Relentless Health Value

In INBW32, I talked about telehealth. In this episode, I’m talking about collaboration between healthcare stakeholders or the lack thereof. My grandfather suffered from heart failure. This was many years ago now. But when I say suffered, I mean it. As many of you know, when heart failure is uncontrolled, it is painful to go through or even watch a loved one go through. There was that one time when I accompanied my grandfather (and my grandma was there, too) on a trip to the emergency room, you know, because he was drowning in his own lung fluid and could barely breathe. And when we arrived, they were going to wheel him into one of the exam rooms. But my grandmother put her foot down. She did not want to go into that one exam room because the TV was broken in there. Yes, the two of them had been in the ER so many times that they were familiar with the pros and cons of the various exam rooms. The end of my grandfather’s life was almost unbearable, and I can’t even begin to estimate the hundreds of thousands of

People are averse to change. It’s a thing. It’s a thing that affects even those of us who consider ourselves highly educated and/or very smart. Nobody likes disruption or, even worse, the prospect of disruption and the uncertainty that goes along with that. Nobody likes to feel like the rug just got pulled out from under them or that they’ve lost control of something, especially something important like their health benefits or how they care for patients. Changes to health insurance and healthcare, from any angle, are fraught with stress. A big reason for this is because health and healthcare are filled with so-called “one-way-door” types of decisions and decision points. If I cannot get the care I need today, or if the care I want to provide today to a patient does not go as desired, I feel like the door is one-way: Once I make a decision, I cannot go back. I can’t click “undo” on that and go back through the door and arrive at yesterday. Health decisions, therefore, have a very “you got one shot at this” ki

Lots of talk about direct contracting going on these days. Many of you will be familiar with the term, but in short, direct contracting means when a self-insured employer directly contracts with a provider organization with no payer in the middle of that arrangement. And when I say “employer,” I mean the employer and all their peeps—their TPAs, repricers, other vendors, and consultants. Most of this talk, though, seems to come from the point of view of the employer. It’s super easy to quantify what’s in it for employers. US healthcare costs get blamed for all kinds of things: companies who have lost big global contracts because all of those fringe benefits cost way too much around here. If we’re looking around for a why on that point, let me refer you to last week’s episode (EP366) with Dr. Kevin Schulman entitled “An In-Depth Dissection of Our Dysfunctional Healthcare Benefits Market.” Or the show with Dr. Wayne Jenkins (EP358) about how premium and deductible financial toxicity negatively impacts plan membe

First of all, this is a 400-level discussion. If you think you already know all about our dysfunctional healthcare benefits market, then this show is for you. Before we begin, I just want to say something. I’m gonna refer back to David Muhlestein’s episode (EP364), where he talks about the first step toward healthcare transformation. It is, let’s just say, for incumbent health systems and payers, people who work there, to step back and in the harsh light of day really contemplate their business model—see it clearly. If you’re listening to this show, then know that I love you; so this is not a condemnation of you or the great things that you are likely doing in your department. I see you as a changemaker. But contemplating your organization as a whole is like the first step of a 10-step program … to admit what friends and family were saying at the intervention. If you’re not yet at the—what’s it called?—contemplative stage in your journey toward transformation, you could skip ahead to the 23:00 mark approximat

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, 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

In this healthcare podcast, we’re gonna zoom out and look at the entire healthcare industry. I am very confident that you know a lot about the healthcare industry and its basic stats. It’s huge. The healthcare industry is approaching the $4 trillion mark, and it employs more people than any other industry in 47 states. Think about that momentarily. More people work in healthcare than in any other industry in every state except for Wisconsin, Indiana, and Nevada. We could get into (but we won’t) how many of the gigantic, consolidated incumbents in the healthcare industry are either for-profits sporting very happy shareholders or investors. Then, of course, we have our “nonprofits”—especially mega-nonprofit health systems—who enjoy some pretty healthy margins while, at the same time, these health systems in general offer up some fairly embarrassing levels of charity care considering the amount of taxes they deprive their communities of. You also are probably eminently familiar with various ways that have been c

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 find someone complaining about arduous prior auth processes and how long specialists sit on phones trying to get a prior auth approved while having a frustrating “peer consult” with a “peer” whose career has nothing to do with that specialty and, in fact, knows very little about it. Also consider the time that specialists’ admin teams have to spend—or really any doctor’s admin teams have to spend—when they are required to send documentation validating some prior auth request or appeal. They, in many cases, have to send this documentation via old-school, drop-it-in-a-mailbox mail … literally. This documentation can and often does amount to a sizable box full of paper patient records. They have to drag a box into their office and fill it up with paper to send to the insura

Let’s talk about provider organizations and telehealth. It’s just too common a refrain amongst provider organizations who say some combination of: Our patients and/or clinicians don’t like telehealth. Telehealth is too expensive for us to do ... unless maybe we should charge facility fees for telehealth visits. Telehealth is risky to invest in because as soon as payers start paying less than 65% of in-person visits, we’re gonna drop it anyway. These things are said despite the overwhelming popularity of telehealth in almost any large-scale survey that you’ll find. It seems like largely the only entities reporting that patients and clinicians don’t like telehealth are provider organizations who haven’t adequately invested in telehealth at the systematic/strategic level. Therefore, the only thing their anecdotal evidence about telehealth really seems to show is the negative impact of phoning it in—which is no one wanting to phone in (pun unintentional but, you have to admit, kind of great). All of this is goi

David Contorno the other day posted the life expectancy chart comparing the US to comparable countries. Spoiler alert: It’s horrifying. You see Japan; you see Switzerland, Israel, Spain, Italy … basically everybody else in a cluster of pretty darn vertical lines: increasing life expectancies year over year without much cost increase at all. And then—wow!—off to the right, all by itself, you see the USA, costing nearly double the worst of the other countries with a life expectancy that is years lower. We pay a whole lot, and despite all of the advances in medicine and how much we pay, we don’t seem to be getting the value for our dollar. We could dig into those poor outcomes that we pay for. If we were going to, I might mention our truly beyond-upsetting maternal mortality rates and also infant mortality rates, which are way above other comparable countries. We could talk about all of our issues with diabetes and obesity. But let’s save all that for another day and just take one example that is really the qu

Before I get into the show today, let me just remind everybody about our mailing list, which you can sign up for on our Web site, relentlesshealthvalue.com. You might follow Relentless Health Value on LinkedIn or Twitter, which is a great option, for sure; but I wanted to point out that what you see there is abridged at some level. Meanwhile, if you subscribe to our mailing list directly (again, by going to our Web site, relentlesshealthvalue.com—it’s over on the right sidebar where you can sign up for the mailing list), if you subscribe that way, each week you’ll get an email with a full transcription of the whole introduction of the show with timed show notes. Also, we don’t send out literally anything else beyond what I just described on a weekly basis. Also, you can unsubscribe easily and anytime you want. You just hit the unsubscribe in the email. Also, we don’t share our list with anybody. We barely have time to look at it ourselves, so if you have any concerns there in that regard, please don’t.  Last

Last week’s show was with Wayne Jenkins, MD, from Centivo; and we talked about how insurance design, when not done well, can lead, in a nutshell, to mental and physical health problems for employees. This is a great lead-in to the conversation in this healthcare podcast with Dan O’Neill. And before I get into why it’s a great lead-in, let me just start here—and don’t roll your eyes. What is value-based care? Consider this delineation: There’s value-based payments, and then there’s the type of care that these payments incentivize. You would hope that a value-based payment would result in care that was of value (ie, great patient outcomes and patient satisfaction at a fair total cost of care). But those are two distinct things—the payment and the care. If we change the payment model but the provider behavior doesn’t change in a way that actually improves patient outcomes and care, then what are we doing here? Or the converse: If we do not change the payment model, then how does anyone expect the care paid for i

First of all, anybody who thinks that your average citizen in the United States today is unaware of the financial double jeopardy of going to a doctor, going to an emergency room, getting a procedure is sorely mistaken. Americans today are well aware of the financial risk that they are taking by seeking healthcare in this country. To illustrate this point, let me read the first couple of sentences from a New York Times best-selling book review: “The illness narrative, ending in financial ruin and decreased quality of life, has become one of the classic 21st-century American stories. In her debut essay collection, Emily Maloney documents the … intersections of money, illness and medicine. For Maloney, the primary experience of receiving health care is not merely a bodily or spiritual event but always … a financial one. She understands … the relationship of money to being ill, … to managing an unfathomable amount of debt.” This is a New York Times best-selling book in the beginning of 2022.  Add to this somethi

Here’s the biggest problem with a lot of telehealth endeavors: Someone decides that they need to be doing telehealth, for whatever reason. Maybe there’s a pandemic, for example. And the basic plan is this: Install some technology, give everyone a username and password and a link for patients, check that box, and move on to the next thing. My guest in this healthcare podcast, Liliana Petrova, has seen and talked about how, far too many times, the whole concept of telehealth is narrowed down to the exact moment where a patient and a doctor have a visit together. That’s it … that transaction. There’s little effort, if any effort, made to integrate telehealth into the existing clinical workflow, into the existing patient/customer experience, into the core business, into anything longitudinal. Telehealth becomes a weird island of a service only used by intrepid clinicians willing to put in the time and effort required to deal with its vagaries and inconveniences. Only used also by patients who manage to find the t

So … let’s start here. Mostly this whole episode is about the so-called “Big Three” PBMs that provide between the three of them pharmacy benefit services for 95% of insured Americans. PBM stands for pharmacy benefit manager, and the Big Three PBMs being ESI, otherwise known as Express Scripts; OptumRx, which is a part (a big profitable part) of United Health Group; and then also CVS. Yes, CVS is not just for your retail pharmacy needs; they are also a huge pharmacy benefit manager. Now, we get to the GoodRx part of our story. If you don’t know how GoodRx works, I would strongly encourage you to go back and listen to “An Expert Explains” with Dr. Ge Bai from last year (AEE13). That said, here’s the super short semi-reductive version to keep us all level set here. If you already know how GoodRx works, you can skip forward about four minutes.  So, first of all, let’s all understand that GoodRx’s business model only exists because the pharmacy supply chain dominated by these three big PBMs that we just talked abo

My guest in this healthcare podcast is Nikhil Krishnan, who is the founder of the Out-Of-Pocket newsletter. I was talking with Nikhil, and we identified—or, more accurately, he identified—five business models of digital health. What makes each model distinct is a few factors. If you weren’t in the healthcare industry, you’d probably expect that I’m going to say that the biggest factor a business model must hinge on must have something to do with patient outcomes or care or something that has something to do with the hopes and lives of patients. Except no. Mostly, our models do not define themselves by attributes of their patients, except on one dimension: who is paying their bills. Who is paying has enormous downstream consequences that I don’t think people outside of healthcare, or even people inside of healthcare, sometimes really appreciate. It’s because of all of the perverse incentives. It’s a tangled web we weave. For example, let’s just say you’re a start-up founder trying to cook up your unique sellin

In this healthcare podcast, we’re gonna talk about the realities of setting up a clinically integrated network, otherwise known as a CIN. If only the whole process was unicorns and rainbows, but—as you likely suspected—it’s not. Setting up a clinically integrated network is hard work, but the payoff for patients and clinicians alike can be worth fighting for. First of all, what is a clinically integrated network? It is a kind of ACO (accountable care organization). It is a legal entity that is a form of an ACO. So, every CIN is an ACO. But not all—in fact, most—ACOs are not CINs.  CINs enable coordinated care. Everybody in the network gets together to figure out how to enable clinicians to (for reals) follow their patients through multiple care settings and plan for an entire care journey. It can really help the patients navigate our crazy healthcare industry by giving them a trusted team that plots out a proactive path toward better healthcare outcomes and then make sure the patient stays on that path. It ca

This episode is probably a 400-level class in specialty pharmacy rebating. If you want a 45-minute conversation on rebates in all their glory, go back and listen to the conversation with Chris Sloan (Encore! EP216).   But if you’re still with me, what’s gonna follow is about an eight-minute overview of pharmaceutical rebating, just to make sure we’re all on the same page before we get into the show itself. So, if you know all there is to know about pharmaceutical rebating, you can jump ahead about eight minutes and get to the part where I talk with Pramod John.

As a country, we spend approximately $500 billion on prescription drugs. Specialty drugs account for less than 2% of prescriptions but will cost us over $250 billion (that’s in 2021)—so, 2% of prescriptions but half the spend. Specialty is the fastest-growing segment of healthcare spend and is a dominant issue that self-funded employers and other purchasers face. But let’s dig into that $250 billion being spent on specialty drugs, shall we? I have to say, personally, that if we spent $250 billion but saved more than that in medical costs or if the patient quality of life went up measurably or if life expectancy or overall survival or whatever metric you used to assess quality … if that big spend produced even bigger returns/results, I for one would be like, “OK, trade-offs. Let’s discuss.” But the thing is, clinical trials and real-world evidence alike suggest that there’s a lot of patients who don’t really benefit from the expensive drugs that they are taking or were prescribed, and even those who benefit mi

In this healthcare podcast, I’m speaking with Eric Bricker, MD, about how so many entities in healthcare are getting up in other people’s business and swimming in other people’s traditional lanes. Consider last week’s show with Katy Talento, for example. She mentions employers who are not only doing their own direct contracting (ie, cutting out the traditional carriers and negotiating directly with provider organizations) but also employee benefit consultants who are working on setting up their own hospital—an employer-owned hospital. That was episode 350, and while this hospital idea is a little future oriented, right now today, across the country, we have employers and also unions who are owning their own primary care clinics, which I discussed at some length with Mark Blum from America’s Agenda (EP248).   In this episode with Dr. Bricker, we start from the beginning. We kick off the conversation talking about the payer, PBM, and hospital system horizontal consolidation that has transpired over the past dec

In this healthcare podcast, I’m talking about direct contracting IRL (in real life) with Katy Talento. This is a conversation that’s more about the reality of direct contracting than the theory of direct contracting, and this was not an accident. So much of healthcare transformation is really easy to say and much harder to actually do. So … direct contracting. In the context we discuss in this episode, generally direct contracting means when an employer or their benefits consultant, more likely, hooks up with a provider organization, lots of times a hospital or a health system. Moving forward here, I’m just gonna say employer when I sort of really mean the employer and their TPA and their repricer, the constellation of consultants and other vendors that are working with the employer. So, just for simplicity, the employer says to the provider organization, “Hey, let’s cut out the middleman here” (middleman likely being some insurance carrier). “I will just pay you directly, and it will be a win-win because no