impact patient clinical care?
22:12 Encore! EP216 with Chris Sloan.
23:05 What are the two main reasons patients might not continue their therapy?
23:29 “We’ve got to leave some authority with our prescribers to be able to make a clinical decision of what’s best for that … patient.”
24:41 What is clear bagging?
26:51 How does a hospital specialty pharmacy get in network with a PBM?
28:57 What is gold bagging?
30:11 “Outlook really needs to be what’s best for the patient.”
32:10 EP337 with Olivia Webb.

You can learn more at continuumrx.com.

Keith Hartman of @continuumrx1 discusses #specialtypharmabagging on our #healthcarepodcast. #healthcare #podcast #pharma #specialtypharma

What kinds of patients and/or drugs is the concept of bagging relevant to? Keith Hartman of @continuumrx1 discusses #specialtypharmabagging on our #healthcarepodcast. #healthcare #podcast #pharma #specialtypharma

What is brown bagging, and what are the issues with it? Keith Hartman of @continuumrx1 discusses #specialtypharmabagging on our #healthcarepodcast. #healthcare #podcast #pharma #specialtypharma

What is white bagging, and how is it different from brown bagging? Keith Hartman of @continuumrx1 discusses #specialtypharmabagging on our #healthcarepodcast. #healthcare #podcast #pharma #specialtypharma

Who are the key players in pharma bagging? Keith Hartman of @continuumrx1 discusses #specialtypharmabagging on our #healthcarepodcast. #healthcare #podcast #pharma #specialtypharma

Why does a PBM want a specialty drug to go through them? Keith Hartman of @continuumrx1 discusses #specialtypharmabagging on our #healthcarepodcast. #healthcare #podcast #pharma #specialtypharma

From the physician’s perspective, why is buy and bill ideal? Keith Hartman of @continuumrx1 discusses #specialtypharmabagging on our #healthcarepodcast. #healthcare #podcast #pharma #specialtypharma

How does white bagging impact patient clinical care? Keith Hartman of @continuumrx1 discusses #specialtypharmabagging on our #healthcarepodcast. #healthcare #podcast #pharma #specialtypharma

What are the two main reasons patients might not continue their therapy? Keith Hartman of @continuumrx1 discusses #specialtypharmabagging on our #healthcarepodcast. #healthcare #podcast #pharma #specialtypharma

“We’ve got to leave some authority with our prescribers to be able to make a clinical decision of what’s best for that … patient.” Keith Hartman of @continuumrx1 discusses #specialtypharmabagging on our #healthcarepodcast. #healthcare #podcast #pharma #specialtypharma

What is clear bagging? Keith Hartman of @continuumrx1 discusses #specialtypharmabagging on our #healthcarepodcast. #healthcare #podcast #pharma #specialtypharma

How does a hospital specialty pharmacy get in network with a PBM? Keith Hartman of @continuumrx1 discusses #specialtypharmabagging on our #healthcarepodcast. #healthcare #podcast #pharma #specialtypharma

What is gold bagging? Keith Hartman of @continuumrx1 discusses #specialtypharmabagging on our #healthcarepodcast. #healthcare #podcast #pharma #specialtypharma

“Outlook really needs to be what’s best for the patient.” Keith Hartman of @continuumrx1 discusses #specialtypharmabagging on our #healthcarepodcast. #healthcare #podcast #pharma #specialtypharma

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Dr Aaron Mitchell (Encore! EP282), Stacey Richter (INBW34), Ashleigh Gunter, Doug Hetherington, Dr Kevin Schulman, Scott Haas, David Muhlestein, David Scheinker, Ali Ucar, Dr Carly Eckert, Jeb Dunkelberger (EP360), Dan O’Neill, Dr Wayne Jenkins, Liliana Petrova, Ge Bai, Nikhil Krishnan, Shawn Rhodes, Pramod John (EP353), Pramod John (EP352), Dr Eric Bricker, Katy Talento, Stacey Richter (INBW33), Stacey Richter (INBW32), Dr Steve Schutzer (Encore! EP294), Lisa Trumble, Jeb Dunkelberger, Dr Ian Tong, Mike Schneider

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After that recent episode with Scott Haas (EP365), where we talked about the real deal with PBM contracting, I kicked into high gear trying to untangle this whole apocalyptic honky-tonk we call benefits for prescription drugs. Notice I did not say prescription drug benefits because that would imply that pharmaceuticals are only charged for under the umbrella of pharmacy benefits. Ha ha, that would be just too easy. No, some pharma drugs are charged as part of patients’ medical benefits. An amazing primer for what that looks like in the real world follows.

Just pointing out that any self-respecting healthcare market distortion deserves another, and if anything qualifies as a market distortion, it’s buy and bill—what I talk about with Dr. Mitchell in this healthcare podcast. In the following weeks, we’ll chat about how the market has responded to this buy and bill market distortion that we talk about in this episode. So, next week, we’re gonna get into all the different kinds of bagging: the so-called brown bagging, the white bagging, the clear bagging … and what is this newfangled gold bagging? Spoiler alert there. Tune in next week.

And here’s another spoiler alert: While in this show today we chat about how provider organizations tend to make somewhere between 4.5% and 20% additional over drug costs, there was a recent study claiming that 4.5% to 20% is chump change. Some provider organizations are, in fact, making four times to six times the cost of the drug—a very expensive drug, mind you (lots of zeros here)—in profit. In the show in two weeks, I’m speaking with April Yongchu and Erik Davis from USI about exactly and specifically how provider organizations can manage to perform this “let’s make hundreds of thousands of dollars today” magic trick. So, with that, here’s your encore.

In the April [2020] issue of Value-Based Cancer Care (that’s a journal), there’s an article talking about a keynote presentation and a study highlighting a big problem for patients with cancer: toxicity. It’s a fact that some chemo agents are pretty toxic, but in this healthcare podcast I am talking about financial toxicity. The financial burden of cancer care has a seriously negative influence on patients’ quality of life.

This keynote speaker quoted in the Value-Based Cancer Care article implored his fellow oncologists: “Think twice before ordering costly interventions that may have little impact on the clinical course,” he said.

This might be difficult for a number of reasons, and one of them is that oncology centers make money, a whole lot of money, sometimes the most money, from infusing cancer medications. It’s this little payment paradigm called “buy and bill.” The cancer center buys the meds and then gets paid an additional fee to infuse the drug. This fee is a percentage of the drug cost.

You’ve probably heard a lot lately about the skyrocketing costs of some of these cancer agents. Realize that if you’re an oncology center, the higher the drug costs, the higher your revenue. Now consider the patient suffering under the weight of increased cost sharing and employers and taxpayers who are funding this strange payment model.

You can learn more at drugpricinglab.org. You can also connect with Dr. Mitchell on Twitter at @TheWonkologist. Aaron Mitchell, MD, MPH, is a practicing medical oncologist and health services researcher. He is an assistant attending at Memorial Sloan Kettering Cancer Center in the department of epidemiology and biostatistics. His research focuses on understanding how the financial incentives in the healthcare system affect physician practice patterns and care delivery to cancer patients. He cares for patients with prostate and bladder cancer.

04:34 Following the drug and following the dollar.
04:56 The “buy and bill” system.
05:43 The perverse and problematic incentives of the system.
08:38 “It creates the incentive for us to gravitate toward the more expensive drug.”
08:42 The hesitancy to address the financial toxicity of drugs for patients.
09:53 Why the only person losing in this situation is the patient.
10:51 The financial impact from the patient perspective.
13:57 Are patients realizing this impact?
14:42 Solving the problem of oncology drug choice.
16:45 Reimbursement reform.
18:24 Capitated systems and incrementalist impacts to reimbursement reform, and what these look like.
23:30 Are we at a tipping point?
23:51 “The current system … works too well for too many people.”
25:01 Who isn’t well served by the current system.
25:32 Who has to lead the charge for change.
28:28 Large oncology providers vs small oncology providers in the buy and bill system.

You can learn more at drugpricinglab.org. You can also connect with Dr. Mitchell on Twitter at @TheWonkologist.

Check out our #healthcarepodcast with @TheWonkologist of @sloan_kettering as he discusses #oncology #drugpricing and #reimbursement. #healthcare #podcast #digitalhealth

Following the drug and following the dollar. @TheWonkologist of @sloan_kettering discusses #oncology #drugpricing and #reimbursement. #healthcarepodcast #healthcare #podcast #digitalhealth

The “buy and bill” system. @TheWonkologist of @sloan_kettering discusses #oncology #drugpricing and #reimbursement. #healthcarepodcast #healthcare #podcast #digitalhealth

The perverse and problematic incentives of the system. @TheWonkologist of @sloan_kettering discusses #oncology #drugpricing and #reimbursement. #healthcarepodcast #healthcare #podcast #digitalhealth

“It creates the incentive for us to gravitate toward the more expensive drug.” @TheWonkologist of @sloan_kettering discusses #oncology #drugpricing and #reimbursement. #healthcarepodcast #healthcare #podcast #digitalhealth

Why is there hesitancy to address the financial toxicity of drug pricing for patients? @TheWonkologist of @sloan_kettering discusses #oncology #drugpricing and #reimbursement. #healthcarepodcast #healthcare #podcast #digitalhealth

Why the patient is the only one that loses. @TheWonkologist of @sloan_kettering discusses #oncology #drugpricing and #reimbursement. #healthcarepodcast #healthcare #podcast #digitalhealth

What’s the financial impact from the patient perspective? @TheWonkologist of @sloan_kettering discusses #oncology #drugpricing and #reimbursement. #healthcarepodcast #healthcare #podcast #digitalhealth

Are patients realizing this financial impact? @TheWonkologist of @sloan_kettering discusses #oncology #drugpricing and #reimbursement. #healthcarepodcast #healthcare #podcast #digitalhealth

Solving the problem of oncology drug choice. @TheWonkologist of @sloan_kettering discusses #oncology #drugpricing and #reimbursement. #healthcarepodcast #healthcare #podcast #digitalhealth

What should reimbursement reform look like? @TheWonkologist of @sloan_kettering discusses #oncology #drugpricing and #reimbursement. #healthcarepodcast #healthcare #podcast #digitalhealth

“The current system … works too well for too many people.” @TheWonkologist of @sloan_kettering discusses #oncology #drugpricing and #reimbursement. #healthcarepodcast #healthcare #podcast #digitalhealth

Who has to lead the charge for change? @TheWonkologist of @sloan_kettering discusses #oncology #drugpricing and #reimbursement. #healthcarepodcast #healthcare #podcast #digitalhealth

Large oncology providers vs small oncology providers in the buy and bill system. @TheWonkologist of @sloan_kettering discusses #oncology #drugpricing and #reimbursement. #healthcarepodcast #healthcare #podcast #digitalhealth

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Stacey Richter (INBW34), Ashleigh Gunter, Doug Hetherington, Dr Kevin Schulman, Scott Haas, David Muhlestein, David Scheinker, Ali Ucar, Dr Carly Eckert, Jeb Dunkelberger (EP360), Dan O’Neill, Dr Wayne Jenkins, Liliana Petrova, Ge Bai, Nikhil Krishnan, Shawn Rhodes, Pramod John (EP353), Pramod John (EP352), Dr Eric Bricker, Katy Talento, Stacey Richter (INBW33), Stacey Richter (INBW32), Dr Steve Schutzer (Encore! EP294), Lisa Trumble, Jeb Dunkelberger, Dr Ian Tong, Mike Schneider, Peter Hayes

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In INBW32, I talked about telehealth. In this episode, I’m talking about collaboration between healthcare stakeholders or the lack thereof.

My grandfather suffered from heart failure. This was many years ago now. But when I say suffered, I mean it. As many of you know, when heart failure is uncontrolled, it is painful to go through or even watch a loved one go through.

There was that one time when I accompanied my grandfather (and my grandma was there, too) on a trip to the emergency room, you know, because he was drowning in his own lung fluid and could barely breathe. And when we arrived, they were going to wheel him into one of the exam rooms. But my grandmother put her foot down. She did not want to go into that one exam room because the TV was broken in there. Yes, the two of them had been in the ER so many times that they were familiar with the pros and cons of the various exam rooms.

The end of my grandfather’s life was almost unbearable, and I can’t even begin to estimate the hundreds of thousands of dollars racked up in ER visits and inpatient stays. He was in the ER once a month at a minimum, and he would come home disoriented and confused.

Now, as everybody listening to this show knows, this anecdote is also a data point that is, dare I say, all too common. But to that end, let me just talk about heart failure data for a second. Patients with heart failure generate a third of Medicare spending and 40% of Medicare fee-for-service deaths. They are also responsible for 55% of Medicare readmissions. You’d think that if there were any chronic condition that we’d be looking to improve outcomes on, it’d be this one.

So, everybody’s on it, right? Oh, wait … heart failure readmissions have actually gone up in recent years.

I just want to point out that in between ER visits and inpatient stays, my grandfather received effectively no education, no PCP or cardiology follow-ups, no community support. He did not get a case manager. He got no coaching.

He got 25 pages of tiny, printed instructions just before the door hit him in the butt on his way out to the parking lot. Obvious point here, but to do any of this in-between stuff would have required collaboration between the hospital and others. And it was conspicuous in its absence.

Look, this is sad and I’m not telling the story because I think it’s unique. If I asked who else has a story like this one where a family member or a loved one got lost in the gaps between their care, I am suspecting that everyone would raise their hands—even those of you who have medical degrees. No matter how much any of us know or care or try to help, stories like my grandfather’s are painfully and unequivocally common in this country today.

OK, so how to improve care, especially for chronic care patients. At its core, and I am not telling anyone listening something that you probably have not already thought about at great length, but there are two important contributors to patient outcomes. Not the only contributors for absolutely sure, but here are two important ones:

Nonfragmented patient journeys that adhere to evidence-based best-practice care. My grandfather and anyone with a chronic condition requires a patient journey that isn’t a game of whack-a-mole. Carly Eckert, MD, says this so well in EP361.
Steering patients to the best care setting, which is required to get the highest-value best-practice care and also reduce financial toxicity. Short but important sidebar: We know that financial toxicity is clinical toxicity. There was just a study that came out that said in 2030, a leading cause of death will be noncompliance to treatment due to patients abandoning care because it costs too much.

Wayne Jenkins, MD, from Centivo (EP358) talks about other implications of financial toxicity for a half-hour. Also, there’s another paper that, again, is just more on this point.

At this juncture, it is not arguable. Financial toxicity is clinical toxicity. So, we need to get patients, people, customers to the next place that is the highest value for them. Doing either or both of these things—nonfragmenting the patient journey and making sure patients get to the next care setting—it requires collaboration.

Let me quote Dr. Steve Klasko, who, until recently, was president and CEO over at Jefferson Health in Philly. He said—and this is an adaptation of an old Steve Jobs mantra—but Steve Klasko said that for hospitals, our old math was inpatient revenue, outpatient revenue, and in-person tuition and funding. The new math is going to be strategic partnerships around this healthcare at any address model.

Right? But good collaborations don’t just improve patient outcomes. Here’s another benefit: They also make happier clinicians or employees. If every outside interaction is a friction point, where employees, clinicians, doctors, nurses are rubbed raw because every interaction becomes a battle, if that’s the ecosystem that any given party has created for themselves, patients aren’t happy and clinicians aren’t happy. And since everything in healthcare spirals around that one relationship, the one between the patient and their clinicians, this could not be more vital.

There’s that famous Richard Branson quote, which I’ll paraphrase: If you want to keep the customers happy, keep the employees happy. How anyone thinks that patients are going to get amazing care when those providing the care are miserable is just the very definition of magical thinking.

All right … so, let’s get into the hard thing about hard things: why with the lack of collaboration across the industry there are a lot of excuses for why parties cannot collaborate. For example, interoperability, HIPAA, legal, cyber, bureaucracy … Also, people are busy, COVID response, being overworked and burned out is a big deal. And I’m not saying that some of these are not valid, but the elephant in the room is this: In healthcare today, most (if not all) big organizations for sure and a lot of small ones have a business model that is built on revenue maximization.

Look, when I’m referring to organizations as revenue maximizers, maybe I’m not talking specifically about specific departments and people working hard in those departments within any given organization. Organizations are not one-celled organisms, after all. But what I am saying is that, as a whole, healthcare organizations—the vast majority and certainly every so-called incumbent payer and health system—when you factor in the actions of the CFO, the actions of the billing department, the group that sets premiums, the one that sets prices, the group that incentivizes brokers, the group that sells to employers, the group that lobbies politicians, the group that writes the contract terms … if you factor in the whole organization, what you get is an organization who acts to maximize outcomes—financial outcomes, that is.

As per my normal MO, I’m gonna say the quiet part out loud here. One big reason why parties do not collaborate is because they are thinking they are going to maximize their revenue by info blocking to prevent network leakage, or not sharing data with an employer because then the employer might steer the employee to an infusion center for their chemo, or drugs will get switched from the profitable one to the not profitable one.

I just saw another article the other day, entitled “The Many Barriers to Payer-Provider Alignment on Value-based Care.” Two entities vital for a nonfragmented frictionless patient journey cannot figure out how to align incentives, share data, or even figure out what good looks like. Speaking industry-wide here, but if patient outcomes were the top of either the payer or the provider’s organizational lists of priorities, I do not think that this would be the case decades later. Listen to the show with Kevin Schulman, MD (EP366); Scott Haas (EP365); or an upcoming one with Autumn Yongchu and Erik Davis coming out in a few weeks that just drives this point home.

So, can you do well by doing good? Yes, you can. I have a degree from a business school, after all; but there is a line that gets crossed when maximizing revenue harms patients. And I’ll tell you how you can tell if you’re over the line.

And again, I’m talking organizations here who have power and control in their local markets. I would say that a lack of collaboration is a symptom. If we all agree that collaboration is essential and some organization is not doing it, maybe it is a sign. It is an actionable bit of information that I hope, if relevant, gets contemplated.

For example, back to my grandfather for a sec, it’s pretty well known how to reduce heart failure revisits. There are more than a few care models that have definitely been shown to work.

Here is one of them, and this was talked about in Dr. William Bestermann’s Substacks. There was a nurse in the Carolinas—and I talked about this before—but there was a nurse in the Carolinas who decreased heart failure readmissions markedly by simply calling up heart failure patients and making sure they were doing OK and that they understood how to take care of themselves. She was caring, and she had relationships with these patients. That’s all she did.

So, hospital collaborates with a payer case manager or a CBO (community-based organization) or an MSO (management services organization), or maybe the hospital has pop health capabilities internally. I mean, we can manage to transplant important organs in this country, and most healthcare organizations cannot figure out how to work together well enough that a nurse calls up a bunch of patients? Is this some arcane or highly complex thing to do? No, it’s not. But most are not doing anything even close to this because revenue maximization is the goal of one or more of the entities who would need to be a party to this, and everything else is just an excuse.

If anyone is thinking interoperability right now, I’ve heard Don Lee say on The #HCBiz Show! often enough that there’s lots of evidence at this point that interoperability has been solved from a technical standpoint. It’s been solved for years. The problem is a business case problem. No one wants to be interoperable because … revenue maximization

All right … aspirationally here, despite all of this, great collaborations happen every single day—collaborations that are bright spots and that definitely improve patient outcomes and reduce financial burdens short-term and long-term. Let me give you some examples: what 32BJ is doing in New York City (upcoming episode with Cora Opsahl talking about the cool things that they are doing with Mount Sinai); CINs (clinically integrated networks), like Lisa Trumble, who talks about SoNE HEALTH in EP349.

There are MSOs that work with ACOs (accountable care organizations) and others. Listen to Shawn Rhodes (EP354); also what Nicole Bradberry and Kelly Conroy are doing in Florida (EP324).

In an upcoming episode, Dave Chase from Health Rosetta: He’s got one great story after another about how employers these days are teaming up with provider organizations, pharmacies, and their communities to put a serious dent in costs while raising patient outcomes and satisfaction.

Doug Hetherington’s episode (EP367) talks about direct contracting with hospitals. Katy Talento (EP350) talks about this also. Steve Schutzer, MD, talks about collaborating with other local orthopedic surgeons to stand up a now nationally recognized center of excellence in Connecticut (EP294).

We also have some pharma companies who are developing some pretty great disease-centric resources for providers. Some pharma companies and some internal teams at those companies can actually be fair and good community players.

Mike Levitt and the work that he has done on the Accountable Care Learning Collaborative, which is headed up by Dr. Eric Weaver, who has been on the show (EP277); or I’m sure after this show airs, I’m gonna hear about more. Please send them my way.

Now, look … let’s get real here. These collaborations may have been initiated with, let’s just say, other beneficial side effects; but they all improve care and reduce costs.

If I were gonna list some common and appealing side effects that could motivate some prospective collaborators to come to the table, some of the usual suspects are proposing that the collaboration will, for example, improve HCAHPS scores, quality metrics, star ratings; improve predictable spend; reduce shock claims; avenge your common competitor and steal their market share; gang up against a payer or some consolidated health system; improve OR utilization; or improve efficiency in some way.

What I would say, though, is that if leveling up patient care happens and costs do not rise as a result, that’s the shared priority I’d focus on. If someone gets some beneficial side action, this is kind of the definition of doing well by doing good.

All right, so let’s talk about the different kinds of collaboration just briefly. I’m gonna say that there’s three kinds of collaboration:

Collaboration along the patient journey by multiple parties who are all along the patient journey
Collaboration by parties who can help inform the patient journey, but they’re not necessarily on the patient journey themselves
Collaboration by parties who can help navigate the patient journey

I am mentioning these three because there’s often sort of this insinuation that collaborators should have equal stature in the care journey or have similar roles, that if you’re not actually on the clinical journey, then you don’t have any responsibility or accountability for the clinical journey and, therefore, are not a worthy collaborator. That is limiting if you are trying to figure out who you might be able to collaborate with to help you.

The patient journey is not like a movie showing all the minutes a patient spends in clinic, and then all the gaps in between visits are edited out. Care can be improved at the population level, at the community level. Care can be improved at the disease or the condition level when clinicians get needed insights or information or tools.

I mean, frankly, to my mind, it shouldn’t be considered a plus when a pharma company or a payer actually does something in the service of improving patient outcomes. It should almost be a requirement that they do. I don’t mean by delivering care in any way. And for the record, most prior auth programs are the opposite of collaborative.

Payers can collaborate by supplying data, as just one example. Heck, external collaborations are great, but we also could think about collaborating internally, like invite the CFO or maybe the gang rewarding brokers with sales competitions. I don’t know. I’d consider ethically dubious: Invite them to come to some meeting where oncology patients are choosing to die rather than bankrupt their families. Communication is the first step to collaboration, after all. That’s a place to start.

Or life science types: They can supply knowledge and expertise about specific diseases or conditions with the purpose of improving patient outcomes. Informing the patient journey could be a collaboration with some of these amazing patient efficacy organizations or CBOs that are out in the community.

Now, I think one barrier to collaboration that we all need to get over is the whole, I call it, stakeholder prejudice thing. Here’s what Colton Ortolf wrote on Twitter the other day. He tweeted, “Hospitals are the Lance Armstrong of healthcare. Pissed [off] at all the [crappy] things they do economically, but also grateful for all the lives they save.”

If we’re gonna eliminate everybody in healthcare who has revenue maximization as their organizational goal, as aforementioned, there is going to be basically no one left standing. As Ge Bai, PhD, CPA, said in EP356, there’s no angels and no demons in healthcare. Everybody is both.

If we’re talking about stakeholder prejudice, though, I would be remiss not to single out Pharma. When I mentioned them a sec ago, I bet some of your eyebrows went up. Here’s my take on it. Consider Pharma’s potential role in leveling up disease-/condition-specific outcomes. I mean, there are thousands, millions probably, of diseases and conditions and health problems out there that any given doctor or clinician has to be familiar with. Pharma has huge infrastructures and physicians and smart people who focused on, like, six of them. They know more about those six than anybody else.

We pay a ton also for their drugs. It’s my view that people along the patient journey should ask for what they want and need relative to the expertise that Pharma possesses. It should be about helping those providing care on the patient journey to level up the standard of care. Frankly, I’d expect collaboration from some of these entities. Ask for it on your own terms, and if all you get back is a sales pitch, you deserve better than that. Find somebody higher up on the food chain to talk to. And also, outcomes-based contracts … yeah, we need to figure out how to operationalize them so that really good drugs that actually produce outcomes like overall survival get paid for and those that do not do not.

Point of note must be said: Colluding and conflict of interest is not cost neutral. If someone is getting things bought for them and then thinking, falsely, that it does not impact prescribing, that is not collaboration. Any of these revenue-maximizing hookups are not included in my definition of collaboration.

So, in sum, ultimately, what we’re talking about here is our legacy. As David Muhlestein, PhD, JD, talks about really well in EP364, we got to ask ourselves, What do we want to leave behind to our children and our grandchildren? Some of this is generational change, for sure. But seriously, talking about today, I mean, who wants to sign their family member up for what my grandfather went through? Right now, across the country, there are heart failure patients going through exactly what he did; and there are other patients with care journeys so dysfunctional that lives are shattered.

Chronic care patients, oncology patients … and this isn’t going to change unless we contemplate, first of all, what we can do today—right now. Even little things can matter a lot, but then also to really consider what we want healthcare to look like in 20 or 25 years and then start working back from that vision and collaborating today so that, slowly and surely, we reach a place with better care that is not financially toxic.

Check out the 8-Step Collaboration Roadmap for more resources to operationalize a collaboration.

03:07 How do we improve care, especially for chronic care patients?
03:18 What are two important contributors to patient outcomes?
03:40 EP361 with Carly Eckert, MD.
03:56 “We know that financial toxicity is clinical toxicity.”
04:09 EP358 with Wayne Jenkins, MD. 06:05 Why can’t parties across the healthcare industry seem to collaborate?
08:05 EP366 with Kevin Schulman, MD. 08:07 EP365 with Scott Haas.
08:10 Upcoming episode with Autumn Yongchu and Erik Davis.
08:34 “I would say that a lack of collaboration is a symptom.”
10:10 There’s lots of evidence that interoperability has been solved. It’s been solved for years.
10:37 Upcoming episode with Cora Opsahl.
10:46 EP349 with Lisa Trumble. 10:53 EP354 with Shawn Rhodes. 10:57 EP324 with Nicole Bradberry and Kelly Conroy.
11:04 Upcoming episode with Dave Chase.
11:19 EP367 with Doug Hetherington. 11:25 EP350 with Katy Talento. 11:28 EP294 with Steve Schutzer, MD. 11:50 EP277 with Eric Weaver, DHA, MHA. 13:00 What are the three kinds of collaboration in healthcare?
13:23 Do collaborators need to have equal status in a collaboration?
13:57 “Care can be improved at the population level, at the community level … at the disease or the condition level.”
15:10 How is stakeholder prejudice holding healthcare back?
15:42 EP356 with Ge Bai, PhD, CPA. 16:55 “Outcomes-based contracts … we need to figure out how to operationalize them.”
17:08 “Colluding and conflict of interest is not cost neutral.”
17:30 EP364 with David Muhlestein, PhD, JD.

For more information, go to aventriahealth.com.

Stacey discusses #healthcarecollaboration on our #healthcarepodcast. #healthcare #podcast #healthcollab

How do we improve care, especially for chronic care patients? Stacey discusses #healthcarecollaboration on our #healthcarepodcast. #healthcare #podcast #healthcollab

What are two important contributors to patient outcomes? Stacey discusses #healthcarecollaboration on our #healthcarepodcast. #healthcare #podcast #healthcollab

“We know that financial toxicity is clinical toxicity.” Stacey discusses #healthcarecollaboration on our #healthcarepodcast. #healthcare #podcast #healthcollab

Why can’t parties across the healthcare industry seem to collaborate? Stacey discusses #healthcarecollaboration on our #healthcarepodcast. #healthcare #podcast #healthcollab

“I would say that a lack of collaboration is a symptom.” Stacey discusses #healthcarecollaboration on our #healthcarepodcast. #healthcare #podcast #healthcollab

There’s lots of evidence that interoperability has been solved. It’s been solved for years. Stacey discusses #healthcarecollaboration on our #healthcarepodcast. #healthcare #podcast #healthcollab

What are the three kinds of collaboration in healthcare? Stacey discusses #healthcarecollaboration on our #healthcarepodcast. #healthcare #podcast #healthcollab

Do collaborators need to have equal status in a collaboration? Stacey discusses #healthcarecollaboration on our #healthcarepodcast. #healthcare #podcast #healthcollab

“Care can be improved at the population level, at the community level … at the disease or the condition level.” Stacey discusses #healthcarecollaboration on our #healthcarepodcast. #healthcare #podcast #healthcollab

How is stakeholder prejudice holding healthcare back? Stacey discusses #healthcarecollaboration on our #healthcarepodcast. #healthcare #podcast #healthcollab

“Outcomes-based contracts … we need to figure out how to operationalize them.” Stacey discusses #healthcarecollaboration on our #healthcarepodcast. #healthcare #podcast #healthcollab

“Colluding and conflict of interest is not cost neutral.” Stacey discusses #healthcarecollaboration on our #healthcarepodcast. #healthcare #podcast #healthcollab

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Ashleigh Gunter, Doug Hetherington, Dr Kevin Schulman, Scott Haas, David Muhlestein, David Scheinker, Ali Ucar, Dr Carly Eckert, Jeb Dunkelberger (EP360), Dan O’Neill, Dr Wayne Jenkins, Liliana Petrova, Ge Bai, Nikhil Krishnan, Shawn Rhodes, Pramod John (EP353), Pramod John (EP352), Dr Eric Bricker, Katy Talento, Stacey Richter (INBW33), Stacey Richter (INBW32), Dr Steve Schutzer (Encore! EP294), Lisa Trumble, Jeb Dunkelberger, Dr Ian Tong, Mike Schneider, Peter Hayes, Paul Simms

View Details

People are averse to change. It’s a thing. It’s a thing that affects even those of us who consider ourselves highly educated and/or very smart. Nobody likes disruption or, even worse, the prospect of disruption and the uncertainty that goes along with that. Nobody likes to feel like the rug just got pulled out from under them or that they’ve lost control of something, especially something important like their health benefits or how they care for patients.

Changes to health insurance and healthcare, from any angle, are fraught with stress. A big reason for this is because health and healthcare are filled with so-called “one-way-door” types of decisions and decision points. If I cannot get the care I need today, or if the care I want to provide today to a patient does not go as desired, I feel like the door is one-way: Once I make a decision, I cannot go back. I can’t click “undo” on that and go back through the door and arrive at yesterday.

Health decisions, therefore, have a very “you got one shot at this” kind of feel. And it’s that, right there, that just upped the ante considerably in the stress department for employees and then also for any clinician who is working with patients.

It’s life or death, and this is why making changes either to the insurance side or the care side of the equation feels like they will be so disruptive. It’s a big reason why some self-insured employers or even fully insured employers won’t mess with the status quo benefit designs or switch up their EBC (employee benefit consultant) or their ASO/TPA (Administrative Services Only/Third-Party Administrator), even if everybody in the entire company is currently complaining about the price and complexity of said status quo (it’s kind of like the devil that you know) and even if it’s possible to offer employees overall better-quality care at lower prices, meaning that everybody in the company could get a raise funded by the sometimes massive savings that could be had. I just heard a union leader the other day, and she said that every worker would have an extra $5000 in their pocket if their healthcare costs were what they should be.

So, for many employers, the prospect of disruption is just too much. It’s not in the CHRO’s (chief human resources officer’s) job description to open that Pandora’s box. Nobody gets fired for doing what they did last year—I guess, until they do (one straw or another is gonna break the camel’s back, after all). But in the meantime, we have this fear-induced festering inertia.

Let me just point out one thing: Implicit in everything that I just said is the notion that one day everyone will have their familiar insurance card snugly tucked in their wallet, and then the next day, it will be ripped from their bloody fingers in a violent and unexpected fashion.

Or, let’s talk about provider organizations now. Say one’s trying to move from the world of fee for service to the world of value-based payment structures with downstream risk, or direct contracts with employers. To do this well, let’s chat about one aspect of this that health systems seem to struggle with that’s been a topic of some conversation lately.

There’s an article cautioning that “practicing at the top of one’s license” and its attendant need for team-based care is a giant fail and/or a money grab, or it could be. And it could be both of these things, don’t get me wrong. Team-based care isn’t a homogeneous construct. It would be like saying that all movies are bad because Super Baby Geniuses 2 was such a dog.

I mean, team-based care—pretty much like team-based anything—if it’s not implemented well, nobody on the team knows what they’re supposed to be doing and nobody is accountable. There’s no infrastructure supporting it. There was no testing or iteration or discussion about the intent. No one actually on the proposed teams was even consulted about the whole idea. And so, everyone starts to suspect, maybe rightfully or maybe not, that it’s all financially driven and a cost-cutting exercise.

On the show today, my guest, Ashleigh Gunter, warns about all of these exact things. You switch something up without going through the proper steps and stages, everybody gets very suspicious. And, nothing for nothing, their suspicion could be the least of the leader’s problems. The initiative’s ensuing failure maybe should be their biggest concern.

Which is a shame if something was done in the spirit of better patient care, for example, because there’s tons of research on the immense power of well-functioning teams as just continuing this one example. And there’s just as much research and well-proven case studies showing that innovative benefit designs can be a 365-degree win when they cut out wasteful spending and navigate employees and plan members to high-value care.

For all of these reasons and more, I wanted to get Ashleigh Gunter, who is an expert in change management, on the show to talk about how to succeed when you want to change something as touchy as healthcare and health insurance.

This all really goes back to the show with Matt Anderson, MD, MBA (EP266) and what Robert Pearl, MD, writes about all the time. It’s a skill we all need to learn to lead change. Many of us had to learn this the hard way because we see our vision so clearly and we want to make it a reality as fast as possible, but the result of our enthusiasm might be that we skip implementation steps that are really not optional.

As Thomas Edison said (and I love this), “Having a vision for what you want is not enough. Vision without execution is hallucination.”

So, to transform anything effectively, we have to put as much effort into the implementation as we do into the strategy. If we don’t do that, then sadly, despite all of the best intentions, whatever we’re trying to do is not gonna work and it might be labeled disruptive.

So, I couldn’t be more pleased to have learned a thing or two from Ashleigh Gunter about change management that avoids this disruption label. Ashleigh Gunter is president of Translucent Healthcare Consulting. She also is an expert in change management as aforementioned and how to help align employees and staff so that an organization can move forward together.

According to Ashleigh, there’s five steps to effective change management that will ensure success:

Having great leadership
Creating a case for the change
Finding champions, engaging people who have to change so that they can contribute and be supportive
Overcommunicating
Measuring how things are going and also celebrating small triumphs

You can learn more at translucenthc.com. Ashleigh Gunter, president of Translucent Healthcare Consulting, combines her experience, an understanding of organizational culture, and a practical mindset to meet her clients’ needs. With over 30 years of management consulting experience, Ashleigh has deep expertise in advising in the dramatically changing healthcare market.

07:46 How does change management go wrong in healthcare?
08:27 “Communication [of change] in and of itself isn’t change management.”
10:03 What is change management?
11:06 What does great leadership look like in change management?
12:29 “Leadership sets the tone.”
12:38 What makes change management so hard?
13:27 “What’s the company reason to make this change happen?”
15:57 What are change champions, and why do you need to create them when changing your benefit plan?
19:18 Why is it important to overcommunicate change?
22:46 Why is it important to measure your successes and communicate those after a change?
24:14 How does change management work on the provider organization side?
28:53 “You want to ensure you are educating the operational folks.”

You can learn more at translucenthc.com.

Ashleigh Gunter of Translucent Healthcare Consulting discusses #benefitdesign and #deliverymodels on our #healthcarepodcast. #healthcare #podcast

How does change management go wrong in healthcare? Ashleigh Gunter of Translucent Healthcare Consulting discusses #benefitdesign and #deliverymodels on our #healthcarepodcast. #healthcare #podcast

“Communication [of change] in and of itself isn’t change management.” Ashleigh Gunter of Translucent Healthcare Consulting discusses #benefitdesign and #deliverymodels on our #healthcarepodcast. #healthcare #podcast

What is change management? Ashleigh Gunter of Translucent Healthcare Consulting discusses #benefitdesign and #deliverymodels on our #healthcarepodcast. #healthcare #podcast

What does great leadership look like in change management? Ashleigh Gunter of Translucent Healthcare Consulting discusses #benefitdesign and #deliverymodels on our #healthcarepodcast. #healthcare #podcast

“Leadership sets the tone.” Ashleigh Gunter of Translucent Healthcare Consulting discusses #benefitdesign and #deliverymodels on our #healthcarepodcast. #healthcare #podcast

What makes change management so hard? Ashleigh Gunter of Translucent Healthcare Consulting discusses #benefitdesign and #deliverymodels on our #healthcarepodcast. #healthcare #podcast

“What’s the company reason to make this change happen?” Ashleigh Gunter of Translucent Healthcare Consulting discusses #benefitdesign and #deliverymodels on our #healthcarepodcast. #healthcare #podcast

What are change champions, and why do you need to create them when changing your benefit plan? Ashleigh Gunter of Translucent Healthcare Consulting discusses #benefitdesign and #deliverymodels on our #healthcarepodcast. #healthcare #podcast

Why is it important to overcommunicate change? Ashleigh Gunter of Translucent Healthcare Consulting discusses #benefitdesign and #deliverymodels on our #healthcarepodcast. #healthcare #podcast

Why is it important to measure your successes and communicate those after a change? Ashleigh Gunter of Translucent Healthcare Consulting discusses #benefitdesign and #deliverymodels on our #healthcarepodcast. #healthcare #podcast

How does change management work on the provider organization side? Ashleigh Gunter of Translucent Healthcare Consulting discusses #benefitdesign and #deliverymodels on our #healthcarepodcast. #healthcare #podcast

“You want to ensure you are educating the operational folks.” Ashleigh Gunter of Translucent Healthcare Consulting discusses #benefitdesign and #deliverymodels on our #healthcarepodcast. #healthcare #podcast

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Doug Hetherington, Dr Kevin Schulman, Scott Haas, David Muhlestein, David Scheinker, Ali Ucar, Dr Carly Eckert, Jeb Dunkelberger (EP360), Dan O’Neill, Dr Wayne Jenkins, Liliana Petrova, Ge Bai, Nikhil Krishnan, Shawn Rhodes, Pramod John (EP353), Pramod John (EP352), Dr Eric Bricker, Katy Talento, Stacey Richter (INBW33), Stacey Richter (INBW32), Dr Steve Schutzer (Encore! EP294), Lisa Trumble, Jeb Dunkelberger, Dr Ian Tong, Mike Schneider, Peter Hayes, Paul Simms, Dr Steven Quimby

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Lots of talk about direct contracting going on these days. Many of you will be familiar with the term, but in short, direct contracting means when a self-insured employer directly contracts with a provider organization with no payer in the middle of that arrangement. And when I say “employer,” I mean the employer and all their peeps—their TPAs, repricers, other vendors, and consultants.

Most of this talk, though, seems to come from the point of view of the employer. It’s super easy to quantify what’s in it for employers. US healthcare costs get blamed for all kinds of things: companies who have lost big global contracts because all of those fringe benefits cost way too much around here.

If we’re looking around for a why on that point, let me refer you to last week’s episode (EP366) with Dr. Kevin Schulman entitled “An In-Depth Dissection of Our Dysfunctional Healthcare Benefits Market.” Or the show with Dr. Wayne Jenkins (EP358) about how premium and deductible financial toxicity negatively impacts plan members. Never forget that financial toxicity is clinical toxicity.

So, like a knight riding in on a white horse, direct contracting with a provider organization has some interesting potential. Most obviously, when an employer contracts directly with a provider organization, they cut out the middleman. They put the direct in direct contracting. Considering the multi-billions of dollars that some of these middle people are raking in every quarter in profits and/or “margins,” cutting out the middle people could have a financial upside as big as those billions in profit.

If those billions get passed on to patients in the form of lower co-pays/coinsurance or premiums, there could be some big benefits to direct contracting for pretty much all involved … except the middle people, of course.

My guest in this healthcare podcast, Doug Hetherington, says that it’s not uncommon to see on the low end a 10% reduction in costs to maybe up to 50% reduction in costs. It’s amazing what can be accomplished when everybody starts working together for the good of the local community and patient and is held accountable for more than just revenue maximization.

But there’s also quality and patient outcomes upsides to these cost reductions. Here’s a few we can speculate about: For example, if the middle people add layers of bureaucracy and administrative burden that make it really hard and/or upsettingly inefficient for anyone trying to serve their patients’ needs to actually serve their patients’ needs, then yeah, direct contracting can make getting the right care to patients faster and easier. That matters to burned-out clinicians.

Also, here’s another potential point to ponder: benefit designs. Listen to the show with Dr. Mark Fendrick (EP308) on this, but most benefit designs offered by middle people are really, as they call them, blunt instruments. High-value care costs as much (or more) as low-value care. Deductibles don’t care if you need your diabetic foot ulcers checked urgently or you might get your foot amputated. It’s a known fact that health outcomes plummet in January when, all of a sudden, cancer meds or whatever essential lifesaving medical innovation cost as much as a patient’s deductible. So, patients abandon care—and outcomes go down.

When an employer direct contracts with a provider, in its most sophisticated form—which my guest, Doug Hetherington, calls a “full-pay open contract”—the employer and the provider work together to construct a benefit design that helps patients get the best outcomes.

Or here’s another benefit, for the whole community, not just the employer: The whole community keeps the money local. Many of these middle people are big national companies. As Dave Chase and others have said often, when these Fortune whatever companies arrive on the scene, lots of money exits stage left out of the community. If local employers contract with local providers, the money stays local.

So, all that I have said has been said before. What I wanted to dig into in this episode is the why and the how from the provider organization standpoint.

I got curious about this after my conversation with Katy Talento (EP350). She talks about a major barrier for self-insured employers who want to work with local hospitals is that the local hospitals couldn’t, frankly, get out of their own way. Maybe they couldn’t see the benefit for themselves that made the juice worth the squeeze? That’s what I talk about in this episode with Doug Hetherington: what’s in it for providers and what a provider organization interested in direct contracting needs to actually pull it off.

Doug Hetherington is CEO of Health2Business, and he has done and continues to do pioneering work with community hospitals in eastern Idaho and elsewhere. Health2Business helps facilitate direct contracting between hospitals and local employers.

You can learn more at health2business.com and connect with Doug on LinkedIn. You can also learn how to engage in direct contracts from Doug’s presentation, “Beyond the Direct Contract.” Doug Hetherington is a health plan visionary, innovator, and program architect who believes providers are the key to sustainable and meaningful healthcare in our communities.

Midway through his 20-year tenure as a benefit advisor, Doug began innovating around self-funding, captives, reference-based pricing (RBP), and population management in search of viable solutions that gave his employer clients control over cost and plan design. His creativity and tenacity for change drove his development of several first-of-their-kind innovations, including RB EmCap, a national access captive program for RBP employers.

Doug founded Health2Business (H2B) in 2019 after successful proof of concept that better healthcare results when employers, providers, and health systems work together at the local level through direct contracts.

Tackling one aspect of our broken healthcare system, H2B solves for how we access and pay for care. While establishing scalable direct contracts with some of the largest flagship health systems in the country, Doug realized that in order to truly decapitalize healthcare, direct contracts need to be transparent, open, and free for employers of all sizes to access. By establishing H2B’s independent, agnostic, and collaborative direct contract administrative platform infrastructure, Doug has created an entirely new vendor class known as direct contract administration.

An optimist by nature, Doug truly believes that the more we work together, the faster we can restore value to our healthcare system and create a sustainable mutual benefit for provider, employer, and employee/member stakeholders.

05:38 Why are health systems interested in direct contracting?
09:43 EP308 with Mark Fendrick, MD.10:06 What are the essentials for direct contracting between a health system and an employer or payer?
11:16 What are the three categories of open direct contracting agreements?
12:44 EP350 with Katy Talento.12:59 EP363 with David Scheinker, PhD.14:43 What direction do we need to be moving to solve the cost problems in healthcare?
18:10 “What does a value-based model begin to look like?”
20:31 What is one of the inherent benefits of a direct contracting environment?
21:01 What data should we actually be capturing?
25:01 “Sometimes you really begin to wonder, why is there such a high level of misalignment?”
25:16 How much can an employer save, on average, with a direct contract?
26:33 What are healthcare costs going up by per year?
26:50 “We pay for these insurance plans … and yet what you’re paying for that and how they’re assessing the risk is not … in line with the actual cost of care.”
30:20 “I would say that … consolidation … is one of the reasons why we’re … seeing more movement towards direct contracting.”

You can learn more at health2business.com and connect with Doug on LinkedIn. You can also learn how to engage in direct contracts from Doug’s presentation, “Beyond the Direct Contract.”

Doug Hetherington of @MyH2B discusses #directcontracting on our #healthcarepodcast. #healthcare #podcast #digitalhealth

Why are health systems interested in direct contracting? Doug Hetherington of @MyH2B discusses #directcontracting on our #healthcarepodcast. #healthcare #podcast #digitalhealth

What are the essentials for direct contracting between a health system and an employer or payer? Doug Hetherington of @MyH2B discusses #directcontracting on our #healthcarepodcast. #healthcare #podcast #digitalhealth

What are the three categories of open direct contracting agreements? Doug Hetherington of @MyH2B discusses #directcontracting on our #healthcarepodcast. #healthcare #podcast #digitalhealth

What direction do we need to be moving to solve the cost problems in healthcare? Doug Hetherington of @MyH2B discusses #directcontracting on our #healthcarepodcast. #healthcare #podcast #digitalhealth

“What does a value-based model begin to look like?” Doug Hetherington of @MyH2B discusses #directcontracting on our #healthcarepodcast. #healthcare #podcast #digitalhealth

What is one of the inherent benefits of a direct contracting environment? Doug Hetherington of @MyH2B discusses #directcontracting on our #healthcarepodcast. #healthcare #podcast #digitalhealth

What data should we actually be capturing? Doug Hetherington of @MyH2B discusses #directcontracting on our #healthcarepodcast. #healthcare #podcast #digitalhealth

“Sometimes you really begin to wonder, why is there such a high level of misalignment?” Doug Hetherington of @MyH2B discusses #directcontracting on our #healthcarepodcast. #healthcare #podcast #digitalhealth

How much can an employer save, on average, with a direct contract? Doug Hetherington of @MyH2B discusses #directcontracting on our #healthcarepodcast. #healthcare #podcast #digitalhealth

What are healthcare costs going up by per year? Doug Hetherington of @MyH2B discusses #directcontracting on our #healthcarepodcast. #healthcare #podcast #digitalhealth

“We pay for these insurance plans … and yet what you’re paying for that and how they’re assessing the risk is not … in line with the actual cost of care.” Doug Hetherington of @MyH2B discusses #directcontracting on our #healthcarepodcast. #healthcare #podcast #digitalhealth

“I would say that … consolidation … is one of the reasons why we’re … seeing more movement towards direct contracting.” Doug Hetherington of @MyH2B discusses #directcontracting on our #healthcarepodcast. #healthcare #podcast #digitalhealth

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Dr Kevin Schulman, Scott Haas, David Muhlestein, David Scheinker, Ali Ucar, Dr Carly Eckert, Jeb Dunkelberger (EP360), Dan O’Neill, Dr Wayne Jenkins, Liliana Petrova, Ge Bai, Nikhil Krishnan, Shawn Rhodes, Pramod John (EP353), Pramod John (EP352), Dr Eric Bricker, Katy Talento, Stacey Richter (INBW33), Stacey Richter (INBW32), Dr Steve Schutzer (Encore! EP294), Lisa Trumble, Jeb Dunkelberger, Dr Ian Tong, Mike Schneider, Peter Hayes, Paul Simms, Dr Steven Quimby, Dr David Carmouche (EP343)

View Details

First of all, this is a 400-level discussion. If you think you already know all about our dysfunctional healthcare benefits market, then this show is for you.

Before we begin, I just want to say something. I’m gonna refer back to David Muhlestein’s episode (EP364), where he talks about the first step toward healthcare transformation. It is, let’s just say, for incumbent health systems and payers, people who work there, to step back and in the harsh light of day really contemplate their business model—see it clearly. If you’re listening to this show, then know that I love you; so this is not a condemnation of you or the great things that you are likely doing in your department. I see you as a changemaker. But contemplating your organization as a whole is like the first step of a 10-step program … to admit what friends and family were saying at the intervention.

If you’re not yet at the—what’s it called?—contemplative stage in your journey toward transformation, you could skip ahead to the 23:00 mark approximately for some advice on what people who work at incumbent payers and/or providers can do right now.

My one and only intent here is to see change happen. What I see currently are certainly efforts to improve quality at some level. But those responsible for finance, premiums, and the employer sales team are in a different part of the building. I mean, maybe a first step here is, Can you invite those guys and gals to your meetings?

OK … so, there was a paper that came out in JAMA entitled “The Dysfunctional Health Benefits Market and Implications for US Employers and Employees.” It was by David Scheinker, PhD; Arnold Milstein, MD; and Kevin Schulman, MD, who is my guest in this healthcare podcast. David Scheinker, by the way, was on the show earlier (EP363), so certainly go back and listen to that.

This paper (the “Dysfunctional Health Benefits Market” paper) showed that commercial insurance costs have gone up 4x the rate of other benchmark goods or services in price. So, bottom line, “It is assumed that insurers compete intensely to improve the value received by employers and employees by negotiating to keep prices down and advocating for employers and employees.” It turns out, though … not so much with that.

My guest in this healthcare podcast, as mentioned, is Kevin Schulman, MD, an author on that paper. And he says this much more eloquently than I will, but the skinny is this: Because insurer profits are capped at 15%, that means that the more healthcare costs go up, the more possible profit in absolute terms that a health insurance carrier can make. After all, 15% of a bigger number is … a bigger number.

If you look at how Wall Street responds to these bigger numbers all the way around—higher costs translating to higher profits, that whole thing—you will find that Wall Street likes this profit-generating formula … very much. Share prices go up when that 15% goes up.

What does Wall Street like less? It likes less restructuring and pushing providers to deliver better care for less cost and then passing those savings on to employers and employees. Even if you increase quality and decrease costs really well and/or profitably as an insurer, share prices do not rise nearly as much as they rise if you phone it in with the “negotiations” with providers.

Nonprofits, by the way, get no pass here either. Some of the most expensive hospitals in the country, which are nonprofit, are doing their thing in areas where nonprofit carriers are the big kahunas. Call it margins. Call it profits. Whatever … same thing. Listen to the show with David Muhlestein, PhD, JD (EP364) from two weeks ago. It’s all about the business models. And that business model is revenue maximization. Period. End of the sentence.

So, who loses in this equation? Oh, right … patients. And employers. Read anything by Dave Chase for more on how crushing this loss is that patients and employers suffer: middle-class wage stagnation, bankruptcies, financial toxicity that is actually clinical toxicity, skyrocketing premiums way over the cost of inflation, that healthcare costs borne by employers are a driver for offshoring because they make American labor so expensive. A study the other day said that nonadherence due to a patient’s inability to pay for treatment will be a leading cause of death in 2030. That’s what this all is adding up to.

Because of business models, insurers have become the piggy banks for health systems, as my guest Dr. Kevin Schulman says. This piggy bank is funded with the pennies, nickels, and dimes from you and me, the insured lives, our employers, and taxpayers. So, unless you’re a shareholder in one of these carriers and their vertically integrated PBMs, of course, then, I guess, good for you. Or getting political donations from them might also be a net plus for you personally. Where are the activist investors in all of this?

Something that Dr. Schulman said in this episode I had never heard before, and—wow!—it explains so much. It’s this whole idea of some, not all, but some health systems clamoring about how they have to charge commercial patients more because they are losing so much on their Medicare patients. They have to cost shift to commercial lives.

Here’s what Dr. Kevin Schulman said about that in my own words: Cost is a construct. Cost is a dynamic fiction. I mean, say I buy a mansion. I put in a Jacuzzi and a tropical flower bed that needs to be misted with water on the half-hour. Then I tell you that my fixed costs are really high and, therefore, my tuna sandwiches are really expensive. I just made them expensive. I made the decision to increase my costs.

The interesting backdrop for that is that in competitive marketplaces, or in Maryland, hospitals do just fine (thank you very much) getting paid Medicare rates. They don’t have to price shift. But in markets with no competition, where the hospitals decided to build, baby, build, they created these giant brick-and-mortar money pits that, yeah, cost a boatload. And then they complain that they have to price shift to employers and their own patients to pay for it all.

One thing that we don’t talk about in this episode are non–fee-based brokers and the role that they play in all of this. One recent lawsuit is a pretty perfect example of what I’m saying here.

You can learn more by visiting Dr. Schulman’s profile page and connect with him on LinkedIn. Kevin Schulman, MD, is a professor of medicine for the Clinical Excellence Research Center (CERC) at the Stanford University School of Medicine and, by courtesy, professor of operations, information, and technology at Stanford’s Graduate School of Business. He is the faculty director of Stanford’s new applied master degree program, the master of science in clinical informatics management program. His research focuses on broad, system challenges in the healthcare market, looking for ways to better understand hidden costs throughout the system. He then works to develop innovative solutions to deliver great care at lower cost.

07:13 Why have commercial insurers become price-takers?
10:04 How does a health plan get bigger profits?
10:40 “At the core at this, Wall Street rewards predictable performance; and the predictable performance … is great if healthcare costs go up.”
11:00 What does it mean to have a “dysfunctional equilibrium” in healthcare?
12:05 What’s really changed in healthcare in the last 20 years that’s caused this increase in healthcare pricing?
12:47 Commercial price versus Medicare: Do hospitals really need to cost shift?
15:51 How is value-based care really going to work?
17:43 “It’s not A or B; it’s a dysfunctional market.”
17:57 “Little changes in volume or incentives is not going to change the underlying dynamics.”
24:32 “I think it’s an open question whether this model is really serving the American public.”
29:25 “It’s a really important time for us to think about, how do we create a different trajectory?”

You can learn more by visiting Dr. Schulman’s profile page and connect with him on LinkedIn.

@kevin_schulman discusses #healthcarebenefits on our #healthcarepodcast. #healthcare #podcast #benefitsmarket

Why have commercial insurers become price-takers? @kevin_schulman discusses #healthcarebenefits on our #healthcarepodcast. #healthcare #podcast #benefitsmarket

How does a health plan get bigger profits? @kevin_schulman discusses #healthcarebenefits on our #healthcarepodcast. #healthcare #podcast #benefitsmarket

“At the core at this, Wall Street rewards predictable performance; and predictable performance … is great if healthcare costs go up.” @kevin_schulman discusses #healthcarebenefits on our #healthcarepodcast. #healthcare #podcast #benefitsmarket

What does it mean to have a “dysfunctional equilibrium” in healthcare? @kevin_schulman discusses #healthcarebenefits on our #healthcarepodcast. #healthcare #podcast #benefitsmarket

What’s really changed in healthcare in the last 20 years that’s caused this increase in healthcare pricing? @kevin_schulman discusses #healthcarebenefits on our #healthcarepodcast. #healthcare #podcast #benefitsmarket

Commercial price versus Medicare: Do hospitals really need to cost shift? @kevin_schulman discusses #healthcarebenefits on our #healthcarepodcast. #healthcare #podcast #benefitsmarket

How is value-based care really going to work? @kevin_schulman discusses #healthcarebenefits on our #healthcarepodcast. #healthcare #podcast #benefitsmarket

“It’s not A or B; it’s a dysfunctional market.” @kevin_schulman discusses #healthcarebenefits on our #healthcarepodcast. #healthcare #podcast #benefitsmarket

“Little changes in volume or incentives is not going to change the underlying dynamics.” @kevin_schulman discusses #healthcarebenefits on our #healthcarepodcast. #healthcare #podcast #benefitsmarket

“I think it’s an open question whether this model is really serving the American public.” @kevin_schulman discusses #healthcarebenefits on our #healthcarepodcast. #healthcare #podcast #benefitsmarket

“It’s a really important time for us to think about, how do we create a different trajectory?” @kevin_schulman discusses #healthcarebenefits on our #healthcarepodcast. #healthcare #podcast #benefitsmarket

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Scott Haas, David Muhlestein, David Scheinker, Ali Ucar, Dr Carly Eckert, Jeb Dunkelberger (EP360), Dan O’Neill, Dr Wayne Jenkins, Liliana Petrova, Ge Bai, Nikhil Krishnan, Shawn Rhodes, Pramod John (EP353), Pramod John (EP352), Dr Eric Bricker, Katy Talento, Stacey Richter (INBW33), Stacey Richter (INBW32), Dr Steve Schutzer (Encore! EP294), Lisa Trumble, Jeb Dunkelberger, Dr Ian Tong, Mike Schneider, Peter Hayes, Paul Simms, Dr Steven Quimby, Dr David Carmouche (EP343), Christin Deacon

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One of my mentors often said price is irrelevant. He said he would sell anything for any price as long as he could define the terms of the deal. During this conversation today with Scott Haas about PBMs, that quote was playing in my head like an earworm.

If you didn’t understand what I just said, no worries. I’m gonna explain it right now. If you did and you know the why behind all of this also, you could probably skip ahead about five minutes.

Here’s the backstory on this whole rebate fandango. Let’s start with part one of what is a two-part transaction.

OK … so, say Pharma gives $100 back to the PBM based on the terms of their deal. Call that part one of this example transaction.

Now it is a tangled web we weave here, and for more on why I say that, listen to the episode with Chris Sloan (Encore! EP216) entitled “How Medicare Part D Plans Became Addicted to Drug Rebates.” There’s also a show with Pramod John (EP353) where we dig into, specifically, specialty drugs and rebating and so-called rebate walls.

But net net, all of this probably myopic focus on rebates means that you have to keep an eagle eye out for so-called exclusions in contracts if you are a plan sponsor. So, what are exclusions?

Whoever gets to define the terms ultimately controls the price. So, get the price up front.

You can learn more at usi.com or by emailing Scott at scott.haas@usi.com. Scott Haas has over 38 years of employee benefits experience. His background includes the development and validation of care management programs; prescription benefit management solutions; provider network evaluation, valuation, and negotiation; and underwriting.

10:29 What’s the major flaw with the buyer-seller relationship between plan sponsors and PBMs?
12:04 What are the five things that need to be considered in order to get a fair price from a PBM?
13:16 Why does using average wholesale price cause problems for plan sponsors?
15:05 What does it mean to put the network risk on the PBM?
17:10 What’s happening with drugs moving from specialty brand to specialty generic?
19:14 “A generic is a generic; in our world, it’s binary.”
23:31 “The term 100% of rebates is really irrelevant.”
23:54 What does it mean to have a minimum guarantee in drug rebates?
26:39 “When you do a line-item assessment … is it producing an optimal result in comparison to competitively achieved … pricing for generics … and for specialty?”
27:52 “Plan sponsors need to grow a backbone.”
28:36 EP342 with Christin Deacon.29:05 Why do you need to understand your consultant’s process as a plan sponsor?
29:30 Why do you need to understand formulary exclusions as a plan sponsor?
29:41 Why is it important to create a more equal PBM contract?
30:52 “Rebates inure to the benefit of the plan sponsor; they don’t necessarily benefit the consumer.”
31:45 What does Scott do at USI?

You can learn more at usi.com or by emailing Scott at scott.haas@usi.com.

Scott Haas of @USIIns discusses #PBMs and #drugrebates on our #healthcarepodcast. #healthcare #podcast

What’s the major flaw with the buyer-seller relationship between plan sponsors and PBMs? Scott Haas of @USIIns discusses #PBMs and #drugrebates on our #healthcarepodcast. #healthcare #podcast

What are the five things that need to be considered in order to get a fair price from a PBM? Scott Haas of @USIIns discusses #PBMs and #drugrebates on our #healthcarepodcast. #healthcare #podcast

Why does using average wholesale price cause problems for plan sponsors? Scott Haas of @USIIns discusses #PBMs and #drugrebates on our #healthcarepodcast. #healthcare #podcast

What does it mean to put the network risk on the PBM? Scott Haas of @USIIns discusses #PBMs and #drugrebates on our #healthcarepodcast. #healthcare #podcast

What’s happening with drugs moving from specialty brand to specialty generic? Scott Haas of @USIIns discusses #PBMs and #drugrebates on our #healthcarepodcast. #healthcare #podcast

“A generic is a generic; in our world, it’s binary.” Scott Haas of @USIIns discusses #PBMs and #drugrebates on our #healthcarepodcast. #healthcare #podcast

“The term 100% of rebates is really irrelevant.” Scott Haas of @USIIns discusses #PBMs and #drugrebates on our #healthcarepodcast. #healthcare #podcast

What does it mean to have a minimum guarantee in drug rebates? Scott Haas of @USIIns discusses #PBMs and #drugrebates on our #healthcarepodcast. #healthcare #podcast

“When you do a line-item assessment … is it producing an optimal result in comparison to competitively achieved … pricing for generics … and for specialty?” Scott Haas of @USIIns discusses #PBMs and #drugrebates on our #healthcarepodcast. #healthcare #podcast

“Plan sponsors need to grow a backbone.” Scott Haas of @USIIns discusses #PBMs and #drugrebates on our #healthcarepodcast. #healthcare #podcast

Why do you need to understand your consultant’s process as a plan sponsor? Scott Haas of @USIIns discusses #PBMs and #drugrebates on our #healthcarepodcast. #healthcare #podcast

Why do you need to understand formulary exclusions as a plan sponsor? Scott Haas of @USIIns discusses #PBMs and #drugrebates on our #healthcarepodcast. #healthcare #podcast

Why is it important to create a more equal PBM contract? Scott Haas of @USIIns discusses #PBMs and #drugrebates on our #healthcarepodcast. #healthcare #podcast

“Rebates inure to the benefit of the plan sponsor; they don’t necessarily benefit the consumer.” Scott Haas of @USIIns discusses #PBMs and #drugrebates on our #healthcarepodcast. #healthcare #podcast

Recent past interviews:

Click a guest’s name for their latest RHV episode!

David Muhlestein, David Scheinker, Ali Ucar, Dr Carly Eckert, Jeb Dunkelberger (EP360), Dan O’Neill, Dr Wayne Jenkins, Liliana Petrova, Ge Bai, Nikhil Krishnan, Shawn Rhodes, Pramod John (EP353), Pramod John (EP352), Dr Eric Bricker, Katy Talento, Stacey Richter (INBW33), Stacey Richter (INBW32), Dr Steve Schutzer (Encore! EP294), Lisa Trumble, Jeb Dunkelberger, Dr Ian Tong, Mike Schneider, Peter Hayes, Paul Simms, Dr Steven Quimby, Dr David Carmouche (EP343), Christin Deacon, Gary Campbell

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In this healthcare podcast, we’re gonna zoom out and look at the entire healthcare industry. I am very confident that you know a lot about the healthcare industry and its basic stats. It’s huge. The healthcare industry is approaching the $4 trillion mark, and it employs more people than any other industry in 47 states. Think about that momentarily. More people work in healthcare than in any other industry in every state except for Wisconsin, Indiana, and Nevada.

We could get into (but we won’t) how many of the gigantic, consolidated incumbents in the healthcare industry are either for-profits sporting very happy shareholders or investors. Then, of course, we have our “nonprofits”—especially mega-nonprofit health systems—who enjoy some pretty healthy margins while, at the same time, these health systems in general offer up some fairly embarrassing levels of charity care considering the amount of taxes they deprive their communities of.

You also are probably eminently familiar with various ways that have been cited to transform the industry. So, the usual suspects here are, of course, changing incentives—offering true value-based care contracts, for example—and then the whole creative destruction angle, wherein upstarts come in with far superior products and services, à la the whole Kodak case study or what happened to Sears and Kmart. Maybe this will happen in healthcare. Other ideas to transform the healthcare industry include employers harnessing the latent power that they have in some markets and then, of course, getting rid of middle people, for sure. Or we could go single payer, of course. That’s another suggestion/solution.

Today’s conversation is a rather holistic look at all of this. I dig into this with David Muhlestein, who is chief research and innovation officer at Health Management Association (HMA). And when I say dig in, I mean dig in. David made some very intriguing points that I had not heard before, actually—and I’ve heard a lot in my time, so that’s saying something. I’m gonna tick off a couple of them, but I don’t do them justice. So, you’ll need to listen to David explain them and give context.

First off, what’s the problem with healthcare being a $4 trillion industry in this country—I mean, almost 20% of GDP—and employing more people than any other industry in 47 of our 50 states? There are other big sectors in our economy, after all, that get lots of love. Why is big healthcare “bad” and these other sectors “good” in economic terms when we talk about employment?

That’s one thing I wanted to know. And David made a point that may be self-evident for some but is worth reiterating in all cases. The government pays for roughly half of healthcare, and from a consumer or just American standpoint, it kind of sucks. I mean, I don’t see many Insta selfies of someone rocking their brand-new insurance premium. Dollars going to healthcare or health insurance are not going to consumer goods. And that matters economically as well as retail therapy. For all you econ geeks out there, this industry offers no marginal utility.

Here’s a second interesting point: Just changing incentives might not be enough. Organizations downstream and upstream need to be on board with the spirit and objective of the incentive change. If they are not, then it’s game on for every CFO and their revenue cycle managers to finagle how to find the loophole that enables revenue maximization. Revenue maximization. Period. Revenue. The end.

Which brings me to another interesting point: Boards of directors, CEOs, people with fiduciary responsibility … they need to know thyself and consider their actual customer.

Spoiler alert: 99% of the time, that actual customer is not patients, no matter what is printed in big letters on the front door.

No change can really happen unless those who serve in the upper echelons of these businesses get really real about where their bread is buttered. Organizations are built to serve their customer, after all. So, if a patient isn’t identified as a customer, the organization at its very core is gonna have a lot of difficulty serving the patient.

So, now what? If I want my organization to move forward in a way that is more patient-centric and less financially toxic, say, what to do? Here’s thoughts after chatting with David Muhlestein. Four main steps:

As I just said, you gotta get your current state unemotionally understood. For reals, who is the organization built to serve? So, first step is being introspective in the harsh light of day.
Consider the timeline of your existential demise. Ha ha, this show is so uplifting. But unless organizations really think out 5 years, 10 years, 25 years and really internalize the existential threat, it’s going to be hard to motivate change. I see this all the time. So do you. Inertia is real. Nobody does anything until they absolutely have to.
- Sidebar: But if you need an eventual demise to bring up at your next strategy meeting, I just saw a paper come out saying that by 2030, cost-related nonadherence could become a leading cause of death in the United States, surpassing diabetes, influenza, pneumonia, and kidney disease. This is as per a study by the nonprofit West Health Policy Center and Xcenda. Nonadherence … what does that mean? It means the patient is not doing their treatment. They are not going to the doctor or getting medical care or not taking their drugs. Meaning no one is making money off of all of those patients, especially when they’re dead. This is where the rubber meets all of those excess profits everybody is reaping in the short term. I hope that was helpful for anybody trying to motivate change today.
Consider what legacy we want to leave behind. Do we all want to wait until we’re forced to change to do so? Is this the healthcare system we want to leave behind to children and grandchildren? I mean, anybody who’s got a loved one in the hospital with anything complex, fighting for their own patient records, on the phone for hours a day with insurance carriers while care is delayed with possibly devastating consequences, the family having to coordinate care and cross their fingers and pray they don’t get a ridiculous bill for services that may or may not have been rendered and then use retirement savings to pay for them … if anyone is not looking to be a party to all of this, then let’s think about our strategy moving forward and how it will change to meet the future we want to see.
On to the evolve and change approaches: How exactly do you think about doing that? According to David Muhlestein, you can repair your current organization or remodel or rebuild.

It sounds daunting, but as Dr. Eric Bricker said on our recent interview together (EP351) and as others have said as well, this is already happening in some regions across the country. There are pockets with real transformation. These changes are on the edges right now, but they’re showing that this can and is possible.

You can learn more at healthmanagement.com. David Muhlestein, PhD, JD, is chief research and innovation officer for Health Management Associates (HMA). He is responsible for the firm’s self-directed research and supports strategic planning and innovation.

David joined HMA via its acquisition of Leavitt Partners in 2021, where he was the chief strategy and chief research officer.

David earned his PhD in health services management and policy, JD, MHA, and MS from The Ohio State University and a BA from Brigham Young University.

07:38 Is it an issue for the healthcare industry that it is one of the largest employers in the country?
08:42 “I think that we need to figure out what is an appropriate amount to spend on healthcare and get to that level.”
09:01 How do we not decrease the amount of healthcare we’re receiving while paying less for that healthcare?
10:11 What are the two ways we can look at decreasing healthcare spend?
15:39 “I think that a regional approach may happen.”
16:56 “When somebody takes less, others are going to follow them.”
17:33 Who is really paying in our current healthcare system?
19:47 “Any sort of a model that you start with influences everything else that you do.”
20:09 What’s the common challenge David Muhlestein sees in value-based care systems?
23:21 “There are countless things that you can do to improve the current system today.”
27:25 What are the three options for building up better healthcare?
28:19 David’s advice for healthcare executives.
33:22 “To really lower the total cost of … healthcare, it’s a 30-year process.”

You can learn more at healthmanagement.com.

@DavidMuhlestein discusses #healthcaretransformation on our #healthcarepodcast. #healthcare #podcast #digitalhealth

Is it an issue for the healthcare industry that it is one of the largest employers in the country? @DavidMuhlestein discusses #healthcaretransformation on our #healthcarepodcast. #healthcare #podcast #digitalhealth

“I think that we need to figure out what is an appropriate amount to spend on healthcare and get to that level.” @DavidMuhlestein discusses #healthcaretransformation on our #healthcarepodcast. #healthcare #podcast #digitalhealth

How do we not decrease the amount of healthcare we’re receiving while paying less for that healthcare? @DavidMuhlestein discusses #healthcaretransformation on our #healthcarepodcast. #healthcare #podcast #digitalhealth

What are the two ways we can look at decreasing healthcare spend? @DavidMuhlestein discusses #healthcaretransformation on our #healthcarepodcast. #healthcare #podcast #digitalhealth

“I think that a regional approach may happen.” @DavidMuhlestein discusses #healthcaretransformation on our #healthcarepodcast. #healthcare #podcast #digitalhealth

“When somebody takes less, others are going to follow them.” @DavidMuhlestein discusses #healthcaretransformation on our #healthcarepodcast. #healthcare #podcast #digitalhealth

Who is really paying in our current healthcare system? @DavidMuhlestein discusses #healthcaretransformation on our #healthcarepodcast. #healthcare #podcast #digitalhealth

“Any sort of a model that you start with influences everything else that you do.” @DavidMuhlestein discusses #healthcaretransformation on our #healthcarepodcast. #healthcare #podcast #digitalhealth

What’s the common challenge David Muhlestein sees in value-based care systems? @DavidMuhlestein discusses #healthcaretransformation on our #healthcarepodcast. #healthcare #podcast #digitalhealth

“There are countless things that you can do to improve the current system today.” @DavidMuhlestein discusses #healthcaretransformation on our #healthcarepodcast. #healthcare #podcast #digitalhealth

“To really lower the total cost of … healthcare, it’s a 30-year process.” @DavidMuhlestein discusses #healthcaretransformation on our #healthcarepodcast. #healthcare #podcast #digitalhealth

Recent past interviews:

Click a guest’s name for their latest RHV episode!

David Scheinker, Ali Ucar, Dr Carly Eckert, Jeb Dunkelberger (EP360), Dan O’Neill, Dr Wayne Jenkins, Liliana Petrova, Ge Bai, Nikhil Krishnan, Shawn Rhodes, Pramod John (EP353), Pramod John (EP352), Dr Eric Bricker, Katy Talento, Stacey Richter (INBW33), Stacey Richter (INBW32), Dr Steve Schutzer (Encore! EP294), Lisa Trumble, Jeb Dunkelberger, Dr Ian Tong, Mike Schneider, Peter Hayes, Paul Simms, Dr Steven Quimby, Dr David Carmouche (EP343), Christin Deacon, Gary Campbell, Kristin Begley

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Administrative costs in the United States have a bad rap. You don’t have to look too far to find an article about how there’s now, like, 10 administrators for every 1 physician in this country. Or 3 to 4 billing people for every physician. Or find someone complaining about arduous prior auth processes and how long specialists sit on phones trying to get a prior auth approved while having a frustrating “peer consult” with a “peer” whose career has nothing to do with that specialty and, in fact, knows very little about it.

Also consider the time that specialists’ admin teams have to spend—or really any doctor’s admin teams have to spend—when they are required to send documentation validating some prior auth request or appeal. They, in many cases, have to send this documentation via old-school, drop-it-in-a-mailbox mail … literally. This documentation can and often does amount to a sizable box full of paper patient records. They have to drag a box into their office and fill it up with paper to send to the insurance company to validate whatever appeal. Think about who prints out all that paper. Who does all this stuff? And who on the insurance side is unboxing it all and, I don’t know, are they highlighting the good parts? Are they rekeying anything? What goes on there?

Or here’s another administrative cost: collecting and tabulating all the data needed to participate in some quality incentive program. Considering that each carrier has their own flavor of metrics … yeah again. Administrative burden, administrative costs.

Or consider what Dan O’Neill was talking about in EP359 the other day. He was talking about IPAs (independent physician associations) and other managed care entities. These entities hold the contracts with payers on behalf of smaller provider organizations or solo practitioners. So, these smaller (usually) individual practices contract with the IPAs—you know, for leverage and all that. And then it’s the IPA who then holds the contract with the payer. As Dan mentions, contracting with some of these IPAs is like an “I love 1990” flashback. The contracting process, again, transpires via mail. Not email, mind you. Mail. Like, stick-a-stamp-on-the-envelope mail.

So, in sum, there’s a lot of pretty well-founded complaining about administrative costs in this country. A lot of this administrative stuff is truly inefficient and a fantastical waste of time—valuable clinician time. So, here we are freaking out about staffing shortages, overlooking that doctors at the heights of their careers are spending some percentage of their time not counseling, treating, or diagnosing patients but twiddling their thumbs on hold with one insurance company or another slowly burning out by the inefficiency of it all. Or doing pajama time, and we all know that too much pajama time means also burnout on a silver platter.

Now consider this: Reducing admin costs are frequently cited as a fine way to reduce overall healthcare spending in this country. So then, let’s get granular here. If we’re trying to quantify admin costs, how you’d do that is to quantify how much each transaction costs. How much does it cost to send a bill and get paid for it? How much does it cost to file an appeal and a denial of a prior auth? Add all those transactions together and you get the full cost of the administrative burden.

In this healthcare podcast, we’re digging into a paper about admin costs written by David Scheinker, PhD (my guest today); Barak Richman, JD, PhD; Arnold Milstein, MD, MPH; and Kevin Schulman, MD, MBA.

I have the pleasure of speaking with David Scheinker, PhD (as I mentioned), who is the lead author on this paper. Dr. Scheinker is an associate professor of pediatrics and executive director of systems design and collaborative research at the Stanford Lucile Packard Children’s Hospital. He is the founder and director of SURF Stanford Medicine at Stanford. David Scheinker’s work centers around bringing together engineering PhD students and faculty with hospital administrators, leaders, doctors, nurses. The goal here is to design improvements to operations from an industrial engineering point of view. So, you can see how investigating administrative burden and costs and trying to reduce them fits in here.

Before we begin, I just want to point out one thing: I alluded to this earlier when I mentioned staffing shortages. As reported by Gist a few weeks ago, health systems saw an 8% increase in labor costs per patient day; and many are budgeting for a negative operating margin. In the past, most administrative challenges were solved by throwing bodies at the problem. That is now untenable. This is one promise of technology. Tech can automate, replicate, and scale much of what has required human labor in the past. Tech is used to automate administrative functions in many other industries also, so there’s a number of precedents for this.

Now, just to underline a major takeaway from this conversation with Dr. David Scheinker, he reiterates a recommendation to eliminate a big proportion of administrative costs.

You can learn more by connecting with David on LinkedIn and following him on Twitter. David Scheinker, PhD, started his career as a research mathematician and switched to healthcare operations to work on an interdisciplinary team and have a more immediate impact. He is a clinical associate professor of pediatrics, the executive director of systems design and collaborative research at the Stanford Lucile Packard Children’s Hospital, and a member of the Clinical Excellence Research Center (CERC) at Stanford University. He founded and directs SURF Stanford Medicine, which brings together students and faculty from the university with physicians, nurses, and administrators from the hospitals. He studies clinical care delivery, hospital operations, sensor-based and algorithm-enabled telemedicine, the socioeconomic factors that shape healthcare, and policy.

07:23 What’s the quantitative administrative cost in an average transaction?
07:49 What’s the quantitative administrative cost in a healthcare transaction?
08:43 What does the healthcare billing and administration cost add to the US’s overall healthcare spend?
09:38 Is it possible to cut billing and administrative costs in healthcare?
11:01 “In some ways, the problem for healthcare should be simpler.”
12:14 What does the complexity of the current system look like in a doctor’s office?
15:26 How did David go about studying healthcare administrative costs?
18:17 “It doesn’t have to be simple; it should be standardized.”
21:41 What would be the pushback on standardizing contracts in healthcare?
22:35 Why is it possible to gain more value by losing customization in contracts?
24:11 “Never let a good crisis go to waste.”
24:33 “It’s much easier in healthcare to build something new than to change something that exists.”
27:39 What benefits does telemedicine have to cutting administrative costs?
29:09 What is another significant benefit of using standardized contracts?
30:17 Why haven’t standardized contracts become a common thing in the current healthcare system?

You can learn more by connecting with David on LinkedIn and following him on Twitter.

@David_Scheinker of @SURFStanfordMed discusses administrative burden on our #healthcarepodcast. #healthcare #podcast #healthcarecosts

What’s the quantitative administrative cost in an average transaction? @David_Scheinker of @SURFStanfordMed discusses administrative burden on our #healthcarepodcast. #healthcare #podcast #healthcarecosts

What’s the quantitative administrative cost in a healthcare transaction? @David_Scheinker of @SURFStanfordMed discusses administrative burden on our #healthcarepodcast. #healthcare #podcast #healthcarecosts

What does the healthcare billing and administration cost add to the US’s overall healthcare spend? @David_Scheinker of @SURFStanfordMed discusses administrative burden on our #healthcarepodcast. #healthcare #podcast #healthcarecosts

Is it possible to cut billing and administrative costs in healthcare? @David_Scheinker of @SURFStanfordMed discusses administrative burden on our #healthcarepodcast. #healthcare #podcast #healthcarecosts

“In some ways, the problem for healthcare should be simpler.” @David_Scheinker of @SURFStanfordMed discusses administrative burden on our #healthcarepodcast. #healthcare #podcast #healthcarecosts

What does the complexity of the current system look like in a doctor’s office? @David_Scheinker of @SURFStanfordMed discusses administrative burden on our #healthcarepodcast. #healthcare #podcast #healthcarecosts

How did David go about studying healthcare administrative costs? @David_Scheinker of @SURFStanfordMed discusses administrative burden on our #healthcarepodcast. #healthcare #podcast #healthcarecosts

“It doesn’t have to be simple; it should be standardized.” @David_Scheinker of @SURFStanfordMed discusses administrative burden on our #healthcarepodcast. #healthcare #podcast #healthcarecosts

What would be the pushback on standardizing contracts in healthcare? @David_Scheinker of @SURFStanfordMed discusses administrative burden on our #healthcarepodcast. #healthcare #podcast #healthcarecosts

Why is it possible to gain more value by losing customization in contracts? @David_Scheinker of @SURFStanfordMed discusses administrative burden on our #healthcarepodcast. #healthcare #podcast #healthcarecosts

“Never let a good crisis go to waste.” @David_Scheinker of @SURFStanfordMed discusses administrative burden on our #healthcarepodcast. #healthcare #podcast #healthcarecosts

“It’s much easier in healthcare to build something new than to change something that exists.” @David_Scheinker of @SURFStanfordMed discusses administrative burden on our #healthcarepodcast. #healthcare #podcast #healthcarecosts

What benefits does telemedicine have to cutting administrative cost? @David_Scheinker of @SURFStanfordMed discusses administrative burden on our #healthcarepodcast. #healthcare #podcast #healthcarecosts

What is another significant benefit of using standardized contracts? @David_Scheinker of @SURFStanfordMed discusses administrative burden on our #healthcarepodcast. #healthcare #podcast #healthcarecosts

Why haven’t standardized contracts become a common thing in the current healthcare system? @David_Scheinker of @SURFStanfordMed discusses administrative burden on our #healthcarepodcast. #healthcare #podcast #healthcarecosts

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Ali Ucar, Dr Carly Eckert, Jeb Dunkelberger (EP360), Dan O’Neill, Dr Wayne Jenkins, Liliana Petrova, Ge Bai, Nikhil Krishnan, Shawn Rhodes, Pramod John (EP353), Pramod John (EP352), Dr Eric Bricker, Katy Talento, Stacey Richter (INBW33), Stacey Richter (INBW32), Dr Steve Schutzer (Encore! EP294), Lisa Trumble, Jeb Dunkelberger, Dr Ian Tong, Mike Schneider, Peter Hayes, Paul Simms, Dr Steven Quimby, Dr David Carmouche (EP343), Christin Deacon, Gary Campbell, Kristin Begley, David Contorno (AEE17)

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Let’s talk about provider organizations and telehealth. It’s just too common a refrain amongst provider organizations who say some combination of:

Our patients and/or clinicians don’t like telehealth.
Telehealth is too expensive for us to do ... unless maybe we should charge facility fees for telehealth visits.
Telehealth is risky to invest in because as soon as payers start paying less than 65% of in-person visits, we’re gonna drop it anyway.

These things are said despite the overwhelming popularity of telehealth in almost any large-scale survey that you’ll find. It seems like largely the only entities reporting that patients and clinicians don’t like telehealth are provider organizations who haven’t adequately invested in telehealth at the systematic/strategic level. Therefore, the only thing their anecdotal evidence about telehealth really seems to show is the negative impact of phoning it in—which is no one wanting to phone in (pun unintentional but, you have to admit, kind of great).

All of this is going on with an interesting backdrop, as reported by Chartis Group (and shared by Olivia Webb in her Substack the other day): Health systems see telehealth as a major competitor—82% of health systems surveyed reported that telehealth companies like Teladoc or Amwell are competitors. This is second only to the percentage of surveyed health systems that named other health systems as competitors.

John Singer wrote on Twitter the other day, “Any leader who thinks their business is immune to the wild dynamism of our time is unlikely to last long.”

So apropos. Love it.

I said this on a podcast last December (and you can go back and check the tape if you want to), and I’m even more convinced of it right now: Telehealth is inexorable, and it’s already showing its disruptive potential. But let me point out something here. Who is leaning in hard to telehealth? I’m gonna make a broad-stroke statement here—so take it for what it’s worth—but let me hypothesize that who is leaning in hard to telehealth and virtual healthcare are telehealth and virtual healthcare companies. Many of them are adding in-person care because billing codes, but their DNA is digital. So, most of the so-called “hybrid” companies out there are digital companies with in-person clinics that they’ve added—not ye old in-person clinic that added a digital service line.

So, I say all this to say I wanted to talk to a traditional sort of provider organization. I wanted to talk to an in-person provider organization who is conceiving of telehealth not as a threat but as a new opportunity to provide ancillary services. One who is going “hybrid” but from the other direction—traditional in-person to digital instead of digital to in-person.

Further, I wanted to talk to the CFO of one of these places. I thought the CFO would be the one to get the real scoop from because it’s all about the business model, baby.

Let me underline the business model point with a quote from a Substack entitled “I wasted $40k on a fantastic startup idea.” And here’s the quote: “It had been … a working assumption of mine ... that if you could improve the health of … patients then, you know, [someone] would pay for that.”

Yeah. No, they won’t. Unless … business model.

My guest in this healthcare podcast, Ali Ucar, is the CFO of Care Solutions Group. They provide mobile physician services to seniors. As they expanded their mobile physician service, they also looked at additional ancillary opportunities. Those ancillary opportunities all involve telehealth.

Right now, Ali Ucar’s company is running two telehealth programs. One of them is basically tele-urgent care. The second one is using telehealth for care transitions including some care coordination. They transition patients back to the home care setting as safely as possible. Let me say that again in business model speak: Discharged patients don’t wind up in the ER and/or readmitted within 30 days.

So, let’s hear about telehealth from the vantage point of a CFO. How do organizations who realize that telehealth is essential for future viability, how do they make it financially viable today?

Ali Ucar listed out a stepwise approach to creating a sustainable business model that takes advantage of telehealth. Here’s the first thing: Figure out what you’re trying to do on behalf of patients … please. For example, what opportunities are you trying to give your team or customers to improve patient care or equity in care? That’s where it really should start.

The next step, then, is figuring out how you’re gonna get paid sustainably. There are two pieces to that.

Maybe you can get paid directly, if at all possible. The most common way to do this, which is also the one I like the least because it echoes with the ghosts of paying for volume, is the whole “get yourself a code and bill FFS” for your activities.
Maybe there’s a value-based or risk-based contract that you can get where you’re taking care of a patient population at a certain stage in their care journey. Good luck with that, and I say this as a finger wag to plan sponsors/employers/carriers who, only in a slim majority of cases, offer a way for providers to get paid for the value they create. Please do better.

OK … moving along in our ways to get paid list besides trying to figure out how to get paid directly vis-à-vis FFS or in some kind of risk-based way, another thing that you can do is to ascertain how another stakeholder in the care continuum is going to directly benefit from what you’re doing. Make them your customer and then bill them.

You can figure out the quality programs that they’re a part of and how much revenue is at stake, then take a piece of that.
Maybe you can charge them to do something because they could get direct reimbursement for what you’re doing, and then you take a piece of that.

There’s a second part to the business model here besides the revenue generation part, and oddly, despite its apparent, I don’t know, seeming straightforwardness, it’s so often relegated to the world of the afterthought.

After constructing the revenue side of the business model, you gotta get operational and figure out how you’re going to switch up your workflows and your processes and your roles and responsibilities, your strategy or infrastructure ... ascertain how you’re doing business has to change to accommodate the new service offerings.

Listen to the shows with Liliana Petrova (EP357) and Christian Milaster (EP320) for many examples of healthcare businesses kind of weirdly disregarding this last part here. If I had to pick one predominant reason why, first of all, telehealth at some provider organizations is getting a bad rap but also why doctors are suffering under the weight of their administrative burden (and other clinicians as well, of course), it’s this, right here. If leadership in an organization doesn’t stop and pick apart their operational model when their revenue model changes, you get a suboptimal and misaligned operational model. I feel like there’s three shelves of books on this topic in most public libraries, so I won’t belabor it here.

You can learn more at caresolutionsusa.com or by emailing Ali at ali@caresolutionsusa.com. Ali Ucar is CFO of Care Solutions Group with a diverse background in finance, operations, and strategic planning. Ali has been instrumental in designing and implementing programs targeted at reducing costs to insurance companies, hospitals, and nursing homes.

Ali played the lead role in the acquisition and integration of a distressed, near-bankrupt mobile physician practice in 2015. The integration included implementation of operating and restructuring initiatives to improve competitive positioning and financial performance.

As part of the mobile clinician service and to improve access to care while minimizing the financial impact of the pandemic, Ali launched the statewide telehealth program in 2020.

Additionally, to address the needs of a chronically ill and high-risk patient population, Ali has assisted in the launch of the Transitional and Chronic Care Management Programs to assist families and patients with the required coordination of care in the home. Providing this connectivity to a dedicated, single-contact point provided through a registered nurse has been a major factor in reducing hospitalizations, readmissions, and emergency room visits.

Ali also has secured contracts with commercial insurance companies for implementation of Chronic Care Management programs as well as program outreach initiatives targeted at engaging and communicating with moderate- to high-risk members.

His work also includes project management expertise gained while leading projects with a chain of skilled nursing facilities targeted at managing the needs of discharged patients and for projects initiated by Blue Cross Blue Shield, Ford Motor Company, and multiple start-ups.

The development and expansion of Care Solutions Group’s comprehensive medical management programs traverse across multiple healthcare systems and settings that include private homes, group homes, independent living communities, assisted living, and skilled nursing facilities.

07:45 How do Care Solutions’ telehealth programs do payments?
08:57 EP320 with Christian Milaster and EP357 with Liliana Petrova.09:33 “As you go deeper into it, you’re coupling that telehealth with transitional care, chronic care; you can also address … health equity issues in … areas which may be difficult to reach.”
10:02 As a CFO, how is Ali Ucar involved in the telehealth strategy development?
11:26 How have Care Solutions’ telehealth programs become sustainable?
13:02 Why would it make financial sense for Care Solutions to continue their telehealth programs?
15:13 EP354 with Shawn Rhodes.18:55 How does the work that Care Solutions’ telehealth programs do benefit customers?
21:50 Does Care Solutions have a proactive strategy to building out their telehealth programs?
24:34 How do Care Solutions’ telehealth programs add value to provider organizations?
26:33 “It’s basically refining your practice. That’s the way I look at it.”
27:58 How does Ali Ucar, as a CFO, evaluate the success of his telehealth programs?
30:09 “I think the most frustrating thing from a patient standpoint may be if they don’t have those needs addressed quickly.”

You can learn more at caresolutionsusa.com or by emailing Ali at ali@caresolutionsusa.com.

Ali Ucar of Care Solutions discusses #hybridbusinessmodels on our #healthcarepodcast. #healthcare #podcast #digitalhealth

How do Care Solutions’ #telehealth programs do payments? Ali Ucar of Care Solutions discusses #hybridbusinessmodels on our #healthcarepodcast. #healthcare #podcast #digitalhealth

“As you go deeper into it, you’re coupling that telehealth with transitional care, chronic care; you can also address … health equity issues in … areas which may be difficult to reach.” Ali Ucar of Care Solutions discusses #hybridbusinessmodels on our #healthcarepodcast. #healthcare #podcast #digitalhealth

As a CFO, how is Ali Ucar involved in the telehealth strategy development? Ali Ucar of Care Solutions discusses #hybridbusinessmodels on our #healthcarepodcast. #healthcare #podcast #digitalhealth

How have Care Solutions’ telehealth programs become sustainable? Ali Ucar of Care Solutions discusses #hybridbusinessmodels on our #healthcarepodcast. #healthcare #podcast #digitalhealth

Why would it make financial sense for Care Solutions to continue their telehealth programs? Ali Ucar of Care Solutions discusses #hybridbusinessmodels on our #healthcarepodcast. #healthcare #podcast #digitalhealth

How does the work that Care Solutions’ telehealth programs do benefit customers? Ali Ucar of Care Solutions discusses #hybridbusinessmodels on our #healthcarepodcast. #healthcare #podcast #digitalhealth

Does Care Solutions have a proactive strategy to building out their telehealth programs? Ali Ucar of Care Solutions discusses #hybridbusinessmodels on our #healthcarepodcast. #healthcare #podcast #digitalhealth

How do Care Solutions’ telehealth programs add value to provider organizations? Ali Ucar of Care Solutions discusses #hybridbusinessmodels on our #healthcarepodcast. #healthcare #podcast #digitalhealth

“It’s basically refining your practice. That’s the way I look at it.” Ali Ucar of Care Solutions discusses #hybridbusinessmodels on our #healthcarepodcast. #healthcare #podcast #digitalhealth

How does Ali Ucar, as a CFO, evaluate the success of his telehealth programs? Ali Ucar of Care Solutions discusses #hybridbusinessmodels on our #healthcarepodcast. #healthcare #podcast #digitalhealth

“I think the most frustrating thing from a patient standpoint may be if they don’t have those needs addressed quickly.” Ali Ucar of Care Solutions discusses #hybridbusinessmodels on our #healthcarepodcast. #healthcare #podcast #digitalhealth

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David Contorno the other day posted the life expectancy chart comparing the US to comparable countries. Spoiler alert: It’s horrifying.

You see Japan; you see Switzerland, Israel, Spain, Italy … basically everybody else in a cluster of pretty darn vertical lines: increasing life expectancies year over year without much cost increase at all. And then—wow!—off to the right, all by itself, you see the USA, costing nearly double the worst of the other countries with a life expectancy that is years lower. We pay a whole lot, and despite all of the advances in medicine and how much we pay, we don’t seem to be getting the value for our dollar.

We could dig into those poor outcomes that we pay for. If we were going to, I might mention our truly beyond-upsetting maternal mortality rates and also infant mortality rates, which are way above other comparable countries. We could talk about all of our issues with diabetes and obesity. But let’s save all that for another day and just take one example that is really the quintessential example of what’s going on. Let’s chat about heart failure for just a sec. Here’s some stats for you. They come from Dr. William Bestermann’s Substack newsletter, and if you don’t subscribe to it, you might want to. It’s free.

Dr. Bestermann wrote: “Twenty-two percent of heart failure patients who are admitted to the hospital are dead within a year. Patients with [heart failure] generate a third of Medicare spending and 40% of Medicare fee-for-service deaths. Overall, heart failure patients have a mortality of 22%, compared [to] 4% for Medicare patients without heart failure. They are responsible for 55% of Medicare readmissions.”

But here’s some good news: In Denmark, investigators proved that using optimal medical therapy reduced heart failure admissions by 70% compared with usual care.

Here’s some more good news: There was a small, impoverished town near the coast of the Carolinas that had very few heart failure admissions. How did they accomplish that, you might wonder? Well, there was a nurse—one nurse—who was working under a grant. She was very dedicated. She had a list of all the heart failure patients in the area, and this was her job: making certain that every patient was on the best treatment for heart failure. She called the patients. She spent time with them. She had a trusting, caring, long-term relationship with them. That’s it! That was the secret sauce.

As Dr. Bestermann says, “Every poor community in our country could do that, but they don’t.”

So, this leads us to care gaps—dare I say, this country’s seeming care gap fetish dealing with care gaps retroactively.

In this healthcare podcast, I’m speaking with Carly Eckert, MD. It’s kinda funny, actually. I originally wanted to get Dr. Eckert on the show to talk about care gaps and how to close them, but this show did not wind up going how I thought it was going to go because Carly Eckert is a physician by training who got really interested in the upstream causes of what she was seeing in clinical practice. Despite my best efforts, she refused to be lured into my closing care gaps conversation. So, instead, this conversation is about the construct of care gaps and thinking about them in context. Closing care gaps is a model of care and maybe not a particularly great one, relatively speaking. In fact, here’s another name for the model of care called closing care gaps: care gap whack-a-mole. Care gap pops up … we whack it. Care gap pops up … we try to close it. Another care gap pops up … we try to close it. Another care gap … you get the idea.

Carly Eckert has worked in epidemiology and public health and also clinical informatics for health systems and payers. She is currently leading a team at Olive AI working on network data analytics and machine learning algorithms.

I recorded this show with Dr. Eckert prior to EP359 with Dan O’Neill. In that interview, which you should go back and listen to when you have a sec, Dan O’Neill cleared up a couple of things that I struggled with during this interview.

Here’s the big one that I could not figure out: Why with the whack-a-mole? Why do we still insist as a nation on waiting for someone to show up in clinic to retroactively and reactively address a missed preventative care opportunity?

Why don’t so many more provider organizations create pop health programs that consider the whole person proactively? Why don’t they take the time to operationalize whole-person care in a meaningful way? Why don’t they do what that nurse was doing in the Carolinas?

Ah, yes … to the surprise of exactly no one, it’s all about the Benjamins.

As Dan O’Neill put it, if all a provider organization is doing is slapping a sheet on a doc’s desk every morning with a list of care gaps for all the patients that he/she will see that day, it’s highly likely that incentives, or penalties to do anything else, are very weak. It’s a sign that, from a paying for value perspective, we’re not paying enough for value that it’s worth it or maybe even feasible for any provider organization to take the time and capital expense to switch up their business model in any meaningful way. So, the provider gets a little bump or a little knock if they don’t meet some quality standard. OK, great … so then they’ll minimally tweak their workflow and have doctors within their 7- to 15-minute visit suss out and try to close care gaps.

I don’t want to say this is entirely negative. It’s known that when provider organizations do close care gaps, patient outcomes do tend to get better—so, not arguing that. But there’s opportunities that get left on the table with all this reactiveness. Bottom line: You insurers, you purchasers of healthcare, get to it. Pay for value, for real. If you’re still just kinda paying mostly FFS with an icing of quality measures, maybe think a little bit harder about what’s next that’s really gonna end the whack-a-mole and bring about a more proactive and in-context mindset.

But you provider organizations, if you don’t fix this stuff yourself, you’re gonna get doctors and other clinicians (as we’re seeing) burning out and quitting because there’s only so much you can jam into a 7- or 15-minute visit, number one. But number two, doing population health reactively like this is suboptimal—and everybody knows it. So, what winds up happening is dedicated doctors and nurses desperately want to do the right thing but simply do not have the time. And they watch patient after patient suffer for it. That sucks. So, fix it. Maybe find a nurse like they did in North Carolina. At the end of the day, it’s probably cheaper to stand up a program like that than having to recruit all new doctors and hire traveling nurses when all of the current staff quits due to burnout and/or moral injury.

You can learn more at oliveai.com. You can also connect with Dr. Eckert on LinkedIn and follow her on Twitter. Carly Eckert, MD, MPH, is a product leader at Olive AI, the automation company creating the internet of healthcare. As a trained physician, epidemiologist, and informatician, Dr. Eckert brings a tremendous amount of clinical experience and relevant healthcare industry knowledge to her work. In her role, Dr. Eckert combines her expertise, data understanding, and deep passion to impact healthcare for all patients. Prior to her role at Olive, Dr. Eckert led product for multiple AI start-ups with a particular interest in socially responsible technology and community impact.

06:59 What is the true goal in making population health successful?
07:26 How does the clinical pathway need to manifest in population health?
08:00 How do we get a nonfragmented state of care?
08:25 What is the best model of care?
10:08 “Identifying and addressing care gaps is an important element of population health.”
13:01 Closing care gaps vs creating a nonfragmented system of care.
17:11 “I think you have to take small steps with people.”
18:18 “There’s a lot of power in peer support.”
18:52 Why should provider organizations connect with peer groups?
20:39 “The key is that it’s not going to be the same for everybody.”
24:43 Why is diversity of the workforce key to closing care gaps?
25:07 EP322 with Monica Lypson, MD, MHPE.25:11 EP347 with Ian Tong, MD.30:09 Where can providers improve transparency to help close care gaps?

You can learn more at oliveai.com. You can also connect with Dr. Eckert on LinkedIn and follow her on Twitter.

@md_carly discusses #caregaps in #healthcare on our #healthcarepodcast. #podcast #digitalhealth #valuebasedcare #vbc

What is the true goal in making #populationhealth successful? @md_carly discusses #caregaps in #healthcare on our #healthcarepodcast. #podcast #digitalhealth #valuebasedcare #vbc

How does the clinical pathway need to manifest in #populationhealth? @md_carly discusses #caregaps in #healthcare on our #healthcarepodcast. #podcast #digitalhealth #valuebasedcare #vbc

How do we get a nonfragmented state of care? @md_carly discusses #caregaps in #healthcare on our #healthcarepodcast. #podcast #digitalhealth #valuebasedcare #vbc

What is the best model of care? @md_carly discusses #caregaps in #healthcare on our #healthcarepodcast. #podcast #digitalhealth #valuebasedcare #vbc

“Identifying and addressing care gaps is an important element of #populationhealth.” @md_carly discusses #caregaps in #healthcare on our #healthcarepodcast. #podcast #digitalhealth #valuebasedcare #vbc

Closing care gaps vs creating a nonfragmented system of care. @md_carly discusses #caregaps in #healthcare on our #healthcarepodcast. #podcast #digitalhealth #valuebasedcare #vbc

“I think you have to take small steps with people.” @md_carly discusses #caregaps in #healthcare on our #healthcarepodcast. #podcast #digitalhealth #valuebasedcare #vbc

“There’s a lot of power in peer support.” @md_carly discusses #caregaps in #healthcare on our #healthcarepodcast. #podcast #digitalhealth #valuebasedcare #vbc

Why should provider organizations connect with peer groups? @md_carly discusses #caregaps in #healthcare on our #healthcarepodcast. #podcast #digitalhealth #valuebasedcare #vbc

“The key is that it’s not going to be the same for everybody.” @md_carly discusses #caregaps in #healthcare on our #healthcarepodcast. #podcast #digitalhealth #valuebasedcare #vbc

Why is diversity of the workforce key to closing care gaps? @md_carly discusses #caregaps in #healthcare on our #healthcarepodcast. #podcast #digitalhealth #valuebasedcare #vbc

Where can providers improve transparency to help close care gaps? @md_carly discusses #caregaps in #healthcare on our #healthcarepodcast. #podcast #digitalhealth #valuebasedcare #vbc

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Jeb Dunkelberger (EP360), Dan O’Neill, Dr Wayne Jenkins, Liliana Petrova, Ge Bai, Nikhil Krishnan, Shawn Rhodes, Pramod John (EP353), Pramod John (EP352), Dr Eric Bricker, Katy Talento, Stacey Richter (INBW33), Stacey Richter (INBW32), Dr Steve Schutzer (Encore! EP294), Lisa Trumble, Jeb Dunkelberger, Dr Ian Tong, Mike Schneider, Peter Hayes, Paul Simms, Dr Steven Quimby, Dr David Carmouche (EP343), Christin Deacon, Gary Campbell, Kristin Begley, David Contorno (AEE17), David Contorno (EP339), Nikki King

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Before I get into the show today, let me just remind everybody about our mailing list, which you can sign up for on our Web site, relentlesshealthvalue.com. You might follow Relentless Health Value on LinkedIn or Twitter, which is a great option, for sure; but I wanted to point out that what you see there is abridged at some level. Meanwhile, if you subscribe to our mailing list directly (again, by going to our Web site, relentlesshealthvalue.com—it’s over on the right sidebar where you can sign up for the mailing list), if you subscribe that way, each week you’ll get an email with a full transcription of the whole introduction of the show with timed show notes. Also, we don’t send out literally anything else beyond what I just described on a weekly basis. Also, you can unsubscribe easily and anytime you want. You just hit the unsubscribe in the email. Also, we don’t share our list with anybody. We barely have time to look at it ourselves, so if you have any concerns there in that regard, please don’t.

Last week’s show (EP359) was with Dan O’Neill, and he talked about the four gradations of value-based payments, from paying purely for volume on one end of the continuum to paying purely for value on the other. When you have a moment (not now, but when you can), go back and listen to that show, as it adds some color to what we talk about in this healthcare podcast.

But in the meantime, one of the points that Dan O’Neill makes is that patients in this country won’t gain the benefits of value-based care unless commercial insurers pay for value, for reals. After all, value-based payments are payments that incentivize value-based care. Without value-based payments, how does anyone expect to get value-based care?

To belabor this point momentarily, a provider is not gonna switch up their FFS business model when insurers, especially commercial insurers, pay whatever for whatever with no reward going to providers who spend time and effort to create value and/or better outcomes for patients. I’m being super cynical here, I will grant you. But in this day and age of private equity and record profits by a consolidated healthcare industry, if I’m in charge of a provider organization just realistically here, Pramod John, PhD, says this really well in EP352. He’s talking about drug development in that episode, but same thing here is true for medical care. If you indiscriminately pay Ferrari prices for Hyundais, you’re gonna get a Hyundai for the price of a Ferrari.

To add insult to injury—and this is just one important reason why providers aren’t really willing to invest in lifting outcomes—any value that they would manage to create is gonna be realized by the insurers. It’s gonna go right back into insurers’ pockets. Steve Schutzer, MD, talks about this in his episode (Encore! EP294) about the why and how to create a center of excellence. If, as a provider in a pure volume contract which is FFS, I work really hard to save downstream costs and complications for patients, some carrier is gonna bank the difference.

It’s go time, all you self-insured employers out there. Pay for high quality. Make the carrot an orange-colored stick, as they say. Patients will benefit. Probably doctors and other clinicians, too, honestly: less moral injury and crappy workflows.

In this healthcare podcast, I am talking with Jeb Dunkelberger. Jeb Dunkelberger is the CEO of Sutter Health | Aetna, which is a payvider. Payviders, by Jeb’s definition, take on full risk. They have a full-risk insurance product, meaning they must switch up their business model and how they deliver care so that it works in a total capitation payment situation.

We go deep on payviders the last time Jeb was on the show (EP348). But in this relatively short conversation, I wanted to talk to Jeb about the operational imperatives of moving to value-based care, moving to a care model that is aligned with value-based payments—what needs to switch up in the day-to-day to ensure that patients don’t have care gaps that cause expensive trouble downstream, or patients at rising risk get taken care of promptly before something avoidable and/or acute (ie, expensive) happens.

There are three main things that Jeb talks about:

Fixing up the clinical workflow
Having care navigators
Aligning physician comp to organizational goals

Let me dig into each one of them briefly.

1. Fixing up the clinical workflow. There’s basically five aspects to that:

Ensuring that the right data is in the clinical workflow. Let’s talk about this data for just one sec and we’ll find actually one more reason that payers and purchasers need to get kinda engaged in this making sure members get care thing. Because data—data that payers have that is needed at the point of care. Like claims data. Please provide it to providers and actually insist that it gets used by clinicians making clinical decisions at the point of care.
Ensuring that there are pick lists of drugs, with generic drugs first
Making sure it’s easy to get to pended orders that close care gaps right within the clinical workflow
Empowering medical assistants and holding them responsible to create value for members
Building referral management into the clinical workflow in pursuit of a nonfragmented patient journey

2. Having care navigators. I just want to remind everyone: This is even more important if the EHR doesn’t support referral navigation. Also, Liliana Petrova talks about this extensively, the need for care navigators, in EP357. She’s talking about it relative to telehealth, and she makes a really important point: If you want to ensure that the right patients are getting telehealth and also taking advantage of it to streamline their longitudinal care and make it less fragmented, you have to have navigators involved in scheduling. Otherwise, how’s a patient supposed to know whether to go in person or telehealth or even that telehealth is available?

3. Aligning physician comp to organizational goals. We definitely get into this in some detail.

We cover these three top-line operational must-haves in this episode, and you’ll hear about them right from a CEO who is doing them right now. Besides this conversation, another resource I would highly recommend checking out is a recent article in Nature entitled “Deploying Digital Health Tools Within Large, Complex Health Systems.” While this article is about digital health tools (obviously by its title), 80% of the article is pertinent to deploying pretty much anything in a big provider organization, including an upgrade to value-based care delivery—and/or probably digital health tools are pretty requisite in any attempt to effectively remodel the clinical workflow in this way in 2022, so there’s that, too.

For additional Relentless Health Value episodes on this topic of how to build an operational model that fulfills value-based care objectives, I’d listen to the show with Shawn Rhodes on the essentials for clinical integration (EP354)—also the show with Lisa Trumble (EP349) on what that clinical integration looks like from a care perspective. I am also going to refer you to the episode next week (EP361) with Carly Eckert, MD, MPH. So, check that out for sure. We talk about care gaps.

You can learn more at sutterhealthaetna.com. You can also connect with Jeb on LinkedIn and follow him on Twitter. Jeb Dunkelberger, MSc, MHCI, currently serves as CEO of Sutter Health | Aetna (SH|A), a commercial insurance plan serving Northern California. The health plan aims to combine the value of retail, provider, and payer via its partnerships with CVS, Sutter Health, and Aetna. Prior to SH|A, Jeb led growth for two bay-area healthcare start-ups: Cricket Health and Notable Health. Jeb has also held executive roles at Highmark, McKesson, and EY. Jeb holds healthcare-related degrees from Virginia Tech, The London School of Economics, Cornell University, and University of Pennsylvania.

08:36 What must a provider organization consider operationally when incorporating value-based care and value-based payments?
09:44 How can you use perverse incentives to encourage people to do the right thing?
12:25 How should clinical workflows operate to incorporate value-based care?
14:10 “How do you align patients?”
15:52 How should the EHR operate to maximize value-based workflow?
16:52 Why is taking action on claims data and clinical data together important?
20:26 “Have they actually solved the last mile of integrations?”
21:15 “Changing the behavior of a provider is an absolute art and science.”
22:57 “We have to do more.”
27:09 “That administrative headache … doesn’t just end with the insurer.”

You can learn more at sutterhealthaetna.com. You can also connect with Jeb on LinkedIn and follow him on Twitter.

@Jeb_Dunk discusses #valuebased #clinicalworkflows in this week’s #healthcarepodcast. #healthcare #podcast #vbc #valuebasedcare #ffs

What must a provider organization consider operationally when incorporating value-based care and value-based payments? @Jeb_Dunk discusses #valuebased #clinicalworkflows in this week’s #healthcarepodcast. #healthcare #podcast #vbc #valuebasedcare #ffs

How can you use perverse incentives to encourage people to do the right thing? @Jeb_Dunk discusses #valuebased #clinicalworkflows in this week’s #healthcarepodcast. #healthcare #podcast #vbc #valuebasedcare #ffs

How should clinical workflows operate to incorporate value-based care? @Jeb_Dunk discusses #valuebased #clinicalworkflows in this week’s #healthcarepodcast. #healthcare #podcast #vbc #valuebasedcare #ffs

“How do you align patients?” @Jeb_Dunk discusses #valuebased #clinicalworkflows in this week’s #healthcarepodcast. #healthcare #podcast #vbc #valuebasedcare #ffs

How should the EHR operate to maximize value-based workflow? @Jeb_Dunk discusses #valuebased #clinicalworkflows in this week’s #healthcarepodcast. #healthcare #podcast #vbc #valuebasedcare #ffs

Why is taking action on claims data and clinical data together important? @Jeb_Dunk discusses #valuebased #clinicalworkflows in this week’s #healthcarepodcast. #healthcare #podcast #vbc #valuebasedcare #ffs

“Have they actually solved the last mile of integrations?” @Jeb_Dunk discusses #valuebased #clinicalworkflows in this week’s #healthcarepodcast. #healthcare #podcast #vbc #valuebasedcare #ffs

“Changing the behavior of a provider is an absolute art and science.” @Jeb_Dunk discusses #valuebased #clinicalworkflows in this week’s #healthcarepodcast. #healthcare #podcast #vbc #valuebasedcare #ffs

“We have to do more.” @Jeb_Dunk discusses #valuebased #clinicalworkflows in this week’s #healthcarepodcast. #healthcare #podcast #vbc #valuebasedcare #ffs

“That administrative headache … doesn’t just end with the insurer.” @Jeb_Dunk discusses #valuebased #clinicalworkflows in this week’s #healthcarepodcast. #healthcare #podcast #vbc #valuebasedcare #ffs

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Dan O’Neill, Dr Wayne Jenkins, Liliana Petrova, Ge Bai, Nikhil Krishnan, Shawn Rhodes, Pramod John (EP353), Pramod John (EP352), Dr Eric Bricker, Katy Talento, Stacey Richter (INBW33), Stacey Richter (INBW32), Dr Steve Schutzer (Encore! EP294), Lisa Trumble, Jeb Dunkelberger, Dr Ian Tong, Mike Schneider, Peter Hayes, Paul Simms, Dr Steven Quimby, Dr David Carmouche (EP343), Christin Deacon, Gary Campbell, Kristin Begley, David Contorno (AEE17), David Contorno (EP339), Nikki King, Olivia Webb

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Last week’s show was with Wayne Jenkins, MD, from Centivo; and we talked about how insurance design, when not done well, can lead, in a nutshell, to mental and physical health problems for employees. This is a great lead-in to the conversation in this healthcare podcast with Dan O’Neill. And before I get into why it’s a great lead-in, let me just start here—and don’t roll your eyes.

What is value-based care? Consider this delineation: There’s value-based payments, and then there’s the type of care that these payments incentivize. You would hope that a value-based payment would result in care that was of value (ie, great patient outcomes and patient satisfaction at a fair total cost of care). But those are two distinct things—the payment and the care.

If we change the payment model but the provider behavior doesn’t change in a way that actually improves patient outcomes and care, then what are we doing here?

Or the converse: If we do not change the payment model, then how does anyone expect the care paid for is going to change? Employers or carriers who just meander along with the broad PPO network happily paying as much for low-value care as for high-value care and happily paying centers of excellence as much as non–centers of excellence … how is a provider who wants to spend time and money building out a practice to deliver better patient outcomes, how can they do that without overcoming some pretty fundamental business model challenges?

This whole concept is one that my guest today, Dan O’Neill, has talked about and will talk about in this episode. Dan says the first step is for insurers, IPAs, managed care organizations to take an absolute chainsaw to their network management bureaucracy. There must be a clear door to a value-based payment model. It must be that if you’re a provider or you’re a physician practice (primary care practice, in particular), and you want to go down a value-based care path, there has to be a clear door and a pathway for you.

I think I have a non-perfect litmus test for anybody with a value-based payment program who wants a heuristic to check if their value-based payment program is actually meaningfully impacting models of care in the marketplace: If most of the provider organizations who are part of that value-based program still incentivize and pay their doctors using FFS incentives like RVUs (relative value units), I’d step back and think about that for a piece. Contemplate that doctors, who are responsible for care decisions, still have every incentive to do everything that they would have done had the provider organization just been paid FFS. What’s the point of value-based payments that extract exactly zero behavior change? And that is not a rhetorical question.

So, back to the conversation from last week with Dr. Wayne Jenkins citing all of the things that can go horribly wrong when an employer’s benefit designs are misaligned with the financial realities of their workforce. You get what you pay for, and I don’t just mean that in terms of the dollars outlaid, since we all know in healthcare prices and quality have nothing to do with each other—I mean, in terms of what you choose to pay for and how you choose to pay for it.

That’s the macro of this whole thing, but indulge me as I get into the micro for just one sec. Let me just remind everybody about Goodhart’s Law: “When a measure becomes a target, it ceases to be a good measure.” More on the why of this in the interview with Rishi Wadhera, MD, MPP, on the hospital readmission reduction program (EP326) and also what happens when we don’t adhere to Goodhart’s Law as we evaluate PCPs, which Rebecca Etz, PhD, talks about in EP295.

In this episode with Dan O’Neill, we go through where we’re at on the continuum of value-based payments and how those payments are impacting the care, value-based or otherwise, that is incentivized by those payments. We tick through four gradations of value-based payments:

A pure volume contract (otherwise known as FFS [fee for service])
A clinician bonus for achieving quality measures
A piece of the savings (ie, MSSP [Medicare Shared Savings Program])
Global risk

My guest, Dan O’Neill, is chief commercial officer over at Pine Park Health. Besides over a decade in healthcare tech and services, he was a policy fellow at the National Academy of Medicine and worked in the Senate on the Senate Health Committee.

You can learn more at dponeill.com or connect with Dan on LinkedIn. Daniel O’Neill, MA, MS, currently serves as chief commercial officer for Pine Park Health, a value-based primary care group that delivers on-site care in senior living communities. Prior to that, Dan was a health policy fellow at the National Academy of Medicine, working primarily in the US Senate on legislation focused on surprise billing, anti-competitive contracting practices in the commercial market, and price transparency. Dan has also worked as a senior vice president with Change Healthcare and as an advisor to venture-stage healthcare services and technology firms. At Pine Park, Dan is responsible for risk-based contracting with IPAs and insurers and for the group’s participation in CMS value-based care models, including direct contracting. Dan’s research is available in NEJM Catalyst and on the Health Affairs blog, and he holds graduate degrees from Johns Hopkins University and Stanford University.

05:06 What is the spectrum of value-based contracts?
07:24 Why don’t value-based contracts at the organizational level always trickle down to the provider level?
11:25 What are the two things that need to happen to drive outcomes in value-based healthcare?
15:24 How do insurers play into improving value-based contracts?
19:46 “There’s a strong case to actually clamp down on prices.”
23:47 “Right now, we’re still in a place where if you want to do something other than fee for service … you have to fight like hell.”
24:03 What’s the first step to making value-based contracts more accessible?
24:27 What’s the second step to making value-based contracts accessible?
25:23 Why are the incentives to change American healthcare pretty weak?
27:10 “Organizational change is just exceedingly difficult.”
28:45 What should you do if you want to start pushing organizations toward value-based contracts?
32:42 EP351 with Eric Bricker, MD.

You can learn more at dponeill.com or connect with Dan on LinkedIn.

@dp_oneill discusses #vbc on our #healthcarepodcast. #healthcare #podcast #valuebasedpayments #digitalhealth

What is the spectrum of value-based contracts? @dp_oneill discusses #vbc on our #healthcarepodcast. #healthcare #podcast #valuebasedpayments #digitalhealth

Why don’t value-based contracts at the organizational level always trickle down to the provider level? @dp_oneill discusses #vbc on our #healthcarepodcast. #healthcare #podcast #valuebasedpayments #digitalhealth

What are the two things that need to happen to drive outcomes in value-based healthcare? @dp_oneill discusses #vbc on our #healthcarepodcast. #healthcare #podcast #valuebasedpayments #digitalhealth

How do insurers play into improving value-based contracts? @dp_oneill discusses #vbc on our #healthcarepodcast. #healthcare #podcast #valuebasedpayments #digitalhealth

“There’s a strong case to actually clamp down on prices.” @dp_oneill discusses #vbc on our #healthcarepodcast. #healthcare #podcast #valuebasedpayments #digitalhealth

“Right now, we’re still in a place where if you want to do something other than fee for service … you have to fight like hell.” @dp_oneill discusses #vbc on our #healthcarepodcast. #healthcare #podcast #valuebasedpayments #digitalhealth

What’s the first step to making value-based contracts more accessible? @dp_oneill discusses #vbc on our #healthcarepodcast. #healthcare #podcast #valuebasedpayments #digitalhealth

What’s the second step to making value-based contracts accessible? @dp_oneill discusses #vbc on our #healthcarepodcast. #healthcare #podcast #valuebasedpayments #digitalhealth

Why are the incentives to change American healthcare pretty weak? @dp_oneill discusses #vbc on our #healthcarepodcast. #healthcare #podcast #valuebasedpayments #digitalhealth

“Organizational change is just exceedingly difficult.” @dp_oneill discusses #vbc on our #healthcarepodcast. #healthcare #podcast #valuebasedpayments #digitalhealth

What should you do if you want to start pushing organizations toward value-based contracts? @dp_oneill discusses #vbc on our #healthcarepodcast. #healthcare #podcast #valuebasedpayments #digitalhealth

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Dr Wayne Jenkins, Liliana Petrova, Ge Bai, Nikhil Krishnan, Shawn Rhodes, Pramod John (EP353), Pramod John (EP352), Dr Eric Bricker, Katy Talento, Stacey Richter (INBW33), Stacey Richter (INBW32), Dr Steve Schutzer (Encore! EP294), Lisa Trumble, Jeb Dunkelberger, Dr Ian Tong, Mike Schneider, Peter Hayes, Paul Simms, Dr Steven Quimby, Dr David Carmouche (EP343), Christin Deacon, Gary Campbell, Kristin Begley, David Contorno (AEE17), David Contorno (EP339), Nikki King, Olivia Webb, Brandon Weber

View Details

First of all, anybody who thinks that your average citizen in the United States today is unaware of the financial double jeopardy of going to a doctor, going to an emergency room, getting a procedure is sorely mistaken. Americans today are well aware of the financial risk that they are taking by seeking healthcare in this country.

To illustrate this point, let me read the first couple of sentences from a New York Times best-selling book review: “The illness narrative, ending in financial ruin and decreased quality of life, has become one of the classic 21st-century American stories. In her debut essay collection, Emily Maloney documents the … intersections of money, illness and medicine. For Maloney, the primary experience of receiving health care is not merely a bodily or spiritual event but always … a financial one. She understands … the relationship of money to being ill, … to managing an unfathomable amount of debt.” This is a New York Times best-selling book in the beginning of 2022.

Add to this something I saw Pete Scruggs write on LinkedIn a while back, which I found actionable. He said:

“Patients selling personal items or taking on credit card debt after medical procedures is a failure of creativity in providing healthcare. It is possible to build creative health plans that reduce costs for patients with expensive procedures by giving wise guidance at the time patients need it the most.

“It is not enough for insurance to provide access to a wide range of health providers but effectively leave the patient in debt … after the procedures are done. It is possible to buy healthcare so well in the local community that employers can reduce cost dramatically at the time most needed by those using health services.”

And lastly, let me quote from a recent article in JAMA by David Scheinker, PhD; Arnold Milstein, MD; and Kevin Schulman, MD, which says, “The financial consequences of an underperforming health insurance market (one that is not holding down … cost … ) diminishes the quality of life affordable to US employees and their families and the financial viability of employers not in the health care industry.”

So, in this healthcare podcast, I am speaking with Wayne Jenkins, MD, who is chief medical officer over at Centivo. Before his move into value-based healthcare about 10 years ago, Dr. Jenkins started his career as a radiation oncologist. He has also served as the chief clinician at a bunch of large health systems.

I wanted to have Dr. Jenkins on the show to discuss a recent report which was published by Centivo that methodically dissects how financial toxicity is affecting patients. This includes how it affects choices that employees/patients/members are making both in terms of the care they decide they are willing to pay for or, more likely, the financial risks they’re willing to take.

In short, the three key findings of the report are as follows:

Workers face mounting healthcare affordability issues, and health plan cost sharing features such as high deductibles are an underlying cause.

Just a quick spoiler here: Do you know the percentage of employees who are forgoing buying groceries in order to afford medical expenses left on their shoulders by their high-deductible health plan or by their health plan with excessive premiums? Going hungry isn’t just for minimum wage workers.

Medical expenses are a significant cause of mental health and well-being issues for both individuals and also families.
The conventional wisdom that health plan members will never “trade off” certain offerings for greater savings is simply false.

The big takeaway here, though, is that the situation that we have in this country today is not a secret among your average regular American civilian. They do fully understand that by entering a healthcare setting, they are very well trading off, in their attempt to be healthy and going to the doctor in pursuit of that aim, they are trading off their financial well-being. And that financial toxicity actually has health implications. If you can’t afford groceries, for example, or your mental health suffers, we get ourselves rather rapidly into a downward spiral, as you may be able to see.

Other episodes dedicated to the impact of financial toxicity and possible solutions are in the show notes. I’m just gonna mention here quickly, we talked to Marty Makary, MD, about his book called The Price We Pay (EP242). There’s an interview with Marshall Allen (EP328) and then also a very interesting conversation with Mark Fendrick, MD (EP308).

You can learn more at centivo.com. Wayne Jenkins, MD, is the chief medical officer at Centivo. He is an accomplished physician and executive with a proven track record of patient-centered, revenue-driven results. Over the course of his career, he has consistently transformed large, complex healthcare systems into market leaders that deliver quality and value in a dynamically changing environment.

Prior to Centivo, he was the chief clinical officer for population health at Vanderbilt University Medical Center, where he provided clinical oversight of value-based care delivery and completed the formation of Medicare accountable care organizations (ACOs). Before his time at Vanderbilt University Medical Center, he served as the senior vice president and chief strategy officer of Orlando Health, as well as president of Orlando Health Physician Partners. Previously, Wayne was the chief of radiation oncology and then subsequently the medical director for the Florida affiliate of M.D. Anderson Cancer Center, a subsidiary of Orlando Health, Inc.

Wayne holds a bachelor’s degree from the University of Tennessee, an MD from Vanderbilt University School of Medicine, and a master’s of health policy and administration from Johns Hopkins University. He is board certified in radiation oncology and was recognized in Best Doctors in America annually from 1994 to 2015. He has published 18 scientific articles and is often sought out to speak at state and national conferences.

05:23 How is financial toxicity in healthcare affecting patients?
07:02 How do we define a “normal” deductible in today’s healthcare?
08:14 What’s the point of having a deductible? What does a plan gain from a high deductible?
10:43 How does the cost of a patient’s deductible correlate with their use of their health insurance?
12:51 EP308 with Mark Fendrick, MD.15:18 How is health insurance actually sometimes reducing patients’ health?
16:24 What is the defining characteristic of those who are more adversely affected by high deductibles?
17:04 Why should CFOs consider plans with lower deductibles for their employees?
18:26 “Are there other ways to approach this in a marketplace, to get more value for what you’re paying for so this problem can be addressed?”
21:56 How should employers contemplate health plans moving forward?
22:24 “Having the health plan choice gives more financial viability in addition to that open access.”
22:58 “In some sense, [that] can be a zero-sum game. Do you get it in the premium, or is it paid in the higher deductible?”
23:45 “I think there are value choices in the market that may help negate some of the problems that we were just discussing.”
25:33 “I think conventional wisdom may be left over from the ’90s.”
26:49 Why does building these narrow networks have to be a science?
28:38 Does a narrow network adversely affect mental health?
32:20 “Narrow and excellent is not a bad choice for people.”

You can learn more at centivo.com.

Wayne Jenkins, MD, of @Centivo_Health discusses health insurance plan design on our #healthcarepodcast. #healthcare #podcast #digitalhealth #healthcarecosts

How is financial toxicity in healthcare affecting patients? Wayne Jenkins, MD, of @Centivo_Health discusses on our #healthcarepodcast. #healthcare #podcast #digitalhealth #healthcarecosts

How do we define a “normal” deductible in today’s healthcare? Wayne Jenkins, MD, of @Centivo_Health discusses on our #healthcarepodcast. #healthcare #podcast #digitalhealth #healthcarecosts

What’s the point of having a deductible? What does a plan gain from a high deductible? Wayne Jenkins, MD, of @Centivo_Health discusses on our #healthcarepodcast. #healthcare #podcast #digitalhealth #healthcarecosts

How does the cost of a patient’s deductible correlate with their use of their health insurance? Wayne Jenkins, MD, of @Centivo_Health discusses on our #healthcarepodcast. #healthcare #podcast #digitalhealth #healthcarecosts

How is health insurance actually sometimes reducing patients’ health? Wayne Jenkins, MD, of @Centivo_Health discusses on our #healthcarepodcast. #healthcare #podcast #digitalhealth #healthcarecosts

What is the defining characteristic of those who are more adversely affected by high deductibles? Wayne Jenkins, MD, of @Centivo_Health discusses on our #healthcarepodcast. #healthcare #podcast #digitalhealth #healthcarecosts

Why should CFOs consider plans with lower deductibles for their employees? Wayne Jenkins, MD, of @Centivo_Health discusses on our #healthcarepodcast. #healthcare #podcast #digitalhealth #healthcarecosts

“Are there other ways to approach this in a marketplace, to get more value for what you’re paying for so this problem can be addressed?” Wayne Jenkins, MD, of @Centivo_Health discusses on our #healthcarepodcast. #healthcare #podcast #digitalhealth #healthcarecosts

How should employers contemplate health plans moving forward? Wayne Jenkins, MD, of @Centivo_Health discusses on our #healthcarepodcast. #healthcare #podcast #digitalhealth #healthcarecosts

“Having the health plan choice gives more financial viability in addition to that open access.” Wayne Jenkins, MD, of @Centivo_Health discusses on our #healthcarepodcast. #healthcare #podcast #digitalhealth #healthcarecosts

“In some sense, [that] can be a zero-sum game. Do you get it in the premium, or is it paid in the higher deductible?” Wayne Jenkins, MD, of @Centivo_Health discusses on our #healthcarepodcast. #healthcare #podcast #digitalhealth #healthcarecosts

“I think there are value choices in the market that may help negate some of the problems that we were just discussing.” Wayne Jenkins, MD, of @Centivo_Health discusses on our #healthcarepodcast. #healthcare #podcast #digitalhealth #healthcarecosts

“I think conventional wisdom may be left over from the ’90s.” Wayne Jenkins, MD, of @Centivo_Health discusses on our #healthcarepodcast. #healthcare #podcast #digitalhealth #healthcarecosts

Why does building these narrow networks have to be a science? Wayne Jenkins, MD, of @Centivo_Health discusses on our #healthcarepodcast. #healthcare #podcast #digitalhealth #healthcarecosts

Does a narrow network adversely affect mental health? Wayne Jenkins, MD, of @Centivo_Health discusses on our #healthcarepodcast. #healthcare #podcast #digitalhealth #healthcarecosts

“Narrow and excellent is not a bad choice for people.” Wayne Jenkins, MD, of @Centivo_Health discusses on our #healthcarepodcast. #healthcare #podcast #digitalhealth #healthcarecosts

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Liliana Petrova, Ge Bai, Nikhil Krishnan, Shawn Rhodes, Pramod John (EP353), Pramod John (EP352), Dr Eric Bricker, Katy Talento, Stacey Richter (INBW33), Stacey Richter (INBW32), Dr Steve Schutzer (Encore! EP294), Lisa Trumble, Jeb Dunkelberger, Dr Ian Tong, Mike Schneider, Peter Hayes, Paul Simms, Dr Steven Quimby, Dr David Carmouche (EP343), Christin Deacon, Gary Campbell, Kristin Begley, David Contorno (AEE17), David Contorno (EP339), Nikki King, Olivia Webb, Brandon Weber, Stacey Richter (INBW30)

View Details

Here’s the biggest problem with a lot of telehealth endeavors: Someone decides that they need to be doing telehealth, for whatever reason. Maybe there’s a pandemic, for example. And the basic plan is this: Install some technology, give everyone a username and password and a link for patients, check that box, and move on to the next thing.

My guest in this healthcare podcast, Liliana Petrova, has seen and talked about how, far too many times, the whole concept of telehealth is narrowed down to the exact moment where a patient and a doctor have a visit together. That’s it … that transaction.

There’s little effort, if any effort, made to integrate telehealth into the existing clinical workflow, into the existing patient/customer experience, into the core business, into anything longitudinal. Telehealth becomes a weird island of a service only used by intrepid clinicians willing to put in the time and effort required to deal with its vagaries and inconveniences. Only used also by patients who manage to find the telehealth link buried on some Web site somewhere and then figure out how to schedule their telehealth appointments within a scheduling system mostly unable to accommodate virtual visits without a party-sized amount of technical expertise and, probably, chutzpah.

There are consequences to this narrow and pretty slapdash thinking. One of them is that you have very few clinicians and patients willing to brave the organization’s telehealth experience or lack thereof, so they don’t use it. And then at some point the organization does a survey of how much telehealth is going on—and wow! Surprising news: Incredibly few are using telehealth. So, the conclusion is drawn that patients and/or clinicians don’t want telehealth. What happens then? Further funding is withdrawn and/or the whole telehealth thing goes down on the chopping block.

It reminds me of a cartoon I saw the other day. It was a picture of a bar chart showing some survey results. One of the bars in the bar chart was huge, and then the other one was, like, zero. It was a poll. There were two questions in the poll. Here are the two questions: Do you respond to polls, or don’t you respond to polls? And as per the poll results in the bar chart in the cartoon, turns out, 100% of people respond to polls.

Funny but, at the same time, true. Many organizations don’t really think through the provenance of the “data” they’re using to make really important decisions, and when it comes to telehealth, there’s a lot of dirty data flying around.

This dirty data, though, might be one explanation for the delta between the conclusions of all those studies showing that three out of four patients, always a comfortable majority of patients, intend to use telehealth versus the many health systems and/or provider organizations or even some doctors themselves sniffing and turning up their noses and saying that none of their patients are interested in using telehealth because no one is using telehealth in their office.

Right. The only thing that’s being anecdotally determined by these anecdotal conclusions is that patients don’t like and/or even know about that office’s telehealth solution. It says nothing of the larger trend.

When organizations make decisions to not do telehealth well or at all because they didn’t do it well and no one could figure out how to use it, then the value that telehealth could bring to both patients and clinicians is forfeit. Sad. Also, considering the X on the backs of some specialists and health systems in general these days, this could have longer-term consequences. Some good clinicians could find themselves way behind the curve after making what amounts to a very poor strategic decision.

In this episode, I am speaking with Liliana Petrova, CEO of The Petrova Experience. Liliana is an expert on customer and patient experience. She hails originally from the aviation industry, where she was director of customer experience at JetBlue, where she built and maintained customer centricity across organizations.

Today we’re talking about telehealth. Last time Liliana was on the show (EP236), we talked about customer centricity—so go back and listen to that one if you’re interested. In that show, we talked about, as one aspect, lobby design—the impact of having front desk people and clinicians literally barricaded behind cement and glass like they work in some bodega in a bad part of town that gets held up every other day. I never really thought about that and the message that it sends before.

Liliana served this past year on the NODE patient committee and did a whole lot of work exploring telehealth and its potential and challenges. NODE stands for the Network of Digital Evidence.

In this show, we go through the essentials to pull off a telehealth program that is actually going to deliver returns. In short, here’s the ingredients:

A telehealth “board” comprised of all the cross-disciplinary folks needed to pull this off: clinicians, IT, and also administrative peeps for a few very critical reasons that we talk about. Having executives on this board with enough power in the organization to define long-term goals that supersede all the short-term ones that usually define and plague organizations, especially public ones, is also very essential here.
Redefining IT and the role of IT. This is an interesting one. Liliana talks about how the legacy role of IT is changing. IT leaders can no longer just be the help desk or maintainer of computers or manager of outsource contracts for the place far away that you call when you can’t get on the portal. Today’s IT teams need to think like they’re a vital part of supporting the needs of patients and clinicians. After all, you can’t have technology-augmented care when the IT group is shacked up in the basement doing their own thing.
Identifying a physician ambassador for the telehealth internally (the telehealth program).
Getting patient feedback. I was shocked, literally shocked, to discover that some of the most vocally “patient-centric” health systems do not collect patient feedback systemically. WTH, really? Liliana gets granular here.
What might be the silver bullet? Patient navigation. We talk about this at some length.
Map the end-to-end patient visit.
Continuous improvement—you’re never done.

Also, March 8, 2022, is International Women’s Day, by the way. This episode honors women in healthcare doing great things.

You can learn more at thepetrovaexperience.com or join the patient NODE group by emailing Liliana at liliana@thepetrovaexperience.com. Liliana Petrova, CCXP, is a visionary and a proven leader in the field of customer experience and innovation. She pioneered a new customer-centric culture, energizing the more than 15,000 JetBlue employees with her vision. She has been recognized for her JFK Lobby redesign and facial recognition program with awards from Future Travel Experience and Popular Science.

Liliana is committed to creating seamless, successful experiences for customers and delivering greater value for brands. In 2019, she founded an international customer experience consulting firm that helps brands improve their customer experience. The Petrova Experience focuses on three pillars of customer experience: organizational culture that inspires employees to be brand ambassadors, design and implementation of customer centric journeys, and technology implementations with customer experience value in mind.

06:59 Who should be on the telehealth board to incorporate telehealth successfully?
08:44 What is the population that you’re serving, and how does telehealth serve that population?
09:45 “When they think of this as a project versus a program or a strategic imperative, then there is no business case.”
11:49 “How do you integrate telehealth in your core business?”
12:32 What does a CIO need to do to be best equipped to serve their organization?
14:05 Why are CIOs and CFOs naturally in conflict these days?
15:30 Why is it important to have a physician be an ambassador for telehealth implementation?
17:05 Why is it important to utilize patient feedback properly?
18:37 Why must the patient own their own health?
20:29 “The key is, if you start at the strategic level with cross-functional leaders, then the working team will also be cross-functional.”
21:49 “You won’t have a successful telehealth experience if you don’t think through the end-to-end experience.”
21:55 EP332 with Tony DiGioia, MD.23:40 Who is the digital navigator in implementing telehealth?
24:55 What is a digital navigator, and how does it show up in the telehealth journey?
30:55 Why is it important to have continuous growth in telehealth?

You can learn more at thepetrovaexperience.com or join the patient NODE group by emailing Liliana at liliana@thepetrovaexperience.com.

@LilianaPetrova discusses #telehealth on our #healthcarepodcast. #healthcare #podcast #digitalhealth

Who should be on the telehealth board to incorporate telehealth successfully? @LilianaPetrova discusses #telehealth on our #healthcarepodcast. #healthcare #podcast #digitalhealth

What is the population that you’re serving, and how does telehealth serve that population? @LilianaPetrova discusses #telehealth on our #healthcarepodcast. #healthcare #podcast #digitalhealth

“When they think of this as a project versus a program or a strategic imperative, then there is no business case.” @LilianaPetrova discusses #telehealth on our #healthcarepodcast. #healthcare #podcast #digitalhealth

“How do you integrate telehealth in your core business?” @LilianaPetrova discusses #telehealth on our #healthcarepodcast. #healthcare #podcast #digitalhealth

What does a CIO need to do to be best equipped to serve their organization? @LilianaPetrova discusses #telehealth on our #healthcarepodcast. #healthcare #podcast #digitalhealth

Why is it important to have a physician be an ambassador for telehealth implementation? @LilianaPetrova discusses #telehealth on our #healthcarepodcast. #healthcare #podcast #digitalhealth

Why is it important to utilize patient feedback properly? @LilianaPetrova discusses #telehealth on our #healthcarepodcast. #healthcare #podcast #digitalhealth

Why must the patient own their own health? @LilianaPetrova discusses #telehealth on our #healthcarepodcast. #healthcare #podcast #digitalhealth

“The key is, if you start at the strategic level with cross-functional leaders, then the working team will also be cross-functional.” @LilianaPetrova discusses #telehealth on our #healthcarepodcast. #healthcare #podcast #digitalhealth

“You won’t have a successful telehealth experience if you don’t think through the end-to-end experience.” @LilianaPetrova discusses #telehealth on our #healthcarepodcast. #healthcare #podcast #digitalhealth

Who is the digital navigator in implementing telehealth? @LilianaPetrova discusses #telehealth on our #healthcarepodcast. #healthcare #podcast #digitalhealth

What is a digital navigator, and how does it show up in the telehealth journey? @LilianaPetrova discusses #telehealth on our #healthcarepodcast. #healthcare #podcast #digitalhealth

Why is it important to have continuous growth in telehealth? @LilianaPetrova discusses #telehealth on our #healthcarepodcast. #healthcare #podcast #digitalhealth

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Ge Bai, Nikhil Krishnan, Shawn Rhodes, Pramod John (EP353), Pramod John (EP352), Dr Eric Bricker, Katy Talento, Stacey Richter (INBW33), Stacey Richter (INBW32), Dr Steve Schutzer (Encore! EP294), Lisa Trumble, Jeb Dunkelberger, Dr Ian Tong, Mike Schneider, Peter Hayes, Paul Simms, Dr Steven Quimby, Dr David Carmouche (EP343), Christin Deacon, Gary Campbell, Kristin Begley, David Contorno (AEE17), David Contorno (EP339), Nikki King, Olivia Webb, Brandon Weber, Stacey Richter (INBW30), Brian Klepper (AEE16)

View Details

So … let’s start here. Mostly this whole episode is about the so-called “Big Three” PBMs that provide between the three of them pharmacy benefit services for 95% of insured Americans. PBM stands for pharmacy benefit manager, and the Big Three PBMs being ESI, otherwise known as Express Scripts; OptumRx, which is a part (a big profitable part) of United Health Group; and then also CVS. Yes, CVS is not just for your retail pharmacy needs; they are also a huge pharmacy benefit manager.

The question is, how much did that drug cost the PBM? Remember, that’s commerce: Buy low, sell high, and all that. You buy something, and then you sell it for more than you bought it for.

PBM services are anything but free. PBMs are collecting massive windfalls in the so-called spread between what the patient and the plan pay and what the PBM is actually buying those drugs for.

You can learn more on Ge’s Web site at Johns Hopkins University. You can also connect with her on LinkedIn. Ge Bai, PhD, CPA, is professor of accounting at the Johns Hopkins Carey Business School and professor of health policy and management at the Johns Hopkins Bloomberg School of Public Health. She is an expert on healthcare pricing, policy, and management. Dr. Bai has testified before the House Ways and Means Committee, written for the Wall Street Journal, and published her studies in leading academic journals such as the New England Journal of Medicine, JAMA, JAMA Internal Medicine, Annals of Internal Medicine, and Health Affairs. Her work has been widely featured on ABC, CBS, NBC, Fox News, CNN, and NPR and in the Los Angeles Times, New York Times, Wall Street Journal, Washington Post, and other media outlets and used in government regulations and congressional testimonies.

08:45 What is ESI doing by automatically applying discounts to generic drugs?
10:00 Why are PBMs losing money when consumers don’t use their benefit?
10:46 “GoodRx disrupted the ongoing game.”
11:04 How are PBMs using the Amazon discount card to discourage their patients from moving away from using their benefits?
12:13 Amazon pricing versus GoodRx pricing.
12:50 How much money is a PBM really making?
14:00 EP344 with Steven Quimby, MD.14:29 EP334 with Sunita Desai, PhD.14:43 How is future fear playing into the PBM business model?
16:55 Is there a negative consequence to subtracting from the bottom line in a PBM model?
17:50 “I think to have strong PBMs does not mean necessarily bad things for patients.”
19:39 What happens if everyone uses Amazon for drugs?
22:40 If every PBM gets their own discount cards, what will happen?
25:38 “We are actually witnessing a potential sea change.”
26:25 How do cost-plus pharmacies factor into the current market?
29:16 Is a profit shortfall inevitable?
29:35 “PBMs have to give a slice of their profit back to consumers. That’s just reality.”
30:11 Can anything be done on the PBM side to generate a higher margin in the generic space?
31:41 “Naive plan sponsors are a big problem.”

You can learn more on Ge’s Web site at Johns Hopkins University. You can also connect with her on LinkedIn.