Consumerism – The Race to Value Podcast™

The future of care is not confined by walls; it thrives in the heart of homes, where compassion meets innovation, and healing becomes a daily experience. Home-based primary care with full-risk Medicare Advantage is a transformative model that not only brings health care to the doorstep of our seniors but also places the responsibility for their well-being squarely in the hands of dedicated providers, creating a proactive and patient-centered approach to aging with dignity and comprehensive care. By making primary care easier to access for our nation’s seniors, we can deliver personalized care that meets their needs; help them stay healthy and feel better; and live well with existing conditions so they can prepare for what’s ahead.

This week we are joined by two executive leaders from WellBe Senior Medical — the largest and fastest growing independent home-based medical group in the country. WellBe is a global risk medical group that provides longitudinal geriatric care to underserved, frail, complex, and homebound Medicare Advantage beneficiaries. In this episode, we feature Dr. Jeffrey Kang, Chief Executive Officer and Mike Stuart, Chief Growth Officer from WellBe Senior Medical.

Dr. Kang is a geriatrician with extensive experience in global risk and primary care for frail, elderly, and disabled populations.  Mike Stuart has extensive experience in fostering partnerships with health plans, health systems, and provider groups and leads commercial strategy and partnership development for WellBe Senior Medical.  In this interview you will learn about the home-based care continuum, primary care innovation, mission-driven leadership, Medicare Advantage risk, and the future of value-based primary care.

Episode Bookmarks:

01:30 An overview of WellBe Senior Medical – a global risk primary care group providing longitudinal geriatric care in the home.

02:30 Introduction to Dr. Jeffrey Kang, WellBe CEO (formerly served as ChenMed President, Walgreens SVP, Cigna CMO, and CMS CMO).

03:00 Introduction to Mike Stuart, WellBe Chief Growth Officer (formerly served in executive leadership roles at Somatus and Evolent).

05:00 An overview of the home care continuum (e.g. acute, post-acute, custodial, longitudinal primary care, DME, home infusion).

08:00 How WellBe is helping patients navigate and coordinate the fragmentation of home care point solutions.

10:30 A mission to help senior patients “lead healthier meaningful lives by delivering the most complete care”.

11:30 Opportunities to make care in the home more multidisciplinary, personalized, and SDOH-responsive.

12:00 Proactive vs. Reactive Care (leveraging analytics and unique provider skillsets for population health).

13:30 The clinical persona of the “frail elderly” and why WellBe focuses on this target population.

14:30 “Everything done in a primary care office can actually be done at home.”

15:30 “Home-based primary care is the best thing to do. You get better outcomes and better patient satisfaction.”

15:45 Is it possible to deliver high quality primary care (like ChenMed or Oak Street) in the home setting?

16:30 Referencing Marcus Welby, M.D. as an example of an empathetic approach to delivering care in the home (see Season 1 Trailer)

17:00 Care Fragmentation Challenges – NEJM found that the average Medicare patient sees a median of two PCPs and five specialist physicians per year.

18:00 “Quality of Life” is more important than “Quantity of Life” (why empathy and compassion matter most in caring for frail seniors).

19:30 Patients define a good doctor by bedside manner and respect given.

20:30 How the economics of full global risk enable complete care models for seniors.

20:30 Scalable home-based primary care is a new approach in value-based care.

23:00 WellBe’s results (e.g. >50% neighborhood engagement, patient satisfaction is at 95%, and MLR improvement >40% in 3yrs).

23:30 The importance of reaching a 4 Star Rating in a Medicare Advantage plan.

24:45 Key Measures of success:  Patient Engagement, HEDIS, Medical Costs and MLR

25:45 Bringing health plan leaders on a ride-along to see high quality care in action.

26:00 Negotiating global risk deals with MA plans that offer favorable economics for both parties.

27:00 The starting HEDIS Stars score of a typical WellBe patient is 2.3-2.5 (polychronic, frail, high-risk).

27:45 “When you are at full global risk, it is in your interest to do care innovation.”

28:00 Innovation #1 = Access (“Primary care in the home needs to be both convenient and responsive.”)

29:00 How WellBe developed a mobile paramedic program to enhance responsiveness to emergent acute care needs.

30:00 Mobile paramedic program reduced emergency room visits by 33%!

31:00 Dr. Kang’s recent article in Health Affairs responding to concerns from Berwick and Gilfillan about Risk Adjustment in MA.

31:30 The CMS-HCC V28 changes to the Risk Adjustment model that begin the phasing in next year.

33:00 The evidence for Medicare Advantage being overpaid relative to FFS?

33:45 Eliminating disease-based risk adjustment is the wrong policy (e.g. need for fair payment for complex populations, avoidance of cherry picking healthy populations).

35:30 The case for HCC under-coding in Traditional Medicare (due to lack of incentives in FFS).

36:45 “The bulk of the problem with HCC coding is under-diagnosis in fee-for-service Medicare – not over-coding in MA.”

38:00 Modern Healthcare Best Places to Work 2023 – WellBe Senior Medical

38:30 WellBe Senior Medical providers see 4-5 patients per day allowing them to build trusting relationships.

39:30 A recent study from Elation Health and the AAFP confirms that VBC can ameliorate the suffering of the physician workforce!

40:30 The culture of WellBe that empowers workforce collaboration with a “patients first” mentality.

42:00 Examples of how risk-based economics improve patient care.

43:00 Creating a foundation of values to underpin a culture of collaboration is crucial before accepting risk!

43:30 A clinically-led culture vs. a financially-led culture (“If you take good care of the patients, the financials will follow in a value-based model.”)

45:00 A financially-led organization will focus almost exclusively on risk adjustment (as opposed to delivering patient-centered care).

45:30 “Most of our MLR improvement is from medical cost reduction, not HCC coding.”

46:45 Wellbe Senior Medical is now in 7 states caring for 107,000 MA patients (20% of them which are dual eligibles).

48:00 Proving the scalability of a home-based primary care model.

48:45 Expansion into rural areas.

49:45 Future growth plans.

50:00 Advantage in Scalability: (“When launching new markets, we could actually be up and running in 90-days – we don’t have the problem of bricks and mortar.”)

51:00 Disadvantage in Productivity: (ChenMed and Oak Street providers can see 20 patients a day in the office, while we are only seeing 4-5.”)

52:30 The ethno-geriatric imperative (one-third of older Americans are projected to be from one of the minority populations by mid-century).

54:00 Dr. Kang discusses how the Chinese cultural significance of taking care of elders informs his leadership at WellBe.

54:45 Healthcare disparities are driven by inadequate access to care.

56:00 An example of how WellBe provides linguistically appropriate and culturally competent care in Chicago.

57:00 The number of Americans aged 65 and older will more than doubling over the next 40 years — reaching 80 million in 2040.

58:00 Optimism for the value-based future of caring for seniors – does hope mostly reside only with Medicare Advantage and ACO REACH?

61:00 Multi-payer alignment in value-based care as an imperative to a hopeful future.

Since diabetes is one of the few chronic conditions that can be very effectively managed by an individual, why are there so many people with poorly managed diabetes? Despite conventional logic, it’s not that most people aren’t willfully noncompliant with their diabetes care. Instead, many have extenuating socioeconomic or other circumstances that can lead to drifting away from their care plans.

There is an opportunity in value-based care to engage diabetic patients more effectively through data-driven personalized care interventions.  By merging rich, non-traditional data sources such as purchase trends with foundational elements like claims and clinical services, trusted care team members can develop one-of-a-kind insights into individuals’ risks and behaviors. Translating broad, extensive multiple data sets into actionable information specific to an individual holds the potential to better manage populations while simultaneously changing the trajectory for each patient living with a chronic disease.

On this week’s episode, we have: Richard Mackey, Chief Technology Officer at CCS, a company that transforms chronic care management by combining equipment and products with comprehensive education, monitoring, and coaching…serving more than 400 employers and more than 1,800 managed care plans nationally to support patients with diabetes.  Joining Richard on the podcast is Jean-Claude Saghbini, Chief Technology Officer at Lumeris who also serves on the advisory board for CCS.

Richard and Jean-Claude address how technology-assisted disease management makes the patient experience less arduous. They also discuss how devices and digital tools such as continuous glucose monitors, insulin pumps, chatbots and smartphones can generate an enormous amount of new and unique data. The information from these additional data feeds can be used to derive valuable insights into both the individual and population levels to drive the future of personalized care.

Episode Bookmarks:

01:30 Data-driven, personalized care interventions are key to effective chronic disease management.

02:00 Introduction to Richard Mackey and Jean-Claude Saghbini.

02:45 An overview of technology-assisted disease management.

04:00 Support Race to Value by subscribing to our weekly newsletter and leaving a review/rating on Apple Podcasts.

05:00 Diabetes is such a significant problem in the United States, affecting over 37 million people, and it leads to numerous health complications.

07:00 Richard provides his perspective on the potential for aggregating disparate data sources and applying advanced analytics to transform diabetes outcomes.

08:30 How technology solutions can enhance the relationship between the care provider and the patient.

09:00 An overarching data interoperability framework is not necessarily required to leverage the power of data and technical solutions.

09:30 Jean-Claude on balancing the aims of interoperability, data normalization, and predictability in data flows with current day realities.

12:00 The importance of partnerships in driving scale in population health management through combined data feeds and biometric capabilities.

13:00 Richard expounds on the importance of partnerships in data-driven solutioning and medical device optimization for effective delivery of VBC.

14:30 Jean-Claude on how healthcare organizations can extract insights from technology to change the trajectory of disease in their patient population.

16:00 Predictive analytics can accelerate progress in understanding relationships between external factors and human biology.  

17:30 Richard discusses the impact of predictive analytics to enhance the reengineering of clinical pathways to deliver personalized care to patients.

18:15 The unique opportunity to customize patient segmentation at the individual-level (versus relying just on profiling patients at the population-level).

19:45 Jean-Claude on how SDOH predictive models focused on housing instability or transportation access can be combined with clinical data.

21:00 “We are at the intersection of both AI and enhanced accessibility of data.  This will ultimately change the trajectory of chronic disease in our country.”

22:00 Diabetes supply ordering patterns can be an early indicator that there’s a problem with a person’s self-care routines.

22:45 How consumption-focused data can be used to support more effective chronic disease management for diabetes.

25:00 The correlation between medical cost savings and lower Hemoglobin A1c scores in diabetic populations (e.g. a 1% reduction in HbA1c is associated with a 9.8% reduction in TCOC).

25:45 In general, on average, a patient with an A1c > 9% costs $10,000 dollars per year more than a patient with an A1c < 7%.

26:30 “We certainly see that better care and lower cost care go hand in hand.  The shift from FFS to value-based care will give us the outcomes we want in terms of cost and quality.”

27:00 “The keys to value-based care success are alignment of incentives, technology enablement, and effective change management.”

29:00 Adherence to continuous glucose monitoring (CGM) therapy results in a 20% reduction in excess healthcare utilization for diabetic patients.

30:00 “Technology-assisted disease management and health coaching is not just a transaction.  It is an important relationship with the patient that reinforces the provision of primary care.”

31:00 A digital front door can improve communication, care coordination, and population health management, ultimately leading to better patient outcomes and more efficient healthcare delivery.

31:45 “It is important for us to have a holistic, 360-degree view of the patient to drive and fuel care management interactions.”

32:00 The importance of self-managed care options in diabetes to empower the healthcare consumer to maintaining their care plan.

33:30 How successful technology to improve healthcare consumerism is not always front-facing and often runs behind the scenes.

34:45 The inevitable shift away from inpatient hospitalizations and procedures to care being delivered more in the home.

36:30 Richard shares the story of how his father was burdened with a fragmented and complicated diabetes care experience.

37:45 The opportunity to improve outcomes in value-based care by creating an integrated, seamless experience for patients suffering with diabetes.

39:00 Even the most sophisticated data-driven intervention runs the risk of failure if it is not backed by an established, trusted bond between patients and a provider.

40:30 The power of data to empower care for diabetes by interdisciplinary teams.

42:00 “Data can only be effective to drive population health outcomes if there is trust between the provider and the patient.”

42:30 Data consistency, predictive analytics, workflow integration of recommendations, and provider centricity as keys to success in developing trust.

44:30 “Healthcare data is the lifeblood of modern medicine, but it’s value is limited with patient trust. Trust is the currency that enables the exchange of health information and empowers patients to take control of their health.” – Karen DeSalvo

46:00 Everyone is touched by diabetes.  Now is the opportunity to make a difference!

Dr. Stephen Klasko is a transformative leader and advocate for a revolution in our systems of health care and higher education. He has been a university president, a dean, a CEO, and an obstetrician, and now pursues his vision for the creative reconstruction of American healthcare by bridging traditional academic centers with entrepreneurs and innovators. His passion is using technology to eliminate health disparities and offers everyone the promise of health assurance. Dr. Klasko is also a lifelong DJ who believes that the message in the music can give us the courage to tackle a broken, fragmented, unfriendly, expensive, and inequitable healthcare system.

In this episode, Dr. Klasko merges with his alter ego “Stevie K the DJ” to discuss his new book, “Feeling Alright: How the Message in the Music can Save Healthcare” published by ACHE.  Feelin’ Alright leverages the emotional power of song lyrics to inspire healthcare executives to envision and build a more accessible, high-quality, and equitable healthcare system. Using music as a metaphor,  Dr. Klasko encourages us to examine what is problematic in the existing healthcare model and to take tangible steps toward a more consumer-centered healthcare experience.

Infused with the passion inherent in music, this interview motivate healthcare leaders to take the lead in building a better healthcare system!

Episode Bookmarks:

01:20     DJ Eric “The Dream” Weaver introduces Dr. Stephen Klasko (aka Stevie K the DJ)!

03:30 Support Race to  Value by subscribing to our weekly newsletter and leaving a review/rating on Apple Podcasts.

04:30 Using the power of music to inspire a more optimistic world.

05:30 Dr. Klasko discusses his prior career as a DJ and how getting fired started him on the path to medicine.

06:30 Using music at Jefferson to inspire his others to find hope in overcoming the pandemic, financial tsunami, and systemic racism.

07:00 “Choice of Colors” by Curtis Mayfield and the Impressions (healing during the George Floyd protests)

07:45 “Courage to Change” by Sia become a theme song for frontline workers and their heroic response to the COVID-19 pandemic.

10:00 Health care delivery during the pandemic was a war and how music helped to see a brighter day.

10:45 “We have to stop saying we are the best healthcare system in the world.”

11:00 “Medicine’s Dilemmas: Infinite Needs Versus Finite Resources” and the “Iron Triangle” of Healthcare

11:30 The performance of stocks as evidence for flawed thinking around healthcare disruption.

12:30 Kaiser Permanente and Geisinger come together to launch Risant Health and expand access to value-based care.

13:00     Payer-Provider Alignment in Medicare Advantage

13:45 Cityblock Health leveraging capital investment to build a Community Health Worker model for population health.

14:30     Taking population health, social determinants, predictive analytics, and health equity to the mainstream of healthcare.

14:45 “Keep the Customer Satisfied” by Simon & Garfunkel as inspiration for health assurance to rebuild trust and equity in a broken system.

17:00 In healthcare, do we really view the people as the customer?

18:00 The healthcare system is setup to enrich the people in control.

18:30 “The concept behind health assurance is that costly sick care will give away to affordable, personalized, and preemptive care, partly through genomic sensors and AI-based digital therapies.”

19:00 The future of Jefferson as a health system without a location.

20:00 Livongo and Jefferson Health — a strong, sustainable partnership between technology and providers to remake medicine.

21:00 Poor consumer segmentation in American healthcare (viewing patients monolithically).

22:45 Radical change needed! (collaboration, concentration on health disparities, creativity, and portfolio diversification)

24:00 Dr. Klasko’s prediction for the future market landscape of health systems and hospitals.

25:00 “Mr. Roboto” by Styx bemoans the plight of ‘modern man’ oppressed by technology and is a cautionary tale for the use of tech-enabled healthcare.

27:30 The interface between technology and humans (“When offline meets online, what happens to the human in the middle?”)

27:45 Elon Musk and Generative AI

28:00 The importance of recognizing change in society when selecting and training medical students.

29:00 How do we create humans that are more human than robots, instead of more robotic than robots?

29:45 Retraining doctors and faculty who “joined a cult” when entering medicine.

30:00 The lies to providers that technology would make their life easier.

31:30 Building a relational bridge between healthcare leaders and generative AI.

32:00 Failure of IBM Watson vs. Success of Aidoc (why it is important to augment – not replace human intelligence).

33:00 “I am Changing” by Jennifer Hudson from the movie Dreamgirls – a theme song for American healthcare delivery in the 2020s.

35:30 “Hospital CEOs need to think like Target and Walmart trying to compete with Amazon.”

37:45 Why hospital billboard ads and commercials make no sense!

38:30 The new marketing in healthcare is all about consumerism (helping patient navigate, offering convenience, inspiring loyalty).

39:45 “We need to demonstrate value by giving consumers a single point of contact to create a seamless experience across the continuum.”

40:00 The Amazon acquisition of OneMedical is emblematic of a failed primary care model that lacks consumerism.

41:00 The inevitable failure of Chief Marketing and Growth Officers that are aging white men.

41:45 Examples of innovation:  Strongline (staff safety) and Guild (upskilling the workforce)

43:00 Dr. Austin Chang and his incredible work as a Chief Medical Social Media Officer at Jefferson.

44:00 Overcoming the “poor me” mentality (embracing payer-provider alignment, lower costs, consumerism,Jand portfolio diversification).

44:30 “For the Love of Money” by The O’Jays speaks to the destructive impact that a singular focus on money and profit can have on individuals and society at large.

44:30 The Maryland All-Payer Model – mandated global budgets for hospitals achieved great success.

46:30 Dr. Klasko discusses the concept of a single payer by state model.

47:45 Fear and greed caused by the flow of money into politics.

48:30 Direct patient marketing of expensive, specialty drugs.

49:00 Spending 4X more for obstetrical care than other countries (with far worse outcomes).

50:00 The dilemma of expecting a system to change when salaries depend on it not changing.

51:00 Our healthcare system does absolutely great! (for plaintiff’s lawyers, specialists, pharma and insurance industries, EMR companies, PBMs, and patients with unlimited resources who have the best insurance)

52:00 The unconscionable deaths of people during the pandemic who died at home when telehealth companies made record profits.

53:00 The need for companies to fail.

54:00 “Born This Way” by Lady Gaga as an anthem for self-acceptance and celebrating diversity.

55:30 Dr. Klasko on how zip code and living conditions mean more to life expectancy than one’s genetic code.

56:30 Dr. David Nash and his landmark population health research on Social Determinants of Health.

57:00 “In a practical world, a health system CEO is incentivized to keep their population as healthy as possible.”

57:30 The radical shifts that took place at Jefferson Health to improve health equity.

60:00 Solving for food deserts through bar coding and drone delivery.

61:00 The challenge of focusing on SDOH interventions when fee-for-service revenue declines.

62:00 “The Myth of Trust” by Billy Bragg as a somber reminder that people have lost trust in institutions.

63:00 Lack of trust in the healthcare system (citing the failure of GPS technology to improve health)

64:30 Distrust with genomics testing and the privacy of data.

65:30 Patients being able to monetize their own data when participating in clinical studies.

66:30 Nurses who feel that CEOs do not care about them.

67:00 Reinstating healthcare as a public good with servant leadership at the helm.

68:00 “Don’t Stop Believin’” by Journey

69:00 The future of 3D printing, RPM, and digital medicine in serving humankind alongside compassionate providers

70:00 Dr. Klasko describes a future scenario in 2033 where technology could prevent a global pandemic.

73:00 Optimism for the future of health assurance with currently available technologies.

74:00 “Will it Go Round in Circles” by Billy Preston as reminder that we do not want to reform healthcare 360 degrees!

One of the most widely known and influential thinkers on management, Peter Drucker, once said, “The entrepreneur always searches for change, responds to it, and exploits it as an opportunity.”  In this movement to value, it’s seems that the new players – innovators and disrupters with unbridled passion for entrepreneurialism – are going to be in the best position to be at the headwaters of a transformation in American healthcare. The financial incentives in the current model of healthcare are simply too entrenched to be overcome by most legacy incumbents worried about how value transformation will create demand destruction in their fee-for-service lines of business. We need a better way forward.  Now is the time to  throw away traditional economic principles to reshape healthcare in our country!

Our promise to build a uniquely new American healthcare system that is patient-centered and economically viable will be realized by innovators like the one you will hear on this week’s episode. We are joined this week by Thompson Aderinkomi, the Co-Founder and CEO of Nice Healthcare. Thompson has the mindset that if it’s broken, you fix it…we as industry leaders shouldn’t wait for someone else to figure out how we are going to win in this Race to Value!  Thompson is a health economist and entrepreneur that you should be listening to.  As the co-founder and CEO of Nice Healthcare, he has created a technology-enabled primary care clinic that delivers all care in the comfort of the patient’s home and contracts directly with small employers. Thompson built this company in response to the economic dysfunction and lack of cost accountability that he observed in our broken healthcare system. According to Thompson, it will be necessary for innovators to lead the way since the legacy model is too entrenched to reform itself.  Listen to this incredible interview to find out why Thompson believes that value-based care (if done right) will ultimately lead to the bankruptcy of legacy companies!

Episode Bookmarks:

01:30 Introduction to Thompson Aderinkomi, the Co-Founder and CEO of Nice Healthcare.

02:30 Support Race to  Value by subscribing to our weekly newsletter and leaving a review/rating on Apple Podcasts!

03:30 In 2017, Thompson co-founded Nice Healthcare – an on-demand, in-home technology-enabled clinic that delivers comprehensive healthcare to employees of small and medium-sized businesses.

04:30 Thompson shares the horrific story of the poor healthcare his one-year old son received and how that shaped his entrepreneurial vision to start his company!

06:45 How the lack of consumer-centric innovation in healthcare harms the spirit and hurts patients financially.

08:00 Thompson’s privilege allowed him and his family to overcome their poor healthcare experience unscathed…how many people do not have that fortune? (The inspiration for Nice Healthcare)

09:00 Referencing the famous article, “It’s the Prices, Stupid,” by the late health economist Uwe Reinhardt where he argued that high prices explain most of why U.S. healthcare costs are so much higher than those in other advanced countries.

09:45 The problem with supplier-induced demand, where a  physician (i.e. the “supplier”) also serves the economic role as a consumer by generating their own demand.

10:15 Nice Healthcare is fully capitated (no fee-for-serve whatsoever) which allows it to offer unlimited virtual care and home visits, along with lab tests, drugs, xrays, and EKGs conducted in the home.

10:45 “The problem with healthcare is the unit price.”

12:00 Thompson explains the pricing inelasticity demand in healthcare and why that creates flawed incentives for consumer price gouging.

13:00 Profit maximization by increasing market share is not necessarily the modus operandi in healthcare when you can get away by charging whatever you want.

14:45 “Unless you create a completely new business model in healthcare, you are not going to change the price.”

15:00 How Nice Healthcare has changed the pricing model through a disruptive business model.

17:00 Receiving delegated risk from payers in the form of capitation.

18:30 “Our technology and processes allows us to operate at a lower unit price point that we, in turn, pass on to the consumers of care.”

19:00 Referencing prior Race to Value episode with Dr. Farzad Mostashari

21:30 “The very notion that a legacy model for-profit entity would deliberately engage in activities (like value-based care) that lower their revenues or profit is ludicrous.  Innovators and upstart companies must solve this problem.”

23:00 “If none of the incumbent healthcare players are going out of business, you don’t have value-based care. The ultimate result of true value-based care should be bankruptcy of legacy companies.”

24:30 A new innovator can be profitable and create value for shareholders and communities with much lower revenues than incumbents.

26:00 True innovators in healthcare do not grow fast because they are creating value.

26:45 Referencing “The Innovator’s Prescription’ by Clayton Christensen (the wasteful spending in healthcare that can be addressed by innovators)

28:30 “Simplicity doesn’t start with Technology.  Technology only makes simplicity elegant.”

29:00 The simplicity of the Nice Healthcare care delivery model.

31:00 The surge of venture capital and private equity investment going into virtual care and high-touch primary care models and the move to asset-light hospitals.”

32:45 “Hospitals should not be for-profit and should not even be private organizations. They should serve as a utility offering a public good.”

34:30 Removing the profit motives from hospitals will make them a public utility (just like police and fire departments).

35:30 “Everyday primary care should be as easy to access as air. That is where free market principles, competition, and true innovation come into play.”

38:00 Employer-sponsored health plans have gone up 54% in the last decade.  Are employers the “sleeping giants” that will awaken to force the change needed in our healthcare system?

39:30 Thompson explains how Medicare and commercial insurance plans are inextricably linked together. (Lower wages because increased healthcare costs creates less tax revenue to fund Medicare program.)

42:00 “Any solution we want for Medicare has to involve the commercial population.”

42:30 “The federal government needs to wake up to the fact that the healthcare industry is making it impossible to fund Medicare.”

43:30 “The most expensive and complex care should be provided by the government. The lowest risk pool has everyone in it.”

44:00 “Funding Medicare through income taxes harms employees. We have to be free from that paradigm so employers can affect change in healthcare with true innovation.”

45:30 How the high barriers to entry in the healthcare marketplace prevent new entrants from coming in to impact real change.

45:45 The need to create national provider licensure, loosen telehealth regulations, and lower the debt burden for students in medical schools.

47:45 The healthcare economic model must change to better serve society – healthcare should be a “right” instead of a privilege.

49:00 Will increased patient expectations become a formidable agent of change to hold the healthcare industry accountable for consumer-centric innovation?

50:00 Consumer demands will not lead change in healthcare because they lack agency and ultimately succumb to pricing inelasticity.

51:30 Thompson explains how Nice Healthcare provides patient-centered care by pulling up a random patient review on Google (and compares it to a random competitor clinic in Minnesota).

55:30 Nice Healthcare Results: 98% of patients rate care as better than their previous clinic,  $453 net yearly savings per employee, and the company has a 93.2 Net Promoter Score.

56:30 Saying “no” to insurance and partnering with innovative, forward-thinking brokers led to product distribution at a low price point with minimal friction.

58:00 Combining virtual care with in-home visits to replicate the clinic experience.

62:00 Thompson provides a contrarian view of Population Health by stating that it has nothing to do with predictive modeling and algorithms (we should instead focus on changing our food industry, educational system, and policing to improve health.)

63:00 “The sole purpose of population health management is to improve patient experience and lower the cost of care to improve quality and outcomes. You don’t need data to do that. All you need is to provide access to primary care at a lower unit price.”

66:00 Thompson provides parting thoughts about what it takes to be a healthcare innovator (and provides criticism for those incumbents who are lying about the value they are creating.)

Did you know that musculoskeletal care is one of the biggest challenges facing the value transformation of healthcare?  Musculoskeletal healthcare spending is rising at an unsustainable rate – having doubled in the last decade!  Many of these procedures (such as knee replacements and spinal fusions) contribute to overspending on care that is not even needed, as it has been estimated that only 50% of MSK procedures are evidence-based. The rising costs ofmusculoskeletal care is now a top cost driver for employers and health plans. Yet despite rising costs, MSK outcomes for members haven’t gotten better over the last ten years. Studies have shown that, despite a dramatic increase in health care expenditures for patients with back and neck problems over the last decade, there has not been a corresponding improvement in patient clinical outcomes. In short, spending more money has not correlated with better outcomes.  We are in dire need of a value-based revolution in the provision of musculoskeletal care. The current system is clearly broken. Studies have demonstrated that common approaches to MSK care (surgery, imaging, injections, opioids) do not effectively resolve back and joint pain. And the challenges of escalating costs associated with such low value are too big to ignore.

There is a better way, and this week on the Race to Value, we interview two of the leading innovators in orthopedic value-based care! In this special episode, we will begin with an interview with Dr. Kevin Bozic, the chair of surgery and perioperative care at the Dell Medical School at The University of Texas at Austin. He is an internationally recognized leader in orthopedic surgery and value-based health care payment and delivery models and currently serves on the Board of Directors for the American Academy of Orthopaedic Surgeons – a clear signal from the AAOS that the specialty is moving into the value-based care arena. Our second interview on the podcast is with Dr. Kian Raiszadeh, the CEO and Co-Founder of Livara and SpineZone, an orthopedic surgeon who has created an innovative orthopedic care management system for payors, providers, and health systems to unify the patient experience and transition to orthopedic value-based care.

Episode Bookmarks:

01:30 Musculoskeletal healthcare spending is rising at an unsustainable rate – having doubled in the last decade!

01:45 It has been estimated that only 50% of MSK procedures are evidence-based.

02:00 Increased MSK spending in healthcare not associated with a corresponding improvement in patient clinical outcomes.

03:00 Introduction to Kevin Bozic, M.D., MBA and Kian Raiszadeh, M.D.

03:45 Upcoming conference in value-based orthopedics – OVBC on January 26th-28th

05:00 At the Musculoskeletal Institute at UT Health Austin, Dr. Bozic has created a MSK Integrated Practice Unit.

06:30 Dr. Bozic provides an overview of the Musculoskeletal Institute and how it functions as an Integrated Practice Unit.

07:30 “The vast majority of patients with musculoskeletal conditions do not require or benefit from surgery.”

08:00 The role of the primary care in treating MSK disease within a “musculoskeletal medical home”.

08:45 Comorbid conditions with chronic MSK disease (e.g. anxiety, depression, obesity) are rarely treated in a non-integrated model.

09:45 Holistic integration of primary care-based orthopedic physicians, APPs, physical therapists, dieticians, and social workers.

12:30 Dr. Bozic discusses the potential for condition-based bundled payments in the treatment of MSK disease.

13:45 The role of bundled payment care pathways in lowering overall costs with better clinical outcomes.

14:00 How reduction of inpatient post-acute care can result in lower episode spend with “no detrimental impact on patient outcomes.”

15:00 The big value opportunity — addressing the continuum of care across the spectrum of disease (not just focusing on the surgery).

16:00 Redesigning MSK delivery for optimizing outcomes associated with pain, functional status, and quality of life.

16:30 “Value is all about improving health outcomes in ways that over time reduce the cost of health care. Health is inherently less expensive than disease.”

17:00 The Value Institute for Health and Care and its work in improving health outcomes. (Reference podcast with Elizabeth Teisberg).

19:00 Dr. Bozic discusses the important of patient-reported outcomes (PROs) and how they are used in his musculoskeletal IPU.

20:45 How PROs provide an understanding of a patient’s baseline for pain, functional status, quality of life, and mental health.

23:30 Dr. Bozic provides his parting thoughts on physician leadership in the progression of VBC and the role that AAOS will play in this movement.

26:45 Dr. Raiszadeh and his founding of SpineZone and Livara to reverse the trend of overutilization in orthopedic care through integrated care delivery.

29:30 Dr. Raiszadeh provides perspective on the lack of value-based care from his years of practicing as an orthopedic surgeon.

31:00 “We can create a radically new patient experience in orthopedics allows patients to heal without surgical intervention.”

33:30 Dr. Raiszadeh describes the concept of Orthopedic Whole Health and how it evaluates patients comprehensively from the top-down.

35:30 The impact of obesity, anxiety, and depression on hormonal physiology that affects how patient sense musculoskeletal pain.

36:30 “MSK pain is like the canary in the coalmine. It is giving us an indication of something that is deeper, and that is what Orthopedic Whole Health addresses.”

37:30 The life altering perspective of orthopedic whole health and how this model can be built to scale.

38:00 Transitioning orthopedic care from a biomedical to a biopsychosocial model.

39:00 In the 1990’s, doctors began to view pain as a fifth vital sign, and they over-prescribed opioids (without focusing on safer and more holistic interventions).

40:00 Dr. Raiszadeh discusses the Bio Psychosocial Model of Pain Management in value-based care.

41:30 60-70% of orthopedic patients experience some degree of anxiety, depression, or shame and anger associated with childhood trauma.

42:30 How 1:1 and group sessions, expressive writing, and meditation can be used in MSK treatment.

43:30 Opioid dependency and risks of addiction in orthopedic care.

45:00 “How you feel is the overall foundation of health. It changes our entire chemical environment.”

46:00 The rise of consumerism in orthopedic care and how SpineZone’s consumer-centric model boasts an industry-leading net promoter score of 94.

47:30 Dr. Raiszadeh provides his insights about orthopedic consumerism and how to change a patient’s mindset for MSK treatment.

49:30 How orthopedic consumerism and bio psychosocial care aligns with employer expectations for risk-based payment.

50:30 Creating a MSK model that is non-transactional and opens one up to all aspects of life.

51:45 The launch of Livara – an orthopedic care management system to transition to value-based care at scale.

53:00 Using cost and clinical outcomes data to build a scalable platform that applies to all of orthopedics.

54:30 Leveraging data-driven algorithms to drive diagnosis and value-based care interventions.

57:00 Parting thoughts on the movement to value-based orthopedic care.

Fee-for-service healthcare has destroyed the physician-patient relationship by de-personalizing care delivery.  Patient encounters are looked at as transactions, instead of as opportunities to forge long-term healing relationships. Consequently, the healthcare system delivers inexorably bad cost and quality outcomes, and  primary care is marginalized in lieu of high cost specialists who perform procedures. This has created a perfect storm for physician burnout and moral injury, and we can only regain the humanity of health care by reinstating the primacy of the physician-patient relationship and empowering independent primary care physicians.

Dr. David Pak is an entrepreneurial Internal Medicine physician leader with over 25 years of direct patient care.  His medical practice (Pak Medical Group) is a leading example of a patient-centered, holistic, relationship-based, tech-enabled model that is transforming the lives of seniors. Dr. Pak is an entrepreneur with masterful skill at aggregating local market physicians to build value-based models of care.  He has formed an ACO and Medicare Advantage risk-bearing entity (Zenith Independent Physicians Network) that is moving primary care practices to fully-capitated risk. Dr. Pak is passionate about the personalization of primary care, technology enablement through remote patient monitoring, perpetuation of physician independence through value-based programs, and the creation of Human AI staffing support models that can transform care delivery and physician culture.  While he is an expert on value-based care and care delivery innovation, he is also a proponent of medicine revisiting its roots to a more simpler time where relationships were paramount.

This episode is a must-listen for entrepreneurial primary care physicians who seek independence through value-based care. By following Dr. Pak’s approach, they can reclaim their joy in medicine and propel their practices to business success in the race to value.

Episode Bookmarks:

01:30 Introduction to Dr. David Pak and his healthcare ventures (Pak Medical Group, Zenith IPN, and Eleos Staffing)

04:30 Dr. Pak’s early success as a physician entrepreneur that resulted in his practice to Humana

05:30 Dr. Pak speaks to his career as an entrepreneur in creating value-based, innovative care delivery models for seniors

07:00 “Fee-for-service is a broken model that rewards bad behavior that is not conducive to good outcomes.”

08:00 Holistic patient care only occur in a full-risk medical practice. Will this lead to mandated APMs?

10:00 The explosive growth and enrollment trajectory of Medicare Advantage.

11:00 Learning how to succeed in Medicare Advantage from more advanced models in Florida.

12:15 Identifying vulnerable populations in Medicare Advantage through appropriate risk adjustment coding.

13:00 Delivering customized care delivery care models for different segments of the MA population.

14:30 The need for primary care physician autonomy and independence to overcome current financial challenges.

15:30 Is a massive corporate takeover of primary care necessary for PCPs to succeed in capitated revenue models?

18:00 Comparing PMPM reimbursement to traditional FFS reimbursement and overcoming the physician “education gap” in risk

18:45 The importance of physician leadership and education in value-based care

20:00 It is possible for PCPs to get off the “hamster wheel” (and it doesn’t require a corporate takeover)

21:30 The need for independent physicians to take on a capital partner to support their value journey.

23:00 Dr. Pak explains the importance of physician education and a robust risk-based contract portfolio.

24:00 The aggregation of primary care physicians in local markets.

25:00 “The road to value-based care should be paved by physicians…especially primary care physicians.”

25:30 The difficulties in meeting ROI expectations from PE investors and why physician aggregation is crucial to success.

26:30 Avoidance of PCP commoditization and why hospital-led ACOs may not be an ideal long-term solution.

27:00 Finding “anchor physicians” in local markets as an aggregation strategy

27:45 How PE-led hospital acquisitions of primary care drives up prices and leads to poorer outcomes.

29:00 “M&A is easy; it is the integration that is a nightmare because investors may not understand the local market.”

30:00 The PE-led physician “land grab” in Texas and the challenges of physician integration due to lack of EHR interoperability.

32:00 Creating a data infrastructure in the independent PCP landscape within a local market.

33:30 Will AI robots replace healthcare providers?

34:30 The difficulties in automating personalized healthcare, and the opportunities for technology-enabled standardization.

35:30 Solving for physician burnout and moral injury is critical to avoid a mass workforce exodus.

37:30 A tearful patient testimonial for Dr. Pak’s medical practice

38:00 The biggest mistake made by physicians is thinking they are the “be all end all” of the medical practice.

39:00 “Healthcare is the only industry that doesn’t have a CRM program.  We are in a service industry, yet we don’t operate like one.”

40:00 The paramount importance of patient communication, patient access, and care coordination in building a support infrastructure in a medical practice.

41:30 Building a customer service-focused culture and the “Marcus Welby model” is not possible in a corporatized medical practice.

43:30 What is the difference in primary care access between an underserved American community and a third world country?

45:00 How Pak Medical Group leverages Remote Patient Monitoring in the delivery of patient-centered care (Institute members can download Case Study here)

47:30 How can Amazon and FedEx track packages across the country, but we can lose patients inside a hospital?

48:00 Fallacy #1: “You can’t teach an old dog new tricks” (seniors can adapt to technology!)

49:00 Fallacy #2: “Good health care can only be delivered in-person” (how wearables facilitate remote engagement)

50:45 Deploying mobile units and telehealth in building an asset-light care delivery model.

52:30 An overview of the Zenith Independent Physician Network, a risk-bearing entity of independent primary care physicians that Dr. Pak founded.

54:00 Dr. Pak describes how common it is for ACOs not to provide data reporting and financial transparency to partner physicians.

56:00 The 3 hallmarks of building a good Risk-Bearing Entity (i.e. infrastructure and contracts, financial transparency, performance report cards)

57:30 Creating physician leadership at the pod-level in various regions throughout the ACO’s geography

58:30 An overview of Eleos Staffing, a value-based care Human AI (staffing and automation) company that Dr. Pak founded.

61:30 Wrapping human capital around software, workflows, and processes to create automation.

63:30 Efficiencies in referral management, insurance verification, prior authorizations, scribing, and chart prep by using a virtual healthcare associate (Human AI)

65:00 How Human AI reduced physician burnout and improved ACO performance results.

67:30 Creating a care delivery environment for physicians to find job in their work through personalized relationships.

69:30 Moral injury occurs when physicians are forced to abandon their duty to care for patients in the best way possible.

70:30 Getting to the grassroots and fundamentals of medicine.

If you are looking for the most egregious profiteering and fleecing of American consumers of healthcare, there is no better example than that of the giant industry of middlemen called pharmacy benefit managers – PBMs for short – that are systematically gouging American businesses.  Most people are familiar with the few bad actors in the pharmaceutical industry.  For example, we think of the infamous “pharma bro” Martin Shkrelli that jacked up the price of his company’s drugs – and then smirked his way through subsequent court proceedings.  However, the inner workings of the drug pricing game fostered by the non-transparent PBM industry is actually a far worse scenario that it is million times bigger – and more expensive – than the games of the pharma bad actors.  PBMs who collectively manage pharmacy benefits for 266 million Americans, routinely fleece American businesses using clever shell games that are the absolute antithesis of Value-Based Care. But there is good news…there is an upstart PBM – Capital Rx – that provides a more transparent, sustainable, consumer-centric, and ethical model in the administration of pharmacy benefits.

Joining us this week is A.J. Loiacono, the CEO and co-founder of Capital Rx.  A.J.’s company is the fastest-growing healthcare company in the country, serving more than one million lives across its customer base of payor entities, employers, unions, health systems, and municipalities. It grew by 400% in 2020 and doubled in size in 2021.  Capital Rx are the “good guys” in the PBM industry – they offer a pharmacy benefits spending platform that links providers, patients, pharmacies and plans to bring cost-effective care to employers and their workforce. On average, Capital Rx saves its clients 27% on drug costs, mainly by refusing to use the industry standard model for drug costs: average wholesale price. As a result, Capital Rx has achieved a 96 NPS score, compared to the industry average of 14 in healthcare. A.J. is a visionary leader in the health value movement and was recently named an Entrepreneur Of The Year® 2022 New York Award finalist by Ernst & Young. Under A.J.’s leadership, Capital Rx is modernizing our healthcare infrastructure to reduce costs and deliver superior care, and they have the highest satisfaction scores in the industry. In this episode, A.J. provides you with an unfiltered perspective on our need to reimaging pharmacy benefits in our country.

Episode Bookmarks:

01:30 Pharmacy Benefit Managers (PBMs) – the traditional PBM model is an egregious example of healthcare profiteering and consumer fleecing

02:00 The drug pricing game and non-transparent PBM industry has a far worse negative impact on society than “bad acting” in Big Pharma

02:30 Introduction to A.J. Loiacono and Capital Rx (the “good guys” in the PBM industry)

04:30 Prescription drugs are the fastest growing healthcare expenditure and consistently outpace other health spending.

05:30 Some employers devoting >30% of their health plans’ total cost of care on pharma!

06:00 Half of patients with chronic conditions take their medications as prescribed due to high drug costs.

07:45 The slow compounding effect of incremental drug price increases year over year

08:00 The higher base of drug prices in the US (compared to other nations) and how R&D is recouped by fleecing American consumers

08:30 The opaque and inefficient PBM industry as another reason for escalating prescription drug costs

09:00 Consultant and broker compensation models are misaligned with goals of cost containment.

09:30 The three largest PBMs (CVS Caremark, Express Scripts, and OptumRx) manage 80% of all prescriptions and provide no transparency.

10:00 PBMs are making sick profits from rebates and “the billing spread”

11:00 A.J. provides a comprehensive explanation of what a PBM really does and why they are more than just middlemen

13:30 “PBMs are a problem because of the non-transparent pricing model they use – not because of the invaluable services that they provide.”

14:00 “There has been a lack of regulatory oversight in the PBM industry for 25 years. That is why pharmacy benefits have exploded in cost.”

15:00 “The inelastic demand curve, price inflation, and high margin specialty drugs have created a PBM market that values consolidation over innovation.”

16:30 PBM oligopolies control 80-90% of the market and have no incentives to improve (main focus is maximization of economics)

17:30 The transparent, fixed-price model at Capital Rx and how that differs from a spread pricing model that serves to only maximize PBM margin

19:30 “The PBM game of complexity and opacity creates an optic that payers are saving money when they really aren’t.”

21:30 The current FTC probe (focused on how PBM vertical integration and lack of transparency affects access and pricing) and rebate disclosure requirements

22:30 “You shouldn’t be able to mark up a prescription if you are an administrator of benefits. It should be illegal because of the conflict of interest.”

24:00 The CAA Prescription Drug Benefit Reporting Requirement for group health plans and health insurers to submit information related to prescription drug costs

25:15 Specialty drugs are projected to be a whopping 40-50% of prescription drug costs but only 2% of the transactions.

26:00 Hospitals are marking up infused specialty drugs for cancer up to 2-6X the acquisition cost!

26:30 A.J. provides the context why specialty drugs are so expensive in the United States.

28:00 The massive conflict of interest that occurs in traditional PBMs providing Prior Authorizations

29:15 Typical PBMs have >90% approval rate (Capital Rx has a ~64% approval rate and has the highest NPS in the industry!)

30:00 “Patients want prompt attention, information, communication, and reasonable timeframes.”

30:30 Drug pricing based on NADAC benchmark (versus AWP) and how Capital Rx is disrupting the PBM market

31:45 NADAC-based pricing reduces prescription drug with deflation rate >50%

32:30 Manufacturer-derived revenue for PBMs on specialty drugs in the form of rebates

33:00 Why don’t we have negative cost trend if generic drugs deflate 10-15% each year and branded specialty drugs net prices are going down? (Hint: PBM Opacity)

34:30 PBMs can’t change to a transparent business model because of earnings expectations of a publicly-traded company.

36:00 Vertical and horizontal consolidation of pharmacies and how there are 3X as many pharmacies as there are Starbucks and McDonalds combined!

37:30 “We have the right number of pharmacies in this country but not the right number in the right locations.”

38:00 The challenges of accessing medications in rural communities

39:00 Consolidation of retail pharmacies are inconsequential when compared to consolidation of mail and specialty facilities of Big 3 PBMs.

40:30 Capital Rx is the only PBM with a fully transparent pricing structure with no pricing variability between customers and patients.

41:45 Very few pharmacies publicly report their NADAC data.

43:00 The inconsistent pricing seen when the federal government when buys drugs, as seen by pricing variation of 150% between various public program.

43:30 Unencumbered pricing occurs when PBMs don’t make money on fulfillment, and they can’t manipulate prices.

45:00 A.J. provides insights on the Prescription Drug and Health Care Spending Transparency Rule of the No Surprises Act.

46:30 What does the federal government plan to do with data reported to create a more equitable drug system?

48:30 A.J. explains how innovative PBMs like Capital Rx can get closer to the premium dollar by becoming risk-bearing entities that take on full PMPM risk.

51:45 Innovation gets shut down when incumbent PBMs refuse to bid to self-insured employers in a way that aligns financial risk.

52:45 Capital Rx saves an average of 27% on drug costs and has an industry-leading net promoter score of 92 (far outpaces the healthcare industry average of 15).

53:15 Financial alignment and customer-centric efficiency is why Capital Rx has such a high NPS.

55:00 1st Call Resolution at Capital Rx call center is 90%.

55:45 The technology stack at Capital Rx (JUDITM) that unifies all PBM operations on to a single platform

56:45 What is A.J. most proud of accomplishing at Capital Rx?

58:15 The move to precision medicine (e.g. individualized drug formularies) in the future of pharmacy benefits

60:00 America and New Zealand are the only countries that allow direct-to-consumer advertising of pharmaceuticals.

61:00 A.J. critiques the advertising tactics of pharma manufacturers.

63:00 Parting thoughts from A.J. on the role of an aligned PBM model in value-based care

Creating a value-based healthcare ecosystem with the highest quality outcomes at a reasonable cost for employers and their healthcare consumers requires collaboration. In the state of Connecticut, a grassroots community has formed with the mission to create a value-based healthcare ecosystem.  The Moving to Value Alliance is a multi-stakeholder community composed of individuals, practices, and organizations deeply rooted in Connecticut’s healthcare environment.  They believe that collaboration is the key to solving complex problems and are leading the way to transform healthcare delivery in their state.

Joining us this week are two leaders involved in this important movement to employer-based healthcare transformation in Connecticut. With more than 35 years in the health care sector, Jeff Hogan is a consultant to payers and large provider groups for product development and launch and a resource to employers desirous of implementing strategies to manage their health spend. Lisa Trumble is the President and CEO of the Southern New England Healthcare Organization (SoNE HEALTH), a clinically integrated network comprised of six hospitals and 1,700 physicians, which is a for-profit entity owned jointly by Trinity Health Of New England and its employed and independent physicians.  In this episode, we talk about healthcare transformation in the state of Connecticut, vertical and horizontal consolidation in the industry, the dysfunctional health benefits market, the need for employer alliances, leading innovators in the marketplace, value-based insurance design, prescription drug costs, healthcare consumerism, and bundled payment innovation.

The time to move to value is now!  We can create a transformed healthcare ecosystem through industry collaboration.  Thank you, Lisa and Jeff, for showing us the way.

Episode Bookmarks:

01:30 “Collaboration is the key to solving complex problems.”

01:45 The Moving to Value Alliance – a multi-stakeholder grassroots community creating a value-based healthcare ecosystem for employers in Connecticut

02:00 Introduction to Jeffrey Hogan and Lisa Trumble

03:45 Eric reflects on his recent experience attending the MTVA 2022 Symposium

05:00 The leadership of Dr. Stephen Shutzer and other leaders

06:00 Referencing Michael Leavitt’s book, “Finding Allies, Building Alliances” where he talks about the power of collaboration networks

06:20 “Connecticut is known for being ground zero for most of the BUCA health plans and has also been the land of frozen molasses in value-based care.”

07:00 “Healthcare is opaque and balkanized, and COVID has inspired the opportunity to think about things differently.”

07:30 Transparency, Collaboration, Innovation, Consumer Expectations, and the “Great Resignation”

08:30 Lisa shares her background in value-based care transformation in Massachusetts and how that differs from Connecticut

09:30 “We must break away from the traditional structures of fee-for-service, and pursue clinical integration, innovation, alliances, and partnerships.”

10:00 A new wave of horizontal and vertical consolidation between hospitals and physician practices

12:00 The inevitability of consolidation after the pandemic and how consolidations have not resulted in cost and quality improvements.

12:30 The lack of value-based transformation strategy in health systems and why that is short-sighted

13:00 “The pandemic opened up the doors to innovation in a way that none of us anticipated in every sector of healthcare.”

13:40 Concerns about vertical integration of providers in consolidated payer-led structures

14:20 Lisa shares background on SoNE HEALTH (Southern New England Healthcare Organization) and how they partner with physicians.

15:20 Jeff describes how he has never seen so much change in healthcare in such a short period of time.

16:00 The movement to health equity as a result of consumer pressures, innovation, and market trends.

17:00 The hybridization of health systems, balancing in-person care with digital therapeutics, virtual care, home-based care, and other tech-enabled innovations.

17:30 Recent announcement from Mass General Hospital that they are doubling down on hospital at home care investments.

18:30 State of Connecticut employees have moved to value-based care models.

19:00 Variation in cost and quality data across hospitals across the US (referencing RAND study) and how consolidation leads to higher costs/lower quality

20:00 Commercial insurance costs have gone up 4X the rate of other benchmark goods and services!

21:00 Lisa describes the fallacy of the “free market” in employer-purchased healthcare and how it contributes to high costs and health disparities.

22:00 “If we truly believe in health equity, we need to look at our insurance market with employers.”

23:00 Direct-to-employer solutions in healthcare where providers and employers can drive value-based transformation.

24:00 Pay increases to employees occur when healthcare costs are lowered.

24:30 Jeff discusses the challenges with employer brokers and advisors due to their compensation model that favors more expensive healthcare.

26:30 Public disclosure of compensation with benefits brokers and risk-sharing arrangements between them and employers.

27:00 Health Rosetta as an example of a transparent Benefits Advisor Program (see Race to Value episode with Dave Chase)

27:15 “The employer needs a truth source and agent that is on their side when purchasing benefits. That role has yet to be revealed in the marketplace.”

28:00 Coupling direct-to-employer contracting with benefits transparency

29:00 $1 billion in employer spend on healthcare in Connecticut

29:30 “Connecticut is dead last in primary care investment in the country.” (referencing PCC study)

31:00 “Legislators don’t understand the relationship between cost and quality in the provider supply chain.”

31:45 Bright Spots for Value in the State of Connecticut (e.g. SoNE, Optum)

32:30 Collaboration with Advanced Primary Care companies (e.g. Vera Whole Health)

33:00 Lisa provides her observations on the private equity landscape in Advanced Primary Care.

34:30 Virtual care can improve health equity as an extension of primary care.

35:00 How Lisa’s health system is partnering with advanced primary care groups in the marketplace.

35:45 The challenges of implementing virtual care capabilities in a health system.

36:30 Local partnerships in the marketplace are needed for long-term sustainability.

38:00 How are self-insured and fully insured employers coming together to build a Value Based Insurance Design (V-BID) consortium to address benefit design?

39:00 The leadership of Dr. Mark Fendrick in V-BID

40:00 Difficulties of employers and payers understanding value-based insurance design

41:00 Some Connecticut employer-sponsored health plans have annual premiums >$40,000 per family!

42:00 V-BID failed because there was not any “skin in the game.”

43:00 Variations in quality measurements for diabetes create variations in patient outcomes.

44:00 V-BID can only work with normalized quality measurement.

45:00 Lisa expresses her frustration with providers getting blamed for not moving to VBP when other system reforms are ignored.

46:00 For many employers, prescription drug spending can be as high as 30% or more!

47:00 Jeff discusses how Pharmacy has the highest trend factor of any other medical cost category

48:00 >50% of specialty pharmacy is on the medical side and doesn’t go through PBMs

48:30 Referencing the transparent PBM model of Capital Rx that uses deflationary fixed-pricing based on NADAC

49:30 CAA reporting requirements of PBMs will accelerate the business case for transparent PBMs

50:00 Site of service challenges in managing specialty pharmacy costs

51:00 How complexities of pharmacy reimbursement and variations in drug efficacy prevent real understanding of how to reform it

53:00 The rearchitecting of healthcare will need to be based on consumerism and digital transformation

54:30 How do you measure digital transformation?

55:30 Hospitals are seeing declines in patient volumes and why care needs to patient homes and communities.

57:00 The value of innovation and how it will drive care delivery transformation

58:00 Cancer is either #1 or #2 cost category for employers and ~73% of those diagnosed never get a second opinion!

59:00 Democratizing patient access to clinical care trials for treatment of cancer

60:00 The general distrust in government will necessitate that health transformation be driven at the local level.

61:00 Self-insured bundled payment programs being modeled after the CMS Bundled Payment for Care Improvement (BPCI) program

62:30 Lisa provides a comprehensive overview of Bundled Payment innovation for employers

64:30 Chronic care bundles do not have the same effect as surgical procedure bundles

65:45 Jeff on how employers choosing the right bundle can prevent them from hitting their stoploss corridor

67:00 Signify Health is getting out of Medicare and Commercial bundles. Carrum Health and Accarent Health are now leading in the employer bundled payment space.

68:20 Wildflower Health is managing maternity bundles

69:00 Lisa explains difficulties in administering bundled payments between providers and payers.

71:00 Parting thoughts (Lisa) – collaboration and community is the only way towards value and equity

72:00 Parting thoughts (Jeff) – the percent of GDP spent on healthcare will rob the future of our grandchildren if we do not align incentives and democratize access to primary care.

Joining us on the podcast this week is Dr. Clive Fields, the Co-Founder and Chief Medical Officer for VillageMD. Dr. Fields is a leader of high influence in the value economy, having been named to Modern Healthcare’s lists of the 50 Most Influential Clinical Executives and the 100 Most Influential People in Healthcare.  His company, VillageMD, is a leading, national provider of value-based primary care services that partners with physicians to deliver high-quality clinical care and better patient outcomes, while reducing total cost of care. In the years since Dr. Fields co-founded the company, VillageMD has grown to 15 markets and is responsible for more than 1.6 million patients. In 2021, VillageMD received a $5.2 billion investment from Walgreens Boots Alliance, which is looking to expand its healthcare offerings with VillageMD as a partner. This significant multi-billion investment will accelerate the opening of at least 600 Village Medical at Walgreens primary care practices in more than 30 U.S. markets by 2025 and 1,000 by 2027, with more than half of those practices in medically underserved communities.

The Race to Value is honored to have Dr. Fields share his perspective on the opportunity for consumer-centric care delivery in our country.  We discussed important issues such as health equity, digital transformation, integrated pharmacy, home-based care delivery, multipayer contracting, health policy, and employer healthcare costs. Don’t miss out on this important interview so you can learn what it takes to succeed for the future of value-based care!

Episode Bookmarks:

01:40 Introduction to Dr. Clive Fields and VillageMD

05:00 The intersection between value-based care delivery and consumerism

07:00 “Value-based health care success requires affability, availability and ability.”

08:40 Using a team-based, proactive, risk-stratified approach to care to deliver the best outcomes

09:00 Are we using the term “value” incorrectly in the industry?

10:00 VillageMD’s recently announced partnership with Walgreens and how it will provide scalability

12:00 How outcomes-based reimbursement can improve health equity in underserved communities

13:00 The transformative impact of the value movement on primary care

16:00 The acceleration of virtual care and the role it plays in a consumer-centric care delivery

18:00 What will virtual care look like in the post-pandemic era?

18:45 How the economics of global capitation drives improved health outcomes

20:00 The role that pharmacy integration plays in value-based care

21:45 Dr. Fields discusses how pharmacists should be utilized in the ambulatory care setting

23:00 Lessons learned from pharmacy integration and how that informed VillageMD’s collaboration with Walgreens

24:20 How pharmacist intervention can improve both provider and consumer experience by switching to formulary-equivalent drugs

26:45 Referencing recent McKinsey & Company study that projects up to $265B in facility care shifting to the home setting by 2025

27:45 Village Medical at Home – a leading example of home-based care delivery

28:40 “The lack of home-based care is partly related to the hubris of physicians.”

29:30 Dr. Fields reflects on how office-based care contributes to a misinterpretation of social barriers

31:45 Care in the home as the safest and most comfortable option

34:00 How VillageMD has cares for all patient populations (not just particular high-risk segments)

36:20 “We built a model that actually expands doctors’ panels – not limiting them to a certain product or payer.”

37:45 Managing risk across different populations with segregation by SDOH and risk determination (not payer status)

39:30 Referencing Dr. Fields’ most recent Op-Ed in Modern Healthcare addressing the criticisms of the Direct Contracting model

40:30 Dr. Fields provides commentary on the hyper-politicized debate related to public-private partnerships in the Medicare program

43:00 How a program like Direct Contracting can improve care for patients in underserved communities

46:00 Dr. Fields on how employers our now reaching an inflection point in addressing unsustainable healthcare costs

47:30 Brokers, payers, and providers working together to collaborate with large, self-funded employers

48:00 The co-location of primary care clinics with employer groups

50:00 The total addressable market for VillageMD is projected to grow 7% annually through 2025 to $1.4 trillion

50:30 Why Dr. Fields feels “overly bullish” about the state of the value-based care movement (outcomes-based reimbursement)

52:30 How VillageMD is positioning itself for the future of outcomes-based reimbursement with a model that can replicate at scale

54:45 VillageMD will have at least 50% of primary care locations in underserved communities

56:45 Parting comments from Dr. Fields and how to find out more about VillageMD

Every year, millions of Americans are overcharged and underserved while the health care industry makes record profits. We know something is wrong, but layers of complexity make it confusing and discouraging to do anything about it – it seems impossible for most.

Our guest this week is Marshall Allen, author of Never Pay the First Bill: And Other Ways to Fight the Health Care System and Win. Drawing on 15 years of investigating the health care industry, reporter Marshall Allen reveals the industry’s pressure points and how companies and individuals have fought overbilling, price gouging, insurance denials, and more to get the care they deserve and protect against the system’s predatory practices.

The key message is that we, the consumer, can take back control of our health care. It is up to the American people to equip ourselves to fight back for the sake of our families–and everyone else. Consumers must lead the race to value.

Episode Bookmarks: 

01:40 An introduction to Marshall Allen and his work investigating the American healthcare system

03:35 The need for a grassroots consumer movement and employer-based disruption to reform a broken system

04:45 How Marshall’s work in investigative healthcare journalism was informed by his work in ministry

05:50 Marshall explains how the healthcare system’s business design violates the Golden Rule

08:15 “The business of medicine is conducted to maximize the profit for the industry, even at the financial harm of patients.”

08:30 Marshall’s new book: “Never Pay the First Bill: and Other Ways to Fight the Health Care System and Win.”

10:00 The victimization of patients that occurs through flawed system design and the “normalized deviance” by those delivering care

11:30 The importance of reframing the health system to eliminate the exploitation of patients for profit

12:15 “Our healthcare system is allows for the exploitation of sickness for profit.”

13:00 Marshall discusses the lack of an ethical position to exploit consumers for non-discretionary choices

13:20 The escalating price of insulin as an example of how inelastic demand is exploited for profit

15:00 Marshall explains how employers and patients can demand better value by no longer tolerating profit maximization

16:30 Referencing the recent JAMA Study on Medical Debt showing that 1 in 5 Americans have medical debt in collections

17:00 Using Marshall’s new book as a step-by-step, tactical guerilla guide for patient and employer empowerment

19:30 The approval of non-effective drugs and pricing scams conducted by Big Pharma (e.g. the recent approval of Aduhelm)

20:20 Marshall explains how the specialty drug, Vimovo, is an egregious example of a Big Pharma profiteering scheme combining two common drugs with no additional therapeutic benefit (Marshall’s article on Vimovo)

24:00 Motivated to write book to help patients facing financial ruination by healthcare

25:00 185 million Americans in the employer-sponsored insurance market as an opportunity for grassroots reform

25:30 Marshall’s explains his family’s personal experience of financial exploitation by the healthcare system (the Introduction to his book)

28:30 The need for patients to gather evidence when disputing medical billing errors and upcoding

31:30 The effectiveness of small claims courts in empowering patients who are being financially exploited

34:00 Marshall provides guidance on how patients can avoid unnecessary care

37:00 Comparing the financial incentives between capitated models vs. fee-for-service

38:00 Always ask for the cash price as a patient! (you don’t always have to use insurance)

38:30 The massive price variation based on the site of service (e.g. MRIs in hospital vs. freestanding imaging center)

39:45 “You’re not getting more for your money when you pay extra for healthcare.”

42:00 Marshall explains his mission to help patients develop financial literacy by developing consumer empowerment curriculum

45:00 Massive surprise, out-of-network medical bills as an opportunity to fight the system and change the game

48:00 Marshall discusses how employers are “sleeping giants” and have the power to tip the scales in creating a new healthcare system

52:00 Reducing wasteful spending and fraud can reduce healthcare costs by at least 25% (upwards of $1T in savings per year)

53:00 Marshall explains how a phony doctor defrauded health plans by billing with fake NPI numbers

56:30 Marshall explains how an unethical health system in Las Vegas was exploiting foreign-training doctors (“Indentured Doctors”)

58:50 Marshall on the new Hospital Price Transparency rule and the increased exposure of unjustified price variation