Relentless Health Value™

One of the questions I often get asked is this (actually, it’s more of a comment usually than a question): Someone says, “Seems like this whole transformative primary care thing is pretty much just, let’s go back to the old country doctor. Let’s just have a single doctor out there taking care of patients like a Norman Rockwell painting.” To which I reply (and I’m channeling many experts, including my guest Robert Pearl, MD, when I do), “Yeah … except no.” In the golden olden days of the “ye olde country doctor,” there was a lot of art in medicine and a lot less science. If someone got cancer or even heart disease, what was required, fairly exclusively, was comfort and compassion. Now, first and foremost so there’s no confusion, am I dismissing the importance of bedside manner and of providing comfort and compassion? Hell no. Would rather have that any day of the week than deal with a “drive-by PCP” or “drive-by specialist” with the throughput of a freeway who has no idea what I may befall the second I step out of his or her exam room. But in the olden days, medicine was fundamentally art with a lot less science … because there wasn’t much science. For the most part, we didn’t have data. Or MRIs. This was before the whole pharma industry for the most part. We had weird heroin-infused tinctures, but we didn’t have oncology meds or biomarkers or even statins for Pete’s sake. Consider all the new diabetes meds and biologics and artificial joints and sub-subspecialists who have, through data and advanced analytics by looking at patients across the country, proven out some best practices that might be fairly unintuitive—or disproven some conventional wisdom. It’s a different and much more complicated world today, and what’s required now is a healthy appreciation for not only the art of medicine but also the science. And science inherently means that, yeah, there are standards of care to be adhered to. That’s what science means. There are rules and better ways to do things as proven by looking at the data and not relying primarily on personal recollections of what may or may not have worked in the past. Listen to the shows with Bob Matthews (EP315) or Alex Akers (EP154) for more on this topic, but this all leads me to the interview with Dr. Robert Pearl in this healthcare podcast where we get into some concepts that he covers in his new book, Uncaring. In this episode, we’re talking about some how-tos for being a leader of doctors, going about that against the backdrop of this evolving art and science of medicine dynamic, and the impact of this evolving art and science dynamic on physician culture and self-esteem. Because (spoiler alert) if a doc is following evidence-based guidelines, not relying solely on their own personal experience, does that make said doc feel like they are being devalued and that they are but a cog in the wheel and practicing so-called “cookie cutter” medicine? So many nuances, so little time. But, yeah, there’s a lot going on which, at its core, is this tension that can play out in some big bad ways. I asked Dr Pearl for some advice for today’s healthcare leaders, and he did not disappoint. He suggested using a model that he calls the A to G model, and, in short, you’ve got to have: A: an aspirational vision B: behaviors C: context D: data E: engagement (throughout the organization and also with the patient) F: faculty G: governance You’ll have to listen to the episode for the why and how of each of these. My guest today, as aforementioned, is Dr. Robert Pearl. I am sure that most of our Relentless Tribe who are listening to the show today already know Dr. Pearl, but in short, he was the CEO of Kaiser Permanente for 18 years. Now he hosts a podcast called Fixing Healthcare. He teaches at the Stanford Graduate School of Medicine and Business. He writes articles for Forbes and elsewhere. He’s also an author. He wrote a great book called Mistreated, and now there’s a new one called Uncaring. I...

During the recording of episode 409, where Larry Bauer was explaining some really cool and innovative bright spots in the healthcare industry created by physicians, we somehow got off on a tangent about an article in JAMA from 2010—and I was all in. Unfortunately, going all in on a topic that has nothing to do with the actual topic of the currently in progress podcast means one thing; and you probably know by now what that one thing is. Yep … summer short. So, let me unveil for you our last summer short of 2023. In this healthcare podcast, we’re gonna talk about doctors and the societal perception of them as being a knight, a knave, or a pawn. All of this is from a JAMA article that is entitled, surprisingly enough, “Societal Perceptions of Physicians: Knights, Knaves, or Pawns?” and it’s by Sachin Jain, MD, MBA, and Christine Cassel, MD, and is unfortunately firewalled (but I’ve linked to it anyway). To get us started here, this is the first sentence of that JAMA article: “The British economist Julian Le Grand suggested that public policy is grounded in a conception of humans as ‘knights,’ ‘knaves,’ or ‘pawns.’ Human beings are motivated by virtue (knights) or rigid self-interest (knaves) or are passive victims of their circumstances (pawns).” And, yeah, that plays out. Why can’t physicians own hospitals? Well, in somebody’s eyes, docs got a knave rap. How’d that happen? I don’t know. I can make some guesses. Even if it’s a small percentage of docs doing knave-y money grabs or power-hungry things, there is spillover. We societal humans, after all, like black and white, not gray. So, everybody gets painted with the same brush in the same color, and policy gets created to control the lowest common denominators. I loved this conversation with Larry Bauer that follows because it explains a lot of sequelae, if you will, that I couldn’t quite put my finger on the root cause of. So, in the brief but fast-moving clip of the conversation that follows, Larry Bauer and I chat about docs as knaves or knights. But we don’t get around to pawns, so I did just want to chuck in my two cents here about this third category. I also will say that since I’ve got these three new classifications, I find myself using it to predict actions—to some effect, I might add. I was chatting with someone recently, and I said something about doing well by doing good and he replied, “Well, how about this? You can do the good, and I’ll focus on doing well by doing well.” Okay … so, that’s a predictive layup. The harder ones are where people with a lot of press training and social capital do talks about doing good and being knightly, but then you listen to the minutes of their board meetings and, wow, are they focused on revenue maximization … at the expense of patients and their fellow doctors. This happens more often than I would like to see, but then again, I would like to see this happen never. As I mentioned about eight sentences ago, the category we don’t talk about in this conversation with Larry Bauer that follows—which has also occupied a chunk of my mind space lately—are pawns. As with all of these categories, it’s not just docs who fall into them but everybody else, too. Pawns are super interesting. You might be way ahead of me here and have been thinking about this for years because, on its face, this is obvious. But sometimes there’s truth hiding in plain sight, so I’m not embarrassed to keep talking about this in case it helps you connect the same dots I’ve recently started to connect. I will state at the outset here that those who I would chuck in the pawn category do not listen to this podcast (neither do knaves). They do not like this show at all. This show forces a level of self-reflection and awareness and, to some degree, accountability about the net net of some of the goings-on that those who don’t want to hear it don’t like at all. I was reading an article the other day about the “tragedy of organizational decision-making.” Kind...

Just taking a moment here to thank our Relentless Tribe for really getting yourselves involved in the work that I had originally kicked off to improve the outcomes for CKD (chronic kidney disease) patients in this country. With the momentum that we have so far, this Relentless Tribe of ours, we are really (for reals) going to produce measurable improvements for patients with CKD—so many of you, not just talking but actually out there, actively doing what you need to do so that patients do better, and it’s making a difference. I have talked to doctors, other clinicians, administrators, IPAs, other provider organizations big and small, payers, societies, a great data company, a number of you who are consultants. It’s crazy what we have been able to build so far, and we’ve been doing this for less than a year. The Relentless Tribe … let me tell you, we move mountains. We get patients properly diagnosed. We get them into appropriate treatment plans. What restores my faith in these rough times, we have encountered one PCP, one clinician after another; and the second that we show them the “as per the guidelines” way to accurately diagnose and stage chronic kidney disease (which is not just using eGFR for those clinicians who might be listening), yeah, that’s it! These are great doctors, and they switch it up. They switch up what they are doing, and that makes my heart warm. These are doctors across the board, from ones in independent practices to ones maybe employed by academic medical centers. And once they have the right information, they use it. And it’s a wonderful thing, and I cannot thank everybody who has contributed enough. We are making real differences in patients’ lives. If what I am doing speaks to you in any way, please hit me up, because we’re cooking with gas and I could not be prouder of this community of change agents that we have built here. You’re amazing. You know what needs to be done, and you’re not afraid to do it. Now, back to our regularly scheduled programming. In this healthcare podcast, I am talking with Secretary David Shulkin, MD, and Erin Mistry. Here’s the first reason why I was interested in taking this interview after their public relations firm contacted me. We were at the thINc360 conference in DC earlier this summer, and I heard them talking about a new innovation to help patients on dialysis not die from infections, which … didn’t realize how common that was and it seemed like a nice adjacency to our ongoing CKD work. I also thought this might be an opportunity to learn a little bit more about what’s going on with hospital-acquired infections and infection control. Superbugs are hella scary, but one thing I’m just gonna point out—and, small sidebar here, but listen to the show with Bruce Rector, MD (EP300) for more on this—in recent times, I don’t think there has been a pharma company who has managed to launch an antibiotic and achieve commercial success. So, what can easily wind up happening under the current payment model is that instead of just using the new antibiotic to treat resistant cases, there’s this perverse incentive to push for the drug’s use more broadly because more prescriptions, more money. But when the new antibiotic is used more broadly, that actually reduces its effectiveness against those resistant infections that it is here to treat. Okay … back to bloodstream infections now, which is the topic of the conversation today. If a patient has a central line infection and then gets sepsis, their chances of readmission within 30 days is almost 99%. This is not a little cohort. It’s not small potatoes we’re talking about here either. As Secretary Shulkin says during this interview that follows, if you’re gonna make a preventative care economic case study, do it on hospital-acquired infections and, most particularly, those with central lines that lead to sepsis. Even with very short time horizons, you can make that case. So, that was two reasons for this interview. The...

On our Web site, relentlesshealthvalue.com, there is a little orange button that says send us a voice message. If you have a question, feel free to click on that button and we’ll try to round up a posse to answer your question if we can. So, let’s do this thing. “Hey, Stacey! Really big fan. Really loved the last episode. I had a question. Could you provide more clarity on what the key takeaway was about the actuaries and the different timelines that they’re working on versus physicians? I would greatly appreciate it. Thanks.” Great question. And yes, I did kind of drop in an episode something about risk horizons with no explanation. Instead of trying to answer that question myself, I reached out to a couple of actual actuaries, Keith Passwater and JR Clark. I’m gonna play their answers and give a little color commentary before and after to kind of knit together this whole thing into a few succinct takeaways for you. Keith Passwater is former senior vice president and chief actuary over at Anthem. Keith founded Havarti Risk Services. He brings better risk products and services to healthcare clients. Keith is also a Fellow of the Society of Actuaries, a member of the American Academy of Actuaries, and he serves on the General Committee of the Actuarial Standards Board. JR Clark is SVP of health plan product and strategy at Paytient Technologies, where he partners with thoughtful employers, insurers, and health systems to help people better access and afford healthcare. JR is known for his public exchange marketplace strategies (and that’s relevant for today) and the creation of alternative products in the individual and small group segments. So, our panel here is strong is the bottom line. I do want to take a moment to underscore five times that if any healthcare transformation is going to happen, whomever is transforming pretty much anything must—and this is mandatory—they are going to have to be hip to hip with an actuary. But a special kind of actuary—one who applies their considerable smarts to factor in the patient or member as an actual stakeholder in their equations, because what now? Came to discover that in most actuaries’ current models, the impact on the patient or member is not part of their equation. Yeah, yes, you heard that right. Despite the fact that study after study shows that once co-pays or coinsurance reaches a certain dollar amount, patients will start abandoning care, as just one example. And despite financial toxicity being clinical toxicity, and how the cost of care can be a comorbidity, as Cody Coonradt has put it, you only have a small percentage of actuaries who are factoring this in when adding and subtracting and toting up the benefit design. So crazy, especially because even if you forget about the human aspect here (just ignore it), I’d suspect the math is actually wrong if you ignore the patient as a stakeholder. There are financial consequences when patients abandon meds and care, and some of them manifest fairly quickly—and not in a way that is revenue positive for the plan: Diabetes patients who don’t take their insulin. Guy sees a spot on his arm. Is it melanoma? I don’t know, but I do know I’ll be $600 in the hole if I go see the doctor, so he doesn’t go until it’s really big. I mean, unless the patient dies on the quick, you’d think that there’d be some statistical contemplations about this (ie, how much does it cost plans in the short/medium term when patients who need care fail to seek it). Actually, Alex Sommers, MD, wrote a post on this the other day. In this post about how much it actually costs when patients abandon care, he references the Four Horsemen of the Apocalypse, which is probably why I remember it. Any actuaries out there who are taking the patient into account—or health equity is another thing—let me personally give you a round of applause. It’s really easy to feel powerless inside a big machine where everybody is a cog in the wheel, and therefore it’s really...

Lauren Vela is back on the pod today with a summer short that originally was a section of episode 406 that, unfortunately, I had to cut. It was a little bit tangential to the “why with the employer inertia” theme that the original episode was about. But tangential does not mean unimportant. This clip has some really critical insights on a different topic that may or may not to a greater or lesser degree contribute to inertia. And I’m gonna call this other topic the benefit design that most employees might ultimately be the most satisfied with might not be the one that they are explicitly asking for. Let’s start with three kinds of market research insights that Lauren Vela, my guest in this healthcare podcast, uncovered when interviewing friends and neighbors not in the healthcare industry about their benefits: 1. Nobody reads their benefit information. 2. They are unhappy with their benefits. 3. The most important thing for them is to have choice. They want to avoid the notion of “managed care.” In thinking about this, I was reminded of a Henry Ford quote: “If I asked my customers what they wanted, they would have told me a faster horse.” Or Steve Jobs famously said, “Some people say, ‘Give the customers what they want.’ But that’s not my approach. Our job is to figure out what they’re going to want before they do.” Jobs’s whole thing, after all, was that true innovation often comes from anticipating customer needs and desires before they can articulate them themselves. So, let me reconcile Lauren’s findings when she interviewed people about what they want in their benefits and what Henry Ford and Steve Jobs have to say about the matter. First of all, patients/plan members—most people have never experienced a comprehensive primary care situation where they are assisted in finding the highest-quality specialists or sub-specialists and have their care coordinated. They have never had someone worrying about them in their “in-between spaces,” as Amy Scanlan, MD (EP402), put it, between appointments. This is all just a fantasy. It is a reputed Shangri-la that almost no one has ever seen with their own two eyes. But what many have seen—I have; you have—are narrow networks in which cost containment is wielded like a brute-force weapon, where, for example, the NCI-designated cancer centers are out of network as a way to make sure that people with cancer don’t sign up for your plan … or don’t last long on your plan if they do. (Did I say that out loud?) Do I sound like I suffer from a brutal lack of trust? Yes, I do—and I was just role-playing there an employee probably pretty accurately. Most of us remember the HMO a-go-go years when your PCP was an administrative gatekeeper and you had to see them to get a specialist appointment—except you never could see them. Wait times were weeks or months, obviously by design, right? But this way-too-expensive PPO model is the devil I know because, even if it totally sucks, it’s better than the conspiracy theories and/or accurate or exaggerated recollections of other options. Here are my recommended next steps. Listen to the shows with Vivek Garg, MD, MBA (EP407), and Scott Conard, MD (EP391), and Douglas Eby, MD (EP312), as a start. All three make it really clear that advanced primary care—maybe even direct primary care—can not only save money, but it also can produce better health and patients are super happy and usually clinicians, too. It’s like a quadruple aim home run. But none of this can happen if we say “integrated care or advanced primary care and you have to go there to get a referral” and then leave whatever that means up to employees’ or plan members’ imaginations. Communication is really required here, as it is when rolling out most new things—not just cars or cellular telephones. You can learn more about Lauren’s work by connecting with her on LinkedIn. Lauren Vela is a passionate advocate for a more rational and sustainable healthcare system and recognizes the...

This summer short is about the dynamic between payers and providers. An opening point that Jacob Asher, MD, my guest in this healthcare podcast, makes in the interview that follows is that, for a payer, it’s super hard to competitively differentiate from both a cost and/or a quality perspective when you and all of your payer competition use the exact same PPO (preferred provider organization) networks. I mean, what? Are these same exact doctors gonna somehow do a better job with your members than with the rest of their patients? This is even more true if you think about this from a physician or a practice point of view. Will clinical teams in their clinical workflow figure out who your members are, first of all, which is a thing, and then switch up what they choose to do for your members that is special? Even theoretically, that sounds like an executional fandango, which is exacerbated in markets with lots of payers. I guess I am not shocked when I hear stories like Dr. Asher was talking about: Doctor sits down at desk after a long day and sees 27 “Dear Doctor” letters from all of the payers in his or her payer mix. “Hey, Doc. Let me tell you about our amazing new thing.” And Doc’s like, “Pajama time awaits.” And—boom!—the letters, unopened, right in the recycle bin. From a payer’s standpoint, back to square one, I guess. Now, I will chuck in the mix here—and this has nothing to do with the conversation with Dr. Asher that follows—but one thing I’ve spent my entire career doing is helping organizations set up programs to collaborate with other organizations. If I authentically solve an actual, authentic, prioritized problem, I usually can find many people who seem pretty pleased to work with me. Now, is this easy to do? No. It takes strategic thinking and executional competence and/or grit to see it through. You really have to understand and account for vested interests and all the weird perverse incentives. Personally, I gotta work with a whole team of others coming at this from all different directions to untie this Gordian knot. But anyone who really wants to or needs to reach across the aisle and engage with other stakeholders or customers, even in any sort of systemic way, it’s just not possible to phone it in. Anyway, I just want everyone to succeed in working together. It is impossible to have a longitudinal patient journey if everybody is all up in their own silos fragmenting care. You can learn more by connecting with Dr. Asher on LinkedIn. Jacob Asher, MD, completed a residency in otolaryngology–head and neck surgery at the University of California, San Francisco, after receiving degrees from Brown University and the Boston University School of Medicine. Dr. Asher then practiced as an ENT (ear, nose, and throat) surgeon with Kaiser Permanente in Northern California and also served on the board of directors of The Permanente Medical Group, where he focused on physician compensation reform, member satisfaction initiatives, and retirement benefits. After transitioning to full-time health plan management, Dr. Asher served as a California commercial market medical director between 2008 and 2022 for Anthem Blue Cross, Cigna, and UnitedHealthcare. In those roles, he supported membership growth and retention in both fully insured and self-funded product lines and promoted value-based reimbursement, including capitation. He has led utilization management teams, collaborated with internal and external population healthcare advocates, and worked to develop clinical initiatives that sought to achieve the Triple Aim. In his role as the clinical face of the health plan to the local market, he worked with network colleagues on accountable care organization partnerships and hospital and physician contract renewals with integrated pay for performance, supported Obamacare exchange participation, engaged in quality improvement collaboratives, and supported regulatory compliance efforts. Currently, Dr. Asher is serving...

Here’s a quote from Rolling Stone magazine: “A supergroup is a very fragile thing. Rock bands are always about balancing huge egos, but when those egos are oversized from the get-go it can lead to huge problems. That’s why supergroups like Blind Faith often fail to go beyond a single album, and why long-lasting ones like CSNY had drama that never seemed to end.” Hmmm … that’s apropos because, turns out, super ACOs (accountable care organizations) may have some similar issues. A super ACO means multiple ACOs or CINs (clinically integrated networks) which are each comprised of multiple practices or provider organizations, and it’s all under different ownership. Said another way, there are multiple levels of competitors—frenemies, if you will—trying to work together or not work together as the case may be. There’s a lot of infrastructure complexity and process complexity and, frankly, inefficiency. There’s trust issues. There’s the problem that rule #1 of change management is to create “quick wins” so that everyone can smell potential success and realize it’s possible, so momentum happens. But if doing anything is hyper-complicated, then it’s really tough to have a quick win. Today in this summer short, this is what I am chatting about with Eric Gallagher. We talk about how Ochsner evolved from a super ACO or super CIN into its current form. This summer short is a 13-minute clip that went a little far afield from the main topic of episode 405, which was the full episode with Eric Gallagher, and therefore, I cut it. But as I always do when I cut an actually pretty great section from a show for reasons of time, I have been on the edge of my seat to share it with you. This show is actually a very nice follow-on to the one with Dan Serrano (EP410) from last week. As Eric describes Ochsner’s history and its path forward, it is a case study of some of the recommendations that Dan mentioned. This summer short also really echoes some of the themes in episode 409, which was the one with Larry Bauer, and also one upcoming with Jodilyn Owen. What will work in one local market, don’t count on it working elsewhere—or not work as well at a minimum. Healthcare is local. This is a lesson many investors and entrepreneurs looking for rapid scaling prototypes have learned the hard way, and listening to Eric, it’s really easy to catch the why for that. If this topic intrigues you, also listen to the show with Dr. Amy Scanlan (EP402). Also episode 349 with Lisa Trumble. And lastly, I would recommend the show with David Carmouche, MD (EP343). Dr. Carmouche was talking about Ochsner’s work improving patient outcomes with a Medicare Advantage plan. One final note/point to ponder: scale. To really get value-based contracts, you need it. You need it to afford the infrastructure, and you need it to demand a seat at the table. But yeah with that … everything in moderation, I guess, because any scale that starts to approach monopoly proportions seems to invite bad behavior. You have to get big enough to matter in the market but not so big that your big footprint squashes market dynamics, because it seems like many succumb to the siren song at that point of putting profits over patients. You can learn more at Ochsner Health Network. Eric Gallagher, chief executive officer for Ochsner Health Network (OHN), is responsible for directing network and population health strategy and operations, including oversight of performance management operations, population health and care management programs, value-based analytics, OHN network development and administration, strategic program management, and marketing and communications. Prior to joining Ochsner in 2016, Eric held leadership positions in healthcare strategy and execution—including roles at Accenture, Tulane University Health System, and Vanderbilt University and Medical Center. A New Orleans native, Eric earned a bachelor’s degree in human and organizational development from Vanderbilt University...

In this healthcare podcast, I am talking with Dan Serrano; and we’re talking about payer/provider collaboration—blocking and tackling, I’m gonna say—from primarily a financial and revenue point of view. I’d classify this as, say, a 201-level discussion (ie, not entry level, but it’s also not super deep in the weeds). We mainly cover the ins and outs of why a provider organization should probably be looking to get paid to better take care of patients with chronic disease and drive better patient outcomes at lower downstream costs and, to some degree, also why payers should be helping provider organizations in their local communities to do so by providing some help and shelter on the journey from here to a capitated payment. The focus today is really, I’d have to say, on the messy middle, where a provider organization does not have capitated contracts nor access to any premium dollars, which, by all accounts, is the holy grail here. The premium is where it’s at, and provider organizations might want to be aiming to get a piece of that action. The why for this “get the premium dollar” prime directive is pretty self-evident when you look at the big bucks rolling around in the coffers of those who are collecting said premium dollars. So, this “get the premium” endgame is, for sure, a big piece of the why—why, if I am a provider organization, I might want to take the time and energy and spend the money to embark on a path that might lead me to be able to get compensated for the stuff that patients really want and need to do better, which includes all of the things that I spoke about with Eric Gallagher in episode 405. Also, Vivek Garg, MD, MBA, in episode 407 and Amy Scanlan, MD, in episode 402. Spoiler alert: It’s not easy. Now, I asked Dan Serrano, as aforementioned my guest today, to offer up his advice here in the context of CKD (chronic kidney disease) patients. Why did I ask Dan to use the CKD case study, as a touchstone? Well, first of all, talking about this topic in totally theoretical terms is not ideal. We need an actual example for a lot of this to kind of make sense, combined with the first step for most outcomes improvement programs, which is to study your data and pick a patient population to focus on where the data suggests that you can have a big impact. And speaking of impact, did you know that an underlying reason why heart failure patients get hospitalized and rehospitalized is because of underlying CKD? So, impact in the short term and longer term, which I’ll get to in a sec. Another reason is—and I’m quoting John Rodis, MD, MBA, here, who is the independent medical director of QC-Health—Dr. Rodis said the other day, “I sure as heck hope I don’t get CKD, because if I do, chances are I’m not going to be diagnosed. And even if I am diagnosed, I won’t be treated properly.” So, there’s that. And I can see why he’s saying that. Two out of five patients with ESRD (end-stage renal disease) don’t even know they have kidney disease at all. And the number of patients with progressing CKD on any kind of evidence-based treatment plan is stunningly low. But also, here’s another reason I asked Dan Serrano to talk about CKD patient populations specifically as his example: I and Dr. Rodis and the team at QC-Health are not the only ones who have figured out that CKD patients are notoriously expensive and way underdiagnosed. You know who else has figured this out? Payers. Also, private equity. In fact, I was in a meeting with a payer recently, and they stated they had to get CKD patients into point solutions. This payer—and I’ve heard of others, too—none of these entities are waiting around. And I guess, fair enough, if you look at some of the population health data, that I’m sure these payers and others are looking at. But if you work for a payer and you’re listening right now, what I would say, “Okay, with the point solutions, one that you have carefully vetted, of course, because we have patients suffering right now...

In this healthcare podcast, we are talking about innovative primary care teams and, by way of Larry Bauer, my guest today, bringing you three inspiring case studies. Much can be inferred from these case studies, as much from how they are alike as how they are different. It is wildly important at the same time that it is wildly underappreciated how different local markets are. I love how Cody Coonradt put it on LinkedIn the other day. He wrote: “Healthcare is not a $4T market—it’s 500 some-odd interconnected markets ranging in size from $1-50B. [It is] not a singular problem … each market [is driven] by unique third party payer incentives with unique patient cohorts. … “Before you figure out the next great idea—seek to understand the underlying health economic, revenue cycle, service provider contracting, and cash conversion processes that undergird it all. [That] is how to truly disrupt healthcare.” Or, said another way, if you’re part of the community, if you are already caring for patients in that community because you’re a doctor or another clinician, you probably have the best shot at truly—and in meaningful ways—helping patients in that community. This whole statement is a really uncomfortable truth for many in private equity and anybody else who wants to find the easy button to fix healthcare with some big-ass, scalable, rapid-fire bulldozer approach. It’s also a very uncomfortable truth for any national payer looking for one model or one point solution to roll out in a broad stroke to every one of these 500 some-odd interconnected markets that Cody mentioned. One size does not fit all here, and leveling up patient outcomes and care is hard grueling work that requires local market knowledge, being rooted in the community with relationships to succeed. You gotta get a little closer to the ground. Policymakers, please take some notes here. And you, too, self-insured employers, payers. So many universal lessons are embedded in these three examples that Larry Bauer, my guest, shares today. But bottom line—and round of applause required—you go, all you doctors and nurses and other clinicians or mission-oriented teams who take it upon yourselves to find ways to address the problem of human suffering in your local area. Stay tuned for an upcoming show with Jodilyn Owen, where we dig into this whole dynamic hard. I’m talking about the dynamic where some barbarian at the gate (ie, some venture-funded start-up) has gotten money—in some cases, lots of money—while there are community-based organizations out there who are doing amazing work really helping patients in the community improving outcomes and cutting costs and struggling, scrambling for every penny they can manage to get their hands on. So, that’s in the future. Talking about today, though, we’re gonna cover the bright spots when you get a really creative and committed PCP (primary care) team who is part of their own community and who wants to do better by patients locally and got some money to attain that goal. Today, as I said earlier, I am talking with Larry Bauer, who has been working with innovative PCPs and other docs for decades. All three of these case studies that Larry describes on the show today concern frail elderly adults, and this is on purpose (this using of the same patient population) for a couple of reasons. One of them is just to highlight that the same population in different geographies is not the same population and, therefore, the solution set is going to be different if we’re gonna reach out and care for them. The second reason for selecting three solutions that all pertain to frail elders is that this group is notoriously expensive and care is notoriously poor. Everybody has a story about how their frail elderly family member or friend died a bad death or did not “finish well,” as Larry Bauer puts it. It’s a patient population at the mercy of this industry and unable, a lot of times, to advocate for themselves. So, solutions here solve,...

I cut this clip out of episode 407 with Vivek Garg, MD, MBA, from Humana; and it’s actually a really nice follow-on from the show last week with Scott Conard, MD, where we talked about the blowback that happened with clinicians at a clinic. This clinic had put into effect a bunch of the comprehensive primary care kinds of things that Dr. Garg talks about in this summer short. But what happened in Dr. Conard’s case is a new practice manager tried to go back to the olden days, and, spoiler alert, it was a kerfuffle. All the docs and the rest of the clinicians staged what sounded like a “mutiny on the bounty” moment from the way Dr. Conard described it. So, this summer short you’re about to hear and the one from last week again share one key point: Doctors, advanced practice clinicians, medical assistants, pretty much everybody on the team really likes a well-executed, operationally excellent transformed primary care model. And it produces better patient care. I was reading Dr. Robert Pearl’s book Uncaring the other day, and he summed up the reason why, I think, these transformed primary care practices do better. He was quoting Atul Gawande, and here’s the quoted quote: “The public’s experience is that we have amazing clinicians and technologies but little consistent sense that they come together to provide an actual system of care, from start to finish, for people. We train, hire, and pay doctors to be cowboys. But it’s pit crews people need.” I interviewed Dr. Pearl, by the way, so stay tuned for that show coming up. In this summer short, Dr. Garg digs into one common objection to more comprehensively comprehensive primary care, and that is that by improving care, we decrease throughput and, therefore, access to primary care, especially in areas where there are not enough primary care doctors. You can learn more at humana.com, centerwellprimarycare.com, and the Humana report. Vivek Garg, MD, MBA, is a physician and executive dedicated to building the models and cultures of care we need for loved ones and healthcare professionals to thrive. He leads national clinical strategy and excellence, care model development and innovation, and the clinical teams for Humana’s Primary Care Organization, CenterWell and Conviva, as chief medical officer (CMO), where they serve approximately 250,000 seniors across the country as their community-based primary care home, with a physician-led team of practitioners, including advanced practice clinicians, nurses, social workers, pharmacists, and therapists. Dr. Garg is the former chief medical officer of CareMore and Aspire Health, innovative integrated healthcare delivery organizations with over 180,000 patients in over 30 states. He also previously led CareMore’s growth and product functions as chief product officer, including expansion into Medicaid primary care and home-based complex care. Earlier in his career, Dr. Garg joined Oscar Health during its first year of operations as medical director and led care management, utilization management, pharmacy, and quality, leading to Oscar’s initial NCQA accreditation. He was medical director at One Medical Group, focusing on primary care quality and virtual care, and worked at the Medicare Payment Advisory Commission, a Congressional advisory body on payment innovation in Medicare. Dr. Garg graduated summa cum laude from Yale University with a bachelor’s degree in biology and earned his MD from Harvard Medical School and MBA from Harvard Business School. He trained in internal medicine at Brigham and Women’s Hospital, received board certification, and resides in New Jersey. 02:31 Does advanced primary care reduce access to patients? 03:01 Are five-minute visits with patients really access? 04:17 Will advanced primary care provide outcomes that make certain PCP responsibilities unnecessary? You can learn more at humana.com, centerwellprimarycare.com, and the Humana report. @vgargMD discusses #advancedprimarycare on our...

Back at the beginning of this year, I was so sad when I had to edit out the clip that follows from the original and extremely popular episode 391 with Scott Conard, MD. In the literally probably three minutes that follows in this clip with Dr. Conard after I finish my ramblings here, Dr. Conard introduces the impact that changing the practice model in a PCP practice in Queens, New York, had on the staff and patients alike. Spoiler alert: No way no how were they going back to the old way of doing things. The “Before” here was a clinic where the waiting room was filled to overflowing out into the hall with patients waiting to be seen, and this included a mix of really sick people who really needed to be seen and also … others. And thus they had, among a whole host of other bad things going on, the whole issue of suboptimal ER (emergency room) visits and urgent care usage. Anyone who couldn’t wait just headed elsewhere. Also, as it is so many places, care was pretty transactional. A patient who wasn’t in clinic had an “out of sight, out of mind” relationship with their PCPs. There was no systemic way for the clinical teams to really think about the “in between spaces,” as Amy Scanlan, MD, put it (EP402)—the spaces in between office visits. But then as a result, of course, we wind up dealing with uncontrolled chronic conditions and the failure to prevent preventable disease. We wind up with urgent needs for care and acute situations that had, frankly, no business getting to that stage in the first place. So, Dr. Scott Conard and his team worked on practice transformation, including focusing on operational excellence. I say all that to say, here’s Dr. Scott Conard: DR. CONARD: We went and did one pilot clinic, which is, I think, the right way to do it. And then the practice manager was recruited by a competing group. They put another person in the clinic, another practice manager. And she immediately came in and thought that her job was to go back and put the old way of doing things in place, and within literally four or five days, they got together and sat down and said, “Look, we understand where you’re coming from, but we will never go back. We are not going back to that old system. We are going to do things in this new way because it makes our lives—and we work together—so much better. And we enjoy being together, and we’re seeing … we like not having 30 people waiting to get here at work. We like people getting … having a waiting room be close to empty as we just have one or two of the next people coming in. And we will never go back to that old system.” And, to her credit, she’s like, “Okay … cool. Let me understand this.” And she’s now one of the strongest leaders in that organization for this transformation. STACEY: So, the PCPs … it was like mutiny on the bounty. They were like, “No way no how are we going back.” DR. CONARD: Oh, it was the entire team: their receptionist, the telephone operator, the MAs. They have a patient navigator, which is another part of the equation we haven’t talked about that’s really important. And so, the whole team said no. Listen to the full episode 391 to learn more about Dr. Scott Conard and his team’s approach to practice transformation. But in the meantime, Peter Watson, MD, captured a few learnings from the original episode really nicely on LinkedIn; so let me quote him here: Dr. Watson has some other really great posts on the topics of value-based care and primary care. I would highly recommend following him on LinkedIn. Should you continue to be interested in this topic of transformational primary care, additional shows on transforming primary care—including bright spots and challenges—are the shows with Eric Gallagher (EP405) and, as aforementioned, the show with Dr. Amy Scanlan (EP402). Also check out the upcoming show with Larry Bauer, which will be approximately episode 409, should I get my act together. And Vivek Garg, MD, MBA (EP407), who, by the way, is coming up in...

May I just take a moment and thank the Healthy economist for leaving a super nice review on iTunes? The title of the review is “Best podcast on the healthcare industry,” and the Healthy economist writes, “There’s no one simple fix [for the healthcare industry], but [Relentless Health Value] contains valuable insights on what actions can be taken to make things better for consumers and patients.” Thank you, Healthy economist. In this summer short, I am talking with Brennan Bilberry; and we’re talking about why everybody isn’t suing health systems for behaving badly in sometimes pretty egregious ways. Why isn’t anybody stepping in to prevent all of this consolidation that we all know, at this point, is pretty bad news? FTC, where are you? Brennan Bilberry cites three reasons for the way fewer antitrust lawsuits than you’d think would be going on: 1. A continuing lack of transparency. It’s tough to sue someone when you aren’t really sure what they’re up to, and, even if you do, it’s hard to prove because you can’t get the data you need to prove it. 2. Political power of hospitals means legislatures have a hard time telling their major donors to kiss off and pass laws that actually enable legal recourse. 3. Turns out the FTC is a little toothless when it comes to those with tax-exempt (ie, nonprofit) status. Nobody expected nonprofits to act the way that some nonprofits are acting, and the laws haven’t caught up with the reality of the situation. My guest in this healthcare podcast as aforementioned is Brennan Bilberry, who is a founding partner over at Fairmark Partners, which is a law firm litigating some of these antitrust lawsuits against some of these hospital chains. The original pod with Brennan (EP395) is entitled “Consolidated Hospital Systems and Cunning Anticompetitive Contracts.” Here’s a link to an article I was thinking about while recording this show about Daran Gaus’s hypothesis for how mergers will impact hospital prices. And here’s a link to an article about how commercial prices for outpatient visits were 26% higher for patients receiving care at a health system than those visiting nonsystem physicians and hospitals. Covering some of the consequences of consolidation and what it tends to do in local markets is the show with Cora Opsahl (EP373) and also the encore with Dale Folwell, state treasurer in North Carolina. One last link is to the conversation I had with Scott Conard, MD (EP391), where the local hospital bought a local ACO (accountable care organization) physician organization and the community paid an additional $100 million to the hospital the following year. You can learn more at fairmarklaw.com. Brennan Bilberry is a founding partner of Fairmark Partners, LLP, a law firm focused on fair competition issues, especially in the healthcare industry. Fairmark has filed numerous antitrust cases against dominant hospital systems, seeking to tackle anticompetitive practices that lead to higher prices for businesses, consumers, and unions. Prior to founding Fairmark, Brennan worked as a policy consultant and political operative whose work included overseeing environmental public policy campaigns in numerous countries, providing international political intelligence for US investors, advising political campaigns around the world, and designing consumer and legal advertising. Brennan also worked on numerous US political campaigns, including serving as communications director for Terry McAuliffe’s 2013 successful campaign for Virginia governor, serving as deputy executive director of the 2012 pro-Obama Super PAC Priorities USA, and developing research and policy communications for the House Democrats. Brennan is a native of Montana and South Dakota and has lived in Washington, DC, for the past 15 years. 00:23 Healthy economist’s review of Relentless Health Value. 00:52 Why aren’t more people suing hospitals? 01:16 How is the lack of transparency diminishing the number of lawsuits? 01:41...

Thanks for joining me as we kick off the summer season. Here’s what we’re gonna talk about today in our 10-ish-minute conversation. Keeping it short and sweet. First up, we got three super interesting voice messages left by your fellow members of the Relentless Tribe that I wanted to share with you. Next up, I will cover plans for the summer, because this summer, we have plans. And then after that, just wanted to chat a little bit about what I am up to right now. Agenda item #1: Episodes 399 and 400 of Relentless Health Value were me sharing my manifesto as it were. At the end of the show, I said that if you have a manifesto of your own, to share it by going to relentlesshealthvalue.com and hitting the orange leave a voice mail button. Doug Pohl, CEO of HealthTech Content, did so; and here is what he had to say: “My name is Doug Pohl. I’m the founder and CEO of HealthTech Content, and I'm pretty frustrated by the lack of progress toward making the improvements we need for healthcare. So, I put this out there to sort of be a bat signal for anyone else who feels the same way I do but to also hold myself accountable to be congruent outwardly with how I feel inwardly. No longer will I accept healthcare’s prioritization of the bottom line. No more will I ignore the flagrant victimization of our society. I won’t sit silently while shortsighted greed ruins families. I don’t accept a profit-first model that kills people daily. I can’t let complacency keep me from taking action. I won’t let my voice wither away in fear. I can’t—and I won’t—remain quiet. I believe in the potential of regular people. I know how powerful we can be working together. Every one of us is affected by healthcare eventually, and it will take all of us to create the healthcare we deserve. The first step is rejecting the status quo. I’m tossing it out the window. How about you?” And now let me share two more voice mail messages, and here’s why they both are meaningful. We know that this journey to transform the healthcare industry in this country can be long and slow and, at times, lonely. But together we are stronger and more able to help patients receive the care that they need and deserve at a price that we all can afford. So, thank you for being part of our community, and here’s two perspectives on why you being here matters. Here’s a voice mail from Justina Lehman from the Infinite Health Collaborative (iHealth): “When you are in the work of creating change in healthcare and really working to align with value for the patient, value for the physician, the clinician so they have an environment that they can thrive in, the work can feel hard. And it can feel lonely, and you can feel on an island. And Relentless Health Value podcast is your people. We often say this in our team of … when you look to that podcast, you’re reminded of all the amazing people across this country doing incredibly meaningful work. And linking up with one another can create that strength and help you with your resiliency, especially on those days where you’re feeling down and that the work is hard and that you’re doing it alone. And sometimes you may even question: Is this work of value? Will it be valued of others? The Relentless Health Value podcast, Stacey, all of her guests have really been those people for us. Not uncommon for us to share podcasts amongst each other during the work of reminding each other of the people out there doing great things. So, so incredibly grateful for what Stacey’s built and for all the guests that have been on her show and the value it’s adding and the support it’s giving to those of us who are out in the trenches trying to make this happen. So, thank you, Stacey.” And here’s a message from Amy Scanlan, MD, who was also a guest on episode 402: “Hi, Stacey. It’s Amy Scanlan. Wanted to say thank you for your latest episode. It’s so helpful to be reminded that, even though we’re making little steps, we are making progress and we’re part of a...

I hope you enjoy this encore episode of one of the most popular shows in the last 12 months. One of my mentors often said price is irrelevant. He said he would sell anything for any price as long as he could define the terms of the deal. During this conversation today with Scott Haas about PBMs (pharmacy benefit managers), that quote was playing in my head like an earworm. I’m henceforth gonna struggle with the term rebate to define dollars that the PBM gets back from Pharma, because, according to my guest in this healthcare podcast Scott Haas, it turns out “rebates” comprise only about 40% of those back-end dollars that some PBMs manage to score from pharma manufacturers. I don’t have any insight really into this, but Scott Haas certainly does—and this is the average that he has seen in his work and that we’re going to dig into today. But in sum … wow! Let me just repeat that a mere 40 cents on the dollar of the gross amount that PBMs take in “rebates” from Pharma these days winds up going back to plan sponsors, even plan sponsors who are getting “100% of the rebates.” If you didn’t understand what I just said, no worries. I’m gonna explain it right now. If you did and you know the why behind all of this also, you could probably skip ahead about five minutes. Here’s the backstory on this whole rebate fandango. Let’s start with part one of what is a two-part transaction. So, part one: the deal between pharma manufacturers and PBMs. In general, a pharma manufacturer signs a deal with a PBM to give back whatever percentage of their gross sales revenue to the PBM at the end of the year, say. It’s along the same lines as a cash-back coupon for the PBM. Why would a pharma company be up for giving cash back like this? Well, to get on a PBM’s formulary, giving cash back is like the price of admission. PBMs have a lot of leverage, after all—at least the big ones. They control access to millions and millions of patient lives. So, if Pharma wants their drug to be accessible to those millions and millions of lives, they have to play the cash-back game, otherwise known as the rebate game. They have to agree to give back to the PBM a certain amount of cash on the back end. So, PBM pays Pharma’s list price up front—that’s the gross amount paid, based on the list price of the drug—and then after all the cash back gets toted up at the end of the year, there’ll be a net price. List price or gross price minus the cash back equals net price. It’s this net price that’s the true kind of final price which the pharma company gets paid per script by said PBM at the end of the day. These days, most everybody pretty much knows that PBMs are getting these so-called rebates—this cash back from pharma companies that I just explained. And it’s pretty common knowledge the so-called gross-to-net bubble (the gross-to-net dollar amount) is pretty huge, meaning the rebate or cash-back amount is pretty huge. And many have also noticed that the gross-to-net dollar amounts seem to be growing bigger and bigger every year. I mean, for one insulin manufacturer, consider this: Their list price, their gross price, is $350 per script. And their net price after cash back/rebates was $52 this past year. Wait ... what? After all the cash back to the PBM, the insulin manufacturer got paid 86% less than their list price—$350 went down to $52 per prescription. The PBM vacuumed up 86% of the dough for every script written for this particular brand of insulin. Okay … so, say Pharma gives $100 back to the PBM based on the terms of their deal. Call that part one of this example transaction. Here’s part two: the deal between PBMs and health plans or self-insured employers. Health plans and self-insured employers are customers of the PBM. They hire PBMs to manage the pharmacy benefits for their members or employees. So, because everybody knows this whole rebate thing is going on, as part of the contracts that the PBMs put in place with their customers (meaning the...

I couldn’t resist the “who’s suing who” because, yeah, you can’t go wrong with Aretha Franklin references. Back on the pod we have Chris Deacon, who is going to give us a rundown of the legal goings-on going on right now that impact self-insured employers, carriers, hospitals, and taxing authorities like cities. Chris breaks down the legal activity into three main categories, and then we discuss some examples of lawsuits in each category. So, here’s the outline of our upcoming conversation: 1. Breach of Fiduciary Line of Cases Against Carriers a. Bricklayers vs Anthem Class Action b. Mass Laborers vs Blue Cross Blue Shield c. Member vs Cigna 2. Carrier vs Hospital (upcoding) and Hospital vs Carrier (underpayment) a. United vs TeamHealth b. TeamHealth vs United 3. Taxing Authority vs Nonprofit Hospitals a. Tower Health line of cases in Pennsylvania b. Pittsburgh vs UPMC This episode itself is a little on the longer side—and I didn’t want to edit too many of Chris’s words of wisdom—so I’m gonna make this a little bit shorter, this intro. But just one point that I’ll make, and this is about the first category of legal activity wherein self-insured employers mostly try to pass the “who is actually the fiduciary” hot potato to carriers, ASOs (administrative services only), and TPAs (third-party administrators). And the carriers, ASOs, and TPAs are like, “It ain’t us.” Moving forward here, I’m just gonna say carriers as a catchall for carriers, ASOs, and TPAs to save myself a mouthful. But bottom line on this topic, I just want to underscore something that Chris makes clear later on in the show: Plan sponsors (ie, self-insured employers) are the fiduciary, the sole fiduciary, at least according to the carriers who are getting sued right now. This is the position that you can see them taking in every lawsuit that I have seen. What the carriers say also, as a follow-on, is that if there is any contractual language between the carrier and the employer that violates the CAA (Consolidated Appropriations Act) or any other regulations, it is or was the employer’s responsibility to not sign the contract. It’s not the carrier’s responsibility to point out that there’s stuff in their own contract that’s in violation for the employer to sign. And this includes contracts that don’t give self-insured employers the right to their own data, which is pretty much a rate critical for any and all CAA compliance. As Justin Leader wrote the other day in reference to the bricklayer case, “To get to the point of filing the suit, there was a solid 2 years of failed negotiations [for the bricklayers to get their own claims] data.” Two years trying to get claims data that is necessary for a fiduciary to have from a carrier who is saying essentially, “Good luck with that. You’re the ones that signed our contract.” Here’s one of Chris Deacon’s latest LinkedIn posts about this topic. And here’s another one from Jeff Hogan that was interesting. Also, here’s the link to the earlier episode with Chris (EP342), where we dive into the deep end on the topic of the CAA, which was signed into law at the beginning of 2022 and states that self-insured employers have certain rights and responsibilities based on their role as the fiduciary of their health plan. For more on the Member vs Cigna case, check out the encore episode with Dawn Cornelis (Encore! EP285). The show with Vikas Saini, MD, and Judith Garber, MPP (EP394) comes up where we talked about hospitals and their charitable giving. And lastly, I mention the show with Suhas Gondi, MD, MBA (EP404) about who is on the board of directors of hospitals, big nonprofit hospitals in particular. My guest in this healthcare podcast, Chris Deacon, is a lawyer by training. She ran the state health plan for the state of New Jersey, which covered about 820,000 public-sector lives. She now has an independent consulting firm, VerSan Consulting. You can learn more at versanconsulting.com and...

Okay … let me get real here for a sec. For a few reasons, I wanted to chat with Vivek Garg, MD, MBA. Dr. Garg is CMO (chief medical officer) of primary care at Humana. Dr. Garg is an inspiring and incredibly articulate individual, and I like to both learn from and also be kept on my toes by the likes of such folks. But also, yeah, I’m suspicious of vertically consolidated payers. I mean, you listen to this podcast. I don’t need to recap what the financialization of the healthcare industry has done to patient care. But you heard my manifesto in episode 400. It’s about trying to find the right path forward and being open to exploring options here. It’s considering what doing well by doing good actually means. It’s contemplating whether to celebrate some good stuff going on in the industry even if there’s some not-so-good stuff going on in that same sector or even in that same company. Bottom line: We’re living in the real world here, and utopia is not on the table, at least anytime soon. So, that means there is always going to be one thing that we are always going to have to have to weigh in our consideration set, in our assessment equation that I talked about in my manifesto in episode 400. What’s this one thing? It’s self-interested, shareholder-centric goal setting. In other words, just because I spot a self-interested, shareholder-centric goal doesn’t mean I’m automatically gonna get out my red Sharpie and cross off the whatever with a sour expression on my face because … yeah, if I did that, a whole lot of Americans are not gonna get, even incrementally, better healthcare. The right equation to determine if something is net-net good is always going to be nuanced. The equation should weigh the impact of the self-interest, which is always going to be there, against the impact on patient care and patient financials and how the whole thing impacts clinicians at a local level or maybe a national level, depending on what’s going on. I’d also suggest that there’s no real broad strokes here, because the equation for any given initiative or pilot or approach is really singular. I think it’d be a big mistake to lump together, for example, all payviders across the country and assume that their impact is all the same. Or all Medicare Advantage plans. Or anybody doing advanced primary care. All of these words/groups I just referenced are relevant to the conversation today. You have some payviders, for example, doing all kinds of crap with dummy codes and/or anticompetitive contracts and/or steering only to their own medical groups which they staff inadequately and/or blanket denials of anything that will throw off their medical trend calculations and/or prescribing and care pathways coinciding with their own highly financialized PBM (pharmacy benefit manager) formularies. But then, on the flip side, you also have some interesting things going on that help patients and their communities. A key ingredient of these interesting things is taking into account longer time horizons. Longer time horizons are actually pretty key here for anybody trying to do anything preventative or anything involving forming patient relationships. Also, of course, you have those who are doing some combination of the good stuff and the not-so-good stuff; and one of the reasons why the not-so-good stuff becomes so ingrained is that risk adjustment (especially if you’re a payvider) across the board has anything but a longer time horizon. So, let’s dig into what Dr. Vivek Garg has going on at Humana Primary Care, which includes CenterWell Senior Primary Care and also Conviva Care Center. I ask Dr. Garg some pretty hard questions about balancing the tension between being a payer with a PBM with an incentive to deny care and a provider organization seeing patients that is also beholden to those same shareholders. Dr. Garg taught me a new term, and that’s the “dyad model,” where you have doctors and admins working together or clinicians and admins working...

I’m gonna run through the five reasons Lauren Vela talks about in this healthcare podcast for the “why” with the inertia in benefits departments of self-insured employers. But before I do, let me report that, in sum, they add up to … in many cases, benefits folks sit between a rock and a hard place. You really can’t poke fingers at benefits teams who don’t have the bandwidth, the resources, the expertise, or the organizational power to, in essence, run a small insurance company in-house and also do the rest of their jobs. This is especially true when benefits teams get no help or air cover from the CFO or CEO of their companies. So, the bosses are, in effect, telling benefits teams to manage the second-biggest company expense—this uncontrolled thing growing at multiples of the rates of inflation. They say, “Go get a handle on that but also don’t make any noise, don’t disrupt anything.” And meanwhile, I don’t know, is the CFO under the impression that all he/she needs to do is pop by once or twice a year, issue some nastygrams about renewal rates to people who have no training in any of the financial and probably other skills required to manage this huge spend? And/or, on the other hand, the CHRO doesn’t report to the CFO—so, same result, opposite problem. Here’s the five pillars for the “why” with the inertia that I explore pretty deeply with Lauren Vela on the show today: 1. Transforming the healthcare industry is not actually in the job description of benefits professionals. 2. Outsourcing to consultants. Benefits departments a lot of times don’t have the resources or adequate staffing to get deep into the complexities of healthcare, which means that lots gets outsourced to consultants. If you have listened to the episode with Paul Holmes (EP397) or AJ Loiacono (EP379), the problem here is that many traditional EBCs (employee benefit consultants) and brokers have a very vested interest to maintain the status quo. Currently, some are able to skim commissions of up to 30% of pharmacy spend, of employer healthcare spend, into their own pockets. These consultants have zero interest in upending absolutely anything. Employer inertia is paying for their vacation home, after all. 3. Nobody gets fired for hiring the same ASO (administrative services only) or TPA (third-party administrator) or PBM (pharmacy benefit manager) or whomever as their predecessor hired or they’ve been using for years. But they might get fired for doing something new that doesn’t go so well. There might be no patience for even the shortest of learning curves or the smallest amount of disruption. There’s also the aspect of a benefits team being capable of selling a transformational idea up the organizational ladder. Does the benefit department really know what the goals of the C-suite are? And if they aren’t crystal clear on C-suite goals and aren’t the best presenters in the world, it’s gonna be a no-go on the new idea and then, yeah … inertia. 4. There’s no obvious solution, no magic bullet, or easy answers. It might be hard to even figure out what to do that might have the positive impact a benefits team might be looking for. And then we get into the “is the juice worth the squeeze” discussions. 5. There is a status quo bias. Inertia is human nature. But at the same time, employers are wasting up to 30% or more of their healthcare benefits spend. That’s a lot of money. These dollars are getting siphoned right off the top and going into someone’s pockets in ways that do not help employees get better health. Dollars that could have been used to give tens of thousands of dollars in raises. Dollars wasted by the employer. But also, the employee gets ensnared in this financial lack of oversight because employees have deductibles and coinsurance. So, it’s everybody sagging under the current model of some EBCs and payers and providers and PBM executives getting rich and hardworking Americans paying for it. So, let’s cut to the chase. What are two...

So, let’s talk about North Carolina. What a weird outlier of the direction of other states getting active on their healthcare spend. I’m talking about Texas, Indiana, Wisconsin ... I’m naming so-called red states because the legislature in North Carolina is a Republican majority. Gotta say, normally I’m down for a little weird. I find it mostly charming. But with the information I have at present about what’s going on in North Carolina, I don’t love this for you. And when I say “you,” I pretty much mean any family who happens to live in North Carolina or any businesses in North Carolina trying to afford their employee health benefits right now. This whole shebang and the reason I’m covering this on Relentless Health Value is that it is also extremely relevant to anybody else in this country as a case study or a cautionary tale, depending on your point of view. So look, there’s two pieces of legislation running through North Carolina’s Senate and House right now, but both of these pieces of legislation—one that Blue Cross Blue Shield (BCBS) is angling for and the other one that UNC, a big hospital chain in North Carolina is all hachi machi to get passed—both of these have precedents. Both of these things were done elsewhere, and the results were not great, to put it mildly. BCBS wants to be able to open up a holding company that is able to take BCBS policyholder payments and invest them in for-profit ventures—BCBS being a nonprofit and all. Here’s a quote Chris Deacon mentioned on LinkedIn from an article on this topic: “A 2019 examination of the aftermath of 11 conversions of BCBS affiliates showed that fully insured premiums increased roughly 13 percent … suggesting a post-conversion exercise of market power. Significantly, rivals of these large converting insurers also raised their prices following the conversions.” And here’s a link to a Health Solutions podcast with Cristy Gupton, Chris Deacon, and North Carolina Commissioner Mike Causey. So, that’s one of the pieces of legislation on the docket. Then, on the hospital side of the equation, we also have a proposed bill that could give UNC Health Care a green light to expand and buy more physician practices and hospitals without as much oversight. Proponents of the bill say that this will better enable UNC to take over struggling rural hospitals in danger of closing. Considering that UNC has already taken over rural hospitals in danger of closing, not exactly sure how or why basically removing federal and state antitrust scrutiny is helpful here. I went around looking for evidence that if you reduce antitrust scrutiny and enable more unfettered consolidation and expansion that population health outcomes improve. I could not find any. I did find lots of great talking points, but all of them seemed a little light on the evidence. There is, however, an insane amount of evidence at this point that shows unfettered hospital chain consolidation harms local communities from a financial standpoint without improving the quality or outcomes of patient populations, especially when hospital chains, in conjunction with third-party payers, are not willing to share their pricing, even with their largest customer. But I’m getting ahead of myself, because this is exactly what I’m talking about in this 2019 interview with Dale Folwell, the state treasurer of North Carolina. And it is a doozie of a frustrating story, just to cut to the chase. Look, you might be able to hear I definitely have an opinion formed on this topic, and I don’t want to sway yours until you look into all of this yourself. But I loved what Jeff Leston wrote the other day. He wrote, “The North Carolina Legislature proves that they report to the healthcare industry in the State, not the people who actually elected them.” Okay … teeing up the interview today, this whole thing started when the North Carolina State Employees Health Plan (SEHP) crafted a proposal to pay network hospitals based on a transparent...

Let’s cut to the chase. You’ve gotten to the point where you have a gang of physicians/clinicians/physician practices who have expressed a desire to work together. What do you need to know right now? Eric Gallagher, CEO of the Ochsner Health Network, is my guest in this healthcare podcast; and I largely asked him the same question that I had asked Amy Scanlan, MD, from the UCHealth/Intermountain clinically integrated network in Colorado in episode 402 a couple of weeks ago. The question I asked both Eric and Dr. Scanlan is: What are you doing to help align physician practices into an integrated model? How are you going about that? Now, let me remind you, Ochsner Health Network is practically long in the tooth when it comes to clinically integrated networks; and it also exists in an environment that is unique, as are most local markets. But Ochsner’s local market is mostly Louisiana, which has an older population and a huge Medicare Advantage penetration. That is quite a different local market from what’s going on in Colorado, which is the location of Dr. Scanlan’s joint. As we all know, different stages of any journey require different solution sets; and different local markets certainly require different solution sets. But what was so interesting to me was to notice that despite the market differences and the where-are-we-in-the-transformation-journey differences, how many of the things that you’ll hear about in this episode are in the same spirit as the stuff that we talked about in that earlier show with Dr. Scanlan. Eric Gallagher lists three things that he says are essential in the transformation journey: 1. Making sure that physicians, care teams, and those working directly with patients are part of the transformation process, both from a practice standpoint but then also from a financial standpoint. This makes so much sense when I state it explicitly here, but so frequently, it doesn’t happen. So frequently there’s a value-based care team that tinkers around in a silo and then an announcement comes over the loudspeaker one day that henceforth we shall add some more clicks … but trust us, it’s important for some reason we aren’t going to bother to tell you about … you’d be bored by it or you wouldn’t understand it. Even if this was not the intention (and it probably wasn’t), the result is going to be the bad taste in your mouth that I just left you with. Eric Gallagher’s #1 here, that everybody be part of the transformation, might be the umbrella really over the first thing that Dr. Scanlan talked about in that earlier episode, which was to make sure to give practices the tools that they need to succeed—not what you think they need but what you’ve discerned they actually need because you’ve listened to them. It’s a bidirectional exchange here with everybody working together. Eric adds some new ground to that. He says that to make sure that everybody can productively contribute to this transformation process (and probably know what tools they may need), it’s vital that everybody understands the “why” behind what the organization needs to do, meaning educating physicians and other clinicians in the business of medicine and the financial reasons for the “why” with the whatever. Insulating docs from the real world here helps no one, and it’s not really viable actually in the world that we live in today … … which is a callback to the point that Denver Sallee, MD, made also in episode 402, which, in a nutshell, was that he thinks that unless docs, as a gang, start learning a lot more about the business of medicine, that we’ll continue to see this value extraction and financial toxicity and moral injury–inducing environments that we see right now. Dr. Sallee wrote, “I needed more education in order to truly help patients.” So, let me posit that this “everybody works together and gets educated together” step can help the practice and help patients in a myriad of ways, both at the practice level and at the patient...

So much of this episode (and this podcast as a whole, really) is about one consistent theme: How do we reset or redesign our healthcare industry, including hospital chains—mostly talking about the big consolidated ones that have a lot of money here—but how do we redesign these leviathans to be more consistent with our values as a country and the values of the doctors and other clinicians and others who work in these places and who went into the healthcare profession for a reason that had, you know, something to do with patients? And I mean something to do with patients that doesn’t involve dressing up for Halloween as a giant cardboard dollar sign, like some finance department guy did at one large nonprofit hospital in the spirit of shaking money out of poor patients (see article here). Or listen to previous episodes about hospitals raising prices way higher than the rates of inflation. Not to belabor this because we’ve already talked about it so very often, but you also have the whole thing with big, well-funded, nonprofit hospital chains going on cost-cutting extravaganzas and, at least in one case, basically creating their own staffing crisis. Do these activities have a familiar ring to them? Do they strike you as a page out of a playbook you may have seen elsewhere? I don’t know about you, but they remind me of things that private equity or financial folks run around doing. I mean, the classic stepwise for how to maximize the financial value of an “asset” from a financial industry standpoint is to cut costs and raise prices. Piling on this “kind of sounds like a B-school group project” thesis, what about the thing with a bunch of these big, consolidated hospital systems with rich endowments crying crocodile tears about how much money they lost last year? Except … in a whole bunch of cases, the money they lost—some of which came from the COVID CARES relief act funds they got, by the way—but this money was lost when their risky stock market investments tanked. Those are their losses. Stock market losses. From speculative investments. Are you kidding me? But hospitals are charities, right? They are nonprofits. They aren’t owned by private equity. They aren’t owned by an investment bank or a team of financiers, so you wouldn’t expect them to be acting like they are owned by Wall Street. But … oh, wait … how weird. You know who is on the boards of some of these very well-known nonprofit hospitals? If you don’t, I’m not surprised, because in too many cases, if you ask me, you have to dig around in tax filings and other bureaucratic paperwork to unearth the names of these members who have quite a large amount of power (it turns out) over what goes on in the hospital. But you know who is on these boards? Yeah … almost half of board members tend to have a financial background. Almost none of them are nurses. And what about doctors? Are physicians on these boards? Well, almost one-third of hospital boards did not have a single physician member. So, there’s that. Here’s a quote from a STAT news article written by my guest in this healthcare podcast, Suhas Gondi, MD, MBA, and also Sanjay Kishore, MD, about a study that the two of them coauthored about who is on hospital boards. Here’s the quote: Our findings are cause for concern. If hospital executives are largely held accountable by finance professionals and corporate leaders, instead of by clinicians and patients, might they focus more on revenue and expenses than the needs of their communities or staff? While some argue that margin facilitates mission, the measure of a nonprofit organization is how these priorities are balanced by leaders who ultimately answer to their board. So, I get there’s balance. You have to be financially sustainable. But I also get that, apparently, tigers don’t change their pinstripes. The pin-striped suit remains even when the finance tigers become the board members of a charitable organization that’s supposed to be serving the surrounding...