Relentless Health Value

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: 1. 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. 2. 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. 3. 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? 4. 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. 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.   06:33 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   Recent past interviews: Click a guest’s name for their latest RHV episode! 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  

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: 1. “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. 2. “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. 3. 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. 4. More interest in drugs for non-Medicare markets (ie, drugs for diseases of younger populations, perhaps) 5. 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? 6. 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. 7. 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. 8. 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. 9. 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  

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: 1. 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. 2. 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.   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. 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.   03:16 “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)  

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): 1. 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. 2. 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. 3. 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

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.   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. 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.   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  

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: 1. 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. 2. 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. 3. 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. 4. 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. 5. 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. 6. 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. 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.   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  

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. 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. 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. That’s a metric load of our cold hard cash that got dumped out back and burned. 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) at the beginning of 2022. 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. 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  

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)  

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)

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. 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. 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.   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