Relentless Health Value

So, let’s put the last, I don’t know, 300 episodes of Relentless Health Value into perspective here. The USA wastes about $1.5 trillion a year on some combination of paying way too much for low-value care, fraud, and waste—$1.5 trillion down the drain. As my guest, Dave Chase, says in this healthcare podcast, if this was a country, what we waste would be the 11th biggest GDP in the world. We could call it Healthcare-istan. Meanwhile, outcomes aren’t anything to brag about on the world stage, and 41% of American adults have medical debt in this country. Also, all across the country, people making all kinds of healthcare decisions to save money that are clinically toxic. Financial toxicity is clinical toxicity, right? You know this already. You listen to this show. I just saw yet another study the other day—actually this one about cancer outcomes and how they are appreciably worse when patients are worried about how much money their treatment will cost. And a lot of people in this country—many people with a Part D plan, commercial insurance with big deductibles—there’s a lot of people in this country who cannot afford tens of thousands of dollars in out-of-pocket spend every year. But let’s change gears and talk about some good stuff, some inroads that are being made. Let’s talk about Rosen Hotels for a moment. Rosen Hotels is a bright spot, for sure, in all of this. They are a leading indicator of what is possible. Rosen Hotels, which is a hotel chain in Florida, they saved over $450 million in healthcare costs and have healthier, happier employees. They spend 55% less per capita on health benefits despite having an employee population with significant health challenges. They saved so much money that Rosen was able to set up a scholarship fund so that not only kids of employees (and employees themselves) but also kids in the community can go to college. Turnover there is lower. Retention is higher. Employees are healthier. I mean, the ROI of a CEO and a CFO getting engaged and taking back control over their health benefits from third parties? It’s huge. Check out this article about Rosen and also Dave Chase’s TED Talk about Rosen.   My guest today, Dave Chase, says that what they did at Rosen Hotels was actually an inspiration for Health Rosetta, which is the organization that he founded to help employers take control of the out-of-control dysfunctional health benefits market in this country. Dave Chase says that the Health Rosetta community knows something that most don’t (yet). Dave Chase has said that healthcare is fixed/fixable. He said that healthcare actually isn’t expensive. Clinicians only receive $0.27 of every $1 that’s ostensibly spent on healthcare. What is expensive is price gouging, profiteering, administrative bloat, fraud, and inappropriate treatment. And Dave Chase has also said that we’re already investing more than enough money to not only fund world-class healthcare for everyone but also take all that money from Healthcare-istan and fund what drives 80% of health outcomes (ie, income, education, career opportunities, and clean air and water). There’s so much money that is being wasted in healthcare. But all of this other stuff could be funded if we simply pay what we should be paying. (See Dave Chase’s LinkedIn post to learn more about this.)   Health Rosetta currently has about five million lives stewarded through plans managed by their Health Rosetta advisors. That’s probably another bright spot right there—five million lives. Another bright spot is the work of the Nuka System in Alaska. Listen to EP312 with Douglas Eby, MD, MPH, CPE. The Nuka System has won award after award for being one of the best health systems in the country, and it serves a challenging patient population for less money than most Medicaid plans.   So, here you have two entities, Rosen Hotels and the Nuka System, dealing with (on a good day) patient populations with multiple chronic conditions, high maternal mortality … At Rosen, 56% of their pregnancies are categorized as high risk, which not only has generational human consequences, of course, but is also a notorious budget-buster, as Dave Chase has said. There’s substance abuse issues. These are patient populations who are doing appreciably better and cost far less than if they were covered by almost any other health plan in this country. Here’s yet one more bright spot example company, and that’s Pacific Steel. During our conversation, Dave Chase mentioned that the CFO of Pacific Steel said that when they went from spending $8 million in health benefits a year to spending under $3.5 million—basically cutting their healthcare costs in less than half—the CFO said that in order to make that same amount of net income, Pacific Steel would have had to raise their top-line sales revenue by 25% to 30%. So, okay … you’re a CEO, and here’s your choice to appease your shareholders or make your own bonus. Option A: Go out right now and figure out how to sell 30% more. Or Option B: Get your healthcare house in order, which may also improve retention if you do it right. To me, this doesn’t seem like a head-scratcher. Two things that Dave Chase also brought up during our conversation that I thought were thought provoking. First, change is happening regionally and seems to adhere to the so-called “rule of three,” meaning that if three employers have worked with a qualified employee benefit consultant (EBC) and really fixed up their health benefits, then a cascade will start in that region. And secondly—and I never thought about this before—we spend over $4 trillion through various health plans (employer, ACA, Medicare, Medicaid), and yet have little to no objective mark of value for how good any given health plan is. The closest thing, as Dave Chase says, might be Medicare Advantage Star Ratings. To address this problem, Health Rosetta invested seven figures to build a Plan Grader™. This really helps employers make sure that the plan they put in place is a win-win the whole way around. You can learn more at healthrosetta.org or by emailing Dave at dave@healthrosetta.org.   Dave Chase leads the mission for Health Rosetta, which is to empower community-owned health plans (COHPs) with the vision of COHPs everywhere. Health Rosetta’s purpose is creating and reinvesting the Health Rosetta Dividend (ie, redeploying the currently wasted $1.5 trillion in healthcare to a higher and better use—the social determinants of health such as income, better food, etc). Health Rosetta makes health plans local, organic, and sustainable transforming health plans from the number one driver of inflation, poverty, and bankruptcy to drivers of well-being and wealth. Health Rosetta ends the 30-year heist of stolen income from the working middle class. Health Rosetta plans have restored the American Dream for tens of thousands of people, giving them raises/bonuses and healthcare they can access without fear of bankruptcy. Individuals that had sky-high deductibles and co-pays no longer have that as a barrier (typically they are $0). School districts that once couldn’t give teachers raises or had to have school levies to pay for music, art, and sports programs now have the funds (due to healthcare savings) to pay teachers more, have bigger class sizes, avoid cutting extracurricular programs, and more—all while giving teachers much better care outcomes. Health Rosetta’s Plan Grader™ assesses the 40 most important attributes of a health plan “prescribing” proven strategies to transition into local, sustainable, world-class health plans. Health Rosetta community’s transparency set a new industry standard and became the law of the land due to changes in laws that represent the largest change in employee health benefits since 1943. Through best-selling books, writing for various media outlets, TED Talk, and TV/film, Dave has reached over 10 million people with the goal of engaging, equipping, and empowering a broad grassroots movement designed to restore hope, health, and well-being to our communities. Dave received the Health Value Awards’ Lifetime Achievement for Health Benefits Innovation at the World Health Care Congress. Prior to Health Rosetta, Dave cofounded Avado, which was acquired by and integrated into WebMD/Medscape, and founded Microsoft’s $3-billion, 28,000-partner healthcare ecosystem. Outside of work, Dave coaches the next generation of leaders as a high school track and cross-country coach of state champion teams and individuals. Dave was a PAC-12 800 meter and 4×400 competitor. Most importantly, devotion to faith, family, and friends underpin a desire to be a servant leader to the five million lives (and growing) stewarded through the Health Rosetta community. 06:57 Why did Dave Chase start Health Rosetta? 07:42 EP312 with Douglas Eby, MD, MPH, CPE.07:51 How does Health Rosetta deem which health plans are succeeding? 11:07 What are the most important areas and factors for grading health plans? 11:22 EP365 with Scott Haas.11:38 “That $1.5 trillion of waste, how is that possible? Well, it’s all codified in the contracts.” 12:18 “You can’t manage what you can’t measure.” 16:59 “What could be more disruptive than 30 years of wage gains stolen by the status quo health plans?” 17:39 “This is the last major area to modernize inside of corporate America.” 18:15 “This is not small dollars; there’s a tremendous opportunity.” 19:04 “Go back to PBM. That’s the first thing that starts to get at the care delivery side.” 21:52 “Can we even call it primary care if you can’t get in to that doc for weeks?” 25:03 Where does Health Rosetta get their data to assess health plans? 27:00 Who are these self-insured employers, typically? 29:48 “3.5% [is] where the market flips.” 31:57 EP367 with Doug Hetherington.32:03 EP350 with Katy Talento.33:13 “We like to fetishize big in this country.” You can learn more at healthrosetta.org or by emailing Dave at dave@healthrosetta.org.   @chasedave of @HealthRosetta discusses #healthplans in our #healthcarepodcast. #healthcare #podcast #digitalhealth Why did Dave Chase start Health Rosetta? @chasedave of @HealthRosetta discusses #healthplans in our #healthcarepodcast. #healthcare #podcast #digitalhealth How does Health Rosetta deem which health plans are succeeding? @chasedave of @HealthRosetta discusses #healthplans in our #healthcarepodcast. #healthcare #podcast #digitalhealth What are the most important areas and factors for grading health plans? @chasedave of @HealthRosetta discusses #healthplans in our #healthcarepodcast. #healthcare #podcast #digitalhealth “That $1.5 trillion of waste, how is that possible? Well, it’s all codified in the contracts.” @chasedave of @HealthRosetta discusses #healthplans in our #healthcarepodcast. #healthcare #podcast #digitalhealth “You can’t manage what you can’t measure.” @chasedave of @HealthRosetta discusses #healthplans in our #healthcarepodcast. #healthcare #podcast #digitalhealth “What could be more disruptive than 30 years of wage gains stolen by the status quo health plans?” @chasedave of @HealthRosetta discusses #healthplans in our #healthcarepodcast. #healthcare #podcast #digitalhealth “This is the last major area to modernize inside of corporate America.” @chasedave of @HealthRosetta discusses #healthplans in our #healthcarepodcast. #healthcare #podcast #digitalhealth “This is not small dollars; there’s a tremendous opportunity.” @chasedave of @HealthRosetta discusses #healthplans in our #healthcarepodcast. #healthcare #podcast #digitalhealth “Go back to PBM. That’s the first thing that starts to get at the care delivery side.” @chasedave of @HealthRosetta discusses #healthplans in our #healthcarepodcast. #healthcare #podcast #digitalhealth “Can we even call it primary care if you can’t get in to that doc for weeks?” @chasedave of @HealthRosetta discusses #healthplans in our #healthcarepodcast. #healthcare #podcast #digitalhealth Where does Health Rosetta get their data to assess health plans? @chasedave of @HealthRosetta discusses #healthplans in our #healthcarepodcast. #healthcare #podcast #digitalhealth Who are these self-insured employers, typically? @chasedave of @HealthRosetta discusses #healthplans in our #healthcarepodcast. #healthcare #podcast #digitalhealth “3.5% [is] where the market flips.” @chasedave of @HealthRosetta discusses #healthplans in our #healthcarepodcast. #healthcare #podcast #digitalhealth “We like to fetishize big in this country.” @chasedave of @HealthRosetta discusses #healthplans in our #healthcarepodcast. #healthcare #podcast #digitalhealth   Recent past interviews: Click a guest’s name for their latest RHV episode! Cora Opsahl (EP373), Cora Opsahl (EP372), Dr Mark Fendrick (Encore! EP308), Erik Davis and Autumn Yongchu (EP371), Erik Davis and Autumn Yongchu (EP370), Keith Hartman, Dr Aaron Mitchell (Encore! EP282), Stacey Richter (INBW34), Ashleigh Gunter, Doug Hetherington, Dr Kevin Schulman, Scott Haas, David Muhlestein, David Scheinker, Ali Ucar, Dr Carly Eckert, Jeb Dunkelberger (EP360), Dan O’Neill, Dr Wayne Jenkins, Liliana Petrova, Ge Bai, Nikhil Krishnan, Shawn Rhodes, Pramod John (EP353), Pramod John (EP352), Dr Eric Bricker, Katy Talento, Stacey Richter (INBW33)  

In this healthcare podcast, I am speaking with Cora Opsahl, who directs the 32BJ Health Fund. This is the second conversation I’m having with Cora (last one was EP372), but these two conversations are not really linear—so listen in whatever order you want to.   Important to know about Cora’s background, in previous roles, she has worked deep in the inner sanctums of the healthcare industry. So, she came to 32BJ armed with a BS meter that’s finely tuned, which is, as I said last week, an unfortunately essential skill for anyone trying to help patients and members relying on them to successfully navigate the healthcare industry. Here’s a pivotal fact: 56% of total spend at the 32BJ Health Fund goes to hospitals. So, from a “making the juice worth the squeeze” perspective, focusing on hospital prices can have a lot of impact. This is doubly true because of the seriously huge price variations for the same exact types of services at different hospitals, even in the same local market. Because the 32BJ Health Fund demands and gets all of its own data, it can actually run reports and see the impact and nuances of hospital spend very clearly—unlike, frankly, the majority of employers and unions who have zero clue this is all going on behind their backs because they think some other party is actually the fiduciary and not them, which is false, of course. So, let’s just linger on this really high hospital prices that are various across a market for one moment. Here’s a Tweet from Rik Renard: “The price of CABG [coronary artery bypass graft] varies more than 10-fold across US hospitals (ranging from $44,824 to $448,038). There was no evidence to suggest that hospitals that charge higher prices provide a better quality of care.”   WHAT?! An employer could pay $44,000, or it could pay $448,000. Seriously? This is why we can’t have nice raises—because some employer spent $400,000 not on raises but on overpriced hospital services. Ugh … so frustrating. When employers, almost willfully at this juncture, turn a blind eye to all of this because they think it might be disruptive, meanwhile they’re worrying about employee retention and trying to figure out how to give raises. Okay, well, here’s a suggestion: Get your healthcare house in order and then you’ll have enough money for raises, but that aside … In the New York City market, 32BJ used all of the data that we talked about in the last episode (EP372). They used all of that data to deduce, quite crisply, that NewYork-Presbyterian is really, really expensive—even in comparison to other expensive health systems in the New York metro area.   Furthermore, the Fund realized that it could not be sustainable without tackling the challenge of hospital prices. As Cora Opsahl says, “You can’t reduce spend by benefit design alone.” Which reminded me of that famous quote by Uwe Reinhardt, “It’s the prices, stupid.” Which, of course, reminded me of what David Contorno has said a million times, “You can’t pay less for healthcare unless you pay less for healthcare.” I can’t overemphasize these points and their impact on employers and workers. It’s really hard to be competitive in the global marketplace when shelling out an extra $400,000 here and an extra whatever tens of thousand dollars there for fringe benefits that do not actually add any value from the workers’ standpoint and/or confer any additional health. This is just blatantly throwing money away. So, there’s gonna be a few health system peeps listening here who will reflexively mutter under their breath a sentence including the terminology “razor-thin operating margin.” It must be an AHA talking point because I talk to a lot of health system people from all over the country, and “razor-thin operating margin” is invariably the term that gets used. But let’s just dig into that marketing-speak for a moment. While there are some hospitals who assuredly suffered under COVID (or were suffering even before COVID and definitely after), mostly these are rural ones—but let’s not talk about them for a moment. Let’s talk about the large, consolidated health systems who got billions in COVID relief. Are you kidding me with their razor-thin operating margin crocodile tears? Check out “New Study—Hospitals Hike Charges by Up to 18 Times Cost.”   Here’s a few bullet points from that study: Hospital charges play a major role in mounting healthcare costs, with health expenditures closing in on one-fifth of the gross domestic product (GDP). Hospital profits/margins have mushroomed by 411% since 1999 to a record $88 billion in 2017. The rise in charges coincides with growing hospital mergers and acquisitions by large systems. (This is brutally apparent at this juncture.) The result is increased market consolidation, which leads to, again, higher profits and increased charges, not savings for patients as hospital systems often claim. Listen to the show with Kevin Schulman, MD (EP366). It explains a lot about how these “razor-thin operating margins” and the “oh no, we’re losing money on Medicare, so we must cost shift” manifest if you actually follow the dollar. As Dr. Schulman says, it’s not A; it’s not B. I mean, it’s not like payers aren’t taking their own piece of the action. You just got to look at their stock valuations to see all that going on. We have a dysfunctional health benefits market and a lot of rational actors in that market doing what you’d expect rational economic actors to do.   So anyway, 32BJ sees in their own data that all this is going on with hospitals, and they aim to stop covering a super expensive hospital in their local market, which is just making bad even worse. It was a whole thing to do this, and in this episode, Cora Opsahl relays the dramatic tale. You can learn more at 32bjhealthfundinsights.org.   Cora Opsahl is the director of the 32BJ Health Fund, a self-funded plan that provides affordable, comprehensive, and innovative health coverage to 200,000 union members and their families. During her time at the Health Fund, Cora has led the implementation of multiple benefit changes: removing NewYork-Presbyterian Hospital System and physicians from the network, transitioning to a new pharmacy vendor and pharmacy group purchasing coalition, and implementing an expanded Centers of Excellence program administered by Mount Sinai Hospital System. These efforts are projected to save over $35 million in 2022. Prior to joining the 32BJ Health Fund, Cora spent 12 years with Express Scripts, a pharmacy benefit manager. During her time there, she held a variety of roles, including Medicare Part D, strategy and acquisitions, operations, and account management. 07:02 What motivated the decision for 32BJ to cut NewYork-Presbyterian out of their network? 09:14 How did 32BJ compare their spending at each hospital in their network? 13:01 “We cannot be sustainable as a health fund … without really tackling the challenge of hospital prices.” 13:38 “It is one of the challenges as a self-funded plan that, even having this data, there’s not a lot we can do with it.” 16:10 What is 32BJ Health Fund’s maternity program? 19:34 What is the HEAL Act, and why did 32BJ Health Fund support it? 21:39 “For us, we just don’t feel it’s right that anyone gets to dictate our benefit.” 22:43 EP368 with Ashleigh Gunter.23:34 Why did 32BJ Health Fund reprice their claims using Medicare rates? 24:58 “It really goes to show you how high the commercial prices are in comparison to Medicare.” 25:52 EP366 with Kevin Schulman, MD.   You can learn more at 32bjhealthfundinsights.org.  @CoraOpsahl discusses managing #hospitalpricing on our #healthcarepodcast. #healthcare #podcast #digitalhealth What motivated the decision for 32BJ to cut NewYork-Presbyterian out of their network? @CoraOpsahl discusses managing #hospitalpricing on our #healthcarepodcast. #healthcare #podcast #digitalhealth How did 32BJ compare their spending at each hospital in their network? @CoraOpsahl discusses managing #hospitalpricing on our #healthcarepodcast. #healthcare #podcast #digitalhealth “We cannot be sustainable as a health fund … without really tackling the challenge of hospital prices.” @CoraOpsahl discusses managing #hospitalpricing on our #healthcarepodcast. #healthcare #podcast #digitalhealth “It is one of the challenges as a self-funded plan that, even having this data, there’s not a lot we can do with it.” @CoraOpsahl discusses managing #hospitalpricing on our #healthcarepodcast. #healthcare #podcast #digitalhealth What is 32BJ Health Fund’s maternity program? @CoraOpsahl discusses managing #hospitalpricing on our #healthcarepodcast. #healthcare #podcast #digitalhealth What is the HEAL Act, and why did 32BJ Health Fund support it? @CoraOpsahl discusses managing #hospitalpricing on our #healthcarepodcast. #healthcare #podcast #digitalhealth “For us, we just don’t feel it’s right that anyone gets to dictate our benefit.” @CoraOpsahl discusses managing #hospitalpricing on our #healthcarepodcast. #healthcare #podcast #digitalhealth Why did 32BJ Health Fund reprice their claims using Medicare rates? @CoraOpsahl discusses managing #hospitalpricing on our #healthcarepodcast. #healthcare #podcast #digitalhealth “It really goes to show you how high the commercial prices are in comparison to Medicare.” @CoraOpsahl discusses managing #hospitalpricing on our #healthcarepodcast. #healthcare #podcast #digitalhealth Recent past interviews: Click a guest’s name for their latest RHV episode! Cora Opsahl (EP372), Dr Mark Fendrick (Encore! EP308), Erik Davis and Autumn Yongchu (EP371), Erik Davis and Autumn Yongchu (EP370), Keith Hartman, Dr Aaron Mitchell (Encore! EP282), Stacey Richter (INBW34), Ashleigh Gunter, Doug Hetherington, Dr Kevin Schulman, Scott Haas, David Muhlestein, David Scheinker, Ali Ucar, Dr Carly Eckert, Jeb Dunkelberger (EP360), Dan O’Neill, Dr Wayne Jenkins, Liliana Petrova, Ge Bai, Nikhil Krishnan, Shawn Rhodes, Pramod John (EP353), Pramod John (EP352), Dr Eric Bricker, Katy Talento, Stacey Richter (INBW33), Stacey Richter (INBW32)

In this healthcare podcast, I am speaking with Cora Opsahl, who directs the 32BJ Health Fund. Important to know about Cora’s background is this: In previous roles, she’s worked deep in the inner workings of the healthcare industry. So, she came to 32BJ armed with a BS meter that is finely tuned, which is, unfortunately, an essential skill for anyone trying to help the patients and members relying on them to successfully navigate the healthcare industry. So sorry to have to say that, but employers and unions, your employees and members need your help. If you do not help them, then your employees can find themselves defenseless against so many pit traps of financial toxicity and also clinical decision-making that is not made by patients and their clinicians in the service of improving patient outcomes but made by some other party in the service of financial maximization. It is really frightening what goes on in some cases. I really appreciated this interview with Cora Opsahl, which will be two shows, this week and next week. This whole conversation has been really a big bright spot for me and will provide hope, I think, for any employer/union who is seeking ways to protect their members and patients, the ones on their plans and therefore under their aegis and whom they have a fiduciary responsibility to look out for. It also should be a bright spot for dedicated clinicians out there suffering under the weight of moral injury because you are expected to do things that you know are not in your patient’s best interest—or not do things, as the case may be. This whole conversation should put on notice health systems and others who have been really taking advantage of employers who are asleep at the wheel. Change is always really, really slow—until it hits a zeitgeist and then it’s not slow anymore. I just attended the MTVA (Moving to Value Alliance) in Connecticut last month, and there were 30 employers there listening and learning. I hear similar numbers from business coalitions across the country penetrating their local markets (Houston, Indiana, for example). Also, spoiler alert, upcoming conversations with Dave Chase will continue this “yeah, there’s good things happening out there” theme. So, let’s start here with a little bit more about the 32BJ union and their Health Fund that we’ll hear about in this episode. 32BJ represents about 200,000 members. They are mostly in residential and commercial real estate—so, for example, your doormen, your maintenance workers, your security, your cleaners, amongst others. Members are in about 11 states, but a lot of them are in the New York City metro area. These union members who are in the fund work for over 5000 different employers. The 32BJ Health Fund has zero-dollar premiums. Also, employees have no premium contribution. Wowza on that point—that’s a huge benefit. Here’s one more thing that I’m gonna say about the 32BJ Health Fund overseen by Cora Opsahl, my guest today. Let’s talk about their amazing leadership, because I do not, nor should anyone else, take exceptional leadership for granted. We have had one guest after another on this podcast who, when asked what it takes to actually attain value for plan members or attain the quadruple aim, what it takes to navigate and overcome bureaucracy and inertia, every one of those thought leaders asked the “What does it take?” question came back with the following included in their list: It takes leadership. Real leadership. The mark of an exceptional leader is one who can conceive of a big mission statement, a goal to deliver better for their members at lower costs, and also the chops and determination to operationalize that vision. This operationalization requires brainpower and relentless dedication to untangle the deliberate opacity that some current healthcare stakeholders absolutely rely on as a business strategy. It takes work to get to the bottom of and disarm some deliberately labyrinthine and noncompetitive contract terms. Let me just pause for a beat on these basically egregious contract terms. Certain healthcare stakeholders seem to consider it somehow their birthright and their privilege to demand that employer and union customers sign on some pretty insane dotted lines—to the detriment of members and employees. By the way, if anyone is thinking CAA right now, I’m right there with you. Talking about the new Consolidated Appropriations Act that went into effect late 2021, and it’s gonna take a lot of C-suite executives by surprise when they’re named in class action lawsuits. So, there is another impetus to question bad contract terms if anyone at an employer or union needs an additional reason besides the health and safety of employees and members to justify getting their healthcare house under control. For more on the CAA, the Consolidated Appropriations Act, listen to the show with Christin Deacon (EP342).   But as I mentioned a moment ago, we are breaking this conversation up into two power-packed episodes. This first one gets into everything that the 32BJ Health Fund does with their data. They have lots of data. They demand it. Next week’s show gets into their unprecedented decision to kick a major local health system out of their network. This decision was also a data-driven decision, but it’s a whole other conversation, which is why it is now a whole other episode. So, besides kicking out overly expensive health systems from their network, here’s other things that 32BJ is currently doing with their data and which other employers and unions may get a few ideas from. If you have the data, you (like 32BJ) can use it to: Make smart benefit decisions that are validated, not just guesses. Before you decide to do something (add a wellness program etc), be able to model it accurately for how much it will actually cost you—which, spoiler alert, is most of the time not what the vendor will estimate. You have way more data than the vendor does, so you can certainly use it to great effect in this way. Make sure that the right members are being communicated with so that benefit designs are successful. As Ashleigh Gunter said in EP368, success when changing benefit designs has a lot more to do with communication than many realize. Create dashboards for leadership that may show trend lines, for example, which could be very helpful to ensure that the fund doesn’t run out of money etc … little things like that. Figure out how much the fund is spending on various procedures and where. There’s all this talk right now about the crazy variability of prices for the same exact service in the same local market. At one hospital, a colonoscopy could literally cost $10,000; and in another hospital—same quality, same basically everything—that same colonoscopy will be $2000 or $3000. I mean, there’s a 500% delta or something in some of these cases. Ensure that if a vendor said they were going to do something, that they are actually doing it. This is especially meaningful for point solutions because of the whole squeezing the balloon thing. I can save money in a silo, and you won’t realize that those dollars are getting transferred elsewhere unless you are doing your own math. This is a big deal if you start thinking about how pharmacy benefits are typically siloed from medical benefits. So, if I’m a pharmacy benefit manager, I can talk about how much I’m saving by denying patients drugs without consideration of the medical downstream implications of that. Ensure you’re not paying a bill and writing a check for more than the bill was for, which is weirdly common. There’s a whole show with Dawn Cornelis (EP285) about this. 32BJ has an engineering team that is creating an app to help members navigate to great doctors with fair prices. All of these things roll into basically three categories: Cutting wasteful spending and finding fraud Making smart benefit decisions Being able to see trends and forecast the future, which is really helpful for financial solvency etc As Cora Opsahl says, “I think we [all can] recognize [that] you [cannot] make smart … decisions and be a fiduciary of [a] fund without having [data].” You can learn more at 32bjhealthfundinsights.org.  Cora Opsahl is the director of the 32BJ Health Fund, a self-funded plan that provides affordable, comprehensive, and innovative health coverage to 200,000 union members and their families. During her time at the Health Fund, Cora has led the implementation of multiple benefit changes: removing NewYork-Presbyterian Hospital System and physicians from the network, transitioning to a new pharmacy vendor and pharmacy group purchasing coalition, and implementing an expanded Centers of Excellence program administered by Mount Sinai Hospital System. These efforts are projected to save over $35 million in 2022. Prior to joining the 32BJ Health Fund, Cora spent 12 years with Express Scripts, a pharmacy benefit manager. During her time there, she held a variety of roles, including Medicare Part D, strategy and acquisitions, operations, and account management. 08:55 How much data does 32BJ Health Fund have, where do they get it, and how do they use it? 10:56 How did 32BJ Health Fund successfully demand their data from 100% of their vendors? 11:45 “We feel it’s really important that we own this information ourselves.” 12:08 “It always concerns me—if a vendor doesn’t want to give you the information, what are they hiding?” 12:34 “It’s not just getting the data; it’s then using the data.” 15:44 “Without data, you’re really just taking a guess; and guesses are never gonna get you where you need to go.” 17:23 EP285 with Dawn Cornelis.17:42 Is the cost of creating a data analytics team worth the cost savings of those data discoveries? 21:07 “The use of data has really built our knowledge.” 22:55 “It’s really important to us that as we make benefit decisions, we’re doing it smartly.” 27:34 EP358 with Wayne Jenkins, MD.27:42 How is 32BJ Health Fund making their data knowledge actionable? 30:14 “If we can figure out how to make telehealth accessible … there may be an opportunity for telehealth … to upset some of these … monopoly systems or low-choice options.” 32:25 “It’s really easy to think that we can solve this problem through benefit design … but in the end … it’s the price.” You can learn more at 32bjhealthfundinsights.org.  @CoraOpsahl discusses #healthdata on our #healthcarepodcast. #healthcare #podcast #digitalhealth How much data does 32BJ Health Fund have, where do they get it, and how do they use it? @CoraOpsahl discusses #healthdata on our #healthcarepodcast. #healthcare #podcast #digitalhealth How did 32BJ Health Fund successfully demand their data from 100% of their vendors? @CoraOpsahl discusses #healthdata on our #healthcarepodcast. #healthcare #podcast #digitalhealth “We feel it’s really important that we own this information ourselves.” @CoraOpsahl discusses #healthdata on our #healthcarepodcast. #healthcare #podcast #digitalhealth “It always concerns me—if a vendor doesn’t want to give you the information, what are they hiding?” @CoraOpsahl discusses #healthdata on our #healthcarepodcast. #healthcare #podcast #digitalhealth “It’s not just getting the data; it’s then using the data.” @CoraOpsahl discusses #healthdata on our #healthcarepodcast. #healthcare #podcast #digitalhealth “Without data, you’re really just taking a guess; and guesses are never gonna get you where you need to go.” @CoraOpsahl discusses #healthdata on our #healthcarepodcast. #healthcare #podcast #digitalhealth Is the cost of creating a data analytics team worth the cost savings of those data discoveries? @CoraOpsahl discusses #healthdata on our #healthcarepodcast. #healthcare #podcast #digitalhealth “The use of data has really built our knowledge.” @CoraOpsahl discusses #healthdata on our #healthcarepodcast. #healthcare #podcast #digitalhealth “It’s really important to us that as we make benefit decisions, we’re doing it smartly.” @CoraOpsahl discusses #healthdata on our #healthcarepodcast. #healthcare #podcast #digitalhealth How is 32BJ Health Fund making their data knowledge actionable? @CoraOpsahl discusses #healthdata on our #healthcarepodcast. #healthcare #podcast #digitalhealth “If we can figure out how to make telehealth accessible … there may be an opportunity for telehealth … to upset some of these … monopoly systems or low-choice options.” @CoraOpsahl discusses #healthdata on our #healthcarepodcast. #healthcare #podcast #digitalhealth “It’s really easy to think that we can solve this problem through benefit design … but in the end … it’s the price.” @CoraOpsahl discusses #healthdata on our #healthcarepodcast. #healthcare #podcast #digitalhealth Recent past interviews: Click a guest’s name for their latest RHV episode! Dr Mark Fendrick (Encore! EP308), Erik Davis and Autumn Yongchu (EP371), Erik Davis and Autumn Yongchu (EP370), Keith Hartman, Dr Aaron Mitchell (Encore! EP282), Stacey Richter (INBW34), Ashleigh Gunter, Doug Hetherington, Dr Kevin Schulman, Scott Haas, David Muhlestein, David Scheinker, Ali Ucar, Dr Carly Eckert, Jeb Dunkelberger (EP360), Dan O’Neill, Dr Wayne Jenkins, Liliana Petrova, Ge Bai, Nikhil Krishnan, Shawn Rhodes, Pramod John (EP353), Pramod John (EP352), Dr Eric Bricker, Katy Talento, Stacey Richter (INBW33), Stacey Richter (INBW32), Dr Steve Schutzer (Encore! EP294)  

I wanted to remind everyone about this show from last year because it’s becoming increasingly relevant. We have this weird thing going on where everybody seems to be talking about physician incentives and payments and financial implications but so often disregards patient incentives and payments and financial implications. Consider that we’re at a place in the time-space continuum where it is inarguable that financial toxicity has become clinical toxicity. Patients are increasingly in huge numbers abandoning care, splitting pills, doing all kinds of things to save money that are clinically toxic. And these are patients with “good insurance” that we are talking about here. So, here’s a role play: Provider organization is actually paying doctors for outcomes. In wanders a patient with a huge deductible. Doc says, “Wow, Patient … so important that you take your insulin or med as directed or get a follow-up on that scary colonoscopy finding.” Patient says, “Sorry, Doc. Can’t afford it.” And the doc gets dinged because the patient outcomes are avoidably poor. That’s what this show with Dr. Mark Fendrick digs into: aligning patient incentives (aka benefit designs etc) with value-based payments on the provider side. And with that, here’s your encore: And here I thought I knew a lot about value-based care. In this healthcare podcast, I am speaking with Mark Fendrick, MD, who is the director over at the University of Michigan Center for Value-Based Insurance Design. This conversation is for those of you who already know pretty much about value-based care concepts. If you do not, I’d go back and listen to, say, Encore! EP206, with Ashok Subramanian, before this one.   Dr. Fendrick talks in this healthcare podcast about what it takes for value-based care to happen in the real world. No kidding, it’s about making sure that reimbursement is aligned with good things (no great surprise there). But two light bulb moments I had in this conversation with Dr. Fendrick: At the beginning of the year, how many doctors and nurses, inspired to do the right thing, have told their patients with diabetes, say, to go get an eye exam to check for diabetic retinopathy? No one would disagree that this is definitely a good idea. Diabetic retinopathy causes blindness. But here’s the reality of that conversation. Doc says, “Go get an eye exam.” And patient says, “I can’t. My deductible is huge, and I can’t afford it.” So, the patient doesn’t get the follow-up care and winds up in the hospital or blind. And the doctor gets dinged on his or her quality scores. Suboptimal outcomes all around, I’d say. This also happens on the pharmacy side of the equation, but I think a lot of us are a little bit more familiar with that scenario—like type 1 diabetics who can’t afford to pick up their insulin because of a Medicare Part D or commercial deductible that they haven’t met yet. I just never really connected the dots back to the provider getting black marks because their patient has a benefit design that’s not aligned with the quality measures. In a majority of benefit designs, consumer price sharing is based not on the value of the service but on how expensive the service just happens to be. Wow! So, we’re trying to get our plan members to be consumers and use the power of their wallets to make good healthcare choices. And what we’re really doing is driving them toward cheap things or no care and discouraging them from indulging—and I say that sarcastically—in expensive things. But the expensive things might be the high-value care, and the relatively cheap things might be crap that’s fully unnecessary or harmful and, over a whole population, adds up to a lot of zeros. Healthcare is not like a consumer market where the expensive things are usually a better version of the cheap things. For all you economists out there, you don’t want the demand curve to be elastic when what’s cheap and what’s expensive has no correlation to quality or necessity. Nobody should be super flabbergasted when a $35 cure-all supplement peddled on YouTube makes some random influencer a millionaire. That’s how supply and demand works. Much to ponder in this episode. You can learn more at vbidcenter.org. There’s also a great newsletter you can sign up for there.   A. Mark Fendrick, MD, is a professor of internal medicine in the School of Medicine and a professor of health management and policy in the School of Public Health at the University of Michigan. Dr. Fendrick received a bachelor’s degree in economics and chemistry from the University of Pennsylvania and his medical degree from Harvard Medical School. He completed his residency in internal medicine at the University of Pennsylvania, where he was a fellow in the Robert Wood Johnson Foundation Clinical Scholars Program. Dr. Fendrick conceptualized and coined the term Value-Based Insurance Design (V-BID) and currently directs the V-BID Center at the University of Michigan (vbidcenter.org), the leading advocate for development, implementation, and evaluation of innovative health benefit plans. His research focuses on how clinician payment and consumer engagement initiatives impact access to care, quality of care, and healthcare costs. Dr. Fendrick has authored over 250 articles and book chapters and has received numerous awards for the creation and implementation of value-based insurance design. His perspective and understanding of clinical and economic issues have fostered collaborations with numerous government agencies, health plans, professional societies, and healthcare companies.   Dr. Fendrick is an elected member of the National Academy of Medicine (formerly IOM), serves on the Medicare Coverage Advisory Committee, and has been invited to present testimony before the US Senate Committee on Health, Education, Labor and Pensions; the US House of Representatives Ways and Means Subcommittee on Health; and the US Senate Committee on Armed Services Subcommittee on Personnel. 05:00 Is back surgery high-value care? 05:51 If care is patient to patient, how is high-value care decided upon? 06:40 “Flintstones delivery: We have to move from the sledgehammer to the scalpel.” 11:14 “Almost all of the services that we recommend to reduce cost sharing … do not save money.” 12:30 “I didn’t go to medical school to learn how to save people money.” 17:03 “When a patient and their clinician agree … the patient should be able to get that [service] easily, and the clinician should be paid generously.” 18:01 “When patients and providers are aligned, they do much better.” 19:59 What services are deemed high value, and what services should be pre-deductible? 21:50 “Are primary care visits high value? … The answer is, it depends.” 25:55 What are V-BID’s core pillars to address value-based care? 28:04 How does Dr. Fendrick’s method of value-based care and reimbursement actually enable better consumerism? 29:51 What do providers think about changing reimbursement on low-value and high-value care? 30:58 “We have incentives that are run amok.” 32:12 EP176 with Dr. Robert Pearl. 32:49 “It’s all about incentives.” 33:43 “You do have the funding; you just have to have the courage.” You can learn more at vbidcenter.org. There’s also a great newsletter you can sign up for there. Mark Fendrick, MD, of @UM_VBID discusses #valuebasedcare on our #healthcarepodcast. #healthcare #podcast #vbc #digitalhealth If care is patient to patient, how is high-value care decided upon? Mark Fendrick, MD, of @UM_VBID discusses #valuebasedcare on our #healthcarepodcast. #healthcare #podcast #vbc #digitalhealth “Flintstones delivery: We have to move from the sledgehammer to the scalpel.” Mark Fendrick, MD, of @UM_VBID discusses #valuebasedcare on our #healthcarepodcast. #healthcare #podcast #vbc #digitalhealth “Almost all of the services that we recommend to reduce cost sharing … do not save money.” Mark Fendrick, MD, of @UM_VBID discusses #valuebasedcare on our #healthcarepodcast. #healthcare #podcast #vbc #digitalhealth “I didn’t go to medical school to learn how to save people money.” Mark Fendrick, MD, of @UM_VBID discusses #valuebasedcare on our #healthcarepodcast. #healthcare #podcast #vbc #digitalhealth “When patients and providers are aligned, they do much better.” Mark Fendrick, MD, of @UM_VBID discusses #valuebasedcare on our #healthcarepodcast. #healthcare #podcast #vbc #digitalhealth “Are primary care visits high value? … The answer is, it depends.” Mark Fendrick, MD, of @UM_VBID discusses #valuebasedcare on our #healthcarepodcast. #healthcare #podcast #vbc #digitalhealth “We have incentives that are run amok.” Mark Fendrick, MD, of @UM_VBID discusses #valuebasedcare on our #healthcarepodcast. #healthcare #podcast #vbc #digitalhealth “You do have the funding; you just have to have the courage.” Mark Fendrick, MD, of @UM_VBID discusses #valuebasedcare on our #healthcarepodcast. #healthcare #podcast #vbc #digitalhealth   Recent past interviews: Click a guest’s name for their latest RHV episode! Erik Davis and Autumn Yongchu (EP371), Erik Davis and Autumn Yongchu (EP370), Keith Hartman, Dr Aaron Mitchell (Encore! EP282), Stacey Richter (INBW34), Ashleigh Gunter, Doug Hetherington, Dr Kevin Schulman, Scott Haas, David Muhlestein, David Scheinker, Ali Ucar, Dr Carly Eckert, Jeb Dunkelberger (EP360), Dan O’Neill, Dr Wayne Jenkins, Liliana Petrova, Ge Bai, Nikhil Krishnan, Shawn Rhodes, Pramod John (EP353), Pramod John (EP352), Dr Eric Bricker, Katy Talento, Stacey Richter (INBW33), Stacey Richter (INBW32), Dr Steve Schutzer (Encore! EP294), Lisa Trumble  

So, this is a 400-level episode in specialty pharmacy options for plan sponsors, meaning here are your prerequisites: You gotta know what buy and bill is, and you gotta know what pharmacy bagging is, meaning white bagging, for example. If you do not, I would listen to Encore! EP282 with Aaron Mitchell, MD, MPH, where we go deep on buy and bill. And then listen to EP369 for the skinny on pharmacy bagging. If you already know what buy and bill is and you already know what white bagging is, then not only do you know more than 98% of the people in the healthcare industry, but also, you’re going to get as much out of this conversation with Erik Davis and Autumn Yongchu as I did.   Last week’s show was also with Erik Davis and Autumn Yongchu. Last week, we talked about how some hospitals and cancer centers are managing to ring up up to six times the cost of an expensive-already injected or infused drug through buy and bill. This is why pharmacy bagging became a thing, if we want to talk about this in historical perspective. It’s a direct market response to buy and bill. Hospital systems start making egregious amounts of money marking up drugs that already cost hundreds of thousands of dollars, and their markups are hundreds of thousands of dollars on top of that. Hospital starts making a fortune off of drug markups. Plan sponsors need an alternative, and … enter pharmacy bagging (ie, carving out specialty pharmacy drugs to a PBM [pharmacy benefit manager]). In this show, we compare the potential benefits and problematic loopholes and/or patient concerns for plan sponsors who are trying to figure out whether to carve out specialty pharmacy benefits to a PBM or grin and bear it with the buy and bill. Or, as another option, whether to steer patients to specific infusion centers or specific provider organizations that might have more favorable contract terms for the plan sponsor. Or, hooking up with a home infusion company, again, who is willing to negotiate terms that might be far better for said plan sponsor than just letting some hospital have their way with employees and the health plan. As another alternative, of course, plan sponsors could consider medical travel, which some certainly are. My biggest takeaway from this whole conversation and from the episodes that we have had in this, dare I call it, series about pharmacy benefits, starting with the show with Scott Haas (EP365) where we talked about PBM contracts, moving to the show with Dr. Aaron Mitchell (Encore! EP282) where we talked about buy and bill, then going to the show with Keith Hartman (EP369) where we talked about pharmacy bagging, then last week’s show how hospitals manage to buy and bill at 6x the price of these expensive pharmaceuticals … my takeaway from this whole specialty drug extravaganza is that specialty drug procurement is very different than retail drug procurement. Retail drugs, you worry about them en masse at scale almost at the population level. Specialty drugs? You can have one patient on a specialty drug, and that one patient costs as much as the entire rest of the member population combined. So, managing specialty drugs and their administration becomes almost a case-by-case operation. What drug is it? Where is the patient? What options are available? It’s possible to save hundreds of thousands of dollars on that one patient, for that one patient’s care, and get better patient outcomes by getting the right patient on the right drug that is administered in the right setting.   You can learn more by connecting with Erik and Autumn on LinkedIn or by emailing them at erik.davis@usi.com and autumn.yongchu@usi.com.   Erik Davis, AAI, CIC, CRM, is senior vice president and principal consultant, managed care and analytics, at USI Insurance Services. He has over 30 years of experience in the insurance and risk management industry. Erik works to create an environment that supports the healthcare risk management goals of an organization while maintaining focus on compliance and financial accountability. He is instrumental in vendor negotiations, data benchmarking, population health strategies, claims analysis, recommendations in plan design, and communication strategies. In this capacity, Erik has been involved with development of rates, payment structures, and recommendations of changes in processes, policies, and procedures. He has a broad understanding of contract analysis, evaluating risk, auditing for correct payment, and structuring of excess loss and pharmacy programs. Erik’s experience extends from overall employee benefits consulting to workers’ compensation, as well as managed care organizations in Medicaid, Medicare, and commercial contractual risk arrangements. Erik earned his bachelor’s degree in economics from Oregon State University. He holds Accredited Advisor in Insurance (AAI), Certified Insurance Counselor (CIC), and Certified Risk Manager (CRM) designations. Autumn Yongchu is a healthcare operational risk consultant at USI Insurance Services. Autumn works with multiple database platforms to examine data for trends and abnormalities. Using investigative querying, medical coding analysis, and report development, she provides resources that help identify cost control opportunities and assists organizations in strategic business decisions regarding the management of healthcare risks. Autumn analyzes and interprets healthcare utilization data, allowing the development of initiatives regarding claim and risk management. This includes identifying fiscal and clinical strategies and providing necessary information to develop, design, and implement management initiatives. Autumn also analyzes trends, assists with insurance underwriting, and adjudicates stop-loss claims. Autumn has an in-depth knowledge of Medicaid and Medicare billing guidelines and payment methodologies. Prior to joining USI, Autumn was a claims auditor and trainer for a managed care organization which serviced over 100,000 commercial, Medicaid, and Medicare lives. Her responsibilities included contract analysis, claims adjudication, ensuring accurate payment, and identifying and recouping errors. 04:45 Can you actually save money by carving out specialty infused drugs and making them a pharmacy benefit? 06:28 How can plan sponsors use white bagging as leverage to reduce costs from markups? 06:47 Does white bagging save money compared to buy and bill? 07:42 “You also need to understand that with some of these drugs, you’re dealing with very vulnerable people.”—Erik 08:41 EP369 with Keith Hartman, RPh. 11:10 “When your insurance carrier is married to your PBM, it doesn’t matter where the money goes.”—Autumn 11:33 EP365 with Scott Haas. 12:00 “You need to have a collective understanding of every variable … when you’re making those … decisions.”—Erik 14:53 How can comparison shopping save plan sponsors money when it comes to specialty infusion costs? 16:51 How can comparison shopping be a vicious circle in the wrong setting for plan sponsors? 18:43 “That’s part of the problem: It’s not just the plan sponsor not being educated enough; it’s also the consultant … that they believe is supposed to be that isn’t.”—Erik 19:03 How has transparency been used by healthcare systems to keep buyers’ eyes off the ball? 26:55 “It is very case by case, but it comes down to your risk appetite.”—Autumn 28:19 “It’s something that you have to, as a plan sponsor, really continue to monitor throughout the plan year.”—Autumn 28:38 “The more you know, the better equipped you’re gonna be.”—Autumn 29:27 What can employers who are feeling aggressive do? 31:19 “The dollars circle, whether people realize it or not.”—Autumn You can learn more by connecting with Erik and Autumn on LinkedIn or by emailing them at erik.davis@usi.com and autumn.yongchu@usi.com.   Erik Davis and Autumn Yongchu discuss #buyandbill and #pharmabagging on our #healthcarepodcast. #healthcare #podcast #pharmacy #pharma Can you actually save money by carving out specialty infused drugs and making them a pharmacy benefit? Erik Davis and Autumn Yongchu discuss #buyandbill and #pharmabagging on our #healthcarepodcast. #healthcare #podcast #pharmacy #pharma How can plan sponsors use white bagging as leverage to reduce costs from markups? Erik Davis and Autumn Yongchu discuss #buyandbill and #pharmabagging on our #healthcarepodcast. #healthcare #podcast #pharmacy #pharma Does white bagging save money compared to buy and bill? Erik Davis and Autumn Yongchu discuss #buyandbill and #pharmabagging on our #healthcarepodcast. #healthcare #podcast #pharmacy #pharma “You also need to understand that with some of these drugs, you’re dealing with very vulnerable people.” Erik Davis and Autumn Yongchu discuss #buyandbill and #pharmabagging on our #healthcarepodcast. #healthcare #podcast #pharmacy #pharma “When your insurance carrier is married to your PBM, it doesn’t matter where the money goes.” Erik Davis and Autumn Yongchu discuss #buyandbill and #pharmabagging on our #healthcarepodcast. #healthcare #podcast #pharmacy #pharma “You need to have a collective understanding of every variable … when you’re making those … decisions.” Erik Davis and Autumn Yongchu discuss #buyandbill and #pharmabagging on our #healthcarepodcast. #healthcare #podcast #pharmacy #pharma How can comparison shopping save plan sponsors money when it comes to specialty infusion costs? Erik Davis and Autumn Yongchu discuss #buyandbill and #pharmabagging on our #healthcarepodcast. #healthcare #podcast #pharmacy #pharma How can comparison shopping be a vicious circle in the wrong setting for plan sponsors? Erik Davis and Autumn Yongchu discuss #buyandbill and #pharmabagging on our #healthcarepodcast. #healthcare #podcast #pharmacy #pharma “That’s part of the problem: It’s not just the plan sponsor not being educated enough; it’s also the consultant … that they believe is supposed to be that isn’t.” Erik Davis and Autumn Yongchu discuss #buyandbill and #pharmabagging on our #healthcarepodcast. #healthcare #podcast #pharmacy #pharma How has transparency been used by healthcare systems to keep buyers’ eyes off the ball? Erik Davis and Autumn Yongchu discuss #buyandbill and #pharmabagging on our #healthcarepodcast. #healthcare #podcast #pharmacy #pharma “It is very case by case, but it comes down to your risk appetite.” Erik Davis and Autumn Yongchu discuss #buyandbill and #pharmabagging on our #healthcarepodcast. #healthcare #podcast #pharmacy #pharma “It’s something that you have to, as a plan sponsor, really continue to monitor throughout the plan year.” Erik Davis and Autumn Yongchu discuss #buyandbill and #pharmabagging on our #healthcarepodcast. #healthcare #podcast #pharmacy #pharma “The more you know, the better equipped you’re gonna be.” Erik Davis and Autumn Yongchu discuss #buyandbill and #pharmabagging on our #healthcarepodcast. #healthcare #podcast #pharmacy #pharma What can employers who are feeling aggressive do? Erik Davis and Autumn Yongchu discuss #buyandbill and #pharmabagging on our #healthcarepodcast. #healthcare #podcast #pharmacy #pharma “The dollars circle, whether people realize it or not.” Erik Davis and Autumn Yongchu discuss #buyandbill and #pharmabagging on our #healthcarepodcast. #healthcare #podcast #pharmacy #pharma   Recent past interviews: Click a guest’s name for their latest RHV episode! Erik Davis and Autumn Yongchu (EP370), Keith Hartman, Dr Aaron Mitchell (Encore! EP282), Stacey Richter (INBW34), Ashleigh Gunter, Doug Hetherington, Dr Kevin Schulman, Scott Haas, David Muhlestein, David Scheinker, Ali Ucar, Dr Carly Eckert, Jeb Dunkelberger (EP360), Dan O’Neill, Dr Wayne Jenkins, Liliana Petrova, Ge Bai, Nikhil Krishnan, Shawn Rhodes, Pramod John (EP353), Pramod John (EP352), Dr Eric Bricker, Katy Talento, Stacey Richter (INBW33), Stacey Richter (INBW32), Dr Steve Schutzer (Encore! EP294), Lisa Trumble, Jeb Dunkelberger  

I have been on a mission to figure out why some health systems, particularly in the oncology space but not limited to the oncology space, could manage to mark up the price of infused specialty pharmacy drugs up to 6x. Some employers and patients are paying six times the cost of a specialty pharmacy drug in markup for some already incredibly expensive specialty pharmacy drug at some oncology centers. Read more about this in a study by Roy Xiao, MD, and colleagues. Let’s not forget now or ever that financial toxicity is clinical toxicity. This 6x is exactly how financial toxicity is operationalized. Many patients are charged a coinsurance percentage based on their cost of care, after all; and like 20% of 6x is a huge number, it is a huge bankrupting bill for some patients—maybe many patients. That, plus their premiums go up because, of course, their employers are picking up the remaining 80% of that 600% markup. Families are already, on average, paying I think it’s $22,000 in premium; and the trend line on that premium growth continues to go up steeply in the 2022-23 projections that I have seen. Bottom line: This 6x is not a victimless modus operandi is my point. But what I wanted to know is how they do it, these health systems. Charging 6x the cost of a super expensive specialty pharmacy drug in markup would seem to require some skill, right? And any time I see a Pandora’s box, I have a terrible habit of trying to get in there. Autumn Yongchu and Erik Davis to the rescue. Today’s show digs into how some health systems and hospitals stack the odds that no one will notice their 6x markups and just pay the bills. Here’s the short version of the playbook, but you’ll need to listen to the show for a more robust explanation. First off, keep in mind that while Medicare Part B tells hospitals to charge ASP (average sales price) + 6% (ish) when they buy and bill Medicare patients, there is no such guidance for commercial patients. Commercial insurers negotiate a fee off chargemaster rates, and as we all know, those chargemaster prices are, in general, based on absolutely nothing and are, in general, sky-high. So that’s the first thing. The second thing gets into coding. Let me give you the general idea here, but we talk about this in some depth in the conversation to come. As you likely know, hospitals get paid by sending bills with codes on them—procedure codes, for example. We the hospital did this procedure, and our charge for this procedure is $4000—so, here you go. Code followed by dollar amount is shown on somebody’s bill or explanation of benefits document. These procedure codes are standardized across the industry for the most part. It’s not like every health system and/or payer is making up their own. This standardized set of procedure codes is called the Healthcare Common Procedure Coding System, affectionally known as HCPCS. So, if someone starts talking about a HCPCS code, all it means is that the code comes out of that standard set of codes. Now, J-codes are one kind of code in this common procedure coding system. They are procedure codes that start with a “J.” These J-codes are for procedures involving (usually) specialty pharmacy drugs. A J-code identifies the specialty pharmacy drug that was used in the procedure. So, you’d think it’d be pretty easy to audit a hospital bill, right? You look at the J-code on the bill; you find the ASP, the average sales price, or whatever of the drug; and then you get out your trusty calculator and you do the math on what the markup is. And okay, maybe this works sometimes … but the problem is that so very, very often, the hospital doesn’t put the actual drug’s J-code on the bill. There’s this miscellaneous J-code that doesn’t specify the drug used, which is a quite common tactic, it seems. (I learned that in this episode.) Hospital just sticks “Miscellaneous chemotherapy” on a bill with a price after it, and nobody knows what drug was used. Or the hospital will send a bill that just includes revenue codes. I think about revenue codes as the name of the section of the bill. It’s like on a menu: There’s that section, that headline, that says “Seafood” with a whole list of seafood dishes underneath it. In this example, the Seafood header is like the revenue code; and the J-codes are the actual dishes. Some bills come from the hospital, and all they have on them are the revenue code. There was some seafood. We’re not gonna tell you what dish or how much seafood, but yeah, seafood. The only thing we know about seafood is that there was some and it was very pricy. Here’s a great example of a bill with some explanations.   The main point here is that how health systems get away, in large part, with charging a whole lot for specialty pharmacy drugs is that their bills roll up charges into these very opaque codes that include lots and lots of stuff that is not broken out. When I interviewed Marshall Allen (EP328) and we talked about his book Never Pay the First Bill, he said step one in getting an accurate and fair bill is to ask for the line item charges—and now that is totally making sense to me and also why this is so vital. Just be aware, if you ask for these breakouts, you will likely get a huge box of hard copies. Check out this photo of a literally three-foot pile of printouts that one patient-turned-artist exhibited at an art show recently that I saw. If you don’t have the stamina to sort through all of those pages and pages and pages, you could be subject to 6x or more in markups or billing errors which are all too common and all too expensive. Hospital charges are a huge chunk of any employer’s healthcare spend, after all—over half of it in some cases. These are not small potatoes that we’re talking about. These are bills that bankrupt patients and make premiums go so high that patients cannot afford to get care.   In this healthcare podcast, as mentioned earlier, we have two guests—Erik Davis and Autumn Yongchu—both from USI Managed Care Consulting and both having spent decades deep in the inner workings of the healthcare industry. And the topic of today’s show required that depth of knowledge, for sure. You can learn more by connecting with Erik and Autumn on LinkedIn or by emailing them at erik.davis@usi.com and autumn.yongchu@usi.com.   Erik Davis, AAI, CIC, CRM, is senior vice president and principal consultant, managed care and analytics, at USI Insurance Services. He has over 30 years of experience in the insurance and risk management industry. Erik works to create an environment that supports the healthcare risk management goals of an organization while maintaining focus on compliance and financial accountability. He is instrumental in vendor negotiations, data benchmarking, population health strategies, claims analysis, recommendations in plan design, and communication strategies. In this capacity, Erik has been involved with development of rates, payment structures, and recommendations of changes in processes, policies, and procedures. He has a broad understanding of contract analysis, evaluating risk, auditing for correct payment, and structuring of excess loss and pharmacy programs. Erik’s experience extends from overall employee benefits consulting to workers’ compensation, as well as managed care organizations in Medicaid, Medicare, and commercial contractual risk arrangements. Erik earned his bachelor’s degree in economics from Oregon State University. He holds Accredited Advisor in Insurance (AAI), Certified Insurance Counselor (CIC), and Certified Risk Manager (CRM) designations. Autumn Yongchu is a healthcare operational risk consultant at USI Insurance Services. Autumn works with multiple database platforms to examine data for trends and abnormalities. Using investigative querying, medical coding analysis, and report development, she provides resources that help identify cost control opportunities and assists organizations in strategic business decisions regarding the management of healthcare risks. Autumn analyzes and interprets healthcare utilization data, allowing the development of initiatives regarding claim and risk management. This includes identifying fiscal and clinical strategies and providing necessary information to develop, design, and implement management initiatives. Autumn also analyzes trends, assists with insurance underwriting, and adjudicates stop-loss claims. Autumn has an in-depth knowledge of Medicaid and Medicare billing guidelines and payment methodologies. Prior to joining USI, Autumn was a claims auditor and trainer for a managed care organization which serviced over 100,000 commercial, Medicaid, and Medicare lives. Her responsibilities included contract analysis, claims adjudication, ensuring accurate payment, and identifying and recouping errors. 07:33 How do hospitals maximize inpatient bills? 08:05 How can hospitals upcode on specialty pharmacy products? 09:44 “It’s really not uncommon to be overbilled and overcharged.”—Autumn 11:11 Why do marked up bill charges actually affect the price commercial payers pay? 12:49 “If your payer’s not double-checking … how do you know that fraud’s happening?”—Autumn 12:52 “If the payer doesn’t have the detail to validate what that drug actually is, then are they really checking?”—Autumn 13:33 Why is it so hard to verify what you’re actually paying for on a hospital bill? 16:28 How do hospitals maximize profit with outpatients? 17:12 “Really it comes down to contracts and how [the] contracts are written.”—Autumn 21:54 “There are … silos within healthcare, and none of them actually talk to each other.”—Autumn 24:56 “There are these rules out there, but there are also big loopholes out there.”—Autumn 26:13 How can hospitals maximize payments for Medicare patients on drugs that have been out for a while? 29:30 “We just have a tendency to assume … that Medicare has a rate for everything, and Medicare doesn’t.”—Autumn 30:32: EP369 with Keith Hartman, RPh.   You can learn more by connecting with Erik and Autumn on LinkedIn or by emailing them at erik.davis@usi.com and autumn.yongchu@usi.com.   Erik Davis and Autumn Yongchu discuss #specialtypharma billing in #healthsystems on our #healthcarepodcast. #healthcare #podcast #hospitalsystems How do hospitals maximize inpatient bills? Erik Davis and Autumn Yongchu discuss #specialtypharma billing in #healthsystems on our #healthcarepodcast. #healthcare #podcast #hospitalsystems How can hospitals upcode on specialty pharmacy products? Erik Davis and Autumn Yongchu discuss #specialtypharma billing in #healthsystems on our #healthcarepodcast. #healthcare #podcast #hospitalsystems “It’s really not uncommon to be overbilled and overcharged.” Erik Davis and Autumn Yongchu discuss #specialtypharma billing in #healthsystems on our #healthcarepodcast. #healthcare #podcast #hospitalsystems Why do marked up bill charges actually affect the price commercial payers pay? Erik Davis and Autumn Yongchu discuss #specialtypharma billing in #healthsystems on our #healthcarepodcast. #healthcare #podcast #hospitalsystems “If your payer’s not double-checking … how do you know that fraud’s happening?” Erik Davis and Autumn Yongchu discuss #specialtypharma billing in #healthsystems on our #healthcarepodcast. #healthcare #podcast #hospitalsystems “If the payer doesn’t have the detail to validate what that drug actually is, then are they really checking?” Erik Davis and Autumn Yongchu discuss #specialtypharma billing in #healthsystems on our #healthcarepodcast. #healthcare #podcast #hospitalsystems Why is it so hard to verify what you’re actually paying for on a hospital bill? Erik Davis and Autumn Yongchu discuss #specialtypharma billing in #healthsystems on our #healthcarepodcast. #healthcare #podcast #hospitalsystems How do hospitals maximize profit with outpatients? Erik Davis and Autumn Yongchu discuss #specialtypharma billing in #healthsystems on our #healthcarepodcast. #healthcare #podcast #hospitalsystems “Really it comes down to contracts and how [the] contracts are written.” Erik Davis and Autumn Yongchu discuss #specialtypharma billing in #healthsystems on our #healthcarepodcast. #healthcare #podcast #hospitalsystems “There are … silos within healthcare, and none of them actually talk to each other.” Erik Davis and Autumn Yongchu discuss #specialtypharma billing in #healthsystems on our #healthcarepodcast. #healthcare #podcast #hospitalsystems “There are these rules out there, but there are also big loopholes out there.” Erik Davis and Autumn Yongchu discuss #specialtypharma billing in #healthsystems on our #healthcarepodcast. #healthcare #podcast #hospitalsystems How can hospitals maximize payments for Medicare patients on drugs that have been out for a while? Erik Davis and Autumn Yongchu discuss #specialtypharma billing in #healthsystems on our #healthcarepodcast. #healthcare #podcast #hospitalsystems “We just have a tendency to assume … that Medicare has a rate for everything, and Medicare doesn’t.” Erik Davis and Autumn Yongchu discuss #specialtypharma billing in #healthsystems on our #healthcarepodcast. #healthcare #podcast #hospitalsystems   Recent past interviews: Click a guest’s name for their latest RHV episode! Keith Hartman, Dr Aaron Mitchell (Encore! EP282), Stacey Richter (INBW34), Ashleigh Gunter, Doug Hetherington, Dr Kevin Schulman, Scott Haas, David Muhlestein, David Scheinker, Ali Ucar, Dr Carly Eckert, Jeb Dunkelberger (EP360), Dan O’Neill, Dr Wayne Jenkins, Liliana Petrova, Ge Bai, Nikhil Krishnan, Shawn Rhodes, Pramod John (EP353), Pramod John (EP352), Dr Eric Bricker, Katy Talento, Stacey Richter (INBW33), Stacey Richter (INBW32), Dr Steve Schutzer (Encore! EP294), Lisa Trumble, Jeb Dunkelberger, Dr Ian Tong    

Last week’s show was an encore episode with Dr. Aaron Mitchell (Encore! EP282), and we talked about buy and bill. To continue our exploration of specialty pharmacy intrigue, let’s talk about so-called “bagging.” I wanted to get an overview of all of the different kinds of specialty pharmacy bagging. Bagging is a big deal. If you have anything to do with trying to control pharmacy costs or the clinical outcomes of specialty pharmacy patients, you too are going to want to understand what’s going on here with bagging. I was thrilled to have a chance to chat with Keith Hartman, who is my guest in this healthcare podcast. He is the CEO of ContinuumRx. He’s a pharmacist by education and has been in the pharmacy space for over 25 years now, touching just about every aspect of pharmacy from retail operations to long-term care and now, most recently, home infusion. This makes him an ideal person to chat with about this topic. And FYI, it was not easy to find someone to do so to clearly see the actions and reactions going on here because that’s what this is all about: actions and reactions—how any self-respecting market distortion is going to cause a cascade of equal and opposite market distortions. So, let’s cruise through the whole infused/injected specialty pharmacy historical play-by-play, shall we? It’s like a “Who’s on First?” routine—except very, very not funny. So, here we go. This is, of course, the semi-reductive abridged version; but let’s do this thing. Once upon a time, the bagging story starts in ye olden days, meaning more than ten years ago, before specialty pharmacy drugs really became the massive profit centers for any party who can manage to get their fingers in the specialty pharmacy cookie jar. In these ancient and halcyon times, brown bagging was kind of a modus operandi. Don’t forget, we’re talking about infused or injectable drugs here, especially ones that need to be infused or injected in the provider’s office. So, brown bagging means and meant when a specialty pharmacy drug is shipped directly to a patient, or a patient goes and picks up the specialty pharmacy drug at the pharmacy. Doc takes out prescription pad (this is in ye olden days, remember) and writes out the Rx. Patient picks up the drug from the pharmacy, which may be handed to them in a brown bag. Get it? But then they take that “brown bag,” as it were, to their doctor’s office. The doctor takes the drug out of the brown bag and infuses or injects it. I say doctor’s office because many times, in the olden days, that’s where this went down. And this brown bagging had some issues, for sure; but specialty pharmacy drugs really weren’t all that big of a thing either dollar-wise or frequency-wise. At some point in our story here, pharma manufacturers start seeing just exactly how much money the market will bear for specialty pharmacy drugs, and the prices of these specialty drugs go through the roof. At the same time, for a bunch of reasons I actually discussed with Dr. Bruce Rector (EP300), a whole bunch of these specialty pharmacy drugs start hitting the market all at once. So, these drugs have skyrocketing prices—and there’s lots of them.   At that point, some (certainly not all, but enough) CFOs at provider organizations were like—wowza, epiphany, light bulb moment—there’s a lot of money that can be made here because buy and bill. In buy and bill, which I talked about last week with Dr. Aaron Mitchell, provider organizations get reimbursed the cost of the drug plus some percentage when they administer it—meaning the more expensive the drug, the more money a provider can make because a percentage of a bigger number is, of course, a bigger number. Add to that a party-sized container of other provider shenanigans to maximize revenue on specialty pharmacy patients—and that revenue got bigger every single year. A recent report just came out that, on average, for oncology drugs, some providers are making six times the cost of the drug. Six times the cost of a drug that can cost lots of zeros! Just wow—6x! That’s real money. This is winning the lottery every single time a patient needing a specialty drug shows up on your doorstep.   Continuing the tale here, this buy and bill health system extreme greed hits employers in their pocketbooks. And, of course, plan sponsors start desperately seeking relief. Who rides up on a white horse? PBMs (pharmacy benefit managers), of course. PBMs say that they will negotiate with drug companies and buy the drugs on behalf of the plan sponsors for much cheaper. Then they will ship the drugs purchased to the provider organizations. Thus, the plan sponsor only needs to pay providers to administer the drug, not that and some crazy markup on the drug itself. Ladies and gentlemen, white bagging has entered the building. White bagging is when the drug is not shipped directly to the patient à la brown bagging. It is when the drug is shipped to the provider. But wait … there’s more to the story than a grand PBM gesture of goodwill. They see how much money the employers are used to paying providers for these drugs and realize that the PBM only needs to come in with a price that’s less than that, at least at the beginning. So, over the years, weird stuff starts happening with rebates on the specialty drugs. Listen to the show with Scott Haas (EP365) for more on that. But bottom line, white bagging becomes not exactly a mecca of cost savings. PBMs are, as we all know, not known for their ability to moderate their profitability, after all. At this point in our story, let’s just pause to say that provider organizations are very, very, very not happy with this whole white bagging intervention. Not only did a piece of the provider’s specialty pharmacy cash cow get snatched by the PBMs, but there are also clinical issues with white bagging that we talk about on the show today. And some of these issues are not BS. Do not get me wrong. They are very real, and I do not want to minimize them. And so, provider organizations start to stand up their own hospital specialty pharmacies because then at least they can get some of the white bagging cha-ching. See what I mean? Plan sponsor, health plan mandates that the drug be filled in a pharmacy, hospital owns the pharmacy or part of the pharmacy … and now they have so-called clear bagging. Clear bagging is when one organization owns the pharmacy and the provider who will administer the drug. Clear bagging solves some of the clinical issues with white bagging, and the hospital also gets to take a cut. I’d be remiss not to mention here that some hospitals have worked very hard on their clear-bagging programs and definitely have tried to improve the quality of service here. You’re going to have to listen to the show to hear about gold bagging and also the latest developments in this whole war employers and patients and taxpayers are fighting with PBMs and hospitals who are fighting with each other over who gets the money. Also, the continuing trend of brown bagging, especially as “in the patient’s home” gets tagged on the end of lots of care delivery like “in bed” gets tagged on the end of lots of fortune cookies. Next week’s show will dig into how exactly some providers are managing to get the up to 6x the cost of specialty pharmacy drugs when Medicare Part B at least says that they’re only supposed to get ASP [average sales price] + 6% (ish). I just could not figure out how they were managing to get 6x just given that Medicare Part B rule, but yeah, they are—and we’ll learn about that next week. You can learn more at continuumrx.com.   Keith P. Hartman, RPh, is chief executive officer of ContinuumRx and an experienced operating entrepreneur and pharmacy business owner spanning two decades. Keith founded and grew a chain of retail pharmacies, a compounding pharmacy, and two specialty pharmacies along with a long-term care pharmacy. All were built and grown under the guise of operational excellence and produced great results. Some were sold, while others he still owns and provides limited strategic guidance as a member of the board of directors. Keith graduated from the University of the Sciences with a degree in pharmacy. Today he is still involved mentoring future pharmacists and pharmacy owners. 08:09 What kinds of patients and/or drugs is the concept of bagging relevant to? 08:53 What is brown bagging, and what are the issues with it? 10:28 What is white bagging, and how is it different from brown bagging? 11:30 Who are the key players in pharma bagging? 12:25 Why does a PBM want a specialty drug to go through them? 12:49 From the physician’s perspective, why is buy and bill ideal? 16:46 How does white bagging impact patient clinical care? 22:12 Encore! EP216 with Chris Sloan. 23:05 What are the two main reasons patients might not continue their therapy? 23:29 “We’ve got to leave some authority with our prescribers to be able to make a clinical decision of what’s best for that … patient.” 24:41 What is clear bagging? 26:51 How does a hospital specialty pharmacy get in network with a PBM? 28:57 What is gold bagging? 30:11 “Outlook really needs to be what’s best for the patient.” 32:10 EP337 with Olivia Webb.   You can learn more at continuumrx.com.   Keith Hartman of @continuumrx1 discusses #specialtypharmabagging on our #healthcarepodcast. #healthcare #podcast #pharma #specialtypharma What kinds of patients and/or drugs is the concept of bagging relevant to? Keith Hartman of @continuumrx1 discusses #specialtypharmabagging on our #healthcarepodcast. #healthcare #podcast #pharma #specialtypharma What is brown bagging, and what are the issues with it? Keith Hartman of @continuumrx1 discusses #specialtypharmabagging on our #healthcarepodcast. #healthcare #podcast #pharma #specialtypharma What is white bagging, and how is it different from brown bagging? Keith Hartman of @continuumrx1 discusses #specialtypharmabagging on our #healthcarepodcast. #healthcare #podcast #pharma #specialtypharma Who are the key players in pharma bagging? Keith Hartman of @continuumrx1 discusses #specialtypharmabagging on our #healthcarepodcast. #healthcare #podcast #pharma #specialtypharma Why does a PBM want a specialty drug to go through them? Keith Hartman of @continuumrx1 discusses #specialtypharmabagging on our #healthcarepodcast. #healthcare #podcast #pharma #specialtypharma From the physician’s perspective, why is buy and bill ideal? Keith Hartman of @continuumrx1 discusses #specialtypharmabagging on our #healthcarepodcast. #healthcare #podcast #pharma #specialtypharma How does white bagging impact patient clinical care? Keith Hartman of @continuumrx1 discusses #specialtypharmabagging on our #healthcarepodcast. #healthcare #podcast #pharma #specialtypharma What are the two main reasons patients might not continue their therapy? Keith Hartman of @continuumrx1 discusses #specialtypharmabagging on our #healthcarepodcast. #healthcare #podcast #pharma #specialtypharma “We’ve got to leave some authority with our prescribers to be able to make a clinical decision of what’s best for that … patient.” Keith Hartman of @continuumrx1 discusses #specialtypharmabagging on our #healthcarepodcast. #healthcare #podcast #pharma #specialtypharma What is clear bagging? Keith Hartman of @continuumrx1 discusses #specialtypharmabagging on our #healthcarepodcast. #healthcare #podcast #pharma #specialtypharma How does a hospital specialty pharmacy get in network with a PBM? Keith Hartman of @continuumrx1 discusses #specialtypharmabagging on our #healthcarepodcast. #healthcare #podcast #pharma #specialtypharma What is gold bagging? Keith Hartman of @continuumrx1 discusses #specialtypharmabagging on our #healthcarepodcast. #healthcare #podcast #pharma #specialtypharma “Outlook really needs to be what’s best for the patient.” Keith Hartman of @continuumrx1 discusses #specialtypharmabagging on our #healthcarepodcast. #healthcare #podcast #pharma #specialtypharma   Recent past interviews: Click a guest’s name for their latest RHV episode! Dr Aaron Mitchell (Encore! EP282), Stacey Richter (INBW34), Ashleigh Gunter, Doug Hetherington, Dr Kevin Schulman, Scott Haas, David Muhlestein, David Scheinker, Ali Ucar, Dr Carly Eckert, Jeb Dunkelberger (EP360), Dan O’Neill, Dr Wayne Jenkins, Liliana Petrova, Ge Bai, Nikhil Krishnan, Shawn Rhodes, Pramod John (EP353), Pramod John (EP352), Dr Eric Bricker, Katy Talento, Stacey Richter (INBW33), Stacey Richter (INBW32), Dr Steve Schutzer (Encore! EP294), Lisa Trumble, Jeb Dunkelberger, Dr Ian Tong, Mike Schneider  

After that recent episode with Scott Haas (EP365), where we talked about the real deal with PBM contracting, I kicked into high gear trying to untangle this whole apocalyptic honky-tonk we call benefits for prescription drugs. Notice I did not say prescription drug benefits because that would imply that pharmaceuticals are only charged for under the umbrella of pharmacy benefits. Ha ha, that would be just too easy. No, some pharma drugs are charged as part of patients’ medical benefits. An amazing primer for what that looks like in the real world follows.   Just pointing out that any self-respecting healthcare market distortion deserves another, and if anything qualifies as a market distortion, it’s buy and bill—what I talk about with Dr. Mitchell in this healthcare podcast. In the following weeks, we’ll chat about how the market has responded to this buy and bill market distortion that we talk about in this episode. So, next week, we’re gonna get into all the different kinds of bagging: the so-called brown bagging, the white bagging, the clear bagging … and what is this newfangled gold bagging? Spoiler alert there. Tune in next week. And here’s another spoiler alert: While in this show today we chat about how provider organizations tend to make somewhere between 4.5% and 20% additional over drug costs, there was a recent study claiming that 4.5% to 20% is chump change. Some provider organizations are, in fact, making four times to six times the cost of the drug—a very expensive drug, mind you (lots of zeros here)—in profit. In the show in two weeks, I’m speaking with April Yongchu and Erik Davis from USI about exactly and specifically how provider organizations can manage to perform this “let’s make hundreds of thousands of dollars today” magic trick. So, with that, here’s your encore. In the April [2020] issue of Value-Based Cancer Care (that’s a journal), there’s an article talking about a keynote presentation and a study highlighting a big problem for patients with cancer: toxicity. It’s a fact that some chemo agents are pretty toxic, but in this healthcare podcast I am talking about financial toxicity. The financial burden of cancer care has a seriously negative influence on patients’ quality of life. This keynote speaker quoted in the Value-Based Cancer Care article implored his fellow oncologists: “Think twice before ordering costly interventions that may have little impact on the clinical course,” he said. This might be difficult for a number of reasons, and one of them is that oncology centers make money, a whole lot of money, sometimes the most money, from infusing cancer medications. It’s this little payment paradigm called “buy and bill.” The cancer center buys the meds and then gets paid an additional fee to infuse the drug. This fee is a percentage of the drug cost. You’ve probably heard a lot lately about the skyrocketing costs of some of these cancer agents. Realize that if you’re an oncology center, the higher the drug costs, the higher your revenue. Now consider the patient suffering under the weight of increased cost sharing and employers and taxpayers who are funding this strange payment model. In this healthcare podcast, I dig into this so-called “buy and bill” payment model with Aaron Mitchell, MD, MPH. Dr. Mitchell is an oncologist and health services researcher over at Memorial Sloan Kettering. You can learn more at drugpricinglab.org. You can also connect with Dr. Mitchell on Twitter at @TheWonkologist.   Aaron Mitchell, MD, MPH, is a practicing medical oncologist and health services researcher. He is an assistant attending at Memorial Sloan Kettering Cancer Center in the department of epidemiology and biostatistics. His research focuses on understanding how the financial incentives in the healthcare system affect physician practice patterns and care delivery to cancer patients. He cares for patients with prostate and bladder cancer.   04:34 Following the drug and following the dollar. 04:56 The “buy and bill” system. 05:43 The perverse and problematic incentives of the system. 08:38 “It creates the incentive for us to gravitate toward the more expensive drug.” 08:42 The hesitancy to address the financial toxicity of drugs for patients. 09:53 Why the only person losing in this situation is the patient. 10:51 The financial impact from the patient perspective. 13:57 Are patients realizing this impact? 14:42 Solving the problem of oncology drug choice. 16:45 Reimbursement reform. 18:24 Capitated systems and incrementalist impacts to reimbursement reform, and what these look like. 23:30 Are we at a tipping point? 23:51 “The current system … works too well for too many people.” 25:01 Who isn’t well served by the current system. 25:32 Who has to lead the charge for change. 28:28 Large oncology providers vs small oncology providers in the buy and bill system.   You can learn more at drugpricinglab.org. You can also connect with Dr. Mitchell on Twitter at @TheWonkologist.   Check out our #healthcarepodcast with @TheWonkologist of @sloan_kettering as he discusses #oncology #drugpricing and #reimbursement. #healthcare #podcast #digitalhealth Following the drug and following the dollar. @TheWonkologist of @sloan_kettering discusses #oncology #drugpricing and #reimbursement. #healthcarepodcast #healthcare #podcast #digitalhealth The “buy and bill” system. @TheWonkologist of @sloan_kettering discusses #oncology #drugpricing and #reimbursement. #healthcarepodcast #healthcare #podcast #digitalhealth The perverse and problematic incentives of the system. @TheWonkologist of @sloan_kettering discusses #oncology #drugpricing and #reimbursement. #healthcarepodcast #healthcare #podcast #digitalhealth “It creates the incentive for us to gravitate toward the more expensive drug.” @TheWonkologist of @sloan_kettering discusses #oncology #drugpricing and #reimbursement. #healthcarepodcast #healthcare #podcast #digitalhealth Why is there hesitancy to address the financial toxicity of drug pricing for patients? @TheWonkologist of @sloan_kettering discusses #oncology #drugpricing and #reimbursement. #healthcarepodcast #healthcare #podcast #digitalhealth Why the patient is the only one that loses. @TheWonkologist of @sloan_kettering discusses #oncology #drugpricing and #reimbursement. #healthcarepodcast #healthcare #podcast #digitalhealth What’s the financial impact from the patient perspective? @TheWonkologist of @sloan_kettering discusses #oncology #drugpricing and #reimbursement. #healthcarepodcast #healthcare #podcast #digitalhealth Are patients realizing this financial impact? @TheWonkologist of @sloan_kettering discusses #oncology #drugpricing and #reimbursement. #healthcarepodcast #healthcare #podcast #digitalhealth Solving the problem of oncology drug choice. @TheWonkologist of @sloan_kettering discusses #oncology #drugpricing and #reimbursement. #healthcarepodcast #healthcare #podcast #digitalhealth What should reimbursement reform look like? @TheWonkologist of @sloan_kettering discusses #oncology #drugpricing and #reimbursement. #healthcarepodcast #healthcare #podcast #digitalhealth “The current system … works too well for too many people.” @TheWonkologist of @sloan_kettering discusses #oncology #drugpricing and #reimbursement. #healthcarepodcast #healthcare #podcast #digitalhealth Who has to lead the charge for change? @TheWonkologist of @sloan_kettering discusses #oncology #drugpricing and #reimbursement. #healthcarepodcast #healthcare #podcast #digitalhealth Large oncology providers vs small oncology providers in the buy and bill system. @TheWonkologist of @sloan_kettering discusses #oncology #drugpricing and #reimbursement. #healthcarepodcast #healthcare #podcast #digitalhealth   Recent past interviews: Click a guest’s name for their latest RHV episode! Stacey Richter (INBW34), Ashleigh Gunter, Doug Hetherington, Dr Kevin Schulman, Scott Haas, David Muhlestein, David Scheinker, Ali Ucar, Dr Carly Eckert, Jeb Dunkelberger (EP360), Dan O’Neill, Dr Wayne Jenkins, Liliana Petrova, Ge Bai, Nikhil Krishnan, Shawn Rhodes, Pramod John (EP353), Pramod John (EP352), Dr Eric Bricker, Katy Talento, Stacey Richter (INBW33), Stacey Richter (INBW32), Dr Steve Schutzer (Encore! EP294), Lisa Trumble, Jeb Dunkelberger, Dr Ian Tong, Mike Schneider, Peter Hayes  

In INBW32, I talked about telehealth. In this episode, I’m talking about collaboration between healthcare stakeholders or the lack thereof. My grandfather suffered from heart failure. This was many years ago now. But when I say suffered, I mean it. As many of you know, when heart failure is uncontrolled, it is painful to go through or even watch a loved one go through. There was that one time when I accompanied my grandfather (and my grandma was there, too) on a trip to the emergency room, you know, because he was drowning in his own lung fluid and could barely breathe. And when we arrived, they were going to wheel him into one of the exam rooms. But my grandmother put her foot down. She did not want to go into that one exam room because the TV was broken in there. Yes, the two of them had been in the ER so many times that they were familiar with the pros and cons of the various exam rooms. The end of my grandfather’s life was almost unbearable, and I can’t even begin to estimate the hundreds of thousands of dollars racked up in ER visits and inpatient stays. He was in the ER once a month at a minimum, and he would come home disoriented and confused. Now, as everybody listening to this show knows, this anecdote is also a data point that is, dare I say, all too common. But to that end, let me just talk about heart failure data for a second. Patients with heart failure generate a third of Medicare spending and 40% of Medicare fee-for-service deaths. They are also responsible for 55% of Medicare readmissions. You’d think that if there were any chronic condition that we’d be looking to improve outcomes on, it’d be this one. So, everybody’s on it, right? Oh, wait … heart failure readmissions have actually gone up in recent years.   I just want to point out that in between ER visits and inpatient stays, my grandfather received effectively no education, no PCP or cardiology follow-ups, no community support. He did not get a case manager. He got no coaching. He got 25 pages of tiny, printed instructions just before the door hit him in the butt on his way out to the parking lot. Obvious point here, but to do any of this in-between stuff would have required collaboration between the hospital and others. And it was conspicuous in its absence. Look, this is sad and I’m not telling the story because I think it’s unique. If I asked who else has a story like this one where a family member or a loved one got lost in the gaps between their care, I am suspecting that everyone would raise their hands—even those of you who have medical degrees. No matter how much any of us know or care or try to help, stories like my grandfather’s are painfully and unequivocally common in this country today. OK, so how to improve care, especially for chronic care patients. At its core, and I am not telling anyone listening something that you probably have not already thought about at great length, but there are two important contributors to patient outcomes. Not the only contributors for absolutely sure, but here are two important ones: Nonfragmented patient journeys that adhere to evidence-based best-practice care. My grandfather and anyone with a chronic condition requires a patient journey that isn’t a game of whack-a-mole. Carly Eckert, MD, says this so well in EP361. Steering patients to the best care setting, which is required to get the highest-value best-practice care and also reduce financial toxicity. Short but important sidebar: We know that financial toxicity is clinical toxicity. There was just a study that came out that said in 2030, a leading cause of death will be noncompliance to treatment due to patients abandoning care because it costs too much. Wayne Jenkins, MD, from Centivo (EP358) talks about other implications of financial toxicity for a half-hour. Also, there’s another paper that, again, is just more on this point. At this juncture, it is not arguable. Financial toxicity is clinical toxicity. So, we need to get patients, people, customers to the next place that is the highest value for them. Doing either or both of these things—nonfragmenting the patient journey and making sure patients get to the next care setting—it requires collaboration. Let me quote Dr. Steve Klasko, who, until recently, was president and CEO over at Jefferson Health in Philly. He said—and this is an adaptation of an old Steve Jobs mantra—but Steve Klasko said that for hospitals, our old math was inpatient revenue, outpatient revenue, and in-person tuition and funding. The new math is going to be strategic partnerships around this healthcare at any address model. Right? But good collaborations don’t just improve patient outcomes. Here’s another benefit: They also make happier clinicians or employees. If every outside interaction is a friction point, where employees, clinicians, doctors, nurses are rubbed raw because every interaction becomes a battle, if that’s the ecosystem that any given party has created for themselves, patients aren’t happy and clinicians aren’t happy. And since everything in healthcare spirals around that one relationship, the one between the patient and their clinicians, this could not be more vital. There’s that famous Richard Branson quote, which I’ll paraphrase: If you want to keep the customers happy, keep the employees happy. How anyone thinks that patients are going to get amazing care when those providing the care are miserable is just the very definition of magical thinking. All right … so, let’s get into the hard thing about hard things: why with the lack of collaboration across the industry there are a lot of excuses for why parties cannot collaborate. For example, interoperability, HIPAA, legal, cyber, bureaucracy … Also, people are busy, COVID response, being overworked and burned out is a big deal. And I’m not saying that some of these are not valid, but the elephant in the room is this: In healthcare today, most (if not all) big organizations for sure and a lot of small ones have a business model that is built on revenue maximization. Look, when I’m referring to organizations as revenue maximizers, maybe I’m not talking specifically about specific departments and people working hard in those departments within any given organization. Organizations are not one-celled organisms, after all. But what I am saying is that, as a whole, healthcare organizations—the vast majority and certainly every so-called incumbent payer and health system—when you factor in the actions of the CFO, the actions of the billing department, the group that sets premiums, the one that sets prices, the group that incentivizes brokers, the group that sells to employers, the group that lobbies politicians, the group that writes the contract terms … if you factor in the whole organization, what you get is an organization who acts to maximize outcomes—financial outcomes, that is. As per my normal MO, I’m gonna say the quiet part out loud here. One big reason why parties do not collaborate is because they are thinking they are going to maximize their revenue by info blocking to prevent network leakage, or not sharing data with an employer because then the employer might steer the employee to an infusion center for their chemo, or drugs will get switched from the profitable one to the not profitable one. I just saw another article the other day, entitled “The Many Barriers to Payer-Provider Alignment on Value-based Care.” Two entities vital for a nonfragmented frictionless patient journey cannot figure out how to align incentives, share data, or even figure out what good looks like. Speaking industry-wide here, but if patient outcomes were the top of either the payer or the provider’s organizational lists of priorities, I do not think that this would be the case decades later. Listen to the show with Kevin Schulman, MD (EP366); Scott Haas (EP365); or an upcoming one with Autumn Yongchu and Erik Davis coming out in a few weeks that just drives this point home.   So, can you do well by doing good? Yes, you can. I have a degree from a business school, after all; but there is a line that gets crossed when maximizing revenue harms patients. And I’ll tell you how you can tell if you’re over the line. And again, I’m talking organizations here who have power and control in their local markets. I would say that a lack of collaboration is a symptom. If we all agree that collaboration is essential and some organization is not doing it, maybe it is a sign. It is an actionable bit of information that I hope, if relevant, gets contemplated. For example, back to my grandfather for a sec, it’s pretty well known how to reduce heart failure revisits. There are more than a few care models that have definitely been shown to work. Here is one of them, and this was talked about in Dr. William Bestermann’s Substacks. There was a nurse in the Carolinas—and I talked about this before—but there was a nurse in the Carolinas who decreased heart failure readmissions markedly by simply calling up heart failure patients and making sure they were doing OK and that they understood how to take care of themselves. She was caring, and she had relationships with these patients. That’s all she did.   So, hospital collaborates with a payer case manager or a CBO (community-based organization) or an MSO (management services organization), or maybe the hospital has pop health capabilities internally. I mean, we can manage to transplant important organs in this country, and most healthcare organizations cannot figure out how to work together well enough that a nurse calls up a bunch of patients? Is this some arcane or highly complex thing to do? No, it’s not. But most are not doing anything even close to this because revenue maximization is the goal of one or more of the entities who would need to be a party to this, and everything else is just an excuse. If anyone is thinking interoperability right now, I’ve heard Don Lee say on The #HCBiz Show! often enough that there’s lots of evidence at this point that interoperability has been solved from a technical standpoint. It’s been solved for years. The problem is a business case problem. No one wants to be interoperable because … revenue maximization All right … aspirationally here, despite all of this, great collaborations happen every single day—collaborations that are bright spots and that definitely improve patient outcomes and reduce financial burdens short-term and long-term. Let me give you some examples: what 32BJ is doing in New York City (upcoming episode with Cora Opsahl talking about the cool things that they are doing with Mount Sinai); CINs (clinically integrated networks), like Lisa Trumble, who talks about SoNE HEALTH in EP349.   There are MSOs that work with ACOs (accountable care organizations) and others. Listen to Shawn Rhodes (EP354); also what Nicole Bradberry and Kelly Conroy are doing in Florida (EP324).   In an upcoming episode, Dave Chase from Health Rosetta: He’s got one great story after another about how employers these days are teaming up with provider organizations, pharmacies, and their communities to put a serious dent in costs while raising patient outcomes and satisfaction. Doug Hetherington’s episode (EP367) talks about direct contracting with hospitals. Katy Talento (EP350) talks about this also. Steve Schutzer, MD, talks about collaborating with other local orthopedic surgeons to stand up a now nationally recognized center of excellence in Connecticut (EP294). We also have some pharma companies who are developing some pretty great disease-centric resources for providers. Some pharma companies and some internal teams at those companies can actually be fair and good community players. Mike Levitt and the work that he has done on the Accountable Care Learning Collaborative, which is headed up by Dr. Eric Weaver, who has been on the show (EP277); or I’m sure after this show airs, I’m gonna hear about more. Please send them my way.   Now, look … let’s get real here. These collaborations may have been initiated with, let’s just say, other beneficial side effects; but they all improve care and reduce costs. If I were gonna list some common and appealing side effects that could motivate some prospective collaborators to come to the table, some of the usual suspects are proposing that the collaboration will, for example, improve HCAHPS scores, quality metrics, star ratings; improve predictable spend; reduce shock claims; avenge your common competitor and steal their market share; gang up against a payer or some consolidated health system; improve OR utilization; or improve efficiency in some way. What I would say, though, is that if leveling up patient care happens and costs do not rise as a result, that’s the shared priority I’d focus on. If someone gets some beneficial side action, this is kind of the definition of doing well by doing good. All right, so let’s talk about the different kinds of collaboration just briefly. I’m gonna say that there’s three kinds of collaboration: Collaboration along the patient journey by multiple parties who are all along the patient journey Collaboration by parties who can help inform the patient journey, but they’re not necessarily on the patient journey themselves Collaboration by parties who can help navigate the patient journey I am mentioning these three because there’s often sort of this insinuation that collaborators should have equal stature in the care journey or have similar roles, that if you’re not actually on the clinical journey, then you don’t have any responsibility or accountability for the clinical journey and, therefore, are not a worthy collaborator. That is limiting if you are trying to figure out who you might be able to collaborate with to help you. The patient journey is not like a movie showing all the minutes a patient spends in clinic, and then all the gaps in between visits are edited out. Care can be improved at the population level, at the community level. Care can be improved at the disease or the condition level when clinicians get needed insights or information or tools. I mean, frankly, to my mind, it shouldn’t be considered a plus when a pharma company or a payer actually does something in the service of improving patient outcomes. It should almost be a requirement that they do. I don’t mean by delivering care in any way. And for the record, most prior auth programs are the opposite of collaborative. Payers can collaborate by supplying data, as just one example. Heck, external collaborations are great, but we also could think about collaborating internally, like invite the CFO or maybe the gang rewarding brokers with sales competitions. I don’t know. I’d consider ethically dubious: Invite them to come to some meeting where oncology patients are choosing to die rather than bankrupt their families. Communication is the first step to collaboration, after all. That’s a place to start. Or life science types: They can supply knowledge and expertise about specific diseases or conditions with the purpose of improving patient outcomes. Informing the patient journey could be a collaboration with some of these amazing patient efficacy organizations or CBOs that are out in the community. Now, I think one barrier to collaboration that we all need to get over is the whole, I call it, stakeholder prejudice thing. Here’s what Colton Ortolf wrote on Twitter the other day. He tweeted, “Hospitals are the Lance Armstrong of healthcare. Pissed [off] at all the [crappy] things they do economically, but also grateful for all the lives they save.” If we’re gonna eliminate everybody in healthcare who has revenue maximization as their organizational goal, as aforementioned, there is going to be basically no one left standing. As Ge Bai, PhD, CPA, said in EP356, there’s no angels and no demons in healthcare. Everybody is both.   If we’re talking about stakeholder prejudice, though, I would be remiss not to single out Pharma. When I mentioned them a sec ago, I bet some of your eyebrows went up. Here’s my take on it. Consider Pharma’s potential role in leveling up disease-/condition-specific outcomes. I mean, there are thousands, millions probably, of diseases and conditions and health problems out there that any given doctor or clinician has to be familiar with. Pharma has huge infrastructures and physicians and smart people who focused on, like, six of them. They know more about those six than anybody else. We pay a ton also for their drugs. It’s my view that people along the patient journey should ask for what they want and need relative to the expertise that Pharma possesses. It should be about helping those providing care on the patient journey to level up the standard of care. Frankly, I’d expect collaboration from some of these entities. Ask for it on your own terms, and if all you get back is a sales pitch, you deserve better than that. Find somebody higher up on the food chain to talk to. And also, outcomes-based contracts … yeah, we need to figure out how to operationalize them so that really good drugs that actually produce outcomes like overall survival get paid for and those that do not do not. Point of note must be said: Colluding and conflict of interest is not cost neutral. If someone is getting things bought for them and then thinking, falsely, that it does not impact prescribing, that is not collaboration. Any of these revenue-maximizing hookups are not included in my definition of collaboration. So, in sum, ultimately, what we’re talking about here is our legacy. As David Muhlestein, PhD, JD, talks about really well in EP364, we got to ask ourselves, What do we want to leave behind to our children and our grandchildren? Some of this is generational change, for sure. But seriously, talking about today, I mean, who wants to sign their family member up for what my grandfather went through? Right now, across the country, there are heart failure patients going through exactly what he did; and there are other patients with care journeys so dysfunctional that lives are shattered.   Chronic care patients, oncology patients … and this isn’t going to change unless we contemplate, first of all, what we can do today—right now. Even little things can matter a lot, but then also to really consider what we want healthcare to look like in 20 or 25 years and then start working back from that vision and collaborating today so that, slowly and surely, we reach a place with better care that is not financially toxic. Check out the 8-Step Collaboration Roadmap for more resources to operationalize a collaboration. For more information, go to aventriahealth.com.   Each week on Relentless Health Value, Stacey uses her voice and thought leadership to provide insights for healthcare industry decision makers trying to do the right thing. Each show features expert guests who break down the twists and tricks in the medical field to help improve outcomes and lower costs across the care continuum. Relentless Health Value is a top 100 podcast on iTunes in the medicine category and reaches tens of thousands of engaged listeners across the healthcare industry. In addition to hosting Relentless Health Value, Stacey is co-president of QC-Health, a benefit corporation finding cost-effective ways to improve the health of Americans. She is also co-president of Aventria Health Group, a consultancy working with clients who endeavor to form collaborations with payers, providers, Pharma, employer organizations, or patient advocacy groups. 03:07 How do we improve care, especially for chronic care patients? 03:18 What are two important contributors to patient outcomes? 03:40 EP361 with Carly Eckert, MD. 03:56 “We know that financial toxicity is clinical toxicity.” 04:09 EP358 with Wayne Jenkins, MD. 06:05 Why can’t parties across the healthcare industry seem to collaborate? 08:05 EP366 with Kevin Schulman, MD. 08:07 EP365 with Scott Haas. 08:10 Upcoming episode with Autumn Yongchu and Erik Davis. 08:34 “I would say that a lack of collaboration is a symptom.” 10:10 There’s lots of evidence that interoperability has been solved. It’s been solved for years. 10:37 Upcoming episode with Cora Opsahl. 10:46 EP349 with Lisa Trumble. 10:53 EP354 with Shawn Rhodes. 10:57 EP324 with Nicole Bradberry and Kelly Conroy. 11:04 Upcoming episode with Dave Chase. 11:19 EP367 with Doug Hetherington. 11:25 EP350 with Katy Talento. 11:28 EP294 with Steve Schutzer, MD. 11:50 EP277 with Eric Weaver, DHA, MHA. 13:00 What are the three kinds of collaboration in healthcare? 13:23 Do collaborators need to have equal status in a collaboration? 13:57 “Care can be improved at the population level, at the community level … at the disease or the condition level.” 15:10 How is stakeholder prejudice holding healthcare back? 15:42 EP356 with Ge Bai, PhD, CPA. 16:55 “Outcomes-based contracts … we need to figure out how to operationalize them.” 17:08 “Colluding and conflict of interest is not cost neutral.” 17:30 EP364 with David Muhlestein, PhD, JD.   For more information, go to aventriahealth.com.   Stacey discusses #healthcarecollaboration on our #healthcarepodcast. #healthcare #podcast #healthcollab How do we improve care, especially for chronic care patients? Stacey discusses #healthcarecollaboration on our #healthcarepodcast. #healthcare #podcast #healthcollab What are two important contributors to patient outcomes? Stacey discusses #healthcarecollaboration on our #healthcarepodcast. #healthcare #podcast #healthcollab “We know that financial toxicity is clinical toxicity.” Stacey discusses #healthcarecollaboration on our #healthcarepodcast. #healthcare #podcast #healthcollab Why can’t parties across the healthcare industry seem to collaborate? Stacey discusses #healthcarecollaboration on our #healthcarepodcast. #healthcare #podcast #healthcollab “I would say that a lack of collaboration is a symptom.” Stacey discusses #healthcarecollaboration on our #healthcarepodcast. #healthcare #podcast #healthcollab There’s lots of evidence that interoperability has been solved. It’s been solved for years. Stacey discusses #healthcarecollaboration on our #healthcarepodcast. #healthcare #podcast #healthcollab What are the three kinds of collaboration in healthcare? Stacey discusses #healthcarecollaboration on our #healthcarepodcast. #healthcare #podcast #healthcollab Do collaborators need to have equal status in a collaboration? Stacey discusses #healthcarecollaboration on our #healthcarepodcast. #healthcare #podcast #healthcollab “Care can be improved at the population level, at the community level … at the disease or the condition level.” Stacey discusses #healthcarecollaboration on our #healthcarepodcast. #healthcare #podcast #healthcollab How is stakeholder prejudice holding healthcare back? Stacey discusses #healthcarecollaboration on our #healthcarepodcast. #healthcare #podcast #healthcollab “Outcomes-based contracts … we need to figure out how to operationalize them.” Stacey discusses #healthcarecollaboration on our #healthcarepodcast. #healthcare #podcast #healthcollab “Colluding and conflict of interest is not cost neutral.” Stacey discusses #healthcarecollaboration on our #healthcarepodcast. #healthcare #podcast #healthcollab Recent past interviews: Click a guest’s name for their latest RHV episode! Ashleigh Gunter, Doug Hetherington, Dr Kevin Schulman, Scott Haas, David Muhlestein, David Scheinker, Ali Ucar, Dr Carly Eckert, Jeb Dunkelberger (EP360), Dan O’Neill, Dr Wayne Jenkins, Liliana Petrova, Ge Bai, Nikhil Krishnan, Shawn Rhodes, Pramod John (EP353), Pramod John (EP352), Dr Eric Bricker, Katy Talento, Stacey Richter (INBW33), Stacey Richter (INBW32), Dr Steve Schutzer (Encore! EP294), Lisa Trumble, Jeb Dunkelberger, Dr Ian Tong, Mike Schneider, Peter Hayes, Paul Simms  

People are averse to change. It’s a thing. It’s a thing that affects even those of us who consider ourselves highly educated and/or very smart. Nobody likes disruption or, even worse, the prospect of disruption and the uncertainty that goes along with that. Nobody likes to feel like the rug just got pulled out from under them or that they’ve lost control of something, especially something important like their health benefits or how they care for patients. Changes to health insurance and healthcare, from any angle, are fraught with stress. A big reason for this is because health and healthcare are filled with so-called “one-way-door” types of decisions and decision points. If I cannot get the care I need today, or if the care I want to provide today to a patient does not go as desired, I feel like the door is one-way: Once I make a decision, I cannot go back. I can’t click “undo” on that and go back through the door and arrive at yesterday. Health decisions, therefore, have a very “you got one shot at this” kind of feel. And it’s that, right there, that just upped the ante considerably in the stress department for employees and then also for any clinician who is working with patients. It’s life or death, and this is why making changes either to the insurance side or the care side of the equation feels like they will be so disruptive. It’s a big reason why some self-insured employers or even fully insured employers won’t mess with the status quo benefit designs or switch up their EBC (employee benefit consultant) or their ASO/TPA (Administrative Services Only/Third-Party Administrator), even if everybody in the entire company is currently complaining about the price and complexity of said status quo (it’s kind of like the devil that you know) and even if it’s possible to offer employees overall better-quality care at lower prices, meaning that everybody in the company could get a raise funded by the sometimes massive savings that could be had. I just heard a union leader the other day, and she said that every worker would have an extra $5000 in their pocket if their healthcare costs were what they should be. So, for many employers, the prospect of disruption is just too much. It’s not in the CHRO’s (chief human resources officer’s) job description to open that Pandora’s box. Nobody gets fired for doing what they did last year—I guess, until they do (one straw or another is gonna break the camel’s back, after all). But in the meantime, we have this fear-induced festering inertia. Let me just point out one thing: Implicit in everything that I just said is the notion that one day everyone will have their familiar insurance card snugly tucked in their wallet, and then the next day, it will be ripped from their bloody fingers in a violent and unexpected fashion. Or, let’s talk about provider organizations now. Say one’s trying to move from the world of fee for service to the world of value-based payment structures with downstream risk, or direct contracts with employers. To do this well, let’s chat about one aspect of this that health systems seem to struggle with that’s been a topic of some conversation lately. There’s an article cautioning that “practicing at the top of one’s license” and its attendant need for team-based care is a giant fail and/or a money grab, or it could be. And it could be both of these things, don’t get me wrong. Team-based care isn’t a homogeneous construct. It would be like saying that all movies are bad because Super Baby Geniuses 2 was such a dog.   I mean, team-based care—pretty much like team-based anything—if it’s not implemented well, nobody on the team knows what they’re supposed to be doing and nobody is accountable. There’s no infrastructure supporting it. There was no testing or iteration or discussion about the intent. No one actually on the proposed teams was even consulted about the whole idea. And so, everyone starts to suspect, maybe rightfully or maybe not, that it’s all financially driven and a cost-cutting exercise. On the show today, my guest, Ashleigh Gunter, warns about all of these exact things. You switch something up without going through the proper steps and stages, everybody gets very suspicious. And, nothing for nothing, their suspicion could be the least of the leader’s problems. The initiative’s ensuing failure maybe should be their biggest concern. Which is a shame if something was done in the spirit of better patient care, for example, because there’s tons of research on the immense power of well-functioning teams as just continuing this one example. And there’s just as much research and well-proven case studies showing that innovative benefit designs can be a 365-degree win when they cut out wasteful spending and navigate employees and plan members to high-value care. For all of these reasons and more, I wanted to get Ashleigh Gunter, who is an expert in change management, on the show to talk about how to succeed when you want to change something as touchy as healthcare and health insurance. This all really goes back to the show with Matt Anderson, MD, MBA (EP266) and what Robert Pearl, MD, writes about all the time. It’s a skill we all need to learn to lead change. Many of us had to learn this the hard way because we see our vision so clearly and we want to make it a reality as fast as possible, but the result of our enthusiasm might be that we skip implementation steps that are really not optional.   As Thomas Edison said (and I love this), “Having a vision for what you want is not enough. Vision without execution is hallucination.” So, to transform anything effectively, we have to put as much effort into the implementation as we do into the strategy. If we don’t do that, then sadly, despite all of the best intentions, whatever we’re trying to do is not gonna work and it might be labeled disruptive. So, I couldn’t be more pleased to have learned a thing or two from Ashleigh Gunter about change management that avoids this disruption label. Ashleigh Gunter is president of Translucent Healthcare Consulting. She also is an expert in change management as aforementioned and how to help align employees and staff so that an organization can move forward together. According to Ashleigh, there’s five steps to effective change management that will ensure success: Having great leadership Creating a case for the change Finding champions, engaging people who have to change so that they can contribute and be supportive Overcommunicating Measuring how things are going and also celebrating small triumphs You can learn more at translucenthc.com.  Ashleigh Gunter, president of Translucent Healthcare Consulting, combines her experience, an understanding of organizational culture, and a practical mindset to meet her clients’ needs. With over 30 years of management consulting experience, Ashleigh has deep expertise in advising in the dramatically changing healthcare market. Ashleigh specializes in helping her clients drive change within their health plans, resulting in increased employee engagement, improved human resources experience, and reduced cost for both the employer and the employee. She believes in challenging the status quo by creating direct relationships between employers and providers. Ashleigh has been a key contributor to several community-owned health plans in states from Washington to Virginia and has been credited with being key to employee participation and support of the plans. In working for Andersen Consulting/Accenture, Deloitte Consulting, and The Gunter Group, Ashleigh has provided advice and consulting support to Fortune 100 C-suite executives over her career. She has an MBA with a focus in strategic management and organizational change from the University of Texas at Austin and a bachelor’s degree in business administration from the University of Denver with a concentration in finance. 07:46 How does change management go wrong in healthcare? 08:27 “Communication [of change] in and of itself isn’t change management.” 10:03 What is change management? 11:06 What does great leadership look like in change management? 12:29 “Leadership sets the tone.” 12:38 What makes change management so hard? 13:27 “What’s the company reason to make this change happen?” 15:57 What are change champions, and why do you need to create them when changing your benefit plan? 19:18 Why is it important to overcommunicate change? 22:46 Why is it important to measure your successes and communicate those after a change? 24:14 How does change management work on the provider organization side? 28:53 “You want to ensure you are educating the operational folks.” You can learn more at translucenthc.com.  Ashleigh Gunter of Translucent Healthcare Consulting discusses #benefitdesign and #deliverymodels on our #healthcarepodcast. #healthcare #podcast How does change management go wrong in healthcare? Ashleigh Gunter of Translucent Healthcare Consulting discusses #benefitdesign and #deliverymodels on our #healthcarepodcast. #healthcare #podcast “Communication [of change] in and of itself isn’t change management.” Ashleigh Gunter of Translucent Healthcare Consulting discusses #benefitdesign and #deliverymodels on our #healthcarepodcast. #healthcare #podcast What is change management? Ashleigh Gunter of Translucent Healthcare Consulting discusses #benefitdesign and #deliverymodels on our #healthcarepodcast. #healthcare #podcast What does great leadership look like in change management? Ashleigh Gunter of Translucent Healthcare Consulting discusses #benefitdesign and #deliverymodels on our #healthcarepodcast. #healthcare #podcast “Leadership sets the tone.” Ashleigh Gunter of Translucent Healthcare Consulting discusses #benefitdesign and #deliverymodels on our #healthcarepodcast. #healthcare #podcast What makes change management so hard? Ashleigh Gunter of Translucent Healthcare Consulting discusses #benefitdesign and #deliverymodels on our #healthcarepodcast. #healthcare #podcast “What’s the company reason to make this change happen?” Ashleigh Gunter of Translucent Healthcare Consulting discusses #benefitdesign and #deliverymodels on our #healthcarepodcast. #healthcare #podcast What are change champions, and why do you need to create them when changing your benefit plan? Ashleigh Gunter of Translucent Healthcare Consulting discusses #benefitdesign and #deliverymodels on our #healthcarepodcast. #healthcare #podcast Why is it important to overcommunicate change? Ashleigh Gunter of Translucent Healthcare Consulting discusses #benefitdesign and #deliverymodels on our #healthcarepodcast. #healthcare #podcast Why is it important to measure your successes and communicate those after a change? Ashleigh Gunter of Translucent Healthcare Consulting discusses #benefitdesign and #deliverymodels on our #healthcarepodcast. #healthcare #podcast How does change management work on the provider organization side? Ashleigh Gunter of Translucent Healthcare Consulting discusses #benefitdesign and #deliverymodels on our #healthcarepodcast. #healthcare #podcast “You want to ensure you are educating the operational folks.” Ashleigh Gunter of Translucent Healthcare Consulting discusses #benefitdesign and #deliverymodels on our #healthcarepodcast. #healthcare #podcast   Recent past interviews: Click a guest’s name for their latest RHV episode! Doug Hetherington, Dr Kevin Schulman, Scott Haas, David Muhlestein, David Scheinker, Ali Ucar, Dr Carly Eckert, Jeb Dunkelberger (EP360), Dan O’Neill, Dr Wayne Jenkins, Liliana Petrova, Ge Bai, Nikhil Krishnan, Shawn Rhodes, Pramod John (EP353), Pramod John (EP352), Dr Eric Bricker, Katy Talento, Stacey Richter (INBW33), Stacey Richter (INBW32), Dr Steve Schutzer (Encore! EP294), Lisa Trumble, Jeb Dunkelberger, Dr Ian Tong, Mike Schneider, Peter Hayes, Paul Simms, Dr Steven Quimby