Ep 39 – Overcoming Self-Interest to Build a Social Compact for Health and Equity, with David Smith

Achieving health value demands the formation of a new social construct, one that puts aside self-interest and builds systems of care for the common good. One that prioritizes health and equity for all, including the underserved and most vulnerable among us. This effort requires stronger leaders and better leadership than ever before. Getting Medicaid right, transforming addiction and substance use disorder treatment, reframing behavioral health, and removing silos – these are a few of the efforts of this week’s guest as his work exemplifies the mission of achieving health as the seminal American institution to drive social connectedness and economic prosperity.

Our guest is David Smith, CEO and founder of Third Horizon Strategies (THS), a Chicago-based, boutique advisory firm focused on maximizing human potential through a better health system. David serves on the Health Care Council of Chicago, the Alliance for Addiction Payment Reform, the board of the Sinai Hospital System, the Founder’s Council of United States of Care and as a Senior Advisor at AVIA and a Project Executive for their Medicaid Transformation Project.

04:55 Facts on Medicaid: 75 million Americans covered (1 in 5 Americans), 50% of US births, $600B annual spend

05:40 Medicaid beneficiaries may even approach 100M in the next five years

06:00 Background on the Medicaid Transformation Project (MTP)

08:00 “The Medicaid program is the single most important endeavor in our country, PERIOD. And that’s not just in healthcare, I’m talking about in total.”

09:00 Health is required to serve in the function in the full human capacity.

09:45 The neglect of the Medicaid program over the years and why we need to get it right to improve health in underserved communities

10:18 “Getting Medicaid right improves health, and improving health creates economic development.”

10:30 Disparities in public health are drawn across racial lines

11:00 Transformation Factor #1:  Evolution of payment models and realignment of incentives

11:45 Transformation Factor #2:  An evidence-based approach to Care Model research and implementation

12:15 Transformation Factor #3: Leveraging technology innovation for underserving communities

12:40 Transformation Factor #4: Social impact investments to fuel innovation

13:00 Transformation Factor #5: Social determinants of health

13:30 Transformation Factor #6: Growth in Medicaid enrollment requiring scalable solutions

14:10 Lack of government boldness, states not moving fast enough, MCOs not eager to develop new payment models

14:40 Partnering with health systems in the MTP to look for disruptive solutions that with financial self-sustainability

16:40 Facts about Substance Use Disorder (SUD): 23.4 million Americans affected, 81,000 drug overdose deaths per year, 1 in 5 Medicaid beneficiaries, 46% of the total Medicaid spending

18:40 David shares how he has personally been impacted by drug overdose through the loss of his father, brother, and sister

21:25 The role of Big Pharma in creating the opioid problem and how Addiction (the “dopamine rush”) is the #1 most common human failing

23:00 How the system of care is setup to treat patients with SUD as “bad people”

23:35 “If we think our fee-for-service system is bad for our physical health, it is a dumpster fire for people who struggle with addiction.”

24:15 The total cost of care for a patient with high acuity SUD is $31-32k per year, and how that creates a $17k value gap.

25:20 “There is no “cure” for Substance Use Disorder; there is only reducing a person’s risk to a baseline.”

25:50 The Value Gap due to waste and inefficiency in the treatment of SUD that also results in poor outcomes in long-term recovery.

27:05 The Alliance for Addiction Payment Reform and its role in advocating for a new value-based payment model for long-term recovery of SUD

29:30 Partnering with commercial payers to develop APMs for Substance Use Disorder

30:30 Multi-billion dollar Big Pharma payouts from civil lawsuits presents an opportunity to focus capital in supporting SUD patients throughout the care continuum

31:35 “The human cost of the opioid epidemic in this country is unfathomable, and solving it is within our grasp.”

33:30 Creative partnerships with technology companies to usher in a new age of digital health transformation and care delivery innovation

34:20 Scarce, finite infrastructure and resource limitations in behavioral health care delivery

36:00 The challenge with digital transformation being viewed as a panacea

37:00 Integration of data with Artificial Intelligence to more effectively deliver care

37:30 The need to look at technology resources as an asset class of tools in a toolbox – which one should you use to serve the underserved?

38:10 The impact of the COVID-19 pandemic in creating a new social construct in society which portends future progress in telemedicine

40:30 The Health Care Council of Chicago (HC3) and its focus on addressing racial disparities of care

42:30 David shares a personal reflection on health equity when driving through a violent inner-city area in Chicago and seeing a little girl play outside

44:50 David acknowledges the presence of systemic racism and the need for intellectual awareness of its presence in our society

46:40 David realizes as he unwittingly participated in a system that supports segregation by the choice of his neighborhood

48:00 Reflecting on Martin Luther King, Jr.: How you pull yourself up by your bootstraps without having a pair of boots?

49:10 Challenging yourself to be anti-racist in order to drive a new intergenerational way of thinking

52:00 Silos and individual fiefdoms keeping us from pursuing efficiencies and common good

53:30 Too many healthcare leaders are self-interested – “We need a different type of leadership in our industry.”

55:00 “Healthcare doesn’t focus like a normal economic industry. We don’t have information transparency, information symmetry, rational decision-making, or incentive alignment.”

57:00 Hospital consolidation due to unprecedented M&A activity and its impact on healthcare costs

59:00 Department of Justice & Federal Trade Commission lack of understanding of what competitiveness means in healthcare

1:01 Challenges in healthcare market competitiveness without information transparency and data aggregation

1:02 David addresses the Open Letter to the Healthcare Industry he wrote one-year ago about COVID-19

1:05 Health is the seminal American institution to drive social connectedness and economic prosperity.

1:06 Using the challenges of 2020 as a crucible for growth and for refinement (shifts in culture, change in social compact, payment models, civility)

1:07 $4T (20% of our GDP) is more than enough to do more than we are doing in healthcare. WE CAN DO BETTER!