Why did I decide to encore this show about being customer-centric and transforming or innovating at a very large organization? Well, two main reasons. First reason can be neatly summed up by this recent Tweet from , which I have edited slightly to suit my own purposes. Here’s the : “The Achilles’ heel for most healthcare [innovators] is overlooking the role of change management. The deal isn’t sealed until the whole team is raving. Adoption doesn’t [automatically follow innovative thoughts no matter how good they are or how much it cost to build or buy anything]. Take change mgmt seriously.” This is relevant to pharma companies, to big provider organizations, to SaaS vendors, to payers … pretty much anyone. So, yeah. This show … still relevant. But also there’s a #2 reason for this encore. It’s coming at ya smack in the middle of an ongoing series for boards of directors, CEOs, and CFOs of self-insured employers. As discussed last week in the show with Mark Cuban and Ferrin Williams, PharmD, MBA (), healthcare has become financialized. There is a whole financial layer sitting in between health benefits and the employer, and dealing with that requires customer centricity, transformation, and innovation at the employer level—a little change management, if you will. And with that, here is your encore. I was at the PanAgora Pharma Customer Experience (CX) Summit. Let me tell you one of my big takeaways. Many at pharma companies who are trying to convince their organizations of the need to be provider- and/or patient-centric are having a tough go of it. Heard that coming from every direction. Seems there are quite a few pharma organizations out there who are not actually customer/patient-centric. Say it isn’t so. Turns out, they continue to be pretty darn brand-centric whether or not anyone besides the CX team and the most successful KAMs (key account managers) realize this hard truth. This matters because, from a provider organization, physician, or patient standpoint, it’s not what’s written on the walls … it’s what goes on in the halls. It’s what a company actually does in their interactions with the rest of the healthcare ecosystem that matters and that builds their reputation. You see this lack of customer centricity and, et cetera et cetera, there are certainly other things going on here; but you see the lack of customer centricity manifesting, right? You see the pharma reps that get kicked out of hospital systems because the perception is they add little if any value and “waste doctors’ time; all they do is shove detail aids in our faces.” Heard that recently. Look, this doesn’t just pertain to Pharma; this is a message for the whole industry. But there is certainly a way to do well by doing good, and how that starts is helping provider organizations and patients improve patient outcomes as the primary goal. Being innovative to that end. It’s about supporting the best-practice standard of care and bringing resources to bear that are truly helpful. That is how more of the right patients can get the right treatment/drug at the right time or take their meds as per the A1A clinical guideline. It’s probably also the way to sustainable business success. I’ve said it here a thousand times: People trying to do the right thing by patients all need to work together. If there’s a party in the mix that nobody else wants to deal with because they are deemed not a team player or they don’t listen … yeah, that’s what I call a competitive disadvantage, beyond just squandering their ability to achieve their mission statement and improve patient care and lives, that is. Today’s conversation is with Karen Root, who was a speaker at the aforementioned PanAgora conference. In this healthcare podcast, we are talking about how to make transformation and innovation actionable at a large organization—maybe a pharma company but pretty much any large organization with lots of people, lots...

Encore! EP381: For Reals, Becoming Customer-centric, Transforming, or Innovating at a Very Large Organization, With Karen Root

For a full transcript of this episode, . Are you on the board of directors of a company? Or are you a shareholder of a publicly traded company? Or are you a CEO or a CFO who reports to a board of directors or these shareholders? Well, this show is for you. And it’s about how the healthcare industry has become financialized at the same time that providing health benefits has become the second-biggest line item after payroll for most companies. We talked about that with Mark Cuban () also. So, this show isn’t really about health benefits; it’s about the business that these health benefits have become and how, if the CEO or CFO of an employer is not intimately involved in the financial layer wrapping around health benefits, then the company is getting really taken advantage of by those entities who are intimately familiar with the financial layer surrounding those healthcare benefits. And the employees of that company also are getting equally taken advantage of. This is not a case where paying more or less results in better or worse employee health or healthcare. It is a case where not minding the shop in the C-suite means that financial actors just take more of the pie and nobody wins but them. Employer loses; employee loses. Andreas Mang, my guest today, kicks off this interview talking about the conversation that will go down between himself and any CEO whose company gets bought by Blackstone. So, if you’re a CEO and you’re aspiring for this to happen, yeah … heads up. But he says it’s kind of an unnatural act to dig into anything that smells like health benefits or health insurance. Some may not even realize that this whole financial layer has developed that sits above the healthcare benefits themselves. And they also may not think that there’s anything that’s possible that can be done. As far as both of these points are concerned, Andreas Mang gives a list of, as he calls them, easy things a C-suite can do to save 10% while improving employee satisfaction and health. Saving 10% or more, this can be a really big number. A lot of this is just enforcing purchasing discipline that is being used elsewhere. Here’s Andreas’s list recapped: 1. Have CFO engagement throughout the year. (We talked about that with Mark Cuban also.) 2. Be self-insured once you have reached a certain size. (Andreas gets into this in more detail during the show itself.) 3. Be very, very careful who you hire as your broker or benefits consultant. There are five things that need to be true:  ·&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; They have the experience to do the job.  ·&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Flat-fee model compensation  ·&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; No product pushing  ·&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Fees at risk (30% or more)  ·&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Simple termination provisions 4. Do carrier/ASO/TPA RFPs once every three years or thereabouts. 5. Do dependent eligibility audits. (Cora Opsahl talked a lot about this also in an episode [] last summer.) 6. Leverage pharmacy coalitions and stop-loss collectives. (In the show itself, Andreas offers some warnings because some of these coalitions and collectives are great and some are not.) But bottom line, just keep in mind, as Mark Cuban said two weeks ago (), those that are taking your money, your company’s money, are advantaged when you are confused. Where there’s mystery, there’s margin. If you can’t convince ’em, confuse ’em and all that. This is a business strategy. Healthcare should not be this complicated. But yet, it has become so; and anyone who doesn’t realize that is letting themselves and their employees really get taken advantage of. Unknown unknowns are not benign. As I have said several times already, Andreas Mang is my guest today. He is a partner at Blackstone, the private equity and alternative asset manager. His job is helping portfolio companies manage their US healthcare benefits for their employees. &nbsp;  You can learn more at ...

EP419: The Financialization of Health Benefits for Boards of Directors and C-Suites of Self-Insured Employers, With Andreas Mang

For a full transcript of this episode, . This show is a very natural follow-on to  with Mark Cuban and Ferrin Williams, PharmD, MBA. This show is the how, as in, “How did everything that we talked about in the earlier show wind up the way it did?” And it also proves it … with data. I gotta say I never quite understood the finer points of the rationale of a cash pay system for minor expenses—expenses like generic drugs. I always framed this whole thing in the context of a senior on a fixed income taking 10 drugs, as my grandma did. And even if each of those drugs was only $5 or $10 a month, that’s enough beans a month that it was a big deal for her to swing. So, I have always had this thought that these drugs should be covered by her insurance so she and everybody else living on a fixed income trying to make ends meet could get them and take them and not die from complications of diabetes or high blood pressure. Now, the counterargument to the above, which I have certainly heard more than once, is to offer members/patients HSAs (health savings accounts) and have them buy stuff with their HSA. My knee jerk there is, yeah, but I can barely figure out the deal with HSAs. Most Americans don’t even know what a deductible is let alone an HSA. This approach just feels like it demands a lot of health literacy. So, that’s the place I was when I walked into this conversation in this episode with Ge Bai, PhD, CPA. Here’s two facts that got me inching away from my original position: 1. Generic drugs are cheap. There is already competition in the manufacturing marketplace that holds these prices down. 2. PBMs (pharmacy benefit managers) and insurance are devices to pool risk. If you have a high expense, that expense gets spread out over the rest of the insured population (ie, the risk pool). This whole spreading out of the risk is arduous to pull off and requires a level of administrative costs. So, let’s break this down: In terms of #1 fact, that generic drugs are cheap, let’s think about the value prop of PBMs. It’s to throw their market power around to lower drug prices. But, oh wait … the prices of cheap generics are already cheap. So, not much need for market power? Yeah, that’s a fact.  that I talk about in this healthcare podcast with Ge Bai quantifies that. For patients in their deductible phase actually, 79% of the time paying cash is cheaper than if the patient had used their insurance and gotten the price “negotiated by their PBM.” So, yeah … anytime pretty much anybody can wander in and get a better price than a Fortune 15 PBM, it’s pretty clear that market power is not overly required here. In fact, getting PBMs in the mix just seems to make the drug prices higher for patients. Alright now, moving on to my fact #2 I talked about earlier, which is, what is the point of insurance (and PBMs are a derivative of insurance)? The point with them is to pool risk, to spread out the cost of something over the entire risk pool. So, yeah … drug costs $3. What is the administrative burden that goes in to spreading $3 across a risk pool? Is it worth it? Or is the admin cost burden more burdensome than the actual cost burden of the cost of the drug, and all we’re doing here is driving up the price of healthcare, which ultimately might throw more financial burden back on the patient through higher premiums or out-of-pockets? That’s the  that I talk about today with Ge Bai, and it quantifies exactly how much that administrative burden is when it comes to generic drugs. Because you know who makes the most money in a generic drug transaction? No, it’s not the pharma manufacturer, if that’s what you were thinking. It’s not the pharmacy. It’s not the wholesaler. Yeah, it’s the PBM. The PBM, by a margin of 10 points, makes the most money. The administrative cost burden is actually the most expensive part of buying a generic drug using your insurance and going through that PBM. There’s a  that...

EP420: Paying Cash for Generic Drugs—Some Finer Points That Had Totally Gone Over My Head, With Ge Bai, PhD, CPA

For a full transcript of this episode, . I want to kick off this show with a clip from  with Rob Andrews, wherein he so very eloquently sets the stage here: We think that one of the core problems here is that too many intermediaries and providers in the system, their compensation is not in any way dependent on the outcome. So, let’s think about this NICU baby problem again. Looking at the hospital system—and I’m not at all implying or suggesting any hospital system tries to do this—but I think it is clear that they actually benefit commercially from more babies spending more days in the NICU. NICU’s usually a pretty good margin business. It’s expensive. Lots of money is paid, and margins run pretty well there. So, I don’t think there’s a hospital system in the country that intentionally says, “Oh, good … let’s go out and try to fill up the NICU every day.” But when it gets filled up, they benefit. On the other hand, if the hospital invests significantly in early effective intervention prenatal or even pre-pregnancy, there’s no upside to that financially. They don’t get rewarded for that. They might win an award from some magazine for best practices, but their margin suffers. Then if you look at the intermediaries, the carriers, and PBMs [pharmacy benefit managers], their outcomes are irrelevant to their performance. If an employee of a self-insured employer has a significant risk prenatal or pre-pregnancy and the carrier does a great job identifying that problem and solving it, they make the same amount of money off that patient or that consumer that they would if they did nothing. So, it’s a bit harsh to say this, but the carriers make the same amount of money if every child is born healthy and there’s not a day spent in the NICU as if they do if every child’s born with severe crises and winds up in the NICU. It's not a big mystery in the US economy that people do what you pay them to do. And if you have a system, which we do now, where the case of maternal health, diabetes management, musculoskeletal management, cholesterol and cardiac management … when you have a system where many, many players in the system, at best, make the same amount of money for bad outcomes as they do for good ones and, at worst, they prosper from the bad outcomes, that explains the problem. So, is this show about improving maternal health outcomes in the US, where it is relatively deadly to have a baby compared to other industrialized nations? Yes. But improving maternal health is also a great case study for what needs to be done to just improve health. You could apply it to primary care. You could apply it to chronic care management. It is a fairly broad-spectrum solution, as it were. I’m thinking right now about how Dave Chase, co-founder of Health Rosetta—how does he put it?—he says every big problem in healthcare already has been solved. The existing challenge is how to massively replicate proven solutions. So, yeah … keep that in mind when we talk about what Jodilyn Owen has accomplished with her team in Washington State with their birth and health center. Also, as you consider how you might replicate, keep in mind the struggles she has faced getting contracts from self-insured employers or payers to pay her clinic and a very interesting encounter she had with a VC/PE (venture capital/private equity) funded maternal health start-up. It’s just interesting where the money is flowing and where it’s not flowing. But let’s talk about Jodilyn’s clinic’s outcomes. Their zip code is one of the most diverse in the nation. There are 79 languages spoken. There is lots of social determinants of health going on. It is a medically underserved area. It is a federally designated provider shortage area. So, this community has every right to have horrible outcomes. Meanwhile, nearby, there is a wealthy community. In that zip code, they live 17 years longer than in Jodilyn’s clinic’s zip code. But if...

EP421: Wildly Improving Outcomes When the Patient Is, for Reals, in the Center—For Maternity and Beyond, With Jodilyn Owen

For a full transcript of this episode,&nbsp;. Why did I decide to encore this episode where Cora Opsahl from 32BJ spends 29 minutes talking about the importance of getting your data if you are an employer or a union health fund? Let me quote Jeff Hogan with some light edits here. Jeff wrote about the “outsized role” that employer data and intentional analytics can and will play. This is emerging and a must-have. The show with Andreas Mang () from three weeks ago, the show with Dan Mendelson (), the one with Mark Cuban and Ferrin Williams () … everything that has been talked about in all of these shows and more is gonna be hard to do without having the data so you know what’s going on. But I will let Cora Opsahl explain far more succinctly than I can here. One more note before we dive in here: After you listen to this show, you might want to go back and listen to  with Cora—and that one is entitled “How to Kick a Big Hospital Out of Your Network”—because this is one of the things that 32BJ did when it got its data. 32BJ realized that if it kicked out the really expensive hospital from their network, it would (and did!) save $35 million. Kicking this one hospital out of its network enabled the union to get its biggest wage hike in however many years, and also the employers employing union members got a premium holiday and did not have to pay into the health fund for a few months. Imagine if they didn’t have this data and realized the millions and millions of dollars being siphoned out of the plan by this one hospital charging way too much. It’s just crazy how many employers or unions wind up becoming imprudent fiduciaries because they just don’t have the data to know better. But I’ll tell you who is realizing it: class action attorneys. In this healthcare podcast, I am speaking with Cora Opsahl, who directs the 32BJ Health Fund. Important to know about Cora’s background is this: In previous roles, she’s worked deep in the inner workings of the healthcare industry. So, she came to 32BJ armed with a BS meter that is finely tuned, which is, unfortunately, an essential skill for anyone trying to help the patients and members relying on them to successfully navigate the healthcare industry. This conversation gets into everything that the 32BJ Health Fund does with their data. They have lots of data. They demand it. So, besides kicking out overly expensive health systems from their network, here’s other things that 32BJ is currently doing with their data and which other employers and unions may get a few ideas from. If you have the data, you (like 32BJ) can use it to:  Make smart benefit decisions that are validated, not just guesses. Before you decide to do something (add a wellness program etc), be able to model it accurately for how much it will actually cost you—which, spoiler alert, is most of the time&nbsp;not what the vendor will estimate. You have way more data than the vendor does, so you can certainly use it to great effect in this way. Make sure that the right members are being communicated with so that benefit designs are successful. As Ashleigh Gunter said in , success when changing benefit designs has a lot more to do with communication than many realize. Create dashboards for leadership that may show trend lines, for example, which could be very helpful to ensure that the fund doesn’t run out of money etc … little things like that. Figure out how much the fund is spending on various procedures and where. There’s all this talk right now about the crazy variability of prices for the same exact service in the same local market. At one hospital, a colonoscopy could literally cost $10,000; and in another hospital—same quality, same basically everything—that same colonoscopy will be $2000 or $3000. I mean, there’s a 500% delta or something in some of these cases. Ensure that if a vendor said they were going to do something, that they are actually doing it. This is especially...

Encore! EP372: Step One for Employers and Unions—Get Your Data, With Cora Opsahl

American Healthcare Entrepreneurs and Executives You Might Want to Know. Talking.

Relentless Health Value is a weekly interview podcast hosted by Stacey Richter since 2014. A dynamic healthcare entrepreneur and innovator, Richter has spent more than twenty years mentoring clients and colleagues in the shared pursuit of healthcare value. Subscribe to the podcast and spend an hour with us every Thursday.

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