Relentless Health Value

In this healthcare podcast, I have Merrill Goozner on the show talking about his prognostications for the future of healthcare in this country and how, realistically, it could be engineered so that the healthcare industry rightsizes itself relative to our GDP. Merrill offers three glide paths to this end. Okay … so, let’s break this down some. First, Merrill talks about the full impact of huge numbers of patients/people in this country who are scared to seek medical attention. They are afraid to play the game at the end when the bill comes in the mail and they open it up having no idea what it is going to be. It’s a magical mystery guessing game of luck and chance where losers go bankrupt. This is not a victimless situation we have going on here in this country. All these deaths of despair and life expectancy going down … this is unprecedented. So now, we’re level-set on the stakes. Interestingly, Merrill plots out the aspiration for healthcare spending in exactly the same way that David Muhlestein, PhD, JD, did in episode 364. The goal, according to both of them, isn’t to reduce healthcare spending per se. That would be nie near impossible to pull off in the real world, but we could work on holding healthcare cost increases below the rate of GDP growth. Optimal might be healthcare costing, say, 13% of GDP like it does in Switzerland instead of upwards of 20% ($1 out of $5) getting stuffed in the pockets of a healthcare entity or their shareholders. Fifty percent of that, by the way, is being paid for by the government, the other 50% largely coming out of the wages of employees either directly or indirectly. Okay … so, what is the lightning-in-the-bottle moment where we clip in for this journey toward rightsizing healthcare prices? Merrill says it’s a combo of patients and employers and taxpayers crying uncle at the same time that technology and new competitors move in on the supply side and start to chip away at older incumbents like hospitals, especially hospitals who have broken their social contract with their communities—and there I’m paraphrasing some terminology Vikas Saini, MD, uses in an upcoming episode on hospitals and their embarrassing levels of charity care. So, it’s harnessing forces on the demand side of the equation and on the payment side of the equation, coupled with goings-on on the supply side. With all of this going on, Merrill says that, in this crucible of transformation, we could get better care for lower costs. To accomplish that, he says step 1 is for the team for healthcare costs going down—employers taxpayers, government policy makers—gang up, create a value alliance, and work together. These allies then tell the healthcare industry, “Look, gang … ixnay on the growth rates you’ve been accustomed to in the past. Period. You are going to need to deal with that, so get used to it.” That is kind of where all of this starts. Merrill mentions three glide paths that will help up get from here to there, and he names the three: Accountable care—essentially putting providers at risk, giving them budgets that they are responsible to work within Paying for value. We have PCPs who deliver a lot of value. We should pay ’em more. We should also put docs on salary like they do at Mayo and some of these other leading Centers of Excellence. All-payer pricing, which we do get into. They have this now in Maryland. It’s basically when everybody pays the same price for the same service. Merrill says this all kind of rolls up into removing the incentives that reward low-value care. That can be really expensive. I’m paraphrasing here. I’m sure for many of you, Merrill Goozner needs no introduction. He’s been the editor in chief of Modern Healthcare. He wrote a book on the drug industry. He was a reporter for many years before that and also did public interest work. Thank you to Hugh Sims, MD, MBA, for his support and insight! You can learn more at GoozNews. You can also read his book on the drug industry, The $800 Million Pill. Merrill Goozner served as editor in chief of Modern Healthcare from 2012 to 2017 and, as editor emeritus, continued to write the magazine’s weekly column until April 2021. In October 2020, he launched GoozNews.substack.com, where he continues to write about healthcare, the environment, and other subjects. Prior to joining Modern Healthcare, his journalism career spanned nearly 40 years as an editor, writer and journalism educator. In 2004, he authored The $800 Million Pill: The Truth Behind the Cost of New Drugs. He previously served as a foreign, national, and chief economics correspondent for the Chicago Tribune (1987-2000) and a professor of journalism at New York University (2000-2003). He has contributed to numerous lay press and scientific publications over the course of his career, ranging from the New York Times to the Journal of the National Cancer Institute. He earned his master’s degree in journalism from Columbia University in 1982 and his bachelor’s degree in history from the University of Cincinnati in 1975. The University of Cincinnati named him a Distinguished Alumni in 2008 and inducted him into its Journalism Hall of Fame in 2016. 06:24 How is the rise of the high-deductible plan affecting the nation’s health? 07:20 What is one of the big issues not being discussed in America today? 08:33 What kind of tipping point is in store for hospitals in this decade? 09:01 What two trends are we going to see in healthcare in the coming decade? 10:50 What are the ways in which the changes in healthcare go well, and what pitfalls do we need to look out for? 11:14 “[This] is about what is sustainable and what is not sustainable.” 12:35 “Healthcare is misnamed. It’s sick care.” 13:12 Why do we need to talk more about who gets sick in this country? 13:51 “Pricing is part of the problem, but volume is the other part [of the problem].” 15:40 “The world is gonna change, you’re gonna change, and we’re gonna provide you a glide path … because this is what we need as a society.” 17:20 What should be the overall goal for healthcare spend? 18:45 EP364 with David Muhlestein, PhD, JD. 19:40 Why do we need to address physician pay? 25:31 Why does the single pricing system create equality? 30:11 EP363 with David Scheinker, PhD. 30:34 EP370 with Erik Davis and Autumn Yongchu. 30:55 What are the three glide paths for the future of healthcare? You can learn more at GoozNews. You can also read his book on the drug industry, The $800 Million Pill.   @_GoozNews discusses the future of #healthcare on our #healthcarepodcast. #podcast How is the rise of the high-deductible plan affecting the nation’s health? @_GoozNews discusses the future of #healthcare on our #healthcarepodcast. #podcast What is one of the big issues not being discussed in America today? @_GoozNews discusses the future of #healthcare on our #healthcarepodcast. #podcast What kind of tipping point is in store for hospitals in this decade? @_GoozNews discusses the future of #healthcare on our #healthcarepodcast. #podcast What two trends are we going to see in healthcare in the coming decade? @_GoozNews discusses the future of #healthcare on our #healthcarepodcast. #podcast What are the ways in which the changes in healthcare go well, and what pitfalls do we need to look out for? @_GoozNews discusses the future of #healthcare on our #healthcarepodcast. #podcast “[This] is about what is sustainable and what is not sustainable.” @_GoozNews discusses the future of #healthcare on our #healthcarepodcast. #podcast “Healthcare is misnamed. It’s sick care.” @_GoozNews discusses the future of #healthcare on our #healthcarepodcast. #podcast Why do we need to talk more about who gets sick in this country? @_GoozNews discusses the future of #healthcare on our #healthcarepodcast. #podcast “Pricing is part of the problem, but volume is the other part [of the problem].” @_GoozNews discusses the future of #healthcare on our #healthcarepodcast. #podcast “The world is gonna change, you’re gonna change, and we’re gonna provide you a glide path … because this is what we need as a society.” @_GoozNews discusses the future of #healthcare on our #healthcarepodcast. #podcast What should be the overall goal for healthcare spend? @_GoozNews discusses the future of #healthcare on our #healthcarepodcast. #podcast Why do we need to address physician pay? @_GoozNews discusses the future of #healthcare on our #healthcarepodcast. #podcast Why does the single pricing system create equality? @_GoozNews discusses the future of #healthcare on our #healthcarepodcast. #podcast   Recent past interviews: Click a guest’s name for their latest RHV episode! Betsy Seals (EP387), Stacey Richter (INBW36), Dr Eric Bricker (Encore! EP351), Al Lewis, Dan Mendelson, Wendell Potter, Brian Klepper (Encore! EP335), Dr Aaron Mitchell (EP382), Karen Root, Mark Miller, AJ Loiacono, Josh LaRosa, Stacey Richter (INBW35), Rebecca Etz (Encore! EP295), Olivia Webb (Encore! EP337), Mike Baldzicki, Lisa Bari, Betsy Seals (EP375), Dave Chase, Cora Opsahl (EP373), Cora Opsahl (EP372), Dr Mark Fendrick (Encore! EP308), Erik Davis and Autumn Yongchu (EP371), Erik Davis and Autumn Yongchu (EP370), Keith Hartman, Dr Aaron Mitchell (Encore! EP282), Stacey Richter (INBW34)  

Betsy Seals, CEO and Cofounder of Rebellis Group, discusses the success factors of Medicare Advantage plans, including building relationships with brokers and health systems, and the importance of local market knowledge. The podcast also explores the profitability of Medicare Advantage plans, challenges in product design, analyzing data and innovative strategies, and the impact of social determinants of health on health outcomes.

We got two new reviews this week on the podcast, which I was thrilled to see. The first was from, it turns out, Dave Chase from Health Rosetta, who wrote that “with so many people in healthcare practicing ‘innovation theater’ and bloviating versus driving real change, it’s a breath of fresh air to listen to Relentless Health Value.” Thank you so much for saying that, Dave. We try really hard to get guests who are actually doing great things such as yourself. And then there’s another review from mattiw2002, who says, “For anyone trying to stay abreast of developments in the healthcare space, there’s none better than … Relentless Health Value.” Thank you so much to the two of you who took the time to write a review—could not appreciate it more. There have been two inbetweenisodes this year where I get deep into the why behind the “why collaborate.” And when I say collaborate, what I mean is anybody in the healthcare industry working together with and for the patients that we’re supposed to be serving here. It’s creating alignment amongst stakeholders around what’s best for the patient. Here is the nutshell version of the two previous shows. First point: Patients fall into one care gap after another. You hear this from any PCP you talk to who’s working in a care setting when there’s little, if any, collaboration effort on the front end to ensure a non-fragmented patient journey. So then, all these care gaps wind up getting surfaced, which, by the way—let’s not forget this—these care gaps were there all along negatively affecting patient outcomes. It’s just, in the past, we didn’t know about them. But now that we know about them, it becomes the fee-for-service PCPs’ job to mop up all the care gaps while the faucet is still running. So, that’s the situation analysis, and if we’re going to put an end to this, it means that payers have to align with providers and give enough incentive for those providers to create a non-fragmented patient journey (ie, making sure that the care gaps don’t happen to begin with). This also means providers need to talk amongst themselves and collaborate. Keep in mind that a multi-morbid Medicare patient sees something like 5 to 13 doctors, on average, depending on what study you look at … 13! If anybody thinks that a patient can see 13 doctors not collaborating with each other and coordinating care and not wind up with some polypharmacy adverse event or materially conflicting advice … I don’t know. Call me. I just do not understand how consistent excellence in patient outcomes or patient care even could be achieved. That whole cliché the left hand doesn’t know what the right hand is doing? That’s a cliché for a reason, and I seriously suspect the entire field of medicine isn’t weirdly excluded from it. So, first point: Collaboration/alignment is required amongst healthcare stakeholders for patients to get decent outcomes, especially patients with multiple chronic conditions. Payers gotta pay for the right stuff, and providers have to coordinate care. Otherwise, you wind up with all of the care gaps that PCPs currently working in systems with fragmented patient journeys are seeing. Here’s the second point from earlier episodes: Financial toxicity is clinical toxicity. Patients are forgoing care they need and not taking drugs they need because they cannot afford them. This is not speculation. Trilliant Health just released a report that showed this. Healthcare utilization, if you subtract COVID care and behavioral health, might be permanently down. Other reports speculated that by 2030, a leading cause of death might be nonadherence due to cost concerns. Wayne Jenkins, MD, in episode 358, talks about a whole constellation of negative effects when patients can’t afford care; and yeah … here we are. Patients cannot afford their care. They cannot afford premiums, deductibles, out-of-pockets. These are insured patients a lot of times we’re talking about here. Also, this is not a “Medicaid” problem, as Dan Mendelson put in episode 385. So, go back and listen to the earlier shows for the who and the what and the why of the above and much more context; but nothing I’ve just said is stuff that I personally would regard as my personal opinion. There is one study after another that bears all this out. There is just one anecdote after another. Fragmented patient care and care that is way more expensive than a patient can afford is going to result in outcomes that are not, let’s just say, super. Alright, all of this being said, does then aligning payers and providers, and providers collaborating with each other and coordinating care … if these things are done, do patient outcomes improve? Do care gaps reduce? Are patients more satisfied with their care? Said another way, when physician practices get paid to deliver health and not paid for sick care, does patient health actually improve? Why, yes. Yes, it does. Why do I say this? First of all, this very much seems to be the conclusion of CMS. Here’s from the Center for Medicare & Medicaid Innovation (CMMI). They released a report updating their strategic vision for implementing value-based care. One of the key new strategies focuses on creating greater care coordination between primary care doctors and specialists. What might be some of the success stories that precipitated the CMMI focusing their strategy on exactly what I’ve been running around squawking about for one to three years now? The ChenMed Case Study: ChenMed focuses on the most vulnerable patients and dramatically improves access for those patients, which has led to a 30% to 50% reduction in hospitalizations. They published there’s been a 20% to 30% reduction of stroke. They’ve doubled six-month cancer survival rates and, in some cases, reduced heart failure readmissions by 50%, 70%, up to 90%. They see evidence that they are extending lives five or more years. How? By the providers being aligned with the payers and then also making sure that there is very coordinated care going on there. Johns Hopkins has a paper in JAMA that concluded that a care coordination model can be associated with improved outcomes, including substantial cost reduction. I was talking to Larry Bauer from FMEC, the Family Medicine Education Consortium; and he sent me probably a 40-page PDF of really great patient results when care is coordinated and payers are aligned to pay for health. As just one example, Dr. Daniel Hoefer from Sharp HealthCare, they have created what they call their Transitions program. And the idea is by moving aggressive care upstream via community-based palliative medicine, they have proven that the vast majority of people never need to see the inside of a hospital during the last year-ish of their life. The revolving door of hospitalization should be considered an archaic residual of a bygone era, as they put it. Again, this is very well-coordinated care with payer alignment. Do patients actually want this stuff? Before I get into our evidence here, just let me remind you that Kaiser is a payvider with a narrow network and also that Centivo is an innovative TPA (third-party administrator) pulling together narrow networks. On the podcast the other week, Dan Mendelson (EP385) from Morgan Health said that 40% of new employees are choosing lower-premium plans with either Kaiser or Centivo benefit designs. They are choosing lower-cost plans just as much for the lower premiums as for the care coordination and the “I don’t want anybody between me and my doctor” messages. This is what happens when payers and providers are aligned. Nobody gets in the middle there. Heard a similar story from Nick Stefanizzi (EP383) from Northwell Direct. They’re doing direct contracting with customers like Whole Foods. Everybody I talk to here is surprised how many employees are electing these kinds of plans. So, yeah … The Nuka System of Care in Alaska (EP312), where I get into this with Doug Eby, MD, MPH, CPE, in great detail. But wow, just wow there. With the Nuka ecosystem, they went from basically a failing mess into the health system that many consider to be the best or one of the best in the country at something like half the price per patient than in mainland US. They have this whole thing where they integrate specialty care into primary care. They have established an agreed-upon referral patterns and also an agreed-upon way to work with specialists that very much involves PCPs talking to specialists so that the whole person, the whole patient can be considered. They structure their whole program around paying for health and getting paid for health. Also, Nuka has a 96% patient satisfaction rate. So again, patients are certainly on board with this. If I was gonna sum up these five examples, I would certainly say that any physician practices looking to take better care of patients, rediscover clinical excellence and focus … get aligned with payers (CMS or otherwise). That’s step one and certainly easier said than done. After that, work to collaborate with fellow providers. All of these entities that we just talked about who can brag about their patient outcomes and care quality are doing both of the stuff that we just talked about: aligning and collaborating with payers and other providers. They are also, at the same time, folding three other things into their strategy. And this other stuff is required because you kinda can’t align with payers and you can’t collaborate unless you’re doing these three things at the same time: standardizing best-practice care, getting and using data, and using good technology in conjunction with that data. All of this in the service of this last thing, which is turning transactions into relationships. Human relationships. Relationships with patients. As Rebecca Etz, PhD, and her team at The Larry A. Green Center have shown quite crisply (discussed in episode 295), no relationship with a patient means worse outcomes for patients. End of sentence. But then there’s also having relationships with colleagues and relationships with other docs who have patients in common. It is really tough to coordinate care without relationships, and it’s also not very fulfilling. Alright, moving on to another question: Are doctors happy in these models where payers are paying for health and where it’s a must-have to coordinate across the continuum of care? Well, I can tell you a couple of things. ChenMed has been named to Newsweek’s “Most Loved Workplaces” list. Nuka System has a 93% employee satisfaction rating. Considering that elsewhere one out of two family practice docs are burned out, this is pretty striking in contrast. Also, here’s another quote from a physician leader about good accountable care where health is being paid for. He said, “This has changed our physicians’ lives … the idea that we can get paid to actually take care of people. To actually have data to send people to the best for follow-up care, who we know will continue and contribute to the patients’ well-being in the same way. Burnout reduces here because burnout is moral injury in a cheap Halloween costume.” I’m really sorry I can’t remember who said that because it’s a great quote and so true. Larry Bauer from FMEC also told me the other day that DPC (Direct Primary Care) conferences have never had a session on burnout. Larry says he tells people if they want to see what 350 happy primary care docs look like, they need to come to a DPC summit. They’re happy as clams. Now, while DPC isn’t the “be entirely responsible for downstream costs” kind of accountable care, what is going on in DPC is, these docs are accountable to their patients and for the care that they are providing. Here’s another anecdote which I think, in sum, adds up to a “yes” if the question is “Do docs really like this stuff?” I had a long conversation with Scott Conard, MD, the other day about his work with clinics in Queens. What I learned was, these clinics, they used to have waiting rooms overflowing with patients who had been waiting the entire day to be seen and just ... it wasn’t good for anybody. Fast-forward a few years—high-risk patients get seen fast, and there’s time for care coordination. Patients are happy; outcomes are better. But here is why I inferred that the docs are happy in this model: There was a new office manager. New office manager starts trying to go back to the old way, the “normal” way that practices are run. And it was mutiny on the bounty. No way no how were those docs going back. I took that as a pretty solid testimonial if I ever heard one. So, I don’t know if anybody has done any sort of global physician satisfaction studies to determine if physicians who are in pay-for-health models where they’re collaborating with one another are happier and less burned out than doctors in the current fee-for-service (FFS) environment. But I can tell you that if somebody did do this, there’s gonna be one really big confounding factor … and this is what it is: There’s a world of difference between a well-functioning accountable care model and a very terrible one. I have had a series of (as I said earlier) pretty heartbreaking, honestly, conversations with PCPs around the country who think value-based care pretty much sucks. For the big why on this, listen to the show with Dan O’Neill (EP359). But in short, in “not quite there yet” value-based care models, one’s still in the two canoes messy middle (ie, they’ve got one foot in the value-based care world and one foot firmly in the FFS world). Life can get really hard for PCPs especially because they get the worst of both. They get to be care gap cowboys and cowgirls while, at the same time, having to do all of the FFS coding; and they still have seven-minute visits and RVU targets. There’s not really great population health. Nobody’s figured out how to defragment the care journey. And then there’s the whole measurement industrial complex that gets piled on top of their day. I cannot stress this enough. Alright, so let’s just check off our last big question here for the money motivated. This especially comes up when talking with especially specialists, who are doing very well, thank you very much—financially, I mean—in the current FFS status quo. So, let’s not avoid the elephant in the room. Is taking on risk, getting paid for value, being accountable to deliver great results, deliver health … is it worth it from a financial standpoint? Alright, let’s take a look at this. Here’s from show 343 with David Carmouche, MD, when he was at Ochsner. He said, “Anything that we can do to convert the effective reimbursement in the Medicare space to something greater than Medicare fee-for-service rates, we think that this is in our best interest. So, we have gone very heavy into moving as much of our Medicare business into risk as we can. And we will take full capitation under a couple of Medicare advantage contracts.” So, that includes primary care as well as specialist care. Let’s talk about One Medical for a moment. Five percent of One Medical members account for 51% of the company’s revenue. You know which 5% account for that 51% of revenue? Right, the at-risk ones that are part of the Iora value-based medical group with a capitated model. That is a pretty strong financial endorsement there. There’s a whole show with Brian Klepper, PhD (EP335), about why private equity is willing to pay $55,000 per patient in a capitated model. So, some actuaries somewhere think this is a very financially sound way to go. I am not sure if I would die on this hill, but I’d also say there’s likely a downside to making zero effort on the accountable care front and banking on FFS being a forever cash cow. Everything I’ve just said, not a secret. Not at all. You see CMS moving in the “making providers accountable” direction. I already mentioned this and what CMMI is up to. But this is very much an overall strategy. Currently, 44% of traditional Medicare beneficiaries with parts A and B are in a care relationship with some accountability for quality and total cost of care. CMS aims to boost that number to 60% by 2024 and 100% by 2030. In sum across the industry, it looks like 19.6% of healthcare payments were risk-based in APMs (Alternative Payment Models) that include upside and downside. This is a couple points higher than in 2020, but it’s not like it’s skyrocketing. So, that might be a curb to our enthusiasm. However, in 2022 here, looking forward to 2023, you know who besides CMS is going heavy on trying to pay for health and not sick care? I have never seen my entire career more CEOs of Fortune 500 companies—CEOs!—who are actively taking a role in their employee health benefits. I think it’s because they can’t afford not to at this point. Again, financial toxicity is very, very real for employed individuals. Here’s something that Jeff Hogan called out from a McKinsey report: “VBC [value-based care] models that show promise in the employer context include high-performance provider networks with cost- and quality-based metrics, episode-based payments for standardized patient-care journeys … , and risk-based contracts for end-to-end management of high-cost conditions.” You know what all those things have in common that I just rattled off? Only high-performing docs are in network—and this includes specialists. I say all this to say, I don’t know, if I were a practitioner of healthcare and I knew that all this data was floating around about my practice patterns and given that doctors that don’t perform well as per that data are being excluded from networks … I don’t know, just given all of the signs that are pointing in a risk-based direction, learning to take on risk just seems like—I was never a Boy Scout, but the whole “Be prepared” seems pretty sound advice right now, especially given how long it takes to get good at this. For more information, go to aventriahealth.com. To listen to the playlist of the mentioned episodes, click here. 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.   05:03 When physician practices get paid to deliver health and not paid for sick care, does patient health actually improve? 05:46 What is the ChenMed Case Study? 06:26 Can a care coordination model be associated with improved outcomes, including substantial cost reduction? 06:38 Are there examples of really great patient results when care is coordinated and payers are aligned to pay for health? 07:29 Do patients actually want this stuff? 07:46 Are employees choosing lower-cost plans just as much for the lower premiums as for the care coordination and the “I don’t want anybody between me and my doctor” messages? 08:29 What is the Nuka System of Care in Alaska? 09:25 “I would certainly say that any physician practices looking to take better care of patients, rediscover clinical excellence and focus … get aligned with payers (CMS or otherwise). That’s step one and certainly easier said than done.” 10:45 Are doctors happy in these models where payers are paying for health and where it’s a must-have to coordinate across the continuum of care? 11:16 “This has changed our physicians’ lives … the idea that we can get paid to actually take care of people. To actually have data to send people to the best for follow-up care, who we know will continue and contribute to the patients’ well-being in the same way. Burnout reduces here because burnout is moral injury in a cheap Halloween costume.” —Physician leader 13:25 “There’s a world of difference between a well-functioning accountable care model and a very terrible one.” 13:59 “Life can get really hard for PCPs especially because they get the worst of both. They get to be care gap cowboys and cowgirls while, at the same time, having to do all of the FFS coding; and they still have seven-minute visits and RVU targets.” 14:43 Is taking on risk worth it from a financial standpoint? 16:05 “There’s likely a downside to making zero effort on the accountable care front and banking on FFS being a forever cash cow.” 17:11 “I have never seen my entire career more CEOs of Fortune 500 companies—CEOs!—who are actively taking a role in their employee health benefits. I think it’s because they can’t afford not to at this point. Again, financial toxicity is very, very real for employed individuals.” 17:54 “Only high-performing docs are in network—and this includes specialists.”   For more information, go to aventriahealth.com. To listen to the playlist of the mentioned episodes, click here.   Our host, Stacey, discusses #collaboration on our #healthcarepodcast. #healthcare #podcast When physician practices get paid to deliver health and not paid for sick care, does patient health actually improve? Our host, Stacey, discusses #collaboration on our #healthcarepodcast. #healthcare #podcast What is the ChenMed Case Study? Our host, Stacey, discusses #collaboration on our #healthcarepodcast. #healthcare #podcast Can a care coordination model be associated with improved outcomes, including substantial cost reduction? Our host, Stacey, discusses #collaboration on our #healthcarepodcast. #healthcare #podcast Are there examples of really great patient results when care is coordinated and payers are aligned to pay for health? Our host, Stacey, discusses #collaboration on our #healthcarepodcast. #healthcare #podcast Do patients actually want this stuff? Our host, Stacey, discusses #collaboration on our #healthcarepodcast. #healthcare #podcast Are employees choosing lower-cost plans just as much for the lower premiums as for the care coordination and the “I don’t want anybody between me and my doctor” messages? Our host, Stacey, discusses #collaboration on our #healthcarepodcast. #healthcare #podcast What is the Nuka System of Care in Alaska? Our host, Stacey, discusses #collaboration on our #healthcarepodcast. #healthcare #podcast “Are doctors happy in these models where payers are paying for health and where it’s a must-have to coordinate across the continuum of care?” Our host, Stacey, discusses #collaboration on our #healthcarepodcast. #healthcare #podcast “There’s a world of difference between a well-functioning accountable care model and a very terrible one.” Our host, Stacey, discusses #collaboration on our #healthcarepodcast. #healthcare #podcast Is taking on risk worth it from a financial standpoint? Our host, Stacey, discusses #collaboration on our #healthcarepodcast. #healthcare #podcast “There’s likely a downside to making zero effort on the accountable care front and banking on FFS being a forever cash cow.” Our host, Stacey, discusses #collaboration on our #healthcarepodcast. #healthcare #podcast “Only high-performing docs are in network—and this includes specialists.” Our host, Stacey, discusses #collaboration on our #healthcarepodcast. #healthcare #podcast   Recent past interviews: Click a guest’s name for their latest RHV episode! Dr Eric Bricker (Encore! EP351), Al Lewis, Dan Mendelson, Wendell Potter, Brian Klepper (Encore! EP335), Dr Aaron Mitchell (EP382), Karen Root, Mark Miller, AJ Loiacono, Josh LaRosa, Stacey Richter (INBW35), Rebecca Etz (Encore! EP295), Olivia Webb (Encore! EP337), Mike Baldzicki, Lisa Bari, Betsy Seals (EP375), Dave Chase, Cora Opsahl (EP373), Cora Opsahl (EP372), Dr Mark Fendrick (Encore! EP308), Erik Davis and Autumn Yongchu (EP371), Erik Davis and Autumn Yongchu (EP370), Keith Hartman, Dr Aaron Mitchell (Encore! EP282), Stacey Richter (INBW34), Ashleigh Gunter, Doug Hetherington  

This episode was one of the most popular episodes in the past 12 months. Since it aired, there was a show with Kevin Schulman, MD (EP366), that added some context, which I would recommend, and also one with David Muhlestein, PhD, JD (EP364). Those two shows and this one are a good three-pack. And hey, here’s something new that we’re going to try out. Coming up in December, Dr. Bricker and I will host a smallish virtual chat to discuss the topics covered in this episode. It will be a conversation, not a presentation, so therefore the “why” behind the “smallish.” If you are kinda thinking this is something that you’d like to do, go to our Web site and scroll down to the “Join the Relentless Tribe.” When we get our act together, we’ll send out the details for how to sign up in a future email. I’m thinking it will be very cool to get a chance for the great people who support our show enough to actually get a weekly email to talk amongst ourselves! In this healthcare podcast, I’m speaking with Eric Bricker, MD, about how so many entities in healthcare are getting up in other people’s business and swimming in other people’s traditional lanes. We kick off the conversation talking about the payer, PBM, and hospital system horizontal consolidation that has transpired over the past decades (that’s plural). Horizontal consolidation is pretty much the easiest way to decimate all competition in your own swim lane so that you can charge more and not worry so much about patient/customer/member experience because the patients/customers/members have no better alternative. They effectively have nowhere, or few other places at best, to go if they leave you. So, what’s the impact of horizontal consolidation? Commercial insurance costs have gone up 4x the rate of other benchmark goods and services. Let’s spend a moment, shall we, on the human impact of all this extreme consolidation. The impact is your sister, your neighbor, your son, your friend. So many feel so much pressure financially in our country today because of healthcare costs. Even families earning significantly more than median household income are forgoing care because of costs. This was in a recent paper. (The authors are Alyce S. Adams, Raymond Kluender, Neale Mahoney, Jinglin Wang, Francis Wong, and Wesley Yin.) But the direct observable financial toxicity resulting from high healthcare patient costs is really only the tip of the iceberg here. As Dave Chase from Health Rosetta has said a million times already, high healthcare costs have a multitude of effects on employers, big and small. One big one is, if healthcare costs more, then there’s less money for salaries. Dave, citing lots of evidence, has long attributed wage stagnation in this country to accelerating healthcare costs, which became even more rampant during periods of industry consolidation. Dave Chase leads Health Rosetta, by the way. Here’s another human toxicity: Listen to episode 337 with Oliva Webb on the impact on her life as a result of the undeniably and unquestionably common non-excellent treatment by the PBMs and SPPs that she has to deal with. Because, as Dr. Bricker also says, no competition means basically not a whole lot of concern about patient experience. Why should a for-profit business spend money to improve something when there’s nothing really to be gained for them financially to do so? I mean, the best a patient can do most of the time is hop from the frying pan into the fire. That’s what happens when there’s no competition or no real competition. Also consider the burned-out clinicians who have to get stuck in the middle of this nobody-really-cares-at-the-monopoly customer service paperwork quagmire. By the way, here’s a sidebar that might come as a surprise to some people, but please take this in the spirit with which it’s intended. All of us innovators and lifelong learners, we want to update our beliefs when the facts show us an updated conclusion. So, I have learned that all of this consolidation was going on long before the ACA (Affordable Care Act). My point here is to please look into this well-documented trend line before reflexively tweeting that the ACA drove consolidation. Dr. Bricker and others like Dr. Mai Pham have told me that, in their opinion, low interest rates, cheap debt, and a desire to eliminate competition are wildly powerful drivers of consolidation. Anyway, about eight minutes into the interview with Dr. Bricker, if you’re one of the ones who knows all you care to know about horizontal consolidation, we get into vertical integration, vertical consolidation—and this is where things get interesting. And when I say interesting, I mean it in a “we live in interesting times” kind of way. The vertical consolidation conversation segues into whose swim lane that the digital health and other innovators or, dare I say, disrupters are diving into and whose lunch they are aiming to eat. Dr. Bricker probably needs no introduction. He is the force behind AHealthcareZ, which you can find online, on Twitter, YouTube, and LinkedIn. He has worked as a clinician, in healthcare finance. If that weren’t enough, he’s also been an entrepreneur—a very successful entrepreneur, I might add. He started one of the first healthcare navigation firms. You can connect with Dr. Bricker on Twitter at @DrEricB and on LinkedIn. Eric Bricker, MD, is an internal medicine physician and former cofounder and chief medical officer of Compass Professional Health Services. Compass is a healthcare navigation service that grew to 2000+ clients, including T-Mobile, Southwest Airlines, and Chili’s/Maggiano’s restaurants. Compass was acquired by Alight Solutions in July 2018. Alight is a 10,000-person employee benefits and HR outsourcing company that separated from Aon in 2017. Dr. Bricker has since started AHealthcareZ.com, with 300+ healthcare finance videos with approximately 120,000 views per month across all platforms. In 2022, he became medical director of SimplePay Health, an alternative health plan that empowers employees with high-quality care, concierge support, and easily understood payment. He is also the author of Healthcare Money Campfire Stories.   05:50 What is this “megatrend” happening in healthcare right now? 07:11 How has consolidation changed the healthcare landscape? 09:41 What is vertical integration within healthcare? 11:07 Why doesn’t inorganic growth benefit patients? 12:52 “What is best for the patient does not necessarily make the most money.” 14:02 “It’s not that it’s above the law … it is just intentionally obscured.” 18:16 “Healthcare is glacial. It is slow.” 22:36 “The largest source of healthcare costs is hospitals.” 25:00 EP330 with John Marchica. 28:20 “What have the historical priorities been of the administrators of those hospitals?” 28:35 “Every hospital CFO knows that they need sick people.” 29:21 EP343 with David Carmouche, MD. 30:01 “The payment change has to come first.” 31:19 “The money wins.” 33:16 “You’ve got to put the financial incentives in place … to make people actually behave the way that they should.”   You can connect with Dr. Bricker on Twitter at @DrEricB and on LinkedIn.   @DrEricB discusses #healthcare’s changing landscape on our #healthcarepodcast. #podcast #digitalhealth What is this “megatrend” happening in healthcare right now? @DrEricB discusses #healthcare’s changing landscape on our #healthcarepodcast. #podcast #digitalhealth How has consolidation changed the healthcare landscape? @DrEricB discusses #healthcare’s changing landscape on our #healthcarepodcast. #podcast #digitalhealth What is vertical integration within healthcare? @DrEricB discusses #healthcare’s changing landscape on our #healthcarepodcast. #podcast #digitalhealth Why doesn’t inorganic growth benefit patients? @DrEricB discusses #healthcare’s changing landscape on our #healthcarepodcast. #podcast #digitalhealth “What is best for the patient does not necessarily make the most money.” @DrEricB discusses #healthcare’s changing landscape on our #healthcarepodcast. #podcast #digitalhealth “It’s not that it’s above the law … it is just intentionally obscured.” @DrEricB discusses #healthcare’s changing landscape on our #healthcarepodcast. #podcast #digitalhealth “Healthcare is glacial. It is slow.” @DrEricB discusses #healthcare’s changing landscape on our #healthcarepodcast. #podcast #digitalhealth “The largest source of healthcare costs is hospitals.” @DrEricB discusses #healthcare’s changing landscape on our #healthcarepodcast. #podcast #digitalhealth “What have the historical priorities been of the administrators of those hospitals?” @DrEricB discusses #healthcare’s changing landscape on our #healthcarepodcast. #podcast #digitalhealth “Every hospital CFO knows that they need sick people.” @DrEricB discusses #healthcare’s changing landscape on our #healthcarepodcast. #podcast #digitalhealth “The payment change has to come first.” @DrEricB discusses #healthcare’s changing landscape on our #healthcarepodcast. #podcast #digitalhealth “The money wins.” @DrEricB discusses #healthcare’s changing landscape on our #healthcarepodcast. #podcast #digitalhealth “You’ve got to put the financial incentives in place … to make people actually behave the way that they should.” @DrEricB discusses #healthcare’s changing landscape on our #healthcarepodcast. #podcast #digitalhealth   Recent past interviews: Click a guest’s name for their latest RHV episode! Al Lewis, Dan Mendelson, Wendell Potter, Brian Klepper (Encore! EP335), Dr Aaron Mitchell (EP382), Karen Root, Mark Miller, AJ Loiacono, Josh LaRosa, Stacey Richter (INBW35), Rebecca Etz (Encore! EP295), Olivia Webb (Encore! EP337), Mike Baldzicki, Lisa Bari, Betsy Seals (EP375), Dave Chase, Cora Opsahl (EP373), Cora Opsahl (EP372), Dr Mark Fendrick (Encore! EP308), Erik Davis and Autumn Yongchu (EP371), Erik Davis and Autumn Yongchu (EP370), Keith Hartman, Dr Aaron Mitchell (Encore! EP282), Stacey Richter (INBW34), Ashleigh Gunter, Doug Hetherington, Dr Kevin Schulman  

First of all, let me thank those of you who have left a podcast review in 2022. There was one from Best Healthcare Podcast Around on Apple Podcasts the other day that thanked Relentless Health Value for being singularly responsible for providing a 400-level education in so many complex areas of healthcare, which I personally really appreciated because we aspire to be a master class in healthcare industry strategy, such that those looking to do right by patients understand the dynamics well enough to succeed. This also echoed a review from February of this year that said that Relentless Health Value distills complex healthcare issues into a highly intuitive and highly accessible narrative that helped the reviewer’s Fortune 500 company get everybody in the C-suite the understanding needed to confidently make some pretty key healthcare-related decisions. Thanks so much to those of you who left a review for taking the time. As I have said on earlier shows, we really have a Relentless Tribe here working hard to make the healthcare industry in this country much more accountable to the patients that we serve. And you leaving a rating and a review might be the best thing that you can do if you’re into helping us achieve our mission, because the ratings are so entwined with helping others find the show. If you consider yourself a listener who has gained value from this show and you haven’t yet left a review or a rating, could I ask that you do me a favor and do so? If you don’t know how to do that, there are instructions here for how to do so. *** In this healthcare podcast, I am talking with Al Lewis. Al has been on the show before. One thing I did not realize about Al is that he went to Harvard Law School. Today we are discussing using the Quizzify Consent Form in the emergency room. This Quizzify Consent Form quite simply gives patients convenient ways to remember the exact and specific words they need to write on any financial forms they are presented with and told to sign in the emergency room. These words negate a hospital system or ER staffing firm’s claims that the patient agreed in a blanket statement to pay whatever they are charged. In the past (ie, before the surprise billing legislation that went into effect at the beginning of 2022), this Quizzify Consent Form helped prevent the old $11,000 COVID test somebody got in the emergency room or the million-dollar heart attack. For more on the legislation itself, listen to the show with Loren Adler (EP307). While it is far from perfect in a few respects, on the whole, the No Surprises Act is good for patients. It’s been terribly bad news, however, for certain private equity–backed ER staffing organizations who used surprise billing as a business model, meaning specifically—and maybe there’s others, but Team Health and Envision are certainly the big dogs here. This wasn’t any sort of cloaked-in-the-shadows secret, by the way, as far as business models for these two entities. I recall one of them saying without equivocation that the No Surprises Act would be very detrimental to their business. And it turns out, they were right. Here’s from Fierce Healthcare, quoting Moody’s: “Envision ‘faces significant social risk’ due to ‘significant negative publicity relating to the patients … receiving surprise medical bills’ and will remain financially challenged by the No Surprises Act.” Moody’s downgraded Envision’s corporate debt, suggesting that they are at risk of going bankrupt over the next 12-18 months. To further attenuate my sympathies, both of these companies, Team Health and Envision, cut doctors’ pay during the first COVID-19 wave while simultaneously spending millions on political ads to protect surprise billing practices. Anyway, sad … not sad. Getting back on track here, the good news in all of this is that patients don’t have to worry about surprise bills either by private equity–backed entities or just your run-of-the-mill hospital down the street who, pre–No Surprises Act, were not opposed to a little surprise billing action of their own or not opposed enough to do anything about out-of-network docs sending these bills in a lot of cases. But the No Surprises Act doesn’t make going to the ER a safe space from a financial standpoint for patients or their employers, and this is what I talk about today with Al Lewis. This whole conversation reminded me of something that David Contorno has said more than once: Every hospital bill, every physician bill is a surprise bill if the patient does not know ahead of time what the charges will be. You’ve listened to this podcast before and heard guest after guest talk about how payers … frankly not so good at negotiating with hospitals, most of whom have emergency rooms. (Listen to EP346 with Peter Hayes, for example.) If you’re a patient and you go to the ER, you’re gonna see this lack of great negotiating in all of its glory. So, for example, if a payer “negotiated” $10,000 for an emergency MRI or CT scan or some other test or service and the patient has cost sharing, yeah, that patient just got hit with a very, very big bill. Or the whole upcoding thing. This whole thing is what I talk about with Al Lewis today: post–No Surprises Act, what’s happening in emergency rooms and how can we protect patients/members/employees from excessive financial toxicity that is still rampant when it comes to going to the emergency room in many cases. Al talks about how the employers can really help employees and members protect themselves from profiteering hospitals or physician staffing companies the patient doesn’t even realize are gonna be sending bills. You can get and learn more about the Quizzify Consent Form as well as Quizzify’s Doctor Visit PrepKits here. Another episode along these lines to listen to is EP328 with Marshall Allen. You can get the free version of the card by emailing al@quizzify.com. You can also connect with Al by emailing al@quizzify.com, visiting the Web site at quizzify.com, on LinkedIn, or on Twitter at @quizzify and @whynobodybeliev.   Al Lewis wears multiple hats, both professionally and also to cover his bald spot. Hat #1: Employee Health Literacy. He is the founder and “quizmeister-in-chief” of Quizzify, whose mission is to help companies teach their employees to utilize health care services appropriately, using a format best described as “Jeopardy meets Choosing Wisely meets Comedy Central.” Quizzify is the only vendor authorized to display the Harvard Medical School “Veritas” shield and has received excellent reviews from users. Quizzify is also well known for its ER Sticker Shock Prevent Consent, which has been endorsed by Dr. Marty Makary and Dave Chase, among others. It can be taped to an insurance card, used as a stand-alone card, or downloaded into your Apple or Google Wallet and will “pop up” when you enter an ER. It limits ER bills (both in- and out-of-network) to 2x Medicare, which is less than half of most “negotiated” rates. His quiz-specific background includes authorship of the best-selling Newsweek Presents the Ultimate Trivia Game, which Games magazine lauded as having the best questions of any trivia game; hosting two quiz shows on Boston network affiliates; and appearing on Jeopardy. Hat #2: Outcomes Measurement. As an author, his critically acclaimed category best-selling book on outcomes measurement, Why Nobody Believes the Numbers, chronicling and exposing the innumeracy of the health management field, was named digital health book of the year in Forbes. Cracking Health Costs, written in conjunction with Walmart alum Tom Emerick, was also a trade best seller. He was the cofounder of the World Health Care Congress’s Validation Institute. His expertise in outcomes measurement got him named one of the unsung heroes changing healthcare forever. He graduated Phi Beta Kappa with honors from Harvard, where he taught economics as well. He also graduated from Harvard Law School, albeit with no honors that time—other than winning their annual trivia contest, of course. 06:34 What is the evolving problem around surprise bills? 07:08 What are the two issues with the No Surprises Act? 9:13 Why are ER bills in network still so high? 17:27 How does the Quizzify Consent Form work for patients with insurance who unexpectedly visit the hospital? 20:50 “They’re basically saying, ‘We don’t abide by federal law.’ Good luck with that.” 22:20 “The better question is, why aren’t other vendors copying it?” 23:56 How would Quizzify affect the hospital bottom line if employers start utilizing it as part of their employee healthcare? 27:35 Is there any potential downside to Quizzify? You can get the free version of the card by emailing al@quizzify.com. You can also connect with Al by emailing al@quizzify.com, visiting the Web site at quizzify.com, on LinkedIn, or on Twitter at @quizzify and @whynobodybeliev. @whynobodybeliev of @Quizzify discusses #erbilling and the #nosurprisesact on our #healthcarepodcast. #healthcare #podcast What is the evolving problem around surprise bills? @whynobodybeliev of @Quizzify discusses #erbilling and the #nosurprisesact on our #healthcarepodcast. #healthcare #podcast What are the two issues with the No Surprises Act? @whynobodybeliev of @Quizzify discusses #erbilling and the #nosurprisesact on our #healthcarepodcast. #healthcare #podcast Why are ER bills in network still so high? @whynobodybeliev of @Quizzify discusses #erbilling and the #nosurprisesact on our #healthcarepodcast. #healthcare #podcast How does the Quizzify Consent Form work for patients with insurance who unexpectedly visit the hospital? @whynobodybeliev of @Quizzify discusses #erbilling and the #nosurprisesact on our #healthcarepodcast. #healthcare #podcast “They’re basically saying, ‘We don’t abide by federal law.’ Good luck with that.” @whynobodybeliev of @Quizzify discusses #erbilling and the #nosurprisesact on our #healthcarepodcast. #healthcare #podcast “The better question is, why aren’t other vendors copying it?” @whynobodybeliev of @Quizzify discusses #erbilling and the #nosurprisesact on our #healthcarepodcast. #healthcare #podcast How would Quizzify affect the hospital bottom line if employers start utilizing it as part of their employee healthcare? @whynobodybeliev of @Quizzify discusses #erbilling and the #nosurprisesact on our #healthcarepodcast. #healthcare #podcast Is there any potential downside to Quizzify? @whynobodybeliev of @Quizzify discusses #erbilling and the #nosurprisesact on our #healthcarepodcast. #healthcare #podcast Recent past interviews: Click a guest’s name for their latest RHV episode! Dan Mendelson, Wendell Potter, Brian Klepper (Encore! EP335), Dr Aaron Mitchell (EP382), Karen Root, Mark Miller, AJ Loiacono, Josh LaRosa, Stacey Richter (INBW35), Rebecca Etz (Encore! EP295), Olivia Webb (Encore! EP337), Mike Baldzicki, Lisa Bari, Betsy Seals (EP375), Dave Chase, Cora Opsahl (EP373), Cora Opsahl (EP372), Dr Mark Fendrick (Encore! EP308), Erik Davis and Autumn Yongchu (EP371), Erik Davis and Autumn Yongchu (EP370), Keith Hartman, Dr Aaron Mitchell (Encore! EP282), Stacey Richter (INBW34), Ashleigh Gunter, Doug Hetherington, Dr Kevin Schulman, Scott Haas    

If you listened to the show with Dan O’Neill (EP359), you would know this already. But let me tell you: If you’re a provider, even a provider very confident in your office’s ability to confer better patient health, you will still have a super hard time getting off the fee-for-service (FFS) hamster wheel. Why? Because it’s hard to find payer contracts out there which will reward you (the provider) for actually taking care of your patients and to be accountable for the value of healthcare that you deliver. This is a tangled web we weave because, despite some payers offering risk-based contracts, a lot of times there’s some IPA (independent physician association) or other “holder of the actual payer contract” who does not pass along these contract terms. These IPAs or health systems even sometimes just keep paying docs or provider offices FFS even if they themselves have a risk-based or capitated or value-based-of-any-kind agreement. If I actually kept track of the issues raised in the emails I receive from docs, there’s one thing that I would likely find amongst the most frequently cited points of consternation: Physicians or practices or CINs (clinically integrated networks) or ACOs (accountable care organizations) want contracts where they can do right by patients. These are the good docs. These are the ones burned out and suffering from moral injury because physicians, PAs (physician assistants), nurses, clinicians who actually follow up and coordinate care and spend time making accurate diagnoses instead of cramming in more procedures … these are the clinicians who want to do the right thing and are also the ones who are getting dinged on performance reports and paid less. Bottom line here, for a physician practice to transform itself from an FFS machine cranking out volume but not necessarily health or care, the office has to have a high enough percentage of their patients in value-based arrangements to make it actually feasible to transform. It is only when they hit a tipping point of enough volume, enough patients in risk-based contracts that they can afford to be accountable for their results. At that point, yeah, everybody wins—doctors, patients, actually the entire community wins because when a local practice transforms, all of their patients tend to benefit at some level from the new processes and procedures and standardizations and pop health systems that get put in place. So, let’s move forward with this with all haste, shall we? Why aren’t we? What’s the problem here? Well, there are lots of problems, don’t get me wrong. But a big one is self-insured employers on the whole are not offering any sort of accountable care arrangements to the providers in their community. This is 150 million patient lives we’re talking about here—a huge chunk of many providers’ patient panels. Self-insured employers have a really big opportunity to level up the care in their whole community due to the spillover effect when a provider practice transforms itself because it has enough patients to do so. But these employers are stuck. They are paralyzed. They are doing the same thing this year that they’ve done last year, and therefore their whole community is equally stuck in a smorgasbord of suboptimal FFS goings-on. So, offering accountable care contracts is one thing (a very big consequential thing) that is also one of the five things self-insured employers can do to improve employee health that I talk about in this healthcare podcast with Dan Mendelson. Dan Mendelson, my guest today, also wrote a Forbes article listing out these five things. Here are all five things that Dan mentions in one handy list: Expand availability of accountable care models to improve the care experience, quality, and affordability at a local level. For a deep dive on this, listen to the show with Dave Chase (EP374). Invest in the data access needed to assess health outcomes. For a deep dive on this, listen to the show with Cora Opsahl (EP372). Align employees’ health benefits with pop health outcomes. For a deep dive on this, listen to the show with Mark Fendrick, MD (Encore! EP308). Prioritize care models that can meet employees wherever they are. For a deep dive on the DEI (diversity, equity, and inclusion) aspect of this, listen to the show with Monica Lypson, MD, MHPE (EP322). Make care navigation a central part of the benefits package and experience. I am looking for an expert to take a deep dive on care navigation who does not work for a care navigation company. Hit me up if you know someone (again, who does not work for a care navigation company). My guest today, Dan Mendelson, is CEO of Morgan Health at JPMorgan Chase. He previously founded Avalere Health. Before that, Dan served as associate director for health at the Office of Management and Budget. Besides exploring the why and the what for each of the five things employers should do right now, I also wanted to find out from Dan what’s going on at Morgan Health and how they are looking to help self-insured employers who want to do these five things actually do them. You can learn more at the Morgan Health Web site. Dan Mendelson is the chief executive officer of Morgan Health at JPMorgan Chase & Co. He oversees a business unit at JPMorgan Chase focused on accelerating the delivery of new care models that improve the quality, equity, and affordability of employer-sponsored healthcare. Mendelson was previously founder and CEO of Avalere Health, a healthcare advisory company based in Washington, DC. He also served as operating partner at Welsh Carson, a private equity firm. Before founding Avalere, Mendelson served as associate director for health at the Office of Management and Budget in the Clinton White House. Mendelson currently serves on the boards of Vera Whole Health and Champions Oncology (CSBR). He is also an adjunct professor at the Georgetown University McDonough School of Business. He previously served on the boards of Coventry Healthcare, HMS Holdings, Pharmerica, Partners in Primary Care, Centrexion, and Audacious Inquiry. Mendelson holds a Bachelor of Arts degree from Oberlin College and a Master of Public Policy (MPP) from the Kennedy School of Government at Harvard University.   05:53 Why did Dan direct his article about health benefits at CEOs? 06:56 What does an accountable care model mean to a self-insured employer? 08:50 “This alignment of value will never work … if the 150 million Americans … getting their health insurance through their employer are not also aligned in the same way.” 12:21 “We’re offering them a higher level of service.” 12:32 “Everything that we do is intended to be scalable and not just for us.” 13:01 “We have an obligation to do better for our employees.” 15:44 “Employers need to understand, the only way to get outstanding care is locally.” 18:21 Encore! EP206 with Ashok Subramanian and EP358 with Wayne Jenkins, MD. 19:10 Why is getting quantitative metric data important? 19:42 Encore! EP308 with Mark Fendrick, MD. 21:50 “This is a much broader vision of accountable care than … primary care.” 23:41 “Until everything is aligned, the employer is just not going to be providing an optimal product.” 24:32 “There are substantial issues with … health equity, and employers are paying for the care of 150 million Americans in this country.” 26:15 Is digital health access important for creating meaningful relationships between patients and providers? 30:43 What is the myth that employers need to tackle? 31:10 Why is care navigation important for employees? 32:37 EP334 with Sunita Desai, PhD. You can learn more at the Morgan Health Web site. @dnmendelson of @JPMorgan discusses #selfinsuredemployers on our #healthcarepodcast. #healthcare #podcast Why did Dan direct his article about health benefits at CEOs? @dnmendelson of @JPMorgan discusses #selfinsuredemployers on our #healthcarepodcast. #healthcare #podcast What does an accountable care model mean to a self-insured employer? @dnmendelson of @JPMorgan discusses #selfinsuredemployers on our #healthcarepodcast. #healthcare #podcast “This alignment of value will never work if the 150 million Americans getting their health insurance through their employer are not aligned in the same way.” @dnmendelson of @JPMorgan discusses #selfinsuredemployers on our #healthcarepodcast. #healthcare #podcast “We’re offering them a higher level of service.” @dnmendelson of @JPMorgan discusses #selfinsuredemployers on our #healthcarepodcast. #healthcare #podcast “Everything that we do is intended to be scalable and not just for us.” @dnmendelson of @JPMorgan discusses #selfinsuredemployers on our #healthcarepodcast. #healthcare #podcast “We have an obligation to do better for our employees.” @dnmendelson of @JPMorgan discusses #selfinsuredemployers on our #healthcarepodcast. #healthcare #podcast “Employers need to understand, the only way to get outstanding care is locally.” @dnmendelson of @JPMorgan discusses #selfinsuredemployers on our #healthcarepodcast. #healthcare #podcast Why is getting quantitative metric data important? @dnmendelson of @JPMorgan discusses #selfinsuredemployers on our #healthcarepodcast. #healthcare #podcast “This is a much broader vision of accountable care than … primary care.” @dnmendelson of @JPMorgan discusses #selfinsuredemployers on our #healthcarepodcast. #healthcare #podcast “Until everything is aligned, the employer is just not going to be providing an optimal product.” @dnmendelson of @JPMorgan discusses #selfinsuredemployers on our #healthcarepodcast. #healthcare #podcast “There are substantial issues with … health equity, and employers are paying for the care of 150 million Americans in this country.” @dnmendelson of @JPMorgan discusses #selfinsuredemployers on our #healthcarepodcast. #healthcare #podcast Is digital health access important for creating meaningful relationships between patients and providers? @dnmendelson of @JPMorgan discusses #selfinsuredemployers on our #healthcarepodcast. #healthcare #podcast What is the myth that employers need to tackle? @dnmendelson of @JPMorgan discusses #selfinsuredemployers on our #healthcarepodcast. #healthcare #podcast Why is care navigation important for employees? @dnmendelson of @JPMorgan discusses #selfinsuredemployers on our #healthcarepodcast. #healthcare #podcast Recent past interviews: Click a guest’s name for their latest RHV episode! Wendell Potter, Brian Klepper (Encore! EP335), Dr Aaron Mitchell (EP382), Karen Root, Mark Miller, AJ Loiacono, Josh LaRosa, Stacey Richter (INBW35), Rebecca Etz (Encore! EP295), Olivia Webb (Encore! EP337), Mike Baldzicki, Lisa Bari, Betsy Seals (EP375), Dave Chase, Cora Opsahl (EP373), Cora Opsahl (EP372), Dr Mark Fendrick (Encore! EP308), Erik Davis and Autumn Yongchu (EP371), Erik Davis and Autumn Yongchu (EP370), Keith Hartman, Dr Aaron Mitchell (Encore! EP282), Stacey Richter (INBW34), Ashleigh Gunter, Doug Hetherington, Dr Kevin Schulman, Scott Haas, David Muhlestein

Here’s a Milton Friedman quote: “There is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits so long as it [that entity] stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.” Okay, so this is Friedman, Milton Friedman, pretty much the most influential advocate of free market capitalism, stating quite clearly that an entity’s greatest responsibility lies in the satisfaction of its shareholders. His nod to social responsibility or ethics of any kind comes at the end there, where he says that for free market capitalism to function, there must be open and free competition and no fraud. So, let’s compare this to what’s going on in the payer space in the healthcare industry. First off, there was just a chart in the New York Times the other day where pretty much every major payer except one got a check in a box for being accused of fraud. Interestingly, if you look in the comments section of that article, people posted links where that one outlier was being accused of fraud. So, I’m not sure what’s up with that, but yeah, let’s just conclude that there’s fraud in the payer space. On to Friedman’s requirement for open and free competition. As we all know, there are a few very powerful, very big, consolidated entities who control the vast majority of the market with both regulatory capture as well as the capital to continue to buy more and more adjacent businesses, as well as any threatening upstarts and just close them down. As I often hear said, we’re gonna wind up with single-payer healthcare but maybe not the single payer most people are thinking of. If anyone thinks that in the highly consolidated payer space there is open and free competition, send me a note. I’d love to hear from you. I mean, even if what I’ve just said is 50% or 75% true, we’re still outside of Friedman’s definition of functional free market capitalism in the payer space. I wanna shift gears now to discuss the rules of the game, and this is really the topic of today’s podcast. Friedman said in that quote above that there are rules of the game that entities abide by. Therefore, these rules of the game are inarguably consequential. And in this healthcare podcast we’re talking about how these rules of the game echo when it comes to payers—companies that are publicly traded on Wall Street with shareholders. So, that’s your spoiler for where this episode is headed. But before we go there, let me just say one or two things to the many listeners who I would consider certainly part of our Relentless Tribe who also work for payers. If you work for a payer, you have a few options. One of them is to do as much social good as you can to offset even a little piece of the not so good going on. The other is to help those working elsewhere in the organization to understand the full impact of their actions and the hope that they figure out a way to be less financially toxic to members. You have already taken the first step, because simply by listening to the show, you see the problems with clear eyes. The larger question, though, is this: Is it possible to do well by doing good vis-à-vis leveraging the power of market forces to efficiently help patients, even if shareholders are demanding otherwise? Well, it ain’t working out so great so far, just comparing us to the rest of the world. But the more white hats we have, the better. So, keep advocating for patients in the belly of the beast, and there’s always a whistle around to blow should it come to that. Meanwhile, let’s focus our clear eyes on where we are from a patient’s eye view—just briefly here, because we’ve discussed this all before in great depth. Here’s some stats to a Commonwealth Fund issue brief. In the first half of 2020, first quarter, one out of four adults in employer plans were functionally uninsured due to high out-of-pocket costs or high deductibles. Listen to the show with Wayne Jenkins, MD (EP358), for a deep dive on the human consequences of having insurance but not being able to afford to use it. We’re in a place in this country where the majority (67%) of adults who reported medical bill or debt problems was insured when that care was provided. That’s from Kaiser Family Foundation. There’s 100 million Americans with medical debt. These numbers are staggering. What’s the why with all of this? It’s our dysfunctional healthcare benefits market. Listen to the show with Kevin Schulman, MD (EP366), for more on this at the systemic level. But today we’re talking about one entity in this dysfunction, which are payers, insurance carriers. I invited Wendell Potter on the show to ask him to explain how for-profit payers contribute to our dysfunction, creating inequality and wage stagnation. You see this happening as well as I do, right? On one hand, we have entities claiming all kinds of worthy and beautiful things in press releases and maybe even doing pilot programs—pilots, which are great, and I wish they did more of them and scaled them more broadly, but then premiums go up the following year … again. Being blunt here, it’s hard to attain broad success in improving health outcomes or improving disparities in care when getting and/or using their healthcare benefits is toxic financially and disproportionately impacts lower-income communities. The reality is, private payers have not been able to bring costs of care down. What they have done instead is settle more and more out of pockets with patients or with taxpayers or with employers. Speaking of more and more out-of-pocket costs, although this is not the focus of the show, I am not giving consolidated health systems a pass here, obviously. But in this episode, we’re focusing on why payers behave as they do contributing to the dysfunctional healthcare benefit system in this country. I could not have been more thrilled to have an opportunity to speak with Wendell Potter. His name most likely precedes him. But in brief, for much of his early career, Wendell Potter was a health insurance executive. After 20 years, he left his job after a crisis of conscience. Wendell testified before then-Senator Rockefeller’s Commerce Committee at a hearing about how healthcare companies actually operate. From there, he went on to write books and ultimately to start the Center for Health & Democracy.   You can learn more by following Wendell and signing up for his newsletter at wendellpotter.substack.com. Wendell Potter has more than four decades of experience as a communications professional, including a career as a reporter and a communication executive at the country’s largest health insurers. After seeing firsthand how strategic PR and lobbying are used unfairly to tilt the scales toward corporate interests against the people’s interests, Wendell left his corporate career to advocate for meaningful healthcare reform. He made headlines in 2009 when he disclosed in Congressional testimony how insurance companies, as part of their efforts to boost profits, have contributed to spiraling healthcare costs and the growing number of Americans without health insurance. Since then, he has spoken at more than 200 public forums and authored the award-winning New York Times bestseller Deadly Spin: An Insurance Company Insider Speaks Out on How Corporate PR Is Killing Health Care and Deceiving Americans. He is also the author of Obamacare: What’s in It for Me? What Everyone Needs to Know About the Affordable Care Act. His latest book, which he wrote with Nick Penniman, is Nation on the Take: How Big Money Corrupts Our Democracy and What We Can Do About It. Wendell leads two nonprofit advocacy organizations, Business Leaders for Health Care Transformation and the Center for Health & Democracy that convenes the Lower Out-of-Pocket NOW Coalition that pushes for reforms that lower and cap out-of-pocket costs in the United States.   07:01 What is the medical loss metric? 10:04 “The reality is, insurers have been jacking up premiums … for a long time.” 11:19 “It’s a short-term game.” 14:10 “You’re seeing that these companies are not doing a very good job … of controlling costs because they don’t have the incentive.” 16:37 Why are payers hammering the individual PCPs? 17:40 Why does a Wall Street publicly traded payer care what their medical cost is as long as their premiums are higher? 20:07 EP366 with Kevin Schulman, MD. 22:32 How do payers ensure that they’re controlling utilization? 25:40 “It’s death by a thousand cuts.” 31:42 “Just like independent practice physicians are endangered, so are community pharmacists.” 33:11 Who runs our healthcare system? You can learn more by following Wendell and signing up for his newsletter at wendellpotter.substack.com.   @wendellpotter of @cforhd discusses #healthcareshareholders on our #healthcarepodcast. #healthcare #podcast #healthpayers What is the medical loss metric? @wendellpotter of @cforhd discusses #healthcareshareholders on our #healthcarepodcast. #healthcare #podcast #healthpayers “The reality is, insurers have been jacking up premiums … for a long time.” @wendellpotter of @cforhd discusses #healthcareshareholders on our #healthcarepodcast. #healthcare #podcast #healthpayers “It’s a short-term game.” @wendellpotter of @cforhd discusses #healthcareshareholders on our #healthcarepodcast. #healthcare #podcast #healthpayers “You’re seeing that these companies are not doing a very good job … of controlling costs because they don’t have the incentive.” @wendellpotter of @cforhd discusses #healthcareshareholders on our #healthcarepodcast. #healthcare #podcast #healthpayers Why are payers hammering the individual PCPs? @wendellpotter of @cforhd discusses #healthcareshareholders on our #healthcarepodcast. #healthcare #podcast #healthpayers Why does a Wall Street publicly traded payer care what their medical cost is as long as their premiums are higher? @wendellpotter of @cforhd discusses #healthcareshareholders on our #healthcarepodcast. #healthcare #podcast #healthpayers How do payers ensure that they’re controlling utilization? @wendellpotter of @cforhd discusses #healthcareshareholders on our #healthcarepodcast. #healthcare #podcast #healthpayers “It’s death by a thousand cuts.” @wendellpotter of @cforhd discusses #healthcareshareholders on our #healthcarepodcast. #healthcare #podcast #healthpayers “Just like independent practice physicians are endangered, so are community pharmacists.” @wendellpotter of @cforhd discusses #healthcareshareholders on our #healthcarepodcast. #healthcare #podcast #healthpayers Who runs our healthcare system? @wendellpotter of @cforhd discusses #healthcareshareholders on our #healthcarepodcast. #healthcare #podcast #healthpayers   Recent past interviews: Click a guest’s name for their latest RHV episode! Nick Stefanizzi, Brian Klepper (Encore! EP335), Dr Aaron Mitchell (EP382), Karen Root, Mark Miller, AJ Loiacono, Josh LaRosa, Stacey Richter (INBW35), Rebecca Etz (Encore! EP295), Olivia Webb (Encore! EP337), Mike Baldzicki, Lisa Bari, Betsy Seals (EP375), Dave Chase, Cora Opsahl (EP373), Cora Opsahl (EP372), Dr Mark Fendrick (Encore! EP308), Erik Davis and Autumn Yongchu (EP371), Erik Davis and Autumn Yongchu (EP370), Keith Hartman, Dr Aaron Mitchell (Encore! EP282), Stacey Richter (INBW34), Ashleigh Gunter, Doug Hetherington, Dr Kevin Schulman, Scott Haas, David Muhlestein, David Scheinker

The show on direct contracting with Doug Hetherington (EP367) and also the one with Katy Talento (EP350), both of these experts have said that if an employer direct contracts with a provider organization, in general, the employer gets about 20% savings over the status quo. This makes sense—just cut out the middleman with an MLR (medical loss ratio) of plus or minus about 15% and you’re at three-quarters of the way there. You might be thinking, “Well, maybe not so fast here, because then wouldn’t FFS (fee-for-service) rates go up? Is it not Slide 1 on most carriers’ sales decks how great they are at leveraging their vast buying power to negotiate discounts with hospitals?” Hmmm … if you think this, you’re about to be shook. Turns out, carriers are not so good at negotiating rates with hospitals. For more on this topic, follow Leon Wisniewski on LinkedIn. Or check out an article entitled “Hospital prices vary widely, often higher with insurance than cash, The New York Times finds.” The big concerns for employers looking to direct contract, I think, are going to be threefold. And right now, I’m just speaking in general. This has nothing to do with the conversation that follows. But I think the three big concerns are this: Let’s say the employer gets actual fee-for-service rates that are 20% less than average carrier negotiated rates. So, great … but will utilization go up if the wolf is watching the henhouse, so to speak? Especially if PCPs are owned by the hospital system and incented, as many are, to drive downstream utilization. It’s been estimated that PCPs can drive $1,000,000+ of revenue when they refer in network to profitable service lines. What happens when this is unfettered, meaning no third party to do prior auth stuff for utilization management, for example? Some employers, for sure, could and certainly do hire a third party to do utilization management; but sometimes one of the contractual requirements of a health system direct contract is an easing of, let’s just say, at least the most aggressive PA (prior auth) requirements. So now, all of a sudden, are more plan members getting more services that, even at a 20% discount, add up to a greater total spend? A counterpoint: I’ve heard more than one person who would know say that most PA programs don’t actually do a whole lot except defer spend at best. Here’s a quote from Scott Haas. He said, “The only value I have observed of the prior authorization process is the accumulation of data that is required of the stop-loss industry to establish known risk for them to laser risk. Cost shifting at its best. Other than that, I have rarely observed value to the patient, provider, or the plan sponsor.” One thing I am noticing is that those providers offering direct contracts are aware of this whole line of questioning and fear of the health system driving overutilization because incentives and might be doing things (the health system looking to direct contract) to mitigate those fears. Some are discussed later in this podcast. So, I don’t know about whether plan sponsor spend would net-net go up if you get rid of PAs and profit-driven utilization management or go up enough to offset all of the admin costs and care gaps that crappy prior auths or prior auth processes slam patients and providers with. Big concern for employers (besides even if the price goes down will utilization go up—and then what’s the net effect of that?): Will the provider’s PPO (preferred provider organization) network be too narrow if I go with a direct contract with a health system, either legally running afoul of network adequacy rules or run afoul of employees just getting pissed off because their doctors are no longer in network? I guess there’s a bunch of ways you can do things if you are a plan sponsor that might mitigate this, but I could still see it certainly being a concern. By aligning the plan sponsor with the provider, including getting all the data and just from a pop health perspective being able to align around priorities, does care quality, preventative care stuff, social determinants of health, and equity concerns … does this stuff actually start to improve patient health? There are plenty of examples—some that Nick Stefanizzi talks about in this podcast, including a great one with Whole Foods—where this is certainly the case. But as we in healthcare all know, not all cases are the same. As soon as any party in the mix starts trying to maximize their revenue with little regard to its impact on patients and clinicians, things can go south. For example, just speaking in general here, but I might bring up the whole “remember consolidating health systems?” They promised all kinds of care quality improvements as a result of owning the entire patient journey and consolidating data and … yeah, not so much with that. As we know, hospital systems who consolidated have no greater or better quality on the whole as unconsolidated health systems, despite the fact that their prices went up a lot. Now, I just have to say, this is not a parallel situation. When the health system consolidated, it was just providers consolidating, which may have actually exacerbated relationships with plan sponsors and payers as opposed to driving greater alignments. So, as I said, not a parallel situation. I think the point that I’m making is just because better patient care is theoretically possible doesn’t necessarily mean it will happen when there are profits at stake. However, when incentives do align and true collaborations can occur amongst payers and providers or amongst any of the other stakeholders along the patient journey … yeah, some great stuff can happen. As I mentioned earlier, I am talking with Nick Stefanizzi, who is CEO over at Northwell Direct, which is Northwell’s stand-alone, for-profit entity looking to direct contract with employers and their TPAs (third-party administrators). The board of Northwell, meaning the tax-exempt hospital system mother ship, that same board also oversees Northwell Direct. Northwell Direct has two main categories of product offerings. One is that they offer on-site and virtual clinics for employers. The other is that they offer a network to direct contract with. According to Nick Stefanizzi, a health system can offer significant price reductions because—and this mirrors a lot, as I mentioned earlier, what Doug Hetherington (EP367) and Katy Talento (EP350) said in earlier episodes—you can get rid of a ton of administrative burden that payers place on hospital systems, plus you get rid of the middleman carrier profit margins, plus the health system can drive additional volume, I’m assuming to profitable service lines with profitable commercial patients … patients who are profitable despite the 20% cut because, yes, commercial rates are still way higher than Medicare even if you cut 20% off the top. It’s also, as Nick talks about in this episode, more possible to do value-based things and care for populations because there’s plan sponsor/provider alignment and far better data capture.   You can learn more at northwelldirect.northwell.edu. Nick Stefanizzi is the chief executive officer of Northwell Health’s direct-to-employer organization, Northwell Direct, which supports businesses through a full spectrum of customized employer health services. Prior to joining Northwell Direct, Nick served as chief administrative officer and later as interim chief executive officer of Formativ Health, a for-profit joint venture aimed at enhancing the patient and provider experience of and access to care. Nick also spent over eight years in various leadership roles within the Northwell Health system, focused on human resources (HR), organizational effectiveness, talent management, and HR technology. He was a leader within the health system’s ambulatory network of over 450 physician offices and ambulatory locations, where he was responsible for the direct development, coordination, and administration of central administrative services, as well as the integration of the health system’s network of clinical joint ventures. He also served as the chief of staff for the health system’s chief information officer. Nick received a degree in international relations from Boston University and his MBA in healthcare administration from Hofstra University.   07:22 What do Northwell Health’s main services look like? 08:05 How does Northwell Health save their clients 20%? 12:53 “Look, it is a selective network.” 13:22 What are the factors that allow Northwell Health to provide this 20% discount? 13:36 How does getting rid of the payer help the patient and provider relationship and reduce costs? 17:00 Why Northwell Health is selective, not narrow, in their network. 18:28 How does Northwell Health operationalize their direct network? 19:39 “Communication and change management and engagement.” 22:17 “Providers also want to be a part of this. They also have ideas.” 23:04 Where does the TPA fit into this model? 25:05 EP127 with Kris Smith, MD, MPP. 25:54 What are Northwell Health’s must-haves for their TPA partners? 30:27 What’s different about Northwell Health’s approach?   You can learn more at northwelldirect.northwell.edu.   Nick Stefanizzi of @NorthwellHealth discusses #directcontracting on our #healthcarepodcast. #healthcare #podcast #healthsystems What do Northwell Health’s main services look like? Nick Stefanizzi of @NorthwellHealth discusses #directcontracting on our #healthcarepodcast. #healthcare #podcast #healthsystems How does Northwell Health save their clients 20%? Nick Stefanizzi of @NorthwellHealth discusses #directcontracting on our #healthcarepodcast. #healthcare #podcast #healthsystems “Look, it is a selective network.” Nick Stefanizzi of @NorthwellHealth discusses #directcontracting on our #healthcarepodcast. #healthcare #podcast #healthsystems What are the factors that allow Northwell Health to provide this 20% discount? Nick Stefanizzi of @NorthwellHealth discusses #directcontracting on our #healthcarepodcast. #healthcare #podcast #healthsystems How does getting rid of the payer help the patient and provider relationship and reduce costs? Nick Stefanizzi of @NorthwellHealth discusses #directcontracting on our #healthcarepodcast. #healthcare #podcast #healthsystems “Communication and change management and engagement.” Nick Stefanizzi of @NorthwellHealth discusses #directcontracting on our #healthcarepodcast. #healthcare #podcast #healthsystems “Providers also want to be a part of this. They also have ideas.” Nick Stefanizzi of @NorthwellHealth discusses #directcontracting on our #healthcarepodcast. #healthcare #podcast #healthsystems Where does the TPA fit into this model? Nick Stefanizzi of @NorthwellHealth discusses #directcontracting on our #healthcarepodcast. #healthcare #podcast #healthsystems What are Northwell Health’s must-haves for their TPA partners? Nick Stefanizzi of @NorthwellHealth discusses #directcontracting on our #healthcarepodcast. #healthcare #podcast #healthsystems What’s different about Northwell Health’s approach? Nick Stefanizzi of @NorthwellHealth discusses #directcontracting on our #healthcarepodcast. #healthcare #podcast #healthsystems Brian Klepper (Encore! EP335), Dr Aaron Mitchell (EP382), Karen Root, Mark Miller, AJ Loiacono, Josh LaRosa, Stacey Richter (INBW35), Rebecca Etz (Encore! EP295), Olivia Webb (Encore! EP337), Mike Baldzicki, Lisa Bari, Betsy Seals (EP375), Dave Chase, Cora Opsahl (EP373), Cora Opsahl (EP372), Dr Mark Fendrick (Encore! EP308), Erik Davis and Autumn Yongchu (EP371), Erik Davis and Autumn Yongchu (EP370), Keith Hartman, Dr Aaron Mitchell (Encore! EP282), Stacey Richter (INBW34), Ashleigh Gunter, Doug Hetherington, Dr Kevin Schulman, Scott Haas, David Muhlestein, David Scheinker, Ali Ucar  

This show was one of the most popular episodes in the past 12 months, so enjoy this encore while I am in Chicago moderating a panel on pharmacy benefit management at the WTW Conference Board. But while I have you, I just wanted to thank everyone for listening. You really are a part of our Relentless Tribe, and I could not thank you enough for your commitment to doing the right thing for patients and for this country—and that dedication is evidenced by you listening as often as you do to Relentless Health Value. Our show has the largest following of individuals who are truly pushing hard for patients over profits, and since, according to LinkedIn anyway, 40% of our listeners are at the “highest level of seniority in their organization,” I’m guessing that we have the muscle to do this thing. Thanks for being part of the Relentless Tribe and for all that you do. In this healthcare podcast, I’m talking with Brian Klepper. If you haven’t heard of him, Brian’s a longtime healthcare analyst and former CEO of the National Business Coalition on Health. This interview takes off like a shot, as most of my conversations with Brian Klepper do. We’re talking about primary care and its various iterations. We start out with Exhibit A—the HMO version of primary care from the ’90s. This is a great comparator to really get a handle on what’s going on today. During the heyday of HMOs (back in the ’90s), primary care was basically a glorified gatekeeper kind of doing two things. On one hand, they were restricting access. It wasn’t an accident that it was really hard to get an appointment with a PCP. On the other hand, it also wasn’t an accident that, once you got there, the PCP only had 7 minutes to spend with you, which basically meant that you left with an appointment to see a specialist at, of course, the health system that probably had just bought that PCP practice. Everybody’s happy then, right? Specialist volume goes up, they make a ton of money for the health system, plans make a ton of money because they make a percentage of total healthcare spend … Oh right, everybody’s happy except the patient who can’t get care and the PCP who can’t do their job. By the way, for more information on why the ’90s version of the HMO industry crashed and burned, listen to my conversation with Alex Jung on this exact topic. A big part of the “why” really actually took me by surprise. But back to primary care … Today, in broad strokes, we have three kinds of PCPs. And when I say three kinds of PCPs, we’re not really counting urgent cares or what amounts to urgent cares in that mix—meaning, not counting a lot of the retail clinics because they don’t really manage patient care like you’d hope a PCP would manage care. Last I checked, none of them were managing much more than an episodic visit. You can’t manage a chronic condition in 15 minutes. So, like I said, there’s three kinds of PCPs that are around today; and let’s call the first kind the original PCP. This version of the PCP office is primarily fee for service (FFS). Maybe they have a couple of capitated contracts. But the distinguishing factor isn’t really what their payer mix is. It’s that they’re not taking on much risk or any risk of real consequence. Second, we have direct primary care doctors. This group tends to cut out insurers and work directly with either employers or patients themselves. They take a monthly fee, and, in general, a patient can see them however much they need to. Again, no risk or little risk is assumed here beyond the primary care services themselves that are rendered. Third, we have what Brian calls industrialized primary care—or some people call it advanced primary care, or APC—but I’d probably call it something different. I’d call it “taking risk for the full continuum of care” primary care. Maybe I wouldn’t even call it primary care at all because this third category really is starting to color outside of the lines of primary care. This third iteration requires many things to accomplish. It requires an unimpeachable relationship with the patient; you cannot be successful with this otherwise. It requires great virtual/digital capabilities. It also requires data—data to help ensure that care gaps are filled but also to make sure that patients are referred to high-quality, high-value specialists downstream who will actually create outcomes. It also includes optimizing specialty pharmaceutical usage, for example. Brian gets into this and how a state employee health plan is on track to save $1.3 billion in this fashion. Brian believes that this third iteration of primary care—this APC industrialized primary care—is the third leg of a three-legged stool that is needed to transform healthcare. If you must know, the second leg is identification and the use of high-performing specialty services; and the third is value-based reimbursement environment. Most of the second half of this conversation with Brian is about why there’s just a flurry of investment into various forms of these advanced or just maybe even regular primary care models and how they might evolve moving forward. I ask Brian about Carbon Health and their recent claim that they can do primary care with about 25% to 30% EBITA, even at Medicare FFS rates. So, there’s that. One last thing: We’ll be posting an “Ask an Expert” with Brian Klepper, where he gives the backstory about how the RUC—that AMA committee—basically killed primary care. So, come back for that show after you’re done with this one. It’s a plot full of intrigue, that’s for sure. You can learn more by emailing Brian at bklepper@worksitehealthadvisors.com.   Brian Klepper, PhD, is principal of Worksite Health Advisors and a nationally prominent healthcare analyst and commentator. He speaks, writes, and advises extensively on the management of clinical and financial risk, on high-performance healthcare, and on realizing the potential of primary care. His current focus is on high-performing healthcare organizations that consistently deliver better health outcomes at lower cost than usual approaches in high-value niches and how, integrated with advanced primary care, they can be configured into turnkey comprehensive high-value health plans that can disrupt the status quo.   05:59 Is the HMO model of primary care a good model? 08:36 “Industrialized medicine is exciting.” 09:44 What does primary care have the opportunity to do? 10:06 “The problem that goes along with that is that now immense amounts of money are being infused into primary care organizations.” 11:00 Where does direct primary care and advanced primary care fit into this model? 14:19 “At the end of the day, what primary care really needs to be about is … the management of life issues as well.” 14:48 EP295 with Rebecca Etz, PhD. 15:03 “Better relationships quantifiably translate to better care.” 22:21 “Almost nobody in healthcare wants any of this to happen.” 24:30 Why the huge amounts of money being invested into primary care is actually a big problem. 28:43 “We should be able to get wildly better health outcomes for about 40% to 45% of the money that we’re currently spending.” You can learn more by emailing Brian at bklepper@worksitehealthadvisors.com.   @bklepper1 discusses #primarycare on our #healthcarepodcast. #healthcare #podcast #digitalhealth #pcp Is the HMO model of primary care a good model? @bklepper1 discusses #primarycare on our #healthcarepodcast. #healthcare #podcast #digitalhealth #pcp “Industrialized medicine is exciting.” @bklepper1 discusses #primarycare on our #healthcarepodcast. #healthcare #podcast #digitalhealth #pcp What does primary care have the opportunity to do? @bklepper1 discusses #primarycare on our #healthcarepodcast. #healthcare #podcast #digitalhealth #pcp “The problem that goes along with that is that now immense amounts of money are being infused into primary care organizations.” @bklepper1 discusses #primarycare on our #healthcarepodcast. #healthcare #podcast #digitalhealth #pcp Where does direct primary care and advanced primary care fit into this model? @bklepper1 discusses #primarycare on our #healthcarepodcast. #healthcare #podcast #digitalhealth #pcp “At the end of the day, what primary care really needs to be about is … the management of life issues as well.” @bklepper1 discusses #primarycare on our #healthcarepodcast. #healthcare #podcast #digitalhealth #pcp “Better relationships quantifiably translate to better care.” @bklepper1 discusses #primarycare on our #healthcarepodcast. #healthcare #podcast #digitalhealth #pcp “Almost nobody in healthcare wants any of this to happen.” @bklepper1 discusses #primarycare on our #healthcarepodcast. #healthcare #podcast #digitalhealth #pcp Why the huge amounts of money being invested into primary care is actually a big problem. @bklepper1 discusses #primarycare on our #healthcarepodcast. #healthcare #podcast #digitalhealth #pcp “We should be able to get wildly better health outcomes for about 40% to 45% of the money that we’re currently spending.” @bklepper1 discusses #primarycare on our #healthcarepodcast. #healthcare #podcast #digitalhealth #pcp Recent past interviews: Click a guest’s name for their latest RHV episode! Dr Aaron Mitchell (EP382), Karen Root, Mark Miller, AJ Loiacono, Josh LaRosa, Stacey Richter (INBW35), Rebecca Etz (Encore! EP295), Olivia Webb (Encore! EP337), Mike Baldzicki, Lisa Bari, Betsy Seals (EP375), Dave Chase, Cora Opsahl (EP373), Cora Opsahl (EP372), Dr Mark Fendrick (Encore! EP308), Erik Davis and Autumn Yongchu (EP371), Erik Davis and Autumn Yongchu (EP370), Keith Hartman, Dr Aaron Mitchell (Encore! EP282), Stacey Richter (INBW34), Ashleigh Gunter, Doug Hetherington, Dr Kevin Schulman, Scott Haas, David Muhlestein, David Scheinker, Ali Ucar, Dr Carly Eckert  

I saw a Tweet from Farzad Mostashari, MD, the other day; and I’m gonna rewrite it in the context of today’s show: This is why we can’t have nice things! As soon as someone comes up with something that might accomplish some good things when done in moderation and with good intent, it gets exploited for revenue maximization. I have to admit, this conversation with Aaron Mitchell, MD, MPH, and actually the one with Mark Miller, PhD (EP380), from two episodes ago were both kind of painful for me—and let me tell you why. It’s the same reason I find conversations painful about hospitals or leading cancer centers or even some self-insured employers and EBCs (employee benefit consultants): It hurts my heart when some percentage of healthcare industry peeps who have the opportunity to produce so much good in the world instead choose to do stuff that is financially or otherwise toxic. But let me get to the point of today’s show. Dr. Aaron Mitchell and I are talking about conflicts of interest (COI), and we’re talking about COI in the payments that are made from Pharma to physicians. COI might mean when physicians are paid in a way that skews their clinical decision-making. Nobody wants to be the patient of a physician with skewed decision-making, after all. That’s the “why” of this whole discourse. Now, let’s get into two important points re: skewed decision-making. Any payment that skews decision-making is, in fact, considered no bueno by the current writing of the AKS, the anti-kickback statute. Second, almost any payment, direct or indirect, turns out, skews physician decision-making. It’s not just getting paid the big bucks to make a speech or consult or whatever. Getting a modest free lunch can also have the same effect. Prescribing is affected. That’s what the data show and what the recent paper that Dr. Aaron Mitchell and his colleagues published in the Journal of Health Politics, Policy and Law articulates. Their paper is titled “Industry Payments to Physicians Are Kickbacks: How Should Stakeholders Respond?” So, hmmm. Much to cogitate upon in what I just said, which is what the conversation with Dr. Aaron Mitchell that follows is all about. But let me offer up a few spoilers and maybe some additional thoughts. First of all, some “Are payments COI and kickbacks?” contemplations are pretty black and white. We start out the conversation in this healthcare podcast talking about the recent Biogen incident, I guess I’ll call it, which is sadly not an outlier. Biogen never admitted any wrongdoing here. But if what they are accused of doing is true, this could be considered not a gray area. This is black-and-white COI—unquestionably should not happen. But where things get a little bit more open to interpretation and require some consideration and thoughtfulness is if we’re trying to weigh the gray in the middle between black and white. Here, what needs to be thought through is the aggregate good versus the aggregate bad of Pharma paying physicians to do stuff or buying things for them. If Pharma needs help during its clinical trials to figure out a breakthrough therapy and they want to talk to leading experts in a specialty, that’s maybe a good thing so that they can get a drug that actually works well for patients. So is—and this is me talking, not Dr. Mitchell—but I could see that Pharma helping to figure out ways to educate clinicians about the best ways to help patients suffering with real diseases that nobody else is making any effort to do anything about at a national scale … it could help humans live better lives if Pharma takes the advice of the right thought leaders and helps to disseminate their teachings. Maybe physician societies could fill this role, but a lot of times, who needs educated are not the actual doctors in the society in question. It’s other doctors the patient is seeing who don’t realize the root cause is a GI problem or CKD (chronic kidney disease) until the patient needs a liver transplant or “crashes” into dialysis in the ER. But irrespective of the validity of my musings here, the point is to quantify the in-aggregate “good” that might happen as a result of Pharma paying appropriate clinical experts appropriate amounts. Contrast that aggregate good against some not so good. Study findings that Pharma can drive up not only Rx’s (prescriptions) for its own drugs but also drugs in general when they buy stuff for doctors or pay doctors. Patient populations get overmedicated when compared to a baseline as a result. Too many patients get diagnosed and treated for some condition that they may not actually have. Too many expensive me-too drugs get prescribed at big unnecessary costs to patients, taxpayers, and employers. When I say costs to patients, by the way, I also might be implying a clinical overtone here as much as a financial one, because there’s almost no drug that comes without side effects. So, what are some solutions that Dr. Aaron Mitchell mentions in this episode, or I that bring up, if we are trying to steer physician payments into the aggregate good zone and out of the bad COI zone? Here we go, and these are not necessarily in the order in which they are discussed: Keep an eye on practice patterns and overall costs. This might make physicians aware when their clinical decision-making is getting swayed, so to speak. Get payers involved. Listen to this whole episode for the “how” and “why” here, but if anyone has a visceral reaction to this, here’s one possible positive from a physician standpoint: It could be a way to get rid of a lot of PAs (prior auths). If a doc’s practice pattern is average, on trend, and/or they do not take industry dollars, then they get what amounts to a PA gold card. With that carrot, a doc may have less inclination to let their prescribing decisions sway and/or take pharma dollars. The federal government can get involved in a few ways that Dr. Mitchell talks about. One of them is a direct ban on all payments. Or maybe they could just clarify what is okay and what is not okay, since what is listed as COI in the current AKS is also currently considered an industry norm. Asking providers themselves to pay attention and self-regulate and to, for example, not accept speaking gigs where they are paid to talk to an empty room or “consult” on topics that really they should know they’re not thought leaders in. You can learn more at Dr. Mitchell’s personal profile on the Memorial Sloan Kettering Cancer Center Web site. You can also connect with Dr. Mitchell on Twitter at @TheWonkologist. Aaron Mitchell, MD, MPH, is a practicing medical oncologist and health services researcher. He is an assistant attending at Memorial Sloan Kettering Cancer Center in the department of epidemiology and biostatistics. His research focuses on understanding how the financial incentives in the healthcare system affect physician practice patterns and care delivery to cancer patients. He cares for patients with prostate and bladder cancer. 07:32 How does the recent whistleblower case serve as a good example of what shouldn’t be permissible in Pharma? 11:23 “There’s a little bit of a disconnect between what the law currently says and maybe the ideal world that we would want.” 11:56 Dr. Aaron Mitchell’s paper in the Journal of Health Politics, Policy and Law, titled “Industry Payments to Physicians Are Kickbacks: How Should Stakeholders Respond?” 14:37 How should stakeholders react to this new legislation? 17:56 What is the aggregate benefit versus risk of these payments to doctors? 19:53 BMJ paper by Tyler Greenway and Joseph Ross. 23:51 What should providers and the federal government be doing in light of this new legislation? 29:07 “It’s just always so much harder to get to the outcomes because there’s so much more that happens in between the clinical decision and then what the patient’s outcome is down the road.” 30:42 Will innovation be stifled with this new crackdown on kickbacks? You can learn more at Dr. Mitchell’s personal profile on the Memorial Sloan Kettering Cancer Center Web site. You can also connect with Dr. Mitchell on Twitter at @TheWonkologist. @TheWonkologist discusses #pharma conflicts and kickbacks on our #healthcarepodcast. #healthcare #podcast #digitalhealth How does the recent whistleblower case serve as a good example of what shouldn’t be permissible in Pharma? @TheWonkologist discusses #pharma conflicts and kickbacks on our #healthcarepodcast. #healthcare #podcast #digitalhealth “There’s a little bit of a disconnect between what the law currently says and maybe the ideal world that we would want.” @TheWonkologist discusses #pharma conflicts and kickbacks on our #healthcarepodcast. #healthcare #podcast #digitalhealth Dr. Aaron Mitchell’s paper in the Journal of Health Politics, Policy and Law, titled “Industry Payments to Physicians Are Kickbacks: How Should Stakeholders Respond?” @TheWonkologist discusses #pharma conflicts and kickbacks on our #healthcarepodcast. #healthcare #podcast #digitalhealth How should stakeholders react to this new legislation? @TheWonkologist discusses #pharma conflicts and kickbacks on our #healthcarepodcast. #healthcare #podcast #digitalhealth What is the aggregate benefit versus risk of these payments to doctors? @TheWonkologist discusses #pharma conflicts and kickbacks on our #healthcarepodcast. #healthcare #podcast #digitalhealth What should providers and the federal government be doing in light of this new legislation? @TheWonkologist discusses #pharma conflicts and kickbacks on our #healthcarepodcast. #healthcare #podcast #digitalhealth “It’s just always so much harder to get to the outcomes because there’s so much more that happens in between the clinical decision and then what the patient’s outcome is down the road.” @TheWonkologist discusses #pharma conflicts and kickbacks on our #healthcarepodcast. #healthcare #podcast #digitalhealth Will innovation be stifled with this new crackdown on kickbacks? @TheWonkologist discusses #pharma conflicts and kickbacks on our #healthcarepodcast. #healthcare #podcast #digitalhealth Recent past interviews: Click a guest’s name for their latest RHV episode! 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