Relentless Health Value

Believe me, filling in for the uncontested master of podcasts, Stacey Richter, is just a tad unnerving! My name is Dr. Steve Schutzer. I’m an orthopedic surgeon specializing in joint replacement surgery, and I think it’s fair to say that I’m more comfortable, in my own lane, doing complex surgery than doing this introduction to our encore podcast 294 entitled “Building a Center of Excellence: A Playbook for Physician Entrepreneurs,” which aired originally in October 2020. But when Stacey graciously offered me the honor of doing so, I said to myself (sic: Steve, suck it up) what an opportunity to share with the devoted listeners of this show my humble perspectives on the prominent position COEs (also known as Centers of Excellence) are playing in this rapidly accelerating, evolving, and exciting healthcare landscape. So, there’s an ancient Chinese proverb that goes like this: “When the wind of change blows, some build walls, and others build windmills”—or in this case, Centers of Excellence! And the winds of change in healthcare are blowing, maybe even reaching gale force. In the year since episode 294 aired, there’s been unambiguous upsurge of activity, in part fueled by the pandemic, that has collectively and finally moved the healthcare value agenda across the chasm, over the inflection point—and there’s no turning back. Unaccountable fee for service as the predominant payment model for healthcare services is, well, shall we say, on its last legs—being replaced by reimbursement models that are aligned with the clinical and financial outcome of the services actually delivered to our patients. For COEs, that’s characteristically in the form of predictable bundled payments and fully warrantied episodes of care. Question: Where do COEs fit in this new landscape? Answer: COEs are the common pathway for all healthcare purchasers (whether they’re self-funded employers, advanced primary care groups, Medicare Advantage—all of them) to steer agnostically to high-quality specialists focused on a defined set of healthcare services and who are willing to assume total cost of care for their product. And the favorable impact of COEs on the ROI for purchasers has now moved beyond the realm of theory to indisputable. Take, for example, the recent report by the RAND Corporation published earlier this year in Health Affairs: A study of over 2300 patients who had either total joint, spine, or bariatric surgery done under the Carrum Health program at one of their COEs. Carrum Health is a value-based national COE platform that connects self-insured employers with top providers under standardized bundled payment arrangements. And now in full disclosure, I serve as medical advisor for the company; and our program, the Connecticut Joint Replacement Institute in Hartford, Connecticut, is actually a Carrum COE. But in this independent RAND analysis of two years of medical claims data, the savings per procedure when the surgery was done at a Carrum COE was over $16,000 per procedure. Readmission rates were reduced 80% on average. Out-of-pocket cost to the patient? Zero. And an astonishing 30% of patients who were in the queue awaiting surgery ultimately were treated nonoperatively! Peter Hayes is president and CEO of the Healthcare Purchaser Alliance of Maine and a frequent guest on this podcast. His organization has been under contract with Carrum for approximately two years and recently reported an ROI of 58% and plan savings approaching $1 million. And these data also closely reflect that reported in the Harvard Business Review two years ago by Ruth Coleman and colleagues from their experience with Walmart COEs. Finally, you know, I heard Stacey say of COEs in one of her podcasts, “This is not something you can do on a Tuesday.” Agree. Prescient advice. As you will hear once again in just a moment, this takes work. But physician leaders and entrepreneurs, take heed. Although you won’t be able to stand this up on a Tuesday, there’s no reason why you can’t begin next Monday. You can contact Dr. Schutzer at steve.schutzer@gmail.com and learn more at the Novel Healthcare Solutions website.   Steven F. Schutzer, MD, graduated with honors from Union College and the University of Virginia School of Medicine. Following a surgical internship at the University of Rochester, he served as lieutenant in the Medical Corps of the United States Navy. After his tour of duty, Dr. Schutzer did his general surgical training at the University of Rochester and then completed his orthopedic residency at the University of Connecticut. He was then a fellow in adult hip and reconstructive surgery at the Massachusetts General Hospital, after which he entered practice in Hartford, Connecticut. Dr. Schutzer is a founding member and medical director of the Connecticut Joint Replacement Institute (CJRI), a Center of Excellence at Saint Francis Hospital in Hartford, where he served as medical director between 2007 and 2021. He is currently the physician executive for the orthopedic service line at Trinity Health of New England. He is on the staff of Saint Francis Hospital and a member of Advanced Orthopedics New England. In 2014, Dr. Schutzer and two colleagues, Ms. Steph Kelly and Ms. Maureen Geary, launched a consulting company, Novel Healthcare Solutions, whose mission is to establish effective and trusting business relationships between physicians and hospital partners—and then create orthopedic Centers of Excellence. Dr. Schutzer is also vice president and co-founder of Upswing Health, a health technology start-up whose charge is to help 10 million lives alleviate suffering from musculoskeletal pain by the end of 2023. 04:52 Why would competitive physician groups gang together? 09:02 “Even if you never … bundle, going through the implementation process … will yield incredible unrecognized value.” 10:19 “It demands an end-to-end care redesign process.” 11:40 “The value of a COE is really unquestionable.” 11:48 “For every dollar saved [in a COE], two-thirds was in the quality side, and one-third was in the price point.” 14:38 Slide deck discussing the definition of a COE and its seven building blocks.15:06 “I’m talking about business relationships between the physicians … these are the most fundamental [relationships].” 16:24 “It is all about trust.” 16:49 What is the most central issue as to why a COE does well or fails? 17:26 “It’s not just data. It has to be actionable data because physicians naturally don’t trust data.” 22:55 “Employers are definitely taking note to patient-reported outcomes.” 23:38 What is the seventh element that is necessary for a COE, and what is fundamental to that element? 24:28 Where will fee-for-service doctors be in 2 to 3 years? 25:46 “The only way that we can accrue the value that we deserve is through these types of relationships.” 26:12 “The supreme motivator is opportunity.” 28:03 How do physicians and providers begin a transformation of the marketplace they’re in? 28:38 “What they need from us is product. They need products to disrupt the status quo.” 31:27 “The problem is that there are vendors who are working at the margin.” You can contact Dr. Schutzer at steve.schutzer@gmail.com and learn more at the Novel Healthcare Solutions website.   @SSchutzer of @THOfNewEngland discusses #centersofexcellence on this week’s #healthcarepodcast. #healthcare #podcast #digitalhealth #healthtech Why would competitive physician groups gang together? @SSchutzer of @THOfNewEngland discusses #centersofexcellence on this week’s #healthcarepodcast. #healthcare #podcast #digitalhealth #healthtech “It demands an end-to-end care redesign process.” @SSchutzer of @THOfNewEngland discusses #centersofexcellence on this week’s #healthcarepodcast. #healthcare #podcast #digitalhealth #healthtech “The value of a COE is really unquestionable.” @SSchutzer of @THOfNewEngland discusses #centersofexcellence on this week’s #healthcarepodcast. #healthcare #podcast #digitalhealth #healthtech “It’s not just data. It has to be actionable data because physicians naturally don’t trust data.” @SSchutzer of @THOfNewEngland discusses #centersofexcellence on this week’s #healthcarepodcast. #healthcare #podcast #digitalhealth #healthtech “Employers are definitely taking note to patient-reported outcomes.” @SSchutzer of @THOfNewEngland discusses #centersofexcellence on this week’s #healthcarepodcast. #healthcare #podcast #digitalhealth #healthtech Where will fee-for-service doctors be in 2 to 3 years? @SSchutzer of @THOfNewEngland discusses #centersofexcellence on this week’s #healthcarepodcast. #healthcare #podcast #digitalhealth #healthtech How do physicians and providers begin a transformation of the marketplace they’re in? @SSchutzer of @THOfNewEngland discusses #centersofexcellence on this week’s #healthcarepodcast. #healthcare #podcast #digitalhealth #healthtech Recent past interviews: Click a guest’s name for their latest RHV episode! Lisa Trumble, Jeb Dunkelberger, Dr Ian Tong, Mike Schneider, Peter Hayes, Paul Simms, Dr Steven Quimby, Dr David Carmouche (EP343), Christin Deacon, Gary Campbell, Kristin Begley, David Contorno (AEE17), David Contorno (EP339), Nikki King, Olivia Webb, Brandon Weber, Stacey Richter (INBW30), Brian Klepper (AEE16), Brian Klepper (EP335), Sunita Desai, Care Plans vs Real World (EP333), Dr Tony DiGioia, Al Lewis, John Marchica, Joe Connolly, Marshall Allen, Andrew Eye, Naomi Fried

This interview with Lisa Trumble is mostly about clinically integrated networks (CINs)—what they are, how they work, how data get shared. Furthermore, we talk about hybrid CINs, meaning, for example, a virtual front door that might lead to in-person care. After that, we talk about the potential impact of direct contracting, which Lisa says could significantly change the healthcare marketplace. The hybrid talk, by the way, is toward the middle of the show; and we talk about direct contracting—that’s near the end if you’re short on time and you want to skip around. But before we go there, let’s just level set a little bit, shall we, on the topics of accountability and integration as general constructs. Specifically, what’s the impact, or lack thereof at times, when the provider is not accountable for patient results? I’m talking here about fee for service, in general, where the provider is not accountable for patient results. Like, if we’re talking about a fee-for-service world and what it incents, it goes like this: Transaction happens. Somebody sends a bill. The end. I mean, in a fee-for-service world, the patient encounter may be the highest- or the lowest-value patient-doctor transaction in the history of humankind; but either way, the payment is the same. So, the incentive is to figure out how to encounter lots of patients and/or upcode wildly, I guess. The incentive is not to coordinate care or teach a patient how to take advantage of a telehealth offering to mitigate some social determinant of health or spend 10 minutes doing some education or shared decision making or establishing rapport and being culturally sensitive. Any docs who are doing that stuff are doing it on their own time in an FFS world. Here’s the good news and the bad news—and I don’t often hear it spelled out this bluntly, so I’ll do the honors: If anyone wants to get paid to create patient health, they have to be accountable for the outcomes created—upside and downside. Frankly, when an organization is super worried about the downside, that could be—not in all cases, but it certainly could be—a clue that maybe their approach is a little bit more transactional and/or inefficient than perhaps they would like to admit. There’s been much talk over the years about the importance of giving patients so-called “skin in the game,” but what might work out better is to mandate that providers have so-called skin in the game. Providers have to be accountable so good providers can reap rewards and bad ones don’t. The episode with Sunita Desai (EP334) is all about how providers have proven to actually be better “consumers” than “consumers,” so there could be a constellation of rationales here.   Now, if you’re accountable for care, you must actually create outcomes, as just discussed. And to actually create outcomes, there must be integration. Integration is necessary. Care coordination is necessary both with internal and external other providers and entities. There are very, very few cases where a chronic condition can be appreciably improved by a random assortment of 7- to 15-minute patient encounters. Managing chronic conditions requires a longitudinal journey that weaves together most often more than one doctor, also nurses and a PA and a speech pathologist and a nutritionist and a Certified Diabetes Educator and maybe a physical therapist or two. Considering that 85% of healthcare spend in this country has to do with chronic conditions also ... yeah, integration is really required. And, yeah, how many decades later, we’re still talking about interoperability. Here’s a tidbit I found kinda apropos: Female doctors make $2 million less, apparently, over a 40-year career than their male counterparts. That’s per research in Health Affairs, recently reported in the New York Times. More men become surgeons, and women have been shown to spend more time with their patients, leading to fewer services that can be billed for.   What’s the actionable takeaway there, I wonder? In this healthcare podcast, I have the honor and pleasure of speaking with Lisa Trumble. Lisa is president and CEO of a CIN, a clinically integrated network, called the Southern New England Healthcare Organization, or SoNE. SoNE was formed in January 2020 to integrate three ACOs [accountable care organizations] in two states. The CIN manages a population of over 200,000 patients—about $1.5 billion in total costs of care. Previously, she worked at Cambridge Health Alliance building their pop health and value-based structure to the point where about 60% of their business was in some form of risk or alternative payment models. There is one disclaimer that I would just ask you to keep in mind when listening to any conversation about value-based care—and there are lots of them going on right now—but I just want to tuck this in here because I’d be remiss not to mention it at some point. Dr. Mai Pham (EP325) has put this better than I ever would. She said recently, “After a decade of value-based payment contract negotiations in both public and private sectors, I would like to point out that [health systems] can talk a good value game, but if their ... organizations push for ever-higher unit prices, the word value is meaningless. I’ve seen trends in unit prices for a given health system outstrip the legitimate savings it produces by reducing volume, which was the plan all along.” Dr. Pham is currently writing a piece about this exact topic that’s going to appear in AJMC soon, so definitely look out for that.   You can learn more at sonehealthcare.com.   Lisa M. Trumble, MBA, president and CEO of SoNE HEALTH, has had a career showcased by successes in generating strong clinical and financial operating results for healthcare organizations. She has 30+ years’ experience at integrated delivery systems and physician organizations. Prior to joining SoNE HEALTH, Lisa served as senior vice president of accountable care at Cambridge Health Alliance (CHA); the scope of her responsibility included systemwide duties for accountable care and population health management, incorporating payer contracting, financial medical economics, regulatory compliance, and administrative and clinical programming. Under her leadership, the organization realized significant improvements in clinical and financial outcomes. Lisa joined CHA from Berkshire Health Systems, where she served as vice president of physician services and executive director of the Berkshire Health Systems Physicians Organization. She was instrumental in transforming physician operation, restructuring provider employment agreements and provider compensation plans, and enhancing patient satisfaction. Prior to Berkshire Health Systems, she served as the vice president of finance and operations at the Cambridge Health Alliance Physician Organization, where she achieved similar outcomes. Previously, Lisa was administrative director for anesthesia and surgery services lines at North Shore Medical Center and chief financial officer of North Shore’s Physicians Organization, a subsidiary of North Shore Medical Center. Additionally, she held positions in operations and finance at Commonwealth Health Management Service and Independent Physicians Association. Lisa holds a bachelor’s degree in business administration from North Adams State College and a master’s degree in business administration and healthcare finance from Western New England University. 06:20 Why do accountability and integration go hand in hand? 08:56 “Aggregation just for the point of aggregation doesn’t necessarily produce better outcomes.” 09:18 What questions should we be asking when considering aggregation? 09:45 Does aggregation equal integration? 11:42 What exactly is a clinically integrated network? 12:26 What is the intention of a clinically integrated network? 13:22 Are all CINs ACOs? Are all ACOs CINs? 17:22 What entities make up a clinically integrated network? 19:26 “We want providers that are able to generate the outcomes that we’re expecting.” 20:44 “There is a lot of work that goes into data integration.” 23:14 What is a hybrid CIN model? 25:22 Encore! EP206 with Ashok Subramanian.26:53 “Everyone is sitting around the table proactively.”—Stacey 29:37 What kind of structure could move the Medicare market quickly? You can learn more at sonehealthcare.com.   Lisa Trumble discusses #ClinicallyIntegratedNetworks on our #healthcare #podcast. #healthcarepodcast #digitalhealth #CIN Why do accountability and integration go hand in hand? Lisa Trumble discusses #ClinicallyIntegratedNetworks on our #healthcare #podcast. #healthcarepodcast #digitalhealth #CIN “Aggregation just for the point of aggregation doesn’t necessarily produce better outcomes.” Lisa Trumble discusses #ClinicallyIntegratedNetworks on our #healthcare #podcast. #healthcarepodcast #digitalhealth #CIN What questions should we be asking when considering aggregation? Lisa Trumble discusses #ClinicallyIntegratedNetworks on our #healthcare #podcast. #healthcarepodcast #digitalhealth #CIN Does aggregation equal integration? Lisa Trumble discusses #ClinicallyIntegratedNetworks on our #healthcare #podcast. #healthcarepodcast #digitalhealth #CIN What exactly is a clinically integrated network? Lisa Trumble discusses #ClinicallyIntegratedNetworks on our #healthcare #podcast. #healthcarepodcast #digitalhealth #CIN What is the intention of a clinically integrated network? Lisa Trumble discusses #ClinicallyIntegratedNetworks on our #healthcare #podcast. #healthcarepodcast #digitalhealth #CIN Are all CINs ACOs? Are all ACOs CINs? Lisa Trumble discusses #ClinicallyIntegratedNetworks on our #healthcare #podcast. #healthcarepodcast #digitalhealth #CIN What entities make up a clinically integrated network? Lisa Trumble discusses #ClinicallyIntegratedNetworks on our #healthcare #podcast. #healthcarepodcast #digitalhealth #CIN “We want providers that are able to generate the outcomes that we’re expecting.” Lisa Trumble discusses #ClinicallyIntegratedNetworks on our #healthcare #podcast. #healthcarepodcast #digitalhealth #CIN “There is a lot of work that goes into data integration.” Lisa Trumble discusses #ClinicallyIntegratedNetworks on our #healthcare #podcast. #healthcarepodcast #digitalhealth #CIN What is a hybrid CIN model? Lisa Trumble discusses #ClinicallyIntegratedNetworks on our #healthcare #podcast. #healthcarepodcast #digitalhealth #CIN “Everyone is sitting around the table proactively.” Lisa Trumble discusses #ClinicallyIntegratedNetworks on our #healthcare #podcast. #healthcarepodcast #digitalhealth #CIN What kind of structure could move the Medicare market quickly? Lisa Trumble discusses #ClinicallyIntegratedNetworks on our #healthcare #podcast. #healthcarepodcast #digitalhealth #CIN Recent past interviews: Click a guest’s name for their latest RHV episode! Jeb Dunkelberger, Dr Ian Tong, Mike Schneider, Peter Hayes, Paul Simms, Dr Steven Quimby, Dr David Carmouche (EP343), Christin Deacon, Gary Campbell, Kristin Begley, David Contorno (AEE17), David Contorno (EP339), Nikki King, Olivia Webb, Brandon Weber, Stacey Richter (INBW30), Brian Klepper (AEE16), Brian Klepper (EP335), Sunita Desai, Care Plans vs Real World (EP333), Dr Tony DiGioia, Al Lewis, John Marchica, Joe Connolly, Marshall Allen, Andrew Eye, Naomi Fried, Dr Rishi Wadhera

The discussion to follow is probably a 400-level class in payviders. If I just said the word payvider and you’re scratching your head wondering where you may have heard that term before, this show is probably not the best place for you to start. I’d go back and get some context by listening first to the episodes with Steve Blumberg from GuideWell (EP304) and/or the one with John Moore from Chilmark (EP172); and for a really retrospective lookback, check out the one episode with Dr. Kris Smith from Northwell (EP127) from back when they were still trying to become an insurance carrier. It’s like a time capsule into their ambitions.   OK, if you’re still with me, in this episode I’m looking forward to digging into payviders with Jeb Dunkelberger, who is the CEO of Sutter Health | Aetna. Sutter Health | Aetna is the payvider joint venture between, you guessed it, Sutter Health and Aetna. Not only is Jeb one who would obviously know a whole lot about payviders and how they operate given his role, but he’s also super articulate and thoughtful in terms of the potential impacts that this type of entity can have on patients and the surrounding healthcare ecosystem. I started to get really curious about payviders and what they’re up to because the term keeps coming up in conversations, number one. And the more it came up, the more it started to become really obvious that payvider is one of those terms that everybody tosses around and may or may not define it the same way. Jeb refers to a payvider as an entity that delivers care but also writes insurance products and takes risk for them—not just taking capitated payments or doing direct contracting. While it’s the employer who actually takes the risk, this is the definition of payvider that we explore in this healthcare podcast. Two kinds of interesting points that Jeb makes, which I’ll just underscore here: One is “demand destruction.” I like the idea of the term because it brings a really obvious point into stark focus. Bottom line, taking on risk or value-based programs is easier if you are a smaller percentage of the healthcare spend. The bigger a percentage of the healthcare spend that gets cha-chinged into your cash register, the more you destroy your own demand by creating value-based programs that minimize downstream costs. Those downstream costs are your revenue, after all. Value-based care is all about demand destruction at its core. In the last question of this interview (so, this is the second thing I’m underscoring here), I ask Jeb if he thinks payviders will ultimately lower healthcare costs; and he comes back with a reframe of my question. He says if we take costs out of the system, will hospitals close? And if the hospitals close, then people get laid off. Fair point, since in many places the health system is one of the biggest employers in town if not the biggest—and also a political tour de force. So, there’s more nuances here; but you’ll have to either get to or skip to almost the end of the episode to hear them. Jeb Dunkelberger began his career as a health economist and consultant. He became the CEO of Sutter Health | Aetna to focus on alternative reimbursement models and value-based care. Jeb also wrote a book called Rich & Dying. You can learn more at sutterhealthaetna.com.   You can also connect with Jeb on LinkedIn and follow him on Twitter.   Jeb Dunkelberger, MSc, MHCI, currently serves as CEO of Sutter Health | Aetna (SH|A), a commercial insurance plan serving Northern California. The health plan aims to combine the value of retail, provider, and payer via its partnerships with CVS, Sutter Health, and Aetna. Prior to SH|A, Jeb led growth for two bay-area healthcare start-ups: Cricket Health and Notable Health. Jeb has also held executive roles at Highmark, McKesson, and EY. Jeb holds healthcare-related degrees from Virginia Tech, The London School of Economics, Cornell University, and University of Pennsylvania. 03:58 What all does Sutter Health | Aetna entail? 04:31 What does it mean to be a “performance network”? 04:48 What does it mean to be a payvider? 06:35 How common are payviders? 07:31 “We are writing direct risk.” 09:21 How does the fully insured product work? 12:30 “You want to hold their feet to the fire, from a value-based perspective.” 12:42 What’s the incentive for providers to partner with payers? 15:25 “It’s just math. It’s the amount of lives times the amount of utilization multiplied by your unit costs.” 20:58 “You have to have a day of reckoning, and that only comes from financial incentives creating that gateway out.” 24:55 How do we think about reform and taking money out of the healthcare system? 26:58 “We also have to talk about repurposing the workforce.” 27:27 “We need to upskill our workforce.” 30:14 “Can a health system survive as the largest employer, year over year, if they give unit cost concessions, year over year? … The answer is no.” You can learn more at sutterhealthaetna.com.   You can also connect with Jeb on LinkedIn and follow him on Twitter.   @Jeb_Dunk discusses #payviders on our #healthcarepodcast. #healthcare #podcast #digitalhealth What all does Sutter Health | Aetna entail? @Jeb_Dunk discusses #payviders on our #healthcarepodcast. #healthcare #podcast #digitalhealth What does it mean to be a “performance network”? @Jeb_Dunk discusses #payviders on our #healthcarepodcast. #healthcare #podcast #digitalhealth What does it mean to be a payvider? @Jeb_Dunk discusses #payviders on our #healthcarepodcast. #healthcare #podcast #digitalhealth How common are payviders? @Jeb_Dunk discusses #payviders on our #healthcarepodcast. #healthcare #podcast #digitalhealth “We are writing direct risk.” @Jeb_Dunk discusses #payviders on our #healthcarepodcast. #healthcare #podcast #digitalhealth How does the fully insured product work? @Jeb_Dunk discusses #payviders on our #healthcarepodcast. #healthcare #podcast #digitalhealth “You want to hold their feet to the fire, from a value-based perspective.” @Jeb_Dunk discusses #payviders on our #healthcarepodcast. #healthcare #podcast #digitalhealth What’s the incentive for providers to partner with payers? @Jeb_Dunk discusses #payviders on our #healthcarepodcast. #healthcare #podcast #digitalhealth “It’s just math. It’s the amount of lives times the amount of utilization multiplied by your unit costs.” @Jeb_Dunk discusses #payviders on our #healthcarepodcast. #healthcare #podcast #digitalhealth “You have to have a day of reckoning, and that only comes from financial incentives creating that gateway out.” @Jeb_Dunk discusses #payviders on our #healthcarepodcast. #healthcare #podcast #digitalhealth “We also have to talk about repurposing the workforce.” @Jeb_Dunk discusses #payviders on our #healthcarepodcast. #healthcare #podcast #digitalhealth “We need to upskill our workforce.” @Jeb_Dunk discusses #payviders on our #healthcarepodcast. #healthcare #podcast #digitalhealth “Can a health system survive as the largest employer, year over year, if they give unit cost concessions, year over year? … The answer is no.” @Jeb_Dunk discusses #payviders on our #healthcarepodcast. #healthcare #podcast #digitalhealth Recent past interviews: Click a guest’s name for their latest RHV episode! Dr Ian Tong, Mike Schneider, Peter Hayes, Paul Simms, Dr Steven Quimby, Dr David Carmouche (EP343), Christin Deacon, Gary Campbell, Kristin Begley, David Contorno (AEE17), David Contorno (EP339), Nikki King, Olivia Webb, Brandon Weber, Stacey Richter (INBW30), Brian Klepper (AEE16), Brian Klepper (EP335), Sunita Desai, Care Plans vs Real World (EP333), Dr Tony DiGioia, Al Lewis, John Marchica, Joe Connolly, Marshall Allen, Andrew Eye, Naomi Fried, Dr Rishi Wadhera, Dr Mai Pham

I attended the STAT Summit last week and heard the heart-wrenching story told by Charles Johnson, who is the founder of 4Kira4Moms, which is a group dedicated to improving maternal health equity. Charles’s family is African American. After a planned C-section, his otherwise-healthy wife died an avoidable death because 10 hours after the clinical team was alerted that she had internal bleeding—10 hours later—they got around to wheeling her into surgery. At that point, she had three liters of blood in her abdomen. She bled out and died, leaving her newborn infant motherless. This all went down at a large, incredibly well-respected integrated delivery network. One of the biggest issues in healthcare today … well, there are many issues, so maybe I should start again. One of the biggest issues in healthcare that is going to be discussed on this podcast today is how to engage those patients or members or employees or consumers who might need our healthcare industry to work better on their behalf. This is especially a problem (a well-known problem) when we consider those patients who our healthcare system in so many ways does not serve well: many minority patients, Black people, other people of color, the LGBTQ community, people who do not speak English as their first language. These patient cohorts emerge on the other side of our healthcare industry sporting patient outcomes that are even worse than our usual not-so-great average patient outcomes.   In this healthcare podcast, we’re gonna talk about a new coalition formed by Walmart and six other employers, plus Included Health, which is the combined entity of Grand Rounds and Doctor On Demand. (They merged recently.) So, there was a coalition that was formed. It’s called the Black Community Innovation Coalition, and in short, it’s a new virtual-care program aimed at combating health disparities among African American workers. I wanted to learn more about this coalition, so in this episode I’m speaking with Ian Tong, MD, about the aforementioned Black Community Innovation Coalition—the how and also the intent. Dr. Tong is the chief medical officer over at Included Health and also a clinical assistant professor and adjunct faculty in the medical school at Stanford. One reason I was so intrigued is that the Black Community Innovation Coalition leverages ERGs (employee resource groups) in a way I thought was different. If you’re unfamiliar, ERGs or, as I said, employee resource groups, used to be called employee affinity groups. Many big companies have them. These ERGs bring together groups with shared identities, shared experiences, shared interests. What I thought was worth contemplating if you’re interested in improving health equity, health outcomes … through these existing ERG organizations, it might be possible to pull the healthcare system and these patients closer together to create healthcare benefits and care delivery models that are designed with them in mind. So, what I think might be actionable to others relative to this coalition and its methodology is the best practice of building the engagement mechanism into the design of the initiative. So often it’s an afterthought if you think about it. We build the thing, and then we wonder how to “market” it—like the “marketing” is this separate and sequential function. It’s not. And marketing is also probably a limiting misnomer. This is especially true, though, when contemplating minority populations for a whole bunch of reasons that we get into in this conversation. So that’s number one: Build the engagement mechanism into the program design. But here’s number two: Consider the engagement mechanism relative to existing channels of engagement, re: ERGs or otherwise. Other links on the show include: Rebecca Etz, PhD (EP295) talking about some best ways to measure primary care quality. The Harvard Implicit Bias Test You can learn more by checking out the Implicit Bias Test, the CDC REACH site, and includedhealth.com.  Ian Tong, MD, is chief medical officer at Included Health (formerly Doctor On Demand and Grand Rounds Health). In this role, Ian leads all clinical care delivery, including clinical products and service lines, clinical quality, and practice performance of the clinical staff. Prior to Doctor On Demand, Ian held leadership roles including chief resident of Stanford Internal Medicine and co-medical director of the Arbor Free Clinic. He also founded and was medical director of The Health Resource Initiative for Veterans Everywhere (THRIVE), honored with the Award for Outstanding Achievement in Service to Homeless Veterans in 2008 by the US Secretary of Veterans Affairs. A national collegiate champion in rugby at the University of California at Berkeley, Ian was named to the All-American Team in 1994. He graduated from Berkeley with a bachelor’s degree in English, then earned his medical degree from The University of Chicago Pritzker School of Medicine. He completed residency and chief residency at Stanford Hospital and Clinics and is currently a clinical assistant professor (affiliated) at Stanford University Medical School. He is board certified in internal medicine. Ian has dedicated his career to improving equity in, and access to, high-quality care. He lives in the San Francisco Bay area. 04:33 What is the Black Community Innovation Coalition? 05:06 Who are the partners behind the Black Community Innovation Coalition? 06:23 How is the Black Community Innovation Coalition focusing on patients? 08:05 “If you take a one-size-fits-all approach to your employees, that is not going to be adequate or complete.” 08:56 How the Black Community Innovation Coalition is incorporating engagement into its core foundation. 13:18 “There’s a great deal of hesitancy around engaging care, and there’s a high level of avoidance.” 15:26 EP338 with Nikki King, DHA.16:34 “The technology is not making that experience worse. It’s a bad experience, and it’s broken already.” 23:27 “I feel very strongly that everyone should probably have a virtual primary care clinician.” 27:20 EP295 with Rebecca Etz, PhD.28:15 “We really want to pay attention to that encounter being the best encounter possible because that … might be the only chance you get to engage that patient.” 29:00 Why is virtual care important for self-insured employers? 32:08 “We cannot afford to have low-value encounters.” You can learn more by checking out the Implicit Bias Test, the CDC REACH site, and includedhealth.com.  @Driantong discusses the Black Community Innovation Coalition on our #healthcarepodcast. #healthcare #podcast #healthcareinitiatives #pophealth What is the Black Community Innovation Coalition? @Driantong discusses community health initiatives on our #healthcarepodcast. #healthcare #podcast #healthcareinitiatives #pophealth Who are the partners behind the Black Community Innovation Coalition? @Driantong discusses community health initiatives on our #healthcarepodcast. #healthcare #podcast #healthcareinitiatives #pophealth How is the Black Community Innovation Coalition focusing on patients? @Driantong discusses on our #healthcarepodcast. #healthcare #podcast #healthcareinitiatives #pophealth “If you take a one-size-fits-all approach to your employees, that is not going to be adequate or complete.” @Driantong discusses the Black Community Innovation Coalition on our #healthcarepodcast. #healthcare #podcast #healthcareinitiatives #pophealth “The technology is not making that experience worse. It’s a bad experience, and it’s broken already.” @Driantong discusses the Black Community Innovation Coalition on our #healthcarepodcast. #healthcare #podcast #healthcareinitiatives #pophealth “I feel very strongly that everyone should probably have a virtual primary care clinician.” @Driantong discusses the Black Community Innovation Coalition on our #healthcarepodcast. #healthcare #podcast #healthcareinitiatives #pophealth “We really want to pay attention to that encounter being the best encounter possible because that … might be the only chance you get to engage that patient.” @Driantong discusses the Black Community Innovation Coalition on our #healthcarepodcast. #healthcare #podcast #healthcareinitiatives #pophealth Why is virtual care important for self-insured employers? @Driantong discusses the Black Community Innovation Coalition on our #healthcarepodcast. #healthcare #podcast #healthcareinitiatives #pophealth “We cannot afford to have low-value encounters.” @Driantong discusses the Black Community Innovation Coalition on our #healthcarepodcast. #healthcare #podcast #healthcareinitiatives #pophealth Recent past interviews: Click a guest’s name for their latest RHV episode! Mike Schneider, Peter Hayes, Paul Simms, Dr Steven Quimby, Dr David Carmouche (EP343), Christin Deacon, Gary Campbell, Kristin Begley, David Contorno (AEE17), David Contorno (EP339), Nikki King, Olivia Webb, Brandon Weber, Stacey Richter (INBW30), Brian Klepper (AEE16), Brian Klepper (EP335), Sunita Desai, Care Plans vs Real World (EP333), Dr Tony DiGioia, Al Lewis, John Marchica, Joe Connolly, Marshall Allen, Andrew Eye, Naomi Fried, Dr Rishi Wadhera, Dr Mai Pham, Nicole Bradberry and Kelly Conroy

Over the holiday season here, we’re running some of our favorite episodes from years past. This one is with Mike Schneider, who actually has taken another role since this show was recorded. Other than that, the information that Mike shares during this episode from 2020 is all good. So, let’s do this thing. Disclaimer before we get started here: This show is probably a 300-level class in pharmaceutical/PBM relations. If you are tuning in for the first time and you aren’t pretty familiar with the role of PBMs, I would go back and listen to, say, episode 241 with Vinay Patel or episode 166 with Tim Thomas from Crystal Clear Rx. OK, now that that’s out of the way, if you’re still with me, this episode is like a ride on a roller coaster. I talk with Mike Schneider. And we get into, you know, kinda deeply, the what and the why behind the “Big Three” traditional PBMs deciding that now might be a fantastic time to set up GPOs. PBMs are pharmacy benefit managers—there’s three huge ones. GPO stands for group purchasing organization. Traditionally, these GPOs have purchased drugs and supplies for hospitals and other providers at, according to their marketing materials, volume discounts. So, the unfolding story here, in a nutshell, is that ESI (Express Scripts) set up a GPO called Ascent in Switzerland. Optum has had an Ireland operation going in full swing for a while. And now we have CVS Caremark setting up a GPO called Zinc. These GPOs are not like normal GPOs working with hospitals, but instead, these GPOs are the entity which is now going to negotiate with pharma companies. In the past, it was the PBM that was negotiating with the pharma company to get rebates. Now it’s this GPO entity. “But wait,” you may say. “Wasn’t there an executive order the other day requiring PBMs to, for example, pass through all of the rebates that they’re collecting to patients?” Indeed, there was. And that rule doesn’t say anything about GPOs having to do the same, especially GPOs in, let’s just say, Switzerland. It’s a tangled web we weave. You can learn more by connecting with Mike on LinkedIn.  Mike Schneider is an experienced healthcare executive with over 20 years of experience in the pharmaceutical manufacturer, pharmacy benefit manager, and payer side of healthcare. He previously spent 9 years at CVS Caremark, where he was a director of industry relations with responsibility for trade strategy development, rebate negotiations, and contract execution for CVS Caremark’s own Medicare Part D plans and that of its clients. He held a similar position at Universal American (UA) before it was acquired by CVS Health, where he also negotiated UA’s commercial business. Mike has held various sales and market access roles with pharmaceutical manufacturers with increasing responsibility. Before entering healthcare, Mike began his career as a researcher at the Procter & Gamble Company in Cincinnati, where he worked on hair care product formulation development focusing on the key markets of China and Japan, and then moved on to work in drug development. Mike holds a BS degree from the University of Illinois and an MBA from the University of Akron. 02:48 What does a GPO add to a PBM? 05:23 Rebates vs driving more revenue. 10:39 PBMs vs safe harbors. 12:25 The net impact on the commercial side. 14:07 PBMs vs pharmaceutical manufacturers. 14:54 How the “Big Three” PBMs compete with each other, and how employers would choose between them. 15:56 What the net-net is here. 18:06 How PBMs are shifting their models. 20:42 How GPOs may be making things even less transparent. 21:31 “The PBM world as a whole is not very transparent.” 25:00 “One of the biggest beneficiaries of this whole rebate [system] is the government.” 25:46 “The question is, ‘Who’s paying those costs?’” 26:02 EP216 with Chris Sloan.27:00 A better way to move money from Pharma to employers and plan sponsors. 28:04 “Put your money where your mouth is.” You can learn more by connecting with Mike on LinkedIn.  Check out our newest #healthcarepodcast with Mike Schneider as he discusses #PBMs and #GPOs. #healthcare #podcast #digitalhealth #healthcarefinance #pharma What does a GPO add to a PBM? Mike Schneider discusses #PBMs and #GPOs. #healthcarepodcast #healthcare #podcast #digitalhealth #healthcarefinance #pharma Rebates vs driving more revenue. Mike Schneider discusses #PBMs and #GPOs. #healthcarepodcast #healthcare #podcast #digitalhealth #healthcarefinance #pharma PBMs vs safe harbors. Mike Schneider discusses #PBMs and #GPOs. #healthcarepodcast #healthcare #podcast #digitalhealth #healthcarefinance #pharma What is the net impact on the commercial side? Mike Schneider discusses #PBMs and #GPOs. #healthcarepodcast #healthcare #podcast #digitalhealth #healthcarefinance #pharma PBMs vs pharmaceutical manufacturers. Mike Schneider discusses #PBMs and #GPOs. #healthcarepodcast #healthcare #podcast #digitalhealth #healthcarefinance #pharma How do the “Big Three” PBMs compete with each other? Mike Schneider discusses #PBMs and #GPOs. #healthcarepodcast #healthcare #podcast #digitalhealth #healthcarefinance #pharma How do #employers choose between the “Big Three” PBMs? Mike Schneider discusses #PBMs and #GPOs. #healthcarepodcast #healthcare #podcast #digitalhealth #healthcarefinance #pharma What’s the net-net here? Mike Schneider discusses #PBMs and #GPOs. #healthcarepodcast #healthcare #podcast #digitalhealth #healthcarefinance #pharma How are PBMs shifting their revenue models? Mike Schneider discusses #PBMs and #GPOs. #healthcarepodcast #healthcare #podcast #digitalhealth #healthcarefinance #pharma How are GPOs making things even less transparent? Mike Schneider discusses #PBMs and #GPOs. #healthcarepodcast #healthcare #podcast #digitalhealth #healthcarefinance #pharma “The PBM world as a whole is not very transparent.” Mike Schneider discusses #PBMs and #GPOs. #healthcarepodcast #healthcare #podcast #digitalhealth #healthcarefinance #pharma “One of the biggest beneficiaries of this whole rebate [system] is the government.” Mike Schneider discusses #PBMs and #GPOs. #healthcarepodcast #healthcare #podcast #digitalhealth #healthcarefinance #pharma “The question is, ‘Who’s paying those costs?’” Mike Schneider discusses #PBMs and #GPOs. #healthcarepodcast #healthcare #podcast #digitalhealth #healthcarefinance #pharma A better way to move money from Pharma to employers and plan sponsors. Mike Schneider discusses #PBMs and #GPOs. #healthcarepodcast #healthcare #podcast #digitalhealth #healthcarefinance #pharma “Put your money where your mouth is.” Mike Schneider discusses #PBMs and #GPOs. #healthcarepodcast #healthcare #podcast #digitalhealth #healthcarefinance #pharma Recent past interviews: Click a guest’s name for their latest RHV episode! Peter Hayes, Paul Simms, Dr Steven Quimby, Dr David Carmouche (EP343), Christin Deacon, Gary Campbell, Kristin Begley, David Contorno (AEE17), David Contorno (EP339), Nikki King, Olivia Webb, Brandon Weber, Stacey Richter (INBW30), Brian Klepper (AEE16), Brian Klepper (EP335), Sunita Desai, Care Plans vs Real World (EP333), Dr Tony DiGioia, Al Lewis, John Marchica, Joe Connolly, Marshall Allen, Andrew Eye, Naomi Fried, Dr Rishi Wadhera, Dr Mai Pham, Nicole Bradberry and Kelly Conroy, Lee Lewis

In this healthcare podcast, I speak with Peter Hayes, who is president and CEO at the Healthcare Purchaser Alliance of Maine and a national presence in healthcare strategy, innovation, and a frequent keynote speaker. One thing, among many, that Peter said during our conversation struck me. He said it will take a village to fix what ails the healthcare industry in this country. There are too many interdependencies. This point obviously resonates around these parts because it’s the rationale for the Relentless Health Value podcast. We started this show on the recognition that if you want to achieve anything in healthcare, you cannot do it without collaboration/cooperation/grudging acquiescence of other stakeholders in the patient journey or the payment journey. And when I say, “You can’t do anything,” I mean you can’t sell anything, you can’t improve patient care, and, most relevant to this particular episode, you can’t contain prices. If we’re talking about health systems (for example, hospitals and the like), they are not going to curtail their price hikes or improve the value of care delivered or safety or infection control really unless patients and employers and CMS and others demand that they do—and unless employers and others do some of the five things that Peter Hayes mentions at the end of our conversation. Spoiler alert there. For context to this discussion, let’s check in with some of the biggest, most powerful health systems in this country. If I limit this comment to the “nonprofit” ones—and I say “nonprofit” with air quotes because what does that mean exactly?—look, I know there are many health system execs that listen to this show, but there’s some inalienable facts here. And let’s talk about them with the intent of fixing them because nothing is going to get fixed that isn’t talked about. It’s not my nature to mince words, so I won’t. Many hospitals are, by almost every account, pretty darn inefficient. And they don’t do cost accounting, but then they’ll scream and claim to be losing money when paid the exact same prices for certain services that other hospitals can get paid and make a fair profit. Crappy workflows cost money. Talk to anybody who has watched even the trailer to a Six Sigma course. Another thing that costs money is when all the burned-out doctors quit and you have to recruit new ones, but that’s a topic for a different day. Listen the EP323 with Arshad Rahim, MD.  But there’s also inefficiencies in how many health systems purchase supplies. (Listen to EP281 with Rob Austin for more on that.) Further, paying the C-suite millions of dollars but maybe underpaying or understaffing nurses has consequences. There’s complaints about Medicare payer mixes, but then somehow there’s enough spare shekel to put a waterfall in the lobby. Nonprofit hospitals also don’t pay any taxes, keep in mind, which is a huge financial windfall, especially when they provide vanishingly small amounts of charity care compared to revenue. See the top 10 health system hall of shame in this category here.   Here’s another point to ponder: Amongst the hundreds, thousands, of requests I get from PR firms pitching guests to come on this show, there are plenty from what appears to be a pretty large cottage industry that I had never heard of before. I’ll call it the real estate for nonprofit hospitals cottage industry. From what I can gather by the promo copy, this involves buying up medical office buildings, not paying any real estate taxes, and then leasing out the space. I should have one of these guys come on the show just to shine some light on whatever this apparently pretty common shenanigan is. As Vikas Saini, MD, from the Lown Institute has said, “No margin, no mission” can become an excuse for all kinds of questionable behavior. So bottom line, we have employers, employees, taxpayers, cash-pay patients whose federal and/or state and/or local taxes are going to support these nonprofit hospitals—but then there’s this double tax. Because they claim to be losing money on Medicare patients, they justify cost shifting some pretty big bucks onto the commercially insured patients, who are then paying, on average, some wildly inflated prices for healthcare services. This might be considered a double tax if you think about it: tax dollars going to the IRS directly and then after-tax dollars buying that knee replacement for $125,000 that should cost $25,000. Consider that a $100,000 double tax. But why should a hospital with a motive to maximize margins quit it with their questionable and secretive billing practices if employers just pay whatever the bill is no fuss no muss? Short answer: They won’t. So, it’s going to be up to someone else in the village to make it untenable to continue. It’s going to be up to another party to slow that roll. In this conversation, Peter Hayes talks about the RAND Hospital Price Transparency Study.  One last thing that may or may not be relevant here, but I can’t resist a good sidebar. New catchphrase I have been hearing lately: the “deconstruction of hospitals.” Have you heard it, too? In fact, I was listening to Zeev Neuwirth’s podcast recently that featured Raphael Rakowski. Raphael said that the average fixed cost of any given brick-and-mortar hospital is 65% of revenue. So, just having the building, the physical plant, and paying for all the things you need to pay for to run that physical plant is really high. I heard Jason Wells say in a HealthIMPACT forum the other day that it costs a million dollars to build a bed in California due to all the regulatory requirements. Add to that something Christin Deacon highlighted the other day on LinkedIn about how operating rooms are empty 30% of the time.   So, it makes me wonder whether some of the issues that hospitals have when they claim that they are losing money on Medicaid or Medicare is because their fixed costs are out of whack. This potentially disproportionate situation, however, is one reason why hospitals really have to watch it for hospitals at home or virtual offerings. After all, this is exactly how Amazon ate everybody’s lunch. Erase 65% of your costs, or even 50% of your costs, and that cost-plus profit threshold becomes a weapon of mass destruction. At the end of this podcast—the very end, so if you’re in a rush, jump to 28 minutes or something [32:45]—Peter gives five ideas for employers to limit the ability for hospitals to take advantage. If you’re a hospital exec that’s listening, I would urge you to please help your local employers do these things. Let’s all get on the same team here to improve the health of our communities with pricing and business models that are reasonable and fair. Don’t be like the hospital that Katy Talento is going to talk about in an upcoming episode who won’t do direct contracting with employers because the coding is kind of a hassle. Seriously now. You can learn more at purchaseralliance.org. Peter Hayes is president and CEO of the Healthcare Purchaser Alliance of Maine and formerly a principal of Healthcare Solutions and director of associate health and wellness at Hannaford Supermarkets. He has been in innovative, strategic benefit design for the past 20+ years. During the past several years, Hannaford has received numerous national awards in recognition of the company’s commitment to working collaboratively with healthcare providers and vendors in delivering health benefits that are focused on value (high-quality efficient care). Hannaford Supermarkets has been successful in this arena by focusing on innovative solutions for patient advocacy, chronic disease management, and health promotion programs. Hannaford was recognized by receiving the National Business Group on Health Platinum Award for the health promotion and wellness programs three years in a row. These programs, along with healthcare delivery strategies, contributed to a flat trend line over five years. Peter has also been involved in healthcare reform leadership roles on both the national and regional levels with organizations like the Center for Health Innovation, Care Focused Purchasing, and Leapfrog. He’s also cofounder of the Maine Health Management Coalition (now Healthcare Purchaser Alliance of Maine) and has been appointed by two different Maine Governors to serve on Health Care Reform Commissions to recommend public policies to improve the access and affordability of healthcare for Maine citizens. 07:51 Who are the commercial payers? 08:48 Are hospitals actually losing money on Medicare and Medicaid? 11:26 Is cost inversely connected to quality when it comes to hospital care? 13:46 “A lot of hospitals don’t do cost accounting.” 13:59 If hospitals don’t know their costs, how does Medicare know their costs? 15:52 “In the hospital financial world … they start the budget upside down.” 18:48 “There’s plenty of accountability to spread around for where we are.” 20:30 Do employers have any options in the current health system situation? 21:39 “If this market’s going to change, purchasers have to step up and start demanding more accountability, more transparency.” 26:21 How is the new transparency legislation impacting plan sponsors and employers? 29:41 EP342 with Christin Deacon.32:38 “I think the whole dialogue around how we pay for hospital services is going to really change.” 32:45 What is Peter’s advice to employers? You can learn more at purchaseralliance.org.   @pefhayes of @HPAofMaine discusses #healthsystempricing on our #healthcarepodcast. #healthcare #podcast #digitalhealth Who are the commercial payers? @pefhayes of @HPAofMaine discusses #healthsystempricing on our #healthcarepodcast. #healthcare #podcast #digitalhealth Are hospitals actually losing money on Medicare and Medicaid? @pefhayes of @HPAofMaine discusses #healthsystempricing on our #healthcarepodcast. #healthcare #podcast #digitalhealth Is cost inversely connected to quality when it comes to hospital care? @pefhayes of @HPAofMaine discusses #healthsystempricing on our #healthcarepodcast. #healthcare #podcast #digitalhealth “A lot of hospitals don’t do cost accounting.” @pefhayes of @HPAofMaine discusses #healthsystempricing on our #healthcarepodcast. #healthcare #podcast #digitalhealth If hospitals don’t know their costs, how does Medicare know their costs? @pefhayes of @HPAofMaine discusses #healthsystempricing on our #healthcarepodcast. #healthcare #podcast #digitalhealth “In the hospital financial world … they start the budget upside down.” @pefhayes of @HPAofMaine discusses #healthsystempricing on our #healthcarepodcast. #healthcare #podcast #digitalhealth “There’s plenty of accountability to spread around for where we are.” @pefhayes of @HPAofMaine discusses #healthsystempricing on our #healthcarepodcast. #healthcare #podcast #digitalhealth Do employers have any options in the current health system situation? @pefhayes of @HPAofMaine discusses #healthsystempricing on our #healthcarepodcast. #healthcare #podcast #digitalhealth “If this market’s going to change, purchasers have to step up and start demanding more accountability, more transparency.” @pefhayes of @HPAofMaine discusses #healthsystempricing on our #healthcarepodcast. #healthcare #podcast #digitalhealth How is the new transparency legislation impacting plan sponsors and employers? @pefhayes of @HPAofMaine discusses #healthsystempricing on our #healthcarepodcast. #healthcare #podcast #digitalhealth “I think the whole dialogue around how we pay for hospital services is going to really change.” @pefhayes of @HPAofMaine discusses #healthsystempricing on our #healthcarepodcast. #healthcare #podcast #digitalhealth Recent past interviews: Click a guest’s name for their latest RHV episode! Paul Simms, Dr Steven Quimby, Dr David Carmouche (EP343), Christin Deacon, Gary Campbell, Kristin Begley, David Contorno (AEE17), David Contorno (EP339), Nikki King, Olivia Webb, Brandon Weber, Stacey Richter (INBW30), Brian Klepper (AEE16), Brian Klepper (EP335), Sunita Desai, Care Plans vs Real World (EP333), Dr Tony DiGioia, Al Lewis, John Marchica, Joe Connolly, Marshall Allen, Andrew Eye, Naomi Fried, Dr Rishi Wadhera, Dr Mai Pham, Nicole Bradberry and Kelly Conroy, Lee Lewis, Dr Arshad Rahim

At the beginning of 2021, my guest in this healthcare podcast, Paul Simms, had come up with a set of predictions for 2021. Some came true; some didn’t. But I was fascinated by a bunch of things, one of them being Paul’s sort of implicit and explicit assessment of the context of these predictions. Right now, Pharma is in a weird moment: It’s a confluence of technology, consumer expectations, changes in care delivery accelerated by the pandemic, policy at the state and federal level, and the financial realities of where we’re at today. So, if you meet patients or providers or payers where they were last year or the year before that, you’re gonna potentially be pretty far off the mark. There’s also the financial realities which Pharma kind of exacerbated for themselves when some, many, spent the past however many years making their numbers by raising prices on existing drugs and developing drugs for mostly rare diseases but then, at the same time, not innovating antibiotics or for other diseases that impact so many lives. I mean, no comments on these strategies, but is it safe to then assume that an environment that allows for this sort of thing will continue indefinitely? Not only from an “Is this really the most patient-centric thing we can do?” standpoint, especially when you consider how many patients are being left behind as a result of both the narrow focus and also the price points—upwards of 40% of Americans have said they’ve abandoned meds due to cost, after all—but potentially also from a business continuity standpoint. Right now could be a decent time to start getting creative and experiment with new models and new ways to reach and engage. My guest in this episode, Paul Simms, is the former chairman of eyeforpharma, which ran the largest events in the pharmaceutical space for a number of years. His new company, Impatient Health, helps a very conservative industry find ways to deliver and provide patient value. During our conversation, Paul made a bunch of thought-provoking points; but one of them I keyed onto was a counterpoint to the ye old pharmaceutical conventional wisdom that high drug prices are needed for innovation. He said that actually all the money sloshing around could inhibit R&D innovation. Here’s the thinking: If you can make a ton of money not being super innovative, then why be innovative? If you can make a ton of money not really improving OS (overall survival) in a meaningful way and not really helping a whole lot of patients, then why bother doing anything else, especially if the “anything else” might require risk or new business models that are going to take time and determination? During our chat, the work of Clay Christensen comes up more than once. Just to remind you, Clay Christensen is the one who coined the term disrupters. He wrote The Innovator’s Dilemma back in the 1990s. Keep in mind that the main point of that whole book is that if you’re a big incumbent, it’s pretty easy to cruise along thinking everything is great until you get kneecapped by a competitor who takes advantage of a new business model or consumer preference or technology or law—all of which are coming out of the woodwork right now. Paul Simms has put it this way: When the habitat changes, evolution happens and entities that are able to adapt will thrive. I’ve also heard it put this way: It’s not IQ or even EQ that matters most when change is afoot. It’s AQ—the ability to adapt. You can learn more by connecting with Paul on LinkedIn. Paul Simms is known as the “pharma provocateur” for his efforts to realize the unfulfilled potential of the life sciences industry. His journey started in 2003 with eyeforpharma, an organization which he quickly grew into the pharmaceutical industry’s most influential and largest event organizer, acquired by Reuters in 2019. He has since set up a think tank and consultancy called Impatient Health. Paul counts the industry’s CEOs and innovators amongst his friends and is a regular speaker, host, author, and commentator.   05:04 “We’re at that catalyst point where we could go one way or the other.” 05:39 How can the analogy of Web 1.0 vs Web 2.0 be applied to the future of healthcare business models? 07:06 “People need to improve their awareness at the very least as to a new generation of companies coming forward.” 08:31 “What now is the new business model that can exist in that world?” 09:07 Is there a stage pre-agility that will allow pharma companies to pivot to future markets? 12:08 What are the new ways to think about things in the future of healthcare business? 14:09 “The mind boggles at what is possible but is not yet being achieved.” 16:11 Why could prices falling actually spark more innovation? 16:49 EP300 with Bruce Rector, MD.21:36 “It’s these companies that have this data-driven consumer relationship that I think are very interesting.” 25:16 “I just think that it’s a mindset change first.” 25:38 “I’m not here to be right or wrong. I’m just here to enable the conversation.” 25:56 “What I find is that companies make significant efforts and that they don’t quite gain the same traction as quickly as they might like to.” 26:20 “It seems to be this great impatience that companies can turn around these non-medicine initiatives more quickly.” 29:42 “It seems to me that the pharmaceutical industry’s reaction to the pandemic has been, ‘We need to double down.’” You can learn more by connecting with Paul on LinkedIn. @xpablo of @HealthImpatient discusses the future of #pharma in our #healthcarepodcast. #healthcare #podcast #digitalhealth #pharmahealth “We’re at that catalyst point where we could go one way or the other.” @xpablo of @HealthImpatient discusses the future of #pharma in our #healthcarepodcast. #healthcare #podcast #digitalhealth #pharmahealth “People need to improve their awareness at the very least as to a new generation of companies coming forward.” @xpablo of @HealthImpatient discusses the future of #pharma in our #healthcarepodcast. #healthcare #podcast #digitalhealth #pharmahealth “What now is the new business model that can exist in that world?” @xpablo of @HealthImpatient discusses the future of #pharma in our #healthcarepodcast. #healthcare #podcast #digitalhealth #pharmahealth Is there a stage pre-agility that will allow pharma companies to pivot to future markets? @xpablo of @HealthImpatient discusses the future of #pharma in our #healthcarepodcast. #healthcare #podcast #digitalhealth #pharmahealth What are the new ways to think about things in the future of healthcare business? @xpablo of @HealthImpatient discusses the future of #pharma in our #healthcarepodcast. #healthcare #podcast #digitalhealth #pharmahealth “The mind boggles at what is possible but is not yet being achieved.” @xpablo of @HealthImpatient discusses the future of #pharma in our #healthcarepodcast. #healthcare #podcast #digitalhealth #pharmahealth Why could prices falling actually spark more innovation? @xpablo of @HealthImpatient discusses the future of #pharma in our #healthcarepodcast. #healthcare #podcast #digitalhealth #pharmahealth “It’s these companies that have this data-driven consumer relationship that I think are very interesting.” @xpablo of @HealthImpatient discusses the future of #pharma in our #healthcarepodcast. #healthcare #podcast #digitalhealth #pharmahealth “I just think that it’s a mindset change first.” @xpablo of @HealthImpatient discusses the future of #pharma in our #healthcarepodcast. #healthcare #podcast #digitalhealth #pharmahealth “I’m not here to be right or wrong. I’m just here to enable the conversation.” @xpablo of @HealthImpatient discusses the future of #pharma in our #healthcarepodcast. #healthcare #podcast #digitalhealth #pharmahealth “What I find is that companies make significant efforts and that they don’t quite gain the same traction as quickly as they might like to.” @xpablo of @HealthImpatient discusses the future of #pharma in our #healthcarepodcast. #healthcare #podcast #digitalhealth #pharmahealth “It seems to be this great impatience that companies can turn around these non-medicine initiatives more quickly.” @xpablo of @HealthImpatient discusses the future of #pharma in our #healthcarepodcast. #healthcare #podcast #digitalhealth #pharmahealth “It seems to me that the pharmaceutical industry’s reaction to the pandemic has been, ‘We need to double down.’” @xpablo of @HealthImpatient discusses the future of #pharma in our #healthcarepodcast. #healthcare #podcast #digitalhealth #pharmahealth Recent past interviews: Click a guest’s name for their latest RHV episode! Dr Steven Quimby, Dr David Carmouche (EP343), Christin Deacon, Gary Campbell, Kristin Begley, David Contorno (AEE17), David Contorno (EP339), Nikki King, Olivia Webb, Brandon Weber, Stacey Richter (INBW30), Brian Klepper (AEE16), Brian Klepper (EP335), Sunita Desai, Care Plans vs Real World (EP333), Dr Tony DiGioia, Al Lewis, John Marchica, Joe Connolly, Marshall Allen, Andrew Eye, Naomi Fried, Dr Rishi Wadhera, Dr Mai Pham, Nicole Bradberry and Kelly Conroy, Lee Lewis, Dr Arshad Rahim, Dr Monica Lypson

I was on LinkedIn, and someone was saying, “Oh, there’s no real money in generic drugs. It’s not a huge issue if patients are paying 10 bucks instead of 93 cents for something. It’s not like anyone is getting rich off of that, and it’s not like patient impact here is super meaningful.” This is a pretty common refrain, actually; and from a conventional wisdom perspective, I get it, especially for those living comfortable middle- or upper-middle-class lives where an extra $9.07 for a prescription isn’t a huge deal—except there are big-time issues with the generic supply chain that are worth billions and billions of dollars and that have a major impact on patient health. So, let’s discuss. I started casting my eye over to what was going on on the generic drug front mainly because of the huge lawsuits in the news lately that were either filed and/or settled. Generic drug manufacturers are and have been the defendants in these lawsuits, accused of price collusion amongst other things. These lawsuits aren’t fighting over chump change either, unless you consider hundreds and hundreds of millions of dollars as chump change, that is. The number of zeros on the table in these lawsuits may strike you, as they did me, as a factor of interest. I mean, we’re talking about generic drugs here. The cost of goods on these drugs—there was a WHO study on this—and the cost of goods to manufacture a small molecule generic is, a lot of times, pennies. Further, there’s no innovation undertaken by generic manufacturers in their manufacture of generic meds. Just so no one gets confused here, the rationale branded pharma manufacturers tout for high-cost branded (ie, new) drugs is that branded pharma manufacturers have to spot the R&D (research and development) dollars to come up with the new therapies and they take a lot of risk therein. Generic manufacturers, on the other hand, are getting a recipe that has been handed down to them. There is no R&D. There is no innovation. So, to restate the situation analysis, we have generic manufacturers spending no money on innovation and enjoying, many times, a low cost of goods. If the price were set using a cost plus methodology, you’d expect the prices paid by payers and patients to be correspondingly low—except they aren’t. Depending on what study you look at, somewhere between 29% and 44% of patients who have been prescribed a med say they aren’t taking it because it is unaffordable. Considering that 90% of the prescriptions written in this country are for generics, one could logically assume that there’s some generics in that mix that are unaffordable due to their high prices.   But there’s a compounding factor here: The patient affordability problem has another aspect to it beyond just patients having to pay a portion, or all, of the price of generic meds that may be, let’s just say, higher than one might expect them to be given the cost of goods. But here’s this other factor: The share of patient out of pocket is weirdly high when it comes to generics. Consider that generics and branded generics account for 19% of invoice-level spending but represent 65% of patient out-of-pocket costs (IQVIA National Prescription Audit, 12/2020). So, that seems out of whack. But keep in mind, as I mentioned earlier, that 90% of prescriptions written in this country are for generics. That’s five billion scripts a year. As my guest in this healthcare podcast, Steven Quimby, MD, says, generic medications touch many more lives than new branded drugs. Obviously, GoodRx comes up in the conversation in this episode. If you want to learn more about pharmacy list prices and how GoodRx makes money, listen to the conversation I had with Ge Bai (EP306 and AEE13). Several people actually mentioned on LinkedIn and Twitter that hers was one of the best explanations they had heard on these topics, so I recommend those shows.  The show also with Vinay Patel dives pretty deeply into the “what’s the what” between PBMs and pharmacies (EP241) if you’re looking for more on that.   Dr. Quimby also mentions how important it could be for providers to know at the point of prescribing what the cost of medications are for a patient and get this information right in their EHR system. Refer to the episode with Carm Huntress (EP284) for more info on that.  My guest, as I said, Steven Quimby, MD, is an author and newly retired physician. His father was a pharmacist with a little drugstore that thrived in the late 1960s and early 1970s, so he literally grew up in the business. Dr. Quimby recently wrote a book called Billions in Your Generic Drugs. In sum, it’s a supply chain where not only is nobody watching the henhouse, but everybody within that supply chain has a very, very vested interest to see prices go up. This is kind of a theme in healthcare, but nonetheless. Oh, and one last point to ponder before we get started here: Dr. Quimby mentions at one point that 86% of Americans believe that their health insurance plan always offers the lowest price for a generic and 67% (two-thirds) of people in this country have never heard of GoodRx or other shopping tools. So, yeah … really makes you realize you live in a bubble. You can learn more by reading Dr. Quimby’s book Billions in Your Generic Drugs.   You can also reach Dr. Quimby on Twitter and LinkedIn.  Steven Quimby, MD, is a physician who has worked in academic medicine at the Mayo Clinic and in private practice. He has been involved in drug treatment studies, including major pharmaceutical trials, and maintained an active interest in the interface of corporate business, pharmacy, and medicine for over 50 years. Dr. Quimby is concerned escalating prices for generic drugs, which fill 90% of our prescriptions, threaten access to needed medications and patients going without treatment risk worsening of their medical conditions and further costs. Too often controversies over high new drug prices and the funding of new drug development and innovation obscure addressable problems in the generic drug supply and financing chain. 05:54 What are the current lawsuits involved in the generic drug space right now? 06:52 How is price fixing happening in the generic drug space? 07:58 “If I was the major payer for drugs … I’d want to know answers.” 08:06 What’s the scale on new and generic drugs? 09:02 What’s the problem with using price tools for generic drugs? 10:22 “I think right now, virtually everyone should be checking [those sites vs] their insurance price.” 10:47 Are payers paying too much for generic drugs? 11:53 Who are these generic manufacturers? 12:10 “They’re distinctly different corporations than those that we have called Big Pharma.” 13:55 Why is it important to have adequate numbers of manufacturers for generic drugs? 17:03 “We just can’t get legitimate acquisition and then sale prices of the actual drugs.” 17:17 “The industry’s opaque to all of these things.” 19:39 “The prices that patients are getting at the prescription counter are so high that some studies say a third of them or more are walking away without buying the drug.” 20:02 AEE13 with Ge Bai, PhD, CPA, on the GoodRx model.20:50 EP241 with Vinay Patel.22:05 What and who should be on formulary? 26:24 “If they’d give us the numbers, we could see when it happens.” 28:58 How can we overcome the challenges of these high generic drug costs? 30:38 EP284 with Carm Huntress.30:46 EP334 with Sunita Desai, PhD.  31:26 “How can we judge value when we don’t know price?” You can learn more by reading Dr. Quimby’s book Billions in Your Generic Drugs.   You can also reach Dr. Quimby on Twitter and LinkedIn.  @QuimbyMD discusses #genericdrugpricing on our #healthcarepodcast. #healthcare #podcast #genericdrugs #drugpricing How is price fixing happening in the generic drug space? @QuimbyMD discusses #genericdrugpricing on our #healthcarepodcast. #healthcare #podcast #genericdrugs #drugpricing “If I was the major payer for drugs … I’d want to know answers.” @QuimbyMD discusses #genericdrugpricing on our #healthcarepodcast. #healthcare #podcast #genericdrugs #drugpricing What’s the problem with using price tools for generic drugs? @QuimbyMD discusses #genericdrugpricing on our #healthcarepodcast. #healthcare #podcast #genericdrugs #drugpricing Are payers paying too much for generic drugs? @QuimbyMD discusses #genericdrugpricing on our #healthcarepodcast. #healthcare #podcast #genericdrugs #drugpricing “They’re distinctly different corporations than those that we have called Big Pharma.” @QuimbyMD discusses #genericdrugpricing on our #healthcarepodcast. #healthcare #podcast #genericdrugs #drugpricing Why is it important to have adequate numbers of manufacturers for generic drugs? @QuimbyMD discusses #genericdrugpricing on our #healthcarepodcast. #healthcare #podcast #genericdrugs #drugpricing “We just can’t get legitimate acquisition and then sale prices of the actual drugs.” @QuimbyMD discusses #genericdrugpricing on our #healthcarepodcast. #healthcare #podcast #genericdrugs #drugpricing “The industry’s opaque to all of these things.” @QuimbyMD discusses #genericdrugpricing on our #healthcarepodcast. #healthcare #podcast #genericdrugs #drugpricing “The prices that patients are getting at the prescription counter are so high that some studies say a third of them or more are walking away without buying the drug.” @QuimbyMD discusses #genericdrugpricing on our #healthcarepodcast. #healthcare #podcast #genericdrugs #drugpricing “If they’d give us the numbers, we could see when it happens.” @QuimbyMD discusses #genericdrugpricing on our #healthcarepodcast. #healthcare #podcast #genericdrugs #drugpricing “How can we judge value when we don’t know price?” @QuimbyMD discusses #genericdrugpricing on our #healthcarepodcast. #healthcare #podcast #genericdrugs #drugpricing Recent past interviews: Click a guest’s name for their latest RHV episode! Dr David Carmouche (EP343), Christin Deacon, Gary Campbell, Kristin Begley, David Contorno (AEE17), David Contorno (EP339), Nikki King, Olivia Webb, Brandon Weber, Stacey Richter (INBW30), Brian Klepper (AEE16), Brian Klepper (EP335), Sunita Desai, Care Plans vs Real World (EP333), Dr Tony DiGioia, Al Lewis, John Marchica, Joe Connolly, Marshall Allen, Andrew Eye, Naomi Fried, Dr Rishi Wadhera, Dr Mai Pham, Nicole Bradberry and Kelly Conroy, Lee Lewis, Dr Arshad Rahim, Dr Monica Lypson, Dr Rich Klasco

Most people who have been in the healthcare industry for a while have heard by now the metaphor about the two canoes. Provider organizations or health systems with some of their payments coming from a fee-for-service (FFS) payment model and some of them coming from value-based arrangements have the challenge of one foot in the FFS canoe and one foot in the value-based canoe. They’re probably going through a lot of metaphorical pants is the main takeaway that often comes to mind for me. But wardrobe malfunctions aside, this is a really difficult organizational challenge. That’s what I’m talking about in this healthcare podcast with Dr. David Carmouche: how to deal with the operational challenges, the cultural challenges, maybe even (very arguably) the generational challenges here. Top line (very top line), to succeed in value-based care, you gotta have three things aligned: The payment model, the construct of the contract. No kidding, you have to have value-based contracts to succeed in value-based care. The big problem here—which is not to be underestimated—is that there are some areas of the country where it’s really tough to find somebody, or enough somebodies, willing to offer a capitated, prospective value-based contract. That would be really frustrating to want to go forward (if you’re a provider) in a value-based way but to not have a willing payer partner and/or employer partner to do so. So please step up, payers, policy makers, and employers in those areas of the country. But the construct of the value-based contracts can also not be overlooked. Toward the end of this interview, Dr. Carmouche gets into the different results that were achieved between two patient populations: one served by a Medicare Advantage (MA) plan and one in an MSSP (Medicare Shared Savings Program) model. So, the same provider network, the same environment, same geography, same number of lives, different payment model. Stick around for that part of the conversation. It’s pretty eye-opening. The second of the three things to be aligned to be successful in value-based care are physician/administrative incentives and the employment models. Seriously, who is thinking that anyone’s gonna succeed managing downstream risk when the physicians making the decisions about downstream services used are bonused by how much downstream costs they can drive and everyone is eating what they kill? If culture eats strategy for breakfast, incentives eat culture for lunch, as they say. Leadership skills. Leaders who are going to succeed in a world moving from FFS to VBC have to be mission driven toward that cause. They have to be strategic enough in their approach to take potential short-term revenue hits in pursuit of the longer-term goal—even the medium-term goal, honestly, if you think about the whole context of what’s going on here. Leaders also need the skill and aptitude to pull off the change management and adjustments to the organizational culture that are needed. Staffs and teams really need systematic support. Value-based care is a team sport, and teams require leadership. Here’s one example of where not having great leadership trickles down to bad results: If nurses or social workers or, in general, people of color or women in an organization feel demeaned or not valued by a critical mass of those in power—and maybe here I mean physicians or other physicians that they work with—then patient safety scores diminish and quality goes down. There’s enough studies on the impact of having and not having psychological safety that it’s getting harder to dispute what I just said. And if this environment becomes as toxic as the stories that you read about often enough, that’s on the C-suite to fix. If the C-suite has value-based aspirations, that C-suite really might want to reprioritize their to-do lists. So, think about stuff like this because toxic environments make consistently delivering high-value care and satisfied patients difficult at best for many reasons. Here’s a timely side note: I heard someone say the other day that in light of the pandemic and the FFS inpatient and outpatient volume fluctuations that plummeted and rose at various points during the pandemic, compounded with Medicare FFS rates that some institutions claim are not profitable or profitable enough … someone said that, given these factors, the best way to de-risk is to take on more risk. That’s interesting to think about on a number of levels. In this healthcare podcast, as I mentioned, I’m talking about all this and more with Dr. David Carmouche. Dr. Carmouche was recently the executive vice president of value-based care and network operations at Ochsner, which is a very big integrated delivery network in Louisiana. You heard it here first, folks, but Dr. Carmouche will take on a new role in November 2021. He will oversee Walmart’s expanding clinical care offerings and operations, including Walmart Health MeMD and its social determinants of health line of business. Here’s a quote from the announcement about Dr. Carmouche’s move that I thought was interesting: “Connecting with patients in more places and creating a seamless, personalized patient experience is a crucial component in the new healthcare environment, and a space where Ochsner—as well as retail leaders like Walmart—will continue to invest.” Dr. Carmouche has been on this podcast before (EP316 and AEE15), so if you’d like to hear more from him, go back and listen to those two shows.   Also, if you’re looking for another episode that digs into the importance of leadership, listen to the one two weeks ago with Gary Campbell (EP341).   You can learn more by visiting Dr. Carmouche’s LinkedIn page or by reading From Competition to Collaboration by Tracy Duberman and Robert Sachs.  David Carmouche, MD, views healthcare from three distinct perspectives: as a physician provider, an executive for an insurance company, and as a leader in a health system. Specifically, he built a large, multidisciplinary internal medicine and preventive cardiology practice in Louisiana; served as the chief medical officer for Blue Cross Blue Shield of Louisiana; and has a triad of responsibilities with Ochsner Health, the largest nonprofit academic healthcare system in the Gulf South. He was promoted to serve as executive vice president of value-based care and network operations in addition to his duties as president of the Ochsner Health Network and executive director of the Ochsner Accountable Care Network. He is known as an expert in value-based care. He led one of the top 15 performing accountable care organizations in the United States, managing billions in care spend and generating millions in year-over-year shared savings. Dr. Carmouche earned a bachelor’s degree from Tulane University and a medical degree from Louisiana State University School of Medicine in New Orleans. He completed his residency in internal medicine at the University of Alabama at Birmingham. 06:31 How do you operationally deal with conflicting FFS and VBC processes? 07:23 “It’s pretty clear in Medicare that our strategy in the future … is one of value.” 11:31 “I think a bigger challenge, though, is that in many markets, there are just no opportunities to have experienced value-based care.” 13:18 “How do we engage in collaborative relationships that would allow us to move into value?” 14:01 “No one wants to rush through their day in a series of seven-minute visits.” 15:53 “In a fee-for-service environment … you’re forced to bring people into the office to create an encounter who don’t necessarily need to be there.” 19:22 “We haven’t really changed how we select and train physicians … in the last hundred years.” 20:32 “We, as physicians, were taught to be accountable for outcomes; and we create probably an unnecessary and unfair burden on ourselves.” 21:30 “In the value-based care world, a physician does have to recast themselves as part of a team.” 22:30 “It is an enormous cultural shift … but ultimately, it’s one that the facts … mandate.” 26:58 “You have to have a compelling vision and belief that value-based care offers benefits to all of the actors in the healthcare ecosystem.” 27:24 “You have to be able to communicate effectively across sectors.” 27:43 “You have to have courage.” 28:29 What are the leadership skills required to make value-based care work? You can learn more by visiting Dr. Carmouche’s LinkedIn page or by reading From Competition to Collaboration by Tracy Duberman and Robert Sachs.  @CarmoucheMd discusses #vbc on our #healthcarepodcast. #healthcare #podcast #digitalhealth #valuebasedcare How do you operationally deal with conflicting FFS and VBC processes? @CarmoucheMd discusses #vbc on our #healthcarepodcast. #healthcare #podcast #digitalhealth #valuebasedcare “It’s pretty clear in Medicare that our strategy in the future … is one of value.” @CarmoucheMd discusses #vbc on our #healthcarepodcast. #healthcare #podcast #digitalhealth #valuebasedcare “I think a bigger challenge, though, is that in many markets, there are just no opportunities to have experienced value-based care.” @CarmoucheMd discusses #vbc on our #healthcarepodcast. #healthcare #podcast #digitalhealth #valuebasedcare “How do we engage in collaborative relationships that would allow us to move into value?” @CarmoucheMd discusses #vbc on our #healthcarepodcast. #healthcare #podcast #digitalhealth #valuebasedcare “No one wants to rush through their day in a series of seven-minute visits.” @CarmoucheMd discusses #vbc on our #healthcarepodcast. #healthcare #podcast #digitalhealth #valuebasedcare “In a fee-for-service environment … you’re forced to bring people into the office to create an encounter who don’t necessarily need to be there.” @CarmoucheMd discusses #vbc on our #healthcarepodcast. #healthcare #podcast #digitalhealth #valuebasedcare “We haven’t really changed how we select and train physicians … in the last hundred years.” @CarmoucheMd discusses #vbc on our #healthcarepodcast. #healthcare #podcast #digitalhealth #valuebasedcare “We, as physicians, were taught to be accountable for outcomes; and we create probably an unnecessary and unfair burden on ourselves.” @CarmoucheMd discusses #vbc on our #healthcarepodcast. #healthcare #podcast #digitalhealth #valuebasedcare “In the value-based care world, a physician does have to recast themselves as part of a team.” @CarmoucheMd discusses #vbc on our #healthcarepodcast. #healthcare #podcast #digitalhealth #valuebasedcare “It is an enormous cultural shift … but ultimately, it’s one that the facts … mandate.” @CarmoucheMd discusses #vbc on our #healthcarepodcast. #healthcare #podcast #digitalhealth #valuebasedcare “You have to have a compelling vision and belief that value-based care offers benefits to all of the actors in the healthcare ecosystem.” @CarmoucheMd discusses #vbc on our #healthcarepodcast. #healthcare #podcast #digitalhealth #valuebasedcare “You have to be able to communicate effectively across all platforms.” @CarmoucheMd discusses #vbc on our #healthcarepodcast. #healthcare #podcast #digitalhealth #valuebasedcare What are the leadership skills required to make value-based care work? @CarmoucheMd discusses #vbc on our #healthcarepodcast. #healthcare #podcast #digitalhealth #valuebasedcare Recent past interviews: Click a guest’s name for their latest RHV episode! Christin Deacon, Gary Campbell, Kristin Begley, David Contorno (AEE17), David Contorno (EP339), Nikki King, Olivia Webb, Brandon Weber, Stacey Richter (INBW30), Brian Klepper (AEE16), Brian Klepper (EP335), Sunita Desai, Care Plans vs Real World (EP333), Dr Tony DiGioia, Al Lewis, John Marchica, Joe Connolly, Marshall Allen, Andrew Eye, Naomi Fried, Dr Rishi Wadhera, Dr Mai Pham, Nicole Bradberry and Kelly Conroy, Lee Lewis, Dr Arshad Rahim, Dr Monica Lypson, Dr Rich Klasco, Dr David Carmouche (AEE15)

This episode’s conversation is about the new Consolidated Appropriations Act (CAA), the fee disclosure part of it, as well as ERISA and the fiduciary responsibility that self-insured employers are responsible to comply with under the law. Don’t worry, the first thing my guest in this healthcare podcast, Christin Deacon, does is explain these terms, what they actually mean, and how they can be a tool actually in CEOs’ or CFOs’ toolboxes to get access to the employer’s own claims data, which is a linchpin here that we’ll talk about in a sec. But suffice to say here that the ERISA fiduciary responsibility has a few provisions and, in general, self-insured employer health plan administrators kind of tend to off-load worrying about these provisions to their brokers and consultants. The problem with this is that brokers and consultants do not bear the ERISA fiduciary responsibility. They do not bear the responsibility of complying with the CAA either. The employer does. You’d think that, given this, more self-insured employers would dig in hard to do their own due diligence to check whether or not their plan is compliant. But they don’t. I asked Parker Edman from Leavitt Partners why, and he said he thought that it’s likely a combination of the “old boy’s network” and a fear of the massive lift that switching up plan designs or even looking at this might entail. But here’s another facet: There’s a contingent of plan advisors and carriers who have a very vested interest in self-insured employers not knowing what’s going on with their spend. And they actually even have a magic trick that they have developed to beat back inquiries. In this magic trick, HIPAA is the abracadabra. Let me give you an example role-play. Self-insured employer: I need my claims data. Carrier: HIPAA. Self-insured employer: Nooo, not the HIPAA. I stand down. Forget I mentioned it. Here’s a pro tip: Actually read HIPAA. Pull it up on your computer. It’s easy to find. Spoiler alert: You know what you’ll discover? Ninety percent of it is a love note to the carriers themselves that govern the data they must possess and the structure of that data. Ten percent of it is about the privacy of that data, and in that 10%, it specifies clearly that a self-insured employer is a covered entity and, therefore, falls under the umbrella of who can have access to claims data, especially if it is deidentified. Of course, said employer has obligations as to how to treat that data, but yeah, just don’t be fooled by the HIPAA when it’s wielded like sorcery. The only reason that word has any power is because so many C-suites let it have power. Also now, there’s some provisions in the Consolidated Appropriations Act, the CAA (which was passed in 2020), which really ups the ante here. My guest, Christin Deacon, explains all of this and more, including what’s up with the CAA, which is good because I could barely remember the name of it throughout the course of this interview. Christin Deacon is a healthcare leader and public-sector entrepreneur. She is a former deputy attorney general, a “recovering attorney” as she calls herself. Earlier this year, 2021, she left her role running the state health and school health benefits plan for about 800,000 New Jersey public employees. Now, she’s just transitioned to the private sector where she serves as an executive VP at 4C Health Solutions. You can learn more by emailing Christin at cdeacon@4chealthsolutions.com. You can also connect with her on LinkedIn. Christin Deacon is a healthcare thought leader who brings with her a wealth of experience in both public and private sector. Driven by her passion to change the healthcare system to truly benefit patients and payers, she focuses on bringing solutions and agency to self-funded and government-sponsored health plans.     04:10 What is ERISA, and what does it stand for? 05:40 What is a fiduciary obligation for an employer? 08:18 “We’re now at a point of spending 17.7% of our GDP on healthcare costs.” 09:39 “You absolutely have the keys to … controlling that spend.” 13:35 “You have to own your data.” 15:04 “If you don’t have your claims data, how do you know you’re paying reasonable fees?” 15:31 “If your carrier is telling you, ‘Oh, HIPAA … you can’t look at your data,’ you need to pull out that red BS card.” 16:25 How do employers navigate carriers refusing to share claims data? 21:36 “It has only as much teeth as the self-funded employer is … willing to learn about it and … willing to push back.” 22:22 “This is not aspirational; this is an absolute floor.” 24:11 “What does value mean?” 27:41 “Become familiar with HIPAA beyond just the privacy piece.” 29:30 “At the end of the day, it’s about people.” 29:38 “If you’re not paying reasonable fees, you’re using plan assets to enrich others.” 32:21 “The self-insured market … they hold the keys to unlocking value. And they’re holding them; they just have to use them.” 34:10 Marshall Allen’s new book. You can learn more by emailing Christin at cdeacon@4chealthsolutions.com. You can also connect with her on LinkedIn. @deacon_christin of @4CHealth discusses the #CAA and #ERISA for #selfinsured #employers on our #healthcarepodcast. #healthcare #podcast #digitalhealth What is ERISA, and what does it stand for? @deacon_christin of @4CHealth discusses the #CAA and #ERISA for #selfinsured #employers on our #healthcarepodcast. #healthcare #podcast #digitalhealth What is a fiduciary obligation for an employer? @deacon_christin of @4CHealth discusses the #CAA and #ERISA for #selfinsured #employers on our #healthcarepodcast. #healthcare #podcast #digitalhealth “We’re now at a point of spending 17.7% of our GDP on healthcare costs.” @deacon_christin of @4CHealth discusses the #CAA and #ERISA for #selfinsured #employers on our #healthcarepodcast. #healthcare #podcast #digitalhealth “You absolutely have the keys to … controlling that spend.” @deacon_christin of @4CHealth discusses the #CAA and #ERISA for #selfinsured #employers on our #healthcarepodcast. #healthcare #podcast #digitalhealth “You have to own your data.” @deacon_christin of @4CHealth discusses the #CAA and #ERISA for #selfinsured #employers on our #healthcarepodcast. #healthcare #podcast #digitalhealth “If you don’t have your claims data, how do you know you’re paying reasonable fees?” @deacon_christin of @4CHealth discusses the #CAA and #ERISA for #selfinsured #employers on our #healthcarepodcast. #healthcare #podcast #digitalhealth “If your carrier is telling you, ‘Oh, HIPAA … you can’t look at your data,’ you need to pull out that red BS card.” @deacon_christin of @4CHealth discusses the #CAA and #ERISA for #selfinsured #employers on our #healthcarepodcast. #healthcare #podcast #digitalhealth How do employers navigate carriers refusing to share claims data? @deacon_christin of @4CHealth discusses the #CAA and #ERISA for #selfinsured #employers on our #healthcarepodcast. #healthcare #podcast #digitalhealth “It has only as much teeth as the self-funded employer is … willing to learn about it and … willing to push back.” @deacon_christin of @4CHealth discusses the #CAA and #ERISA for #selfinsured #employers on our #healthcarepodcast. #healthcare #podcast #digitalhealth “This is not aspirational; this is an absolute floor.” @deacon_christin of @4CHealth discusses the #CAA and #ERISA for #selfinsured #employers on our #healthcarepodcast. #healthcare #podcast #digitalhealth “What does value mean?” @deacon_christin of @4CHealth discusses the #CAA and #ERISA for #selfinsured #employers on our #healthcarepodcast. #healthcare #podcast #digitalhealth “Become familiar with HIPAA beyond just the privacy piece.” @deacon_christin of @4CHealth discusses the #CAA and #ERISA for #selfinsured #employers on our #healthcarepodcast. #healthcare #podcast #digitalhealth “At the end of the day, it’s about people.” @deacon_christin of @4CHealth discusses the #CAA and #ERISA for #selfinsured #employers on our #healthcarepodcast. #healthcare #podcast #digitalhealth “If you’re not paying reasonable fees, you’re using plan assets to enrich others.” @deacon_christin of @4CHealth discusses the #CAA and #ERISA for #selfinsured #employers on our #healthcarepodcast. #healthcare #podcast #digitalhealth “The self-insured market … they hold the keys to unlocking value. And they’re holding them; they just have to use them.” @deacon_christin of @4CHealth discusses the #CAA and #ERISA for #selfinsured #employers on our #healthcarepodcast. #healthcare #podcast #digitalhealth Gary Campbell, Kristin Begley, David Contorno (AEE17), David Contorno (EP339), Nikki King, Olivia Webb, Brandon Weber, Stacey Richter (INBW30), Brian Klepper (AEE16), Brian Klepper (EP335), Sunita Desai, Care Plans vs Real World (EP333), Dr Tony DiGioia, Al Lewis, John Marchica, Joe Connolly, Marshall Allen, Andrew Eye, Naomi Fried, Dr Rishi Wadhera, Dr Mai Pham, Nicole Bradberry and Kelly Conroy, Lee Lewis, Dr Arshad Rahim, Dr Monica Lypson, Dr Rich Klasco, Dr David Carmouche (AEE15), Christian Milaster