Introduction and Episode Context
[00:00:02] Stacey Richter: Encore episode. "Some Jumbo Employers Buying Better Healthcare Outcomes While Saving 15% on Total Cost of Care.” Today, I speak with Rob Andrews.
This encore is very relevant after the shows with Cora Opsahl, Claire Brockbank, and Marilyn Bartlett. Getting better health for the 160 million Americans covered by commercial insurance is all about rates, rights, and power.
So for sure, go back and listen to those shows if you haven't already. They are very revealing. And if you listened to this particular episode, 415, last year when it first came out, you might want to listen to it again because in the context of those earlier shows, There's points of contemplation that might become clear.
Listen to the episode or read the show notes with all mentioned links on the episode page.
By the way, also, the show with Ann Kempski is relevant to this end, ie, sometimes government intervention doesn't achieve the stated goal. This is a very nuanced world that we live in, and those nuances impact Americans both clinically and also very much financially. I'm saying this partially because maternal and newborn outcomes and costs are part of this conversation.
Now, in this conversation, maternity care and outcomes gets brought up mainly because a lot of employers, for a lot of them, maternity constitutes one of the highest areas of spend for both the employer and then also employees. It costs a lot to have a baby in this country. Strategy 101 does in fact suggest that if you look at your data and you discover outsized problems and costs in any one area, fixing those problems and costs is going to have an outsized impact on employee health and plan spend.
And this is even more of a strategic consideration just given everything going on with maternal health and rising infant and mom death rates in this country.
Encore Episode with Rob Andrews
[00:02:09] Stacey Richter: So with that, here's Rob Andrews who is the CEO of the HTA, the Health Transformation Alliance, which is a group made up of jumbo employers. I had wanted to get Rob on the show ever since I heard him say at the ThINc360 conference in DC. He said, morally abhorrent doesn't move the needle.
Financial Implications in Healthcare
[00:02:27] Stacey Richter: What moves the needle is financial implications. This interview was my chance to ask Rob Andrews, what are these financial implications of which you speak that move needles? What kinds of financial implications are we talking about? And when that needle moves, what happens?
In the show that follows, Rob says that when you improve the health of employees and dependents, and actually just the health of the community, you as an employer improve your financials directly and also indirectly. But let me focus on the direct bucks out of pocket right now. Because yeah, study after study shows that for self insured employers, if you pay for the right things and you steer to the right providers in the right care settings, a self insured employer and the member do a whole lot better than if the employer kind of laissez faire pays for any manner of things provided by anybody who can manage to submit a billing code, even if that billing code comes with a too good to be true discount.
Rob talks about how the HTA, the Health Transformation Alliance, has data to suggest that if you, as a self insured employer, lean in on paying for the right things, readmissions go down 29%, total cost of care is 15% lower, drugs cost 25% less. So none of this is theoretical as we talk about how employers can create a win win, better health, lower cost.
There are jumbo employers in the HTA right now who are doing this. I love how Dr. Will Shrank has put it, and I'm paraphrasing, but it's a point that keeps getting reiterated in episode after episode here on Relentless Health Value. There's a difference between paying for what you want and just negotiating allegedly cheaper prices.
Buying things is not a strategy, and that is true no matter what price you think you're paying. Also not a strategy, is buying things and then cost shifting to plan members, by the way. Strategy, means addressing root causes. It's a considered plan of action to achieve an optimized ambition.
Strategic Steps for Employers
[00:04:21] Stacey Richter: Here is the strategic stepwise that Rob offers on this. Step one, discern the difference between rumor and data. Get your data and get it objectively analyzed by an objective third party, self insured employers, then you have what you need to figure out the delta between the worst performers and the best performers on a risk adjusted basis. That was step one.
Step two, now that you know what normal is and what good looks like, gang up and negotiate contracts that hold intermediaries accountable for outcomes and with performance guarantees. Address root causes and the excess and wasteful spend, in other words. Listen to the show with Dr. Will Shrank for more on wasteful spend.
Step 3. Be transparent with consumers/employers about relative quality. Educate them. You may also want to reward members who go to see those high quality docs and or make it expensive for them to go to the worst performers. There are lots of win win case studies here on how well this works.
Case Study: Maternal Health
[00:05:26] Stacey Richter: Rob Andrews and I talk a bunch using maternal outcomes as a case study for lots of the points made, and this was done for several reasons. One is that for some employers, maternity is a large chunk of their healthcare spend. As a case study, it is undeniably superb.
Avoidably bad outcomes for moms and babies here is not only scandalous, as Rob Andrews puts it, in a country as wealthy as ours, but also really costly, and many times avoidably so, keeping even one mom, and or one baby, out of the ICU or NICU can save hundreds of thousands of dollars. I said this already, and it's a brutal number worth repeating.
It's really interesting how employers in a geography wind up footing indirectly a rather shockingly large bill for babies and uninsured or underinsured moms or moms on Medicaid. Avoidably going to the ICU and the NICU, which the hospitals tally up as hundreds of thousands of dollars in billed charges. The term "million dollar baby" is a term after all.
Listen to the episode that follows for more on these indirect costs and how they happen. But the good news is that there are really cost effective pathways that actually work to keep moms and babies out of the most expensive care settings money can buy.
Jodilyn Owen on an episode talks about one of them in detail. How her maternal health clinic, which serves zip codes with, let's just say, a lot of social determinants of health going on. Moms in her clinic have a lower rate of NICU admissions than even the fancy zip codes nearby. So this can be done.
Purchasers of healthcare just have to demand that it happens and pay for it to happen. Rob Andrews talks about this and he also talks about why it is quite unlikely that payer or provider organizations themselves are going to pick up this torch and make this happen unilaterally of their own volition. Now, he offers some nuance and you should listen to that nuance.
My name is Stacey Richter. This podcast is sponsored by Aventria Health Group.
Discussion with Rob Andrews
[00:07:30] Stacey Richter: Rob Andrews, welcome to Relentless Health Value.
[00:07:32] Rob Andrews: Thanks, Stacey. It's really good to be with you.
[00:07:34] Stacey Richter: So before we kick into our discussion, which I'm really looking forward to, do you want to just give just a very brief overview of your background.
[00:07:42] Rob Andrews: I've had the privilege for the last eight years of leading the Health Transformation Alliance, which is a cooperative owned by about 60 major US employers. We're JPMorgan Chase, we're Marriott International Paper, General Electric, American Express. And what we are formed to do is to try to use our negotiating leverage and our data to identify high-value care.
Great outcomes that are great for people and steer as many consumers toward that high-value care as we can. We do that for two reasons. The one is when people are healthier, they're better at their work, they're happier. It's something we all should celebrate and try to make happen. And then financially over time for self insured employers, better outcomes lead to much better balance sheets, better economic results.
So I've had the great opportunity, great privilege to be the founding CEO of that group. Prior to that, I was honored to serve in the United States Congress for 24 years.
[00:08:37] Stacey Richter: You said better outcomes lead to better balance sheets.
[00:08:42] Rob Andrews: Yeah.
[00:08:43] Stacey Richter: And you have also said, I heard you say recently at a conference, what moves needles is financial implications. Does improving patient outcomes or reducing probably things that shouldn't happen in the healthcare industry, does that actually, for reals, improve the balance sheets of self-insured employers?
[00:09:06] Rob Andrews: It does, in two really important ways. Let's take, for example, the problem of maternal health, where we have an infant mortality rate higher in the United States than virtually any other industrialized country. And sadly, but typically, that high infant mortality rate has a demographic and social footprint.
So obviously this is a personal tragedy of the highest order when a baby or a mom either doesn't survive or is severely ill in the childbirth process. Self-insured employers pay for those bad results already in two ways.
The first is if the mom or the child is on the health plan of the employer, it costs a lot more to take care of a baby in a NICU or a mom in an ICU, then it does when the birth is normal and healthy and natural.
So the employers directly pay for this, but it's also important to understand they indirectly pay for this. If the mom or the child are on Medicaid or if they're undocumented or if they're uninsured, the hospital that takes care of them very often gets paid very little or not at all.
When the hospital gets paid very little or not at all, it shifts those costs to other payers. The payer to whom the cost most often gets shifted is the employer. 160 million people are insured through their employer. That's where the cost shifting takes place. So, days in the NICU for children, days in the ICU for moms are a really bad economic result for those who are paying the bill, which first and foremost is employers.
So, as you've heard me say before, Stacey, that even if you're not deeply troubled by the fact that the color of a baby's skin or the color of the mom's skin is a factor in their health at birth, that alone to me is deeply disturbing. Even if that doesn't move the needle, then the economic consequences do and should.
[00:10:56] Stacey Richter: Is there a way that those economic consequences have been calculated in ways that jumbo employers or others are accepting as the current reality?
[00:11:10] Rob Andrews: I don't know how broadly accepted this is, but I just read a study in one of the health journals over the weekend where commercial rates are anywhere from 180 to 200 percent of Medicare Advantage rates, so unpack that for a minute.
Medicare Advantage plans are paying significantly less for the same services that self insured employers are paying for. So part of that delta, not all of it, but part of that delta is explainable because of what you and I just talked about.
[00:11:39] Stacey Richter: Well, the other part of it is obviously if you have the same plan that's negotiating the Medicare Advantage rates as negotiating the commercial rates. One thing that I think it might have been that same study made clear is that the Medicare Advantage plans are using the commercial as leverage to get the lower Medicare Advantage rates.
[00:11:59] Rob Andrews: So, lives of Coca-Cola employees or Marriott employees are being used to leverage lower rates, higher discounts for Medicare Advantage.
There's nothing intuitively wrong about that, but there is something that's distorted about that. And the distortion, of course, is that when I say that Coca-Cola or Marriott are paying twice, that's what I mean. They're paying for their own employees but they're also paying for individuals that they don't insure or have direct responsibility for.
So there is an implicit health disparities tax on every self-insured employer in the country. The best way to change it in our mind, Stacey, is to reduce the cost of care throughout the whole system, by improving the outcomes. And my example is how we can do this. Less expensive, more effective early intervention for moms and babies, we know, leads to fewer days in the NICU or the ICU.
We need to do more of that, and the HTA is here to try to assure that that happens.
[00:12:56] Stacey Richter: I could certainly see that the risk horizon to ensure better maternal health is short enough that it's probably a pretty compelling conversation with any sort of finance person. You can probably pretty clearly show this is how much it's going to cost if this number of babies wind up in the NICU, because of or lack of …
So, it seems like maternal health would be a really great place to start, not just because, as you said, of the human tragedy that's involved there, but also I could imagine that there's a pretty compelling economic story.
Have you expressed that story to jumbos who are actively pursuing better maternal health at this time?
[00:13:45] Rob Andrews: 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 applying 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 is usually 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, 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 in 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 may actually prosper from the bad outcomes, that explains the problem.
[00:15:49] Stacey Richter: As I've said more than once, you know, don't confuse buying something with a strategy because they are not the same thing.
[00:15:56] Rob Andrews: And unfortunately, very often buying something is by default strategy, because if you're paying a carrier $21 per employee per month, no matter what they do, as long as they execute on the mechanics of the contract, that becomes your strategy.
You can have all the PowerPoints and all discussions you want, but if you say that, well, when you take care of pregnant moms, we pay you what we pay you, irrespective of the outcome, that's what you get. That becomes your strategy. Strategy is not what people say, it's what they do.
[00:16:26] Stacey Richter: Indeed. And there's many layers to what we're talking about here.
With that, I did have somebody else telling me the other day that he had to literally sneak around if he was going to do something on behalf of patients that he knew was right because not only was he doing it for free, but it was, you know, he was employed physician and his employer was not super happy with him not driving volume.
[00:16:49] Rob Andrews: One of the reasons it's great that you do this podcast is that this story that you and I are talking about here is not one that resonates in our culture because you're right, we do resonate with heroes. Oh, isn't this wonderful? This woman was on the verge of death during childbirth and this heroic physician stepped in and saved her life.
That's an awesome story. It really is. And I applaud those physicians and all those up and do with this. But it's not very compelling to say, yeah, yeah, what happened here is they started to see the pregnant mom every 10 days instead of every 30 days. That's not very exciting, but that can make a huge difference.
They had a nutritionist call the pregnant mom once a week and kind of check on what she was eating and how she was doing with her weight. Again, not exciting, but really effective. So this is a tedious story. It's hard work. It's not dramatic. It's not heroic. But the outcomes are. The outcomes are.
[00:17:42] Stacey Richter: Someone asked me the other day why this is called the Relentless Health Value podcast, and my answer was very similar to what you just said.
It could also probably be the Tedious Value podcast because this is hard work.
[00:17:54] Rob Andrews: It is relentless. Paramount's not going to make a feature length film out of an OBGYN that has a nurse practitioner call someone on the phone every 10 days and check her diet. Not really Hollywood stuff, but that is the difference that will most likely reduce dramatically the risk that the baby winds up in the NICU or the mom winds up in the ICU or either wind up in the morgue, which is a grim thought, but it's one that's much more common in the United States than it is other places.
Operationalizing Better Health Outcomes
[00:18:21] Stacey Richter: So let's talk about operationalizing this. And obviously there's a step one, step two, step three, step four, step five, right? Like you can't just go from zero to this is fixed. How are you conceiving of, all right, so I'm a self-insured employer. I am the one who is ultimately paying the bills for these bad outcomes.
What do I do? What's my first step?
[00:18:42] Rob Andrews: The first step is to discern the difference between rumor and data. So it's very, very important that employers have the opportunity to see and understand data about what does improve maternal health outcomes. And it's important that the data be objectively analyzed within the control of employers.
Again, not casting any aspersions, but where providers and middlemen control data flow, they have a vested interest in what story they want to tell. We do a great job here at Main Street General Hospital in prenatal care. Well, is that true or is that just in their US News and World Report ad? It's very important that the employer have the ability to understand what works and what doesn't. Which is why the HTA has invested an enormous amount of time and effort in creating such a data platform.
So step one is distinguish rumor from truth. The second, then, is to coalesce and begin to negotiate contracts that hold intermediaries and providers accountable for this. And we are suggesting and working with our members to say to carriers, for example: “Hey, this employer has a maternity health problem.”
Carrier, we are paying you $21 per employee per month, which is a lot of money. What are you doing about this? Let's talk about a performance guarantee that we're going to put into your agreement. And if the outcomes improve measurably, we'll pay you more. If the outcomes don't improve measurably, there's going to be some negative consequence attached to that.
They of course will then turn around and do the same thing with the providers, which we think is the way to get this done. The other thing I would say to you, I'll come back to data, which is a dry subject but a really important one. It is totally unreasonable to expect providers to take risks and be held accountable for better outcomes when the standards are not peer driven and data driven and fair.
A hospital in Anacostia in Washington is not going to get the same infant mortality results as one in Alexandria, Virginia. They're just not. So you have to risk adjust the data for the population that's coming in. But it's equally unreasonable to say to the hospital, either in Anacostia or Alexandria, no, you're going to get the same amount of money, fee for service that you would irrespective of the outcome.
So the mechanics of this are learn the data. Use the data to negotiate fair contracts and put the dollars behind them.
[00:20:57] Stacey Richter: Recapping what you said there, first step is, as it always is, get your data. I have talked to countless individuals going through countless stepwise processes.
And step one is always make sure you have your data. And then to your point, now you've got to actually use said data. So what you want to be looking at in this, just keeping on this maternal health example, you really want to be looking at it so that you actually can separate, as you said, rumor from facts, actually be able to understand what the baseline actually is.
Then I guess you'd have to figure out what good looks like.
[00:21:40] Rob Andrews: Let's trace this back again to the maternal health example. The HTA is able to say, let's take the Washington DC metro. We're able to look at cost and outcomes on some fair metric value, whether it's HEDIS scores or leapfrog scores or readmission rates.
We're able to look at a four box, if you will, an upper right hand corner, high quality, low cost, bottom right and high quality, higher cost, and the other two boxes being the converse of that. We're able to identify on a provider system by provider system what that looks like in a given market. In our view, the next step with that is not to chastise those who are in the wrong parts of the grid. It is to say, well, here's what seems to be distinguishing the providers on the correct side of the grid.
And I'll say this again for our wonkish audience, risk adjusted data this is. This is not holding Anacostia to the same standard as Alexandria. It's taking into account that Anacostia is going to have a lot sicker, poorer people walk through or crawl through the door of the emergency room. But let's look at this and try to identify and isolate the steps that the high performers took, encourage the other performers to take those same steps.
In our view, this is remedial, not punitive, if it's done right. And if it isn't done right, though, at some point you say, well, we do need to let consumers know that here's the underperformers. And whether it's through plan design, where their employers will alter co-pays and deductibles, or whether it's through educational means or other techniques, I think all of us wants to know who the best tax return preparer is or certainly want to know who the best babysitter would be for our kids.
Why not who the best medical provider is for our families?
[00:23:20] Stacey Richter: What does that actually look like, you know, on the ground? Is it, I go through my data and obviously in some here, not in the details. Okay. I'm an employer. I have a significant number of my moms who are going to hospital A for their care. And then half of that number go on hospital B and half go on hospital C.
That did not add up, but hang with me here.
[00:23:41] Rob Andrews: We'll add that to a third, a third, a third.
[00:23:44] Stacey Richter: What was that Yogi Berra quote? 80 percent of it is half mental.
[00:23:47] Rob Andrews: It's too crowded there, no one goes there anymore.
[00:23:50] Stacey Richter: You look at the outcomes of those three hospitals, you see that A is performing incredibly well versus C.
Is it then the employer that takes a meeting with A and sits down and says, what are you doing there? Goes through and tries to figure out what the best practice is so that then they can promulgate with the other hospitals.
[00:24:08] Rob Andrews: That's up to the employer. There are some employers who like to lean into this and the employer would wnt to have that meeting with the underperforming hospital. Most do not. Most would expect their carrier to do that for them.
Now carriers, here's where we get into the whole earlier discussion about mixed motives for carriers. If a carrier on Monday is saying to a provider, you really need to up your game on maternal health. Here's how you scored. Here's what you're not doing that your peers and competitors are.
Not an easy conversation. The carriers will say, we're doing this on behalf of these companies who are paying us, the carrier, a whole lot of money to help them manage their plant. Then on Tuesday, you're the carrier going in the provider and saying, oh, by the way, we would like to deepen our discount for knee operations or for cesarean sections or whatever.
Kind of awkward, isn't it? To be in there holding them accountable on Monday and then asking them for something else for yourself on Tuesday. Suffice it to say, our members respect that conflict. They don't regard it as an ethical or certainly a legal flaw, but they're mindful of it. And we are holding the carriers accountable for serving our members without regard to how it affects the other business relationships they might have.
There are some employers who have backed away from third-party administrators that are owned by carriers or controlled by carriers because they feel that that TPA would be more aligned with their needs. That's a minority of employers. But more and more of them are looking at it. That's what it looks like on the ground.
It looks like a set of options that an employer has where you've got a range where you can say, most radical thing to say was, we're just not going to include the underperformers in our network. I'm not going to do it.
The next step down would be, we're going to require the consumer to pay a lot more out of pocket to use that network. Not an easy thing to say to an employee. It's very controversial.
The next step down is we're going to try to engage with the health system and or the carrier to elevate the game. So everybody, like Lake Wobegon, all children are above average, which is a noble objective.
And then the least confrontational, but maybe the most effective is education. That employers are saying through the carrier, we're going to educate our plan members about the scoreboard, how different providers perform in a given market on a given set of criteria.
[00:26:26] Stacey Richter: It's interesting as you were talking about this, especially as we're considering employers and their interactions, or even carriers with their interactions with hospitals, that there was this implicit idea that the interaction is a conflict.
And it makes me wonder how you turn that conflict into a collaboration. Like, for example, I have heard multiple times that providers a lot of times have no idea what their outcomes in fact are. And there was a study, it was with the dermatologists, but I'm assuming this is pretty universal, that if you actually tell doctors that average across the profession does three slices or whatever it is for Mohs surgery and you're doing 10, that without any financial incentives, without any anything, you will start getting the outliers who start doing better just because of it's probably inherent physician culture to be competitive and everybody wants to not be the outlier. It almost makes me wonder whether there is in fact an opportunity, especially at the coalition level, to engage with providers within a certain geography and just talk it out.
So using education, not in the education of the members, which I, I'm going to get to in a sec, but is there an opportunity to actually educate and work with providers or is that too, Lake Wobegon.
Collaborative Efforts and Risk Adjustment
[00:27:54] Rob Andrews: There is an opportunity, but it's really hard to do so on a geographically dispersed basis. This is the big challenge that if a self-insured employer has employees all over the country, They really don't have the time or the inclination to do a market by market negotiation.
It just doesn't make sense for them to do that. Now, this is where I believe carriers can play a very prominent role, because carriers have networks that cover the entire country. And I do believe that there is a win win win structure that could happen here, where the carriers use their national reach.
The employers use data and their checkbooks and providers are given a fair peer driven risk adjusted opportunity to share in the benefits from greater outcomes. So if a health system meets the national standards for reductions in infant mortality, reductions in ICU days, NICU days, they get paid more.
You might say, well, that, that, that's going to raise the cost of healthcare. Well, no, it's not. If the way they get paid more is that they are effective in early intervention that avoids the high cost of the NICU altogether. If you, if you were to distill the mission of the HTA to one sentence is that we want to be a catalyst in having more people paid to do what I just said.
That is to participate in the creation of a great result and get paid more for it.
[00:29:14] Stacey Richter: What you just said there to participate in a great result and get paid more for it and the win win that is possible is that carriers can, I mean, this is the carrier's day job. It's often not the day job of HR teams at self-insured employers.
Carriers can be the ones to carry a lot of the water here.
[00:29:35] Rob Andrews: Well, it should be because for their day jobs, they're being paid 20, 22, 23 bucks for belly button per employee per month. It's a lot of money. And you got to ask yourselves, well, what are they doing for that? Now, they're administering claims, really important, the bills get paid, it all happens the way it should.
But, you know, American Express administers claims and they take a penny on the dollar to do so. So the claims administration part of this does not strike me as justifying the 8, 9, 10, 11, 12 percent of health spend that goes to carriers. They need to do more for that.
[00:30:06] Stacey Richter: So we've got them who are using their national reach and also their, you know, this is what they're getting paid for, they should probably do it.
To engage with providers, figure out how outcomes are going to improve, and then the self-insured employers are really holding everybody that they're, they're paying accountable.
[00:30:26] Rob Andrews: Imagine an ASA contract with a carrier that says, uh, we have a mental health, maternity health problem. Our objective for next year is to reduce by 5% the number of NICU and ICU days for moms and babies. And you can't divert the care to somewhere else. The demand has got to drop. We have to have healthier people coming out of this. Go figure out how to do it. Work with the providers to do it. And if you do, and we save $100, you get to keep 40 of it, 60 of it, whatever we negotiate.
[00:30:53] Stacey Richter: Who's figuring out that risk adjustment because the way that it currently stands, the risk capture is, is on the provider and obviously you've got the whole situation that we've currently got where the wealthier hospitals have the highest risk, it seems, because they're the ones that can afford coders in order to calculate that, that higher risk.
[00:31:14] Rob Andrews: It's a complicated problem, but it's one that nonconflicted analytics people are capable of. They really are. To basically say that, well, we know on the norm obese moms who are in the bottom 10% of incomes look like this in terms of total cost of care. So we can expect this kind of jump. But if you exceed that kind of jump, then there's something else going on here that we got to take a look at.
And risk adjustment is hard, but it's doable by people who have data and are not burdened by conflicts of interest who can call as they see it.
[00:31:43] Stacey Richter: So, are you saying then that the task of risk adjustment probably shouldn't fall on the provider on a onesie twosie basis, that it should happen at the population level?
[00:31:52] Rob Andrews: I think it should be a collaborative effort. Everybody's got to agree that it's fair. The worst thing in the world to do to providers would be for someone like me to say, here's the way you're going to be evaluated on maternal health. I'm not confident to do that. The fairest way to do this would be, all right, here's some outcomes that OBGYN specialists would recommend are good outcomes.
Here are data would show what the costs are right now. Let's all agree on a fair set of metrics to measure success and let's implement. It should be a collaborative effort. Let's all agree on a fair set of metrics to measure success and let's implement. A lot of work, but people will do it if it's tied to the reward. In the US Economy, people do what they get paid to do.
[00:32:30] Stacey Richter: Yeah, I've actually heard that one of the fairest ways to do risk adjustment is just look at what zip code someone lives in. So sometimes I wonder whether...
[00:32:39] Rob Andrews: To say that it's hard to do is not to say that it can't be done. Risk adjustment is done every day.
It affects your auto insurance premium. It affects your homeowner's insurance premium. It affects your credit score. I mean, risk adjustment is the lifeblood of the US Economy. It should be applied here in the same way.
[00:32:57] Stacey Richter: So okay, if we're thinking about maybe that the 35% of jumbo employers who are leaning in to, hey, we have to do something with our health benefits here, where are they, relative to, you know, let's just keep using this maternal health example, are they actually doing any of the things or some of the things or most of the things that you are talking about? Or is this still in the we are planning this stage?
[00:33:24] Rob Andrews: They're doing it. And I don't know that it's 35%, but those that are really leaning into this, we looked at our own data in the HTA.
And found that those employers, first of all, had better outcomes. They had 29% lower readmissions, which is not a precise outcome measurement, but it's pretty good one. It's used pretty much across the board. So on a risk adjusted basis, they had readmissions 29% lower than, than their peers, total cost of care, 15% lower.
And cost of Rx portion there's been 25% lower than the market. So this is what it looks like. Not easy to do. There's a lot of different strategies how to get there. There's no one blueprint. But the employers who would be right at home in this conversation said, Yeah, you know, incentives are badly misaligned. I'm not getting very good results. I'm going to demand something different when I spend my money. That's what it looks like.
[00:34:17] Stacey Richter: You said 29% lower readmissions, total cost of care drops 15%, and then 25% lower Rx spend.
[00:34:26] Rob Andrews: And these are all risk adjusted numbers, meaning this is not something where, yeah, but their population is just healthier and younger. No, it's all baked into the cake. That's what they get.
[00:34:35] Stacey Richter: Yeah, which, and some of this is just write a better contract, right? Like it honestly has nothing necessarily to do with improving outcomes.
[00:34:42] Rob Andrews: But of course better contracts do improve outcomes. If you're basically saying to a carrier, yeah, we know you have this diabetes management program, but we don't think it works.
So we're carving it out, we're going to a point solution that does, and we are assigning that responsibility to the point solution. You are contracting for a better outcome. You're basically saying we think this is going to work and it does, doesn't always work. But again, the gross numbers are that when an employer leans in like that, 29% lower readmissions, 15% lower cost of care, 25% lower in the pharma space.
[00:35:14] Stacey Richter: I could also see that if you're saving the numbers that you're talking about saving here that then those dollars could be used in other ways more effectively, which again, could improve outcomes.
[00:35:26] Rob Andrews: Sure. Because what very often happens is the NICU day is replaced by, 30 prenatal visits that avoid 10 NICU days.
You, you sort of plow it back into the system and then other employers add this to the paychecks of their employees. They hire more people, their share value goes up, all of which has value to the company and takes us back to that initial link, Stacey, we've been talking about, which is how do you tie outcomes to economic gain for jumbo employers. This is how we think you do it.
Conclusion and Final Thoughts
[00:35:58] Stacey Richter: Rob Andrews, if someone is interested in learning more about the HTA, the Health Transformation Alliance, where would you direct them?
[00:36:05] Rob Andrews: I'd be happy to hear from them. My email is randrews@htahealth.com. And we are always looking for like minded, I was going to say combatants, I won't say that. Like minded dreamers in the field of healthcare.
[00:36:22] Stacey Richter: Dreamers and doers.
[00:36:23] Rob Andrews: There is some combat involved. And again, I've said this before, I don't mean to be redundant. I would never say that a carrier, a PBM, a point solution, they're bad people or they're trying to do bad. That's just not true.
They are playing forcefully and intelligently and with great enthusiasm within the rules. And they do achieve good things within those rules. They do. But we could do a lot better. If we change the rules. So then enthusiastic, driven, capable people can channel those capabilities into fewer moms in the ICU, fewer babies in the NICU, certainly fewer infant deaths in this country.
And I just use that as an example because it's so painful and so scandalous that we have this problem in a country as wealthy and successful as we are. And at the bottom line, we have the problem because no one gets paid to fix it.
[00:37:12] Stacey Richter: I love how you put that, that the current thinking in this country is that if you're playing by the rules, there's no shame in this game.
[00:37:21] Rob Andrews: Well, and in fairness, we have to understand here that there are other results that our rules create that are really good ones. It's not a coincidence that wealthy billionaires and sovereign heads of state come to the United States for oncology care or for renal care because we have amazing people here that can do amazing things.
I never want to see that stop, but I don't think we have to choose between that and more prenatal visits for a low income mom. You can have both. Because the NICU days and the ICU days you avoid for that baby and that mom finance the prenatal visits, which in turn turns around and finances more discovery of drugs that will help people with dialysis problems.
[00:38:05] Stacey Richter: Yeah, there's definitely a positive sum game here.
[00:38:07] Rob Andrews: We can do this. I have great faith that if the same incentives that apply to opening urgent care centers for health systems applied to this. We'd have a lot of this. We'd have a lot of progress. But the way the system works now is, hey, if you want a good referral system for your specialist, open up urgent care businesses.
So they all do. There as frequent as McDonald's and Wendy's on every corner. Why don't we take the same principle and say, hey, if you can figure out how to radically improve maternal and infant health, you're going to make a lot of money doing that. I'm for that.
[00:38:42] Stacey Richter: And to your earlier point, those who are financing this whole thing. Whoever has got the gold makes the rules. So self insured employers has just one party here.
[00:38:54] Rob Andrews: We believe self-insured employers can be an important part of this solution. By no means are we the only part of the solution, but the government writes massive checks through Medicare and Medicaid. I think a combination of employers and public programs could change the world in a much better direction. And that's our aspiration.
[00:39:13] Stacey Richter: Let's change the world. Rob Andrews, thank you so much for being on Relentless Health Value.
[00:39:18] Rob Andrews: Thanks, Stacey. I'd love to do it again.
[00:39:20] Tom Nash: Hi, this is Tom Nash, one of the RHV team members. You might recognize my voice from the podcast intro. If you love the show and you want to show us your support, please follow us on your favorite podcast app, sign up for the newsletter, or maybe consider making a small donation in the tip jar. Thanks so much for listening.