Healthcare consultant Ann Kempski discusses the unintended consequences of state healthcare laws CON and COPA. They explore issues with market consolidation, impact on costs, and potential monopolies. The episode highlights the need for vigilant oversight and diverse stakeholder involvement in regulatory terrain.

To read the full show notes with links mentioned, be sure to visit our episode page and consider signing up for our free weekly newsletter. Episode 443 of Relentless Health Value pays tribute to the late Marshall Allen, an investigative journalist dedicated to exposing injustices within the American healthcare system. Hosted by Stacey Richter, the episode features Dave Chase, founder of Health Rosetta, who shares memories and insights into Marshall's tireless work in investigative reporting. The episode highlights Marshall's impact on healthcare legislation, his significant contributions to ProPublica, and his book 'Never Pay the First Bill,' which empowers patients and employers to fight back against corrupt billing practices. The episode also includes an earlier interview with Marshall, focusing on his perspective as an investigative reporter, the exploitation within the healthcare system, and the importance of patients and employers demanding transparency and fairness. The episode encourages listeners to continue Marshall's legacy by subscribing to the Marshall Health Academy and purchasing access for employees. 09:28 What’s the point of view that Marshall is coming from with his investigative reporting? 09:57 “How does this affect the people who are paying for it and the people who are undergoing the care?” 10:49 “There’s a lot of good people working within this very messed up system.” 11:03 Why are patients considered outsiders in the healthcare system? 11:45 “What’s happened in healthcare is that the stakeholders treat each other more as the customer.” 13:45 What is upcoding? 17:18 “These are schemes that have been created within the industry to increase revenue.” 17:46 “This system is not set up for the benefit of the patient.” 18:13 “On the financial side, the industry is actually oppressing the American people.” 19:14 “We have been expected to pay whatever aggregate sum is thrown at us.” 20:21 Why have patients been so passive toward this crooked healthcare system so far? 22:05 What’s the difference between making a profit and profiteering? 29:45 What are the first-order and second-order consequences of what’s happening in health care right now, and which of these consequences will actually drive change? 30:45 “When you tell the truth about what’s going on … they become so ashamed … that they change their behavior.” 32:00 “The patient … is not their most important customer.” 32:50 “The sleeping giant is the employers.”

In Episode 442 of 'Relentless Health Value,' host Stacey Richter shares an intriguing outtake from a previous episode featuring Andreas Mang, senior managing director at Blackstone, discussing the critical issue of cost management in oncology side effect treatment. The conversation delves into the inefficiencies and patient harms caused by inadequate side effect management, particularly dehydration due to chemotherapy, and the resulting financial burdens on employers, taxpayers, and patients.  Stacey explores the importance of a value-based mindset in drug purchasing, integrating oncology care, and the potential financial and health benefits of better side effect management. She highlights various expert opinions and studies supporting these points, encouraging listeners to reconsider their approach to healthcare cost structures and patient care protocols. If you enjoy this podcast, be sure to subscribe to the free weekly newsletter to be a member of the Relentless Tribe.  01:12 Andreas Mang on oncology medication side effect management. 03:12 Mark Lewis, MD’s Tweet. 03:39 Celena Latham’s response. 04:22 How integrative oncology can save money and what it looks like. 04:47 EP157 with Ethan Basch, MD. 06:20 Why PBMs saving money doesn’t necessarily mean savings for employers and payers. 07:36 EP435 with Dan Mendelson. 08:20 EP372 with Cora Opsahl. 08:40 EP331 with Al Lewis. 09:50 Stacey’s second rumination. 10:19 Why having a value mindset when purchasing is a thing. 10:42 Stacey’s third rumination. 12:03 EP370 with Erik Davis and Autumn Yongchu. 13:07 Why FFS does not pay or pay adequately for side effect management. 14:31 Stacey’s final rumination. 17:08 Summarizing Stacey’s four ruminations on this topic.

To read the full article with show notes, mentioned links and a full transcript, visit relentlesshealthvalue.com In this episode, Abby Burns from Radio Advisory interviews Stacey Richter, host of the Relentless Health Value podcast, during the Raising the Bar Value Summit. They discuss the complexities of defining and creating value in healthcare, focusing on the roles of various stakeholders including patients, providers, and payers. Stacey shares insights on the challenges and tensions in the healthcare system, such as the fragmentation of care, financial toxicity, and the cultural norms that inhibit progress. The conversation also highlights practical examples and potential strategies to drive value and sustain positive changes within the industry. 03:33 Stacey’s journey and mission. 04:16 The story of Scott Conard, MD (EP391). 09:28 Why it’s important not just to drive change but to sustain it. 12:23 Heart Failure: A Case Study in Value. 14:13 EP438 with John Lee, MD. 15:07 Why patient positive value often fails instead of succeeds. 18:07 How financial toxicity has become clinical toxicity in healthcare. 19:44 How cultural norms have evolved into healthcare challenges. 23:38 The story of Mike Tuggy, MD, in Washington. 25:13 Looking at the four tensions in measuring value as continuums. 25:37 Why timeline is important in creative value in healthcare. 27:52 Finding Allies by Michael Leavitt. 28:34 What are the four ways to measure value in healthcare? 29:27 How do payers and providers collaborate to align on value metrics? 31:26 Why will proven versus experimental treatments become more important in the next few years? 34:54 Stacey’s manifesto (EP400) and values for personal integrity in healthcare. 38:55 Stacey’s parting advice. For more information, go to Radio Advisory or Aventria Health Group.

In Episode 440 of 'Relentless Health Value,' host Stacey Richter engages with David Muhlestein to explore the optimal size for a medical practice, concluding that 10 to 20 physicians supported by a capable team provide the best balance of economies of scale and community integration. The conversation transitions into the challenges large healthcare systems face, particularly the Diversification Discount. This diversification often impedes patient care and operational efficiency by misaligning values with business practices. The episode delves into the paradox of optimizing primary care while still supporting specialty care, reflecting on how organizational values impact healthcare outcomes. Muhlestein suggests implementing business units or decentralized models to realign with patient care values and efficiencies. To read the full article and show notes with links mentioned as well as a full transcript, click here. 08:12 From a business and patient/better outcomes standpoint, what does an optimal provider practice look like? 11:48 EP412 with Robert Pearl, MD. 13:06 Why isn’t the current landscape what David considers optimal? 14:53 What leads to the “crisis of autonomy”? 15:13 How do medical practices get to the phase of delegation? 17:39 EP438 with John Lee, MD. 18:55 EP437 with Brian Klepper, PhD. 20:53 EP432 with Kate Wolin, ScD. 20:55 EP421 with Jodilyn Owen. 23:48 Medicare Meet-Up podcast with Mai Pham, MD. 24:45 What metrics should boards of directors also be held accountable for? 28:48 Why is an efficiency-focused business not necessarily the best at managing population care? 31:13 What is the “diversification discount”? 32:49 Pivot podcast with Kara Swisher and Scott Galloway, MBA. 35:53 What can primary care doctors do to optimize their practices? 36:48 Why do we need to shift the mindset from “bigger” and “more”?  

In this discussion, Luke Slindee, a pharmacy consultant, unravels the tangled web of generic drug pricing and its impact on patients. He reveals how Pharmacy Benefit Managers (PBMs) profit from inflated costs, often making patients pay more even when insured. They explore innovative solutions like removing unnecessary price structures and the benefits of direct payment tools. Luke also touches on the broader implications of these pricing challenges on pharmacies and the services they provide, all while advocating for a system that prioritizes patient affordability.

Dr. John Lee, an ER physician and chief medical information officer, discusses navigating cognitive dissonance in healthcare, highlighting the importance of celebrating small wins, fostering a supportive culture, and driving incremental improvements. He emphasizes the challenges of delivering better patient care within a system that values financial incentives over preventive care and the significance of aligning actions with personal values despite obstacles.

Healthcare analyst Brian Klepper discusses the influential yet obscure RUC committee within the American Medical Association, revealing how its specialist-dominated composition impacts primary care economics. The episode explores the skewed financial incentives, challenges in assigning true value to healthcare services, and the need for a better understanding of American healthcare to address its shortcomings.

Elizabeth Mitchell from PBGH discusses the gap in the market for independent TPAs not owned by health plans, emphasizing the shift towards direct contracting between employers and providers. The conversation highlights the need for efficient and unbiased TPAs to improve access, quality, and outcomes in healthcare.

For a full transcript of this episode, click here. I’m gonna encore this episode with David Scheinker, PhD, for several reasons; but here’s a big one: Why are we as an industry not doing what David Scheinker suggests in this episode? Why are we not doing, I don’t know, kinds of logical things to reduce admin burden in this country when everyone agrees admin burden is a problem? But let me back up for a moment for context. Two things happened since this show originally aired. One is that I was invited to a fireside chat by the Advisory Board to talk with Abby Burns, one of the amazing hosts over at Radio Advisory; and we talked about value in the healthcare industry. And if you define value as benefit divided by costs, and you can cut costs—like cut admin burden costs in half—then you have created some really nice communal value, which we talked about at length during that aforementioned fireside chat. Here’s the other thing that happened since this show originally aired. I read the book by Mike Leavitt, mainly because Steve Schutzer, MD, kept talking about it. The title of the book is Finding Allies, Building Alliances. Maybe I will do a book report about this at some point, but let me share a couple of key quotes just to get the party started here. Mike Leavitt wrote, “A diverse alliance, well led and well managed, can bring resources to bear on a problem that no organization can match—even the largest of organizations. The synergy of resources—from financial to intellectual—can deal effectively with a wide range of issues confounding organizations today.” I found that very interesting. Here’s the second quote, which deals with what the top reason is that such diverse alliances may wish to hook up. “[It’s] a common pain: A shared problem that motivates people and groups to work together in ways that could otherwise seem counterintuitive.” Hmm … so, back to administrative burden. Let’s review the facts that David Scheinker, PhD, shares in the interview that follows. He says any given transaction will cost provider organizations 14% of the total transaction costs to manage to get paid. Yes, it costs 14% of a transaction merely to get paid for the transaction. This is a big reason why both Peter Hayes, in the episode with him (EP424), and also Marshall Allen (EP425) talk about for why cash prices can be a whole lot less than going through insurance prices because you can skip a lot of insurance burden. Now, on the payer side, add to that 14% an additional 5% to 15% to pay said transaction. That 30% of healthcare is waste stat that keeps getting tossed around. Listen to the show with Will Shrank, MD (EP413) for more on that. But, yeah … here’s 20% to 30% of every transaction that is waste. And we haven’t even gotten into redundant care or inappropriate back surgery yet. Our industry spends up to 30% of our money just trying to get paid and pay. Here’s a case study for you. You know who has already solved for this whole “it’s really hard to get paid and pay” dilemma? Derivative traders. It used to cost derivative traders $100,000 to do a contract, any given contract. And they worked together and got this down to $5000 by doing some of the stuff that David Scheinker talks about in the show. And, I don’t know, I feel like the healthcare industry could also do this, too, if they wanted to. But there are a whole bunch of reasons why our industry cannot seem to get together and be as ruthlessly practical as derivative traders—or banks, who have figured out how to work together to process credit cards to reduce their own common pain. Here are but a few of the reasons, potentially, why the healthcare industry doesn’t get together to reduce administrative burden in some of the ways that Dr. Scheinker talks about. 1. Some organizations actually make a lot of money off of that transactional waste. As but one example—and not to just pick on one, but we don’t have all day—how about some RCM (revenue cycle management) companies who may or may not be owned by the same vertically integrated stacks as the payers themselves? As I have said any number of times, one person’s—or potentially an entire country’s, as the case may be—one party’s waste, is somebody else’s honeypot; and I am not sure if this is any exception. 2. Legacy technology and data systems and all the sunk costs therein 3. As Kaye Davis and Katrina Hubbard reminded me about the other day, there are some serious regulations in healthcare due to everybody being a vendor of CMS that adds a layer of regulatory complication to many collaborations. Also, state laws sometimes have an unintended side effect of making it tough to collaborate. Now, are there any precedents for this type of collaboration in the healthcare industry? Yeah, actually Surescripts, which, don’t forget, was created by an alliance of PBMs (pharmacy benefit managers) who worked together because they all wanted to enable e-prescribing and needed a joint platform to do it. Look, I could say a lot about this one, but nonetheless, so much of what gets talked about in the show today with Dr. David Scheinker is very, very actionable. Just want to note that since David Scheinker was on the show, he and his team have done some major research over the past few years into ways that contracts can be standardized. If enough of you reach out and say that you’re interested, we, for sure, can have David come back on the show and discuss. David Scheinker, PhD, is a clinical professor of pediatrics. He’s the executive director of systems design and collaborative research at Stanford Children’s Health. He also founded and directs SURF Stanford Medicine. And with that, here is your original episode. Administrative costs in the United States have a bad rap. You don’t have to look too far to find an article about how there’s now, like, 10 administrators for every 1 physician in this country. Or 3 to 4 billing people for every physician. Or consider what Dan O’Neill was talking about in episode 359. He was talking about IPAs (independent physician associations) and other managed care entities. As Dan mentions, contracting with some of these IPAs is like an “I love 1990” flashback. The contracting process transpires via mail. Not email, mind you. Mail. Like, stick-a-stamp-on-the-envelope mail. So, in sum, there’s a lot of pretty well-founded complaining about administrative costs in this country. A lot of this administrative stuff is truly inefficient and a fantastical waste of time. So, here we are freaking out about staffing shortages, overlooking that doctors at the heights of their careers are spending some percentage of their time not counseling, treating, or diagnosing patients but twiddling their thumbs on hold with one insurance company or another slowly burning out by the inefficiency of it all. Or doing pajama time, and we all know that too much pajama time means also burnout on a silver platter. So then, let’s get granular here. If we’re trying to quantify admin costs, how you do that is to quantify how much each transaction costs. How much does it cost to send a bill and get paid for it? How much does it cost to file an appeal and a denial of a prior auth? Add all those transactions together and you get the full cost of the administrative burden. In this healthcare podcast, we’re digging into a paper about admin costs written by David Scheinker, PhD (my guest today); Barak Richman, PhD, JD; Arnold Milstein, MD, MPH; and Kevin Schulman, MD, MBA. I have the pleasure of speaking with David Scheinker, PhD (as I mentioned), who is the lead author on this paper. Just to underline a major takeaway from this conversation with Dr. David Scheinker, he reiterates a recommendation to eliminate a big proportion of administrative costs. I guess I should say spoiler alert here, but the major takeaway/recommendation is this: Standardize healthcare contracts between payers and providers. Every payer and every provider finds one contract template and uses it. I don’t mean one template per payer or per provider, although that probably would be a revelation in and of itself. But I mean that all payers use one basic provider contract. A couple of specifics here: The template that I’m referring to (and that Dr. David Scheinker is referring to) consists of parameters. What do I mean when I say parameters? Consider what Airbnb does when you’re looking for a place to stay, as an example. How many bedrooms (that’s a parameter)? How many bathrooms (that’s a parameter)? How many amenities (that’s a parameter)? After everybody picks their standard set of parameters, at that point, all parties can negotiate and come up with whatever they want for what is the price of an extra bedroom or whatever value you’re gonna assign to that parameter. Go nuts there, but from a data collection and analytic perspective and a getting paid perspective, it is way easier to do it that way—meaning it’s way easier to execute and report when all of the contracts use the same parameters. Also, you can build tech to do a lot of that because you don’t have to write algorithms with exponential variables. You can learn more by connecting with David on LinkedIn and following him on X (Twitter). David Scheinker, PhD, started his career as a research mathematician and switched to healthcare operations to work on an interdisciplinary team and have a more immediate impact. He is a clinical professor of pediatrics, the executive director of systems design and collaborative research at Stanford Children’s Health, and a member of the Clinical Excellence Research Center (CERC) at Stanford University. He founded and directs SURF Stanford Medicine, which brings together students and faculty from the university with physicians, nurses, and administrators from the hospitals. He studies clinical care delivery, hospital operations, sensor-based and algorithm-enabled telemedicine, the socioeconomic factors that shape healthcare, and healthcare policy.   10:39 What’s the quantitative administrative cost in an average transaction? 11:05 What’s the quantitative administrative cost in a healthcare transaction? 11:58 What does the healthcare billing and administration cost add to the US’s overall healthcare spend? 12:53 Is it possible to cut billing and administrative costs in healthcare? 14:17 “In some ways, the problem for healthcare should be simpler.” 15:30 What does the complexity of the current system look like in a doctor’s office? 18:42 How did David go about studying healthcare administrative costs? 21:34 “It doesn’t have to be simple; it should be standardized.” 24:50 What would be the pushback on standardizing contracts in healthcare? 25:43 Why is it possible to gain more value by losing customization in contracts? 27:20 “Never let a good crisis go to waste.” 27:41 “It’s much easier in healthcare to build something new than to change something that exists.” 30:47 What benefits does telemedicine have to cutting administrative costs? 32:17 What is another significant benefit of using standardized contracts? 33:26 Why haven’t standardized contracts become a common thing in the current healthcare system?