RHV_EP398 Jacob Asher Payers CA
[00:00:00] Stacey Richter: Episode 398. Why is the commercial payer marketplace in California completely boring. Today I speak with Dr. Jacob Asher.
[00:00:28] Stacey Richter: Yeah, so while the commercial payer marketplace is completely boring, the reasons it's boring are not. Let me walk you through this conversation I have today with Jacob Asher, md. First, we establish that the relative number of each carrier's commercial members in California don't seem to change year over year, and this has been true four years.
When you rank order carriers by member count, the song remains the same. It's Groundhog Day linked to the 2022 CHCF Enrollment Almanac, which shows for the large group market Kaiser has captured and retained just over half of enrollees. Anthem comes in next with 14%. Blue Shield gets 9% and then bringing up the rear, we have UHC, Aetna, Cigna, Centine, and all others in descending orders splitting the remaining 21%. Hmm. Intriguing.
Whole idea that these relative member counts remain so consistent. Then Dr. Asher and I dissect what is anybody actually doing to cut into the Kaiser market share or try to grab share from the two Blues plans, if anything. Dr. Jacob Asher was a great guy to have this conversation with.
He was a practicing head and neck surgeon with Kaiser Permanente, and then he also served on the Permanente Medical Group Board of Directors. Then he changed careers and became a full-time health plan Chief Medical Officer for first Anthem, thens Blue Cross, then Cigna, then UHC UnitedHealthcare. Now he's in air quotes, retired and reflecting back on unsolved and unaddressed issues within healthcare.
And we've covered one here. Why is the commercial payer market as boring as it appears to be in California? Now, after I had this conversation with Dr. Asher, I called up Wendell Potter, who everybody already knows, and Lauren Vila, who everybody also probably already knows, but she has spent her career at various employer coalitions and now works at a big employer transforming their health benefits, and she lives in California.
I learned a few things that really helped me frame my thoughts on some of the issues that surfaced in the conversation that I had with Dr. Asher and that you'll hear today. So let's get to it. Why doesn't the relative market share of the big payers change year over year in California And the commercial space?
May I present? Six reasons. Number one, everybody I talk to, Dr. Asher Wezel Potter, Lauren Vela. First thing right outta the gate that practically everybody mentioned is employer Ander Chef. Trying to get an employer to switch carriers is like trying to pull XCA from its stone and right, not so surprising.
It's disruptive and obnoxious for employees and also benefit teams if carriers are switching all the time. Number two reason for a stagnant and maybe not exactly competitive market. EBCs employee benefit consultants, they have deals with carriers and others and they also have a lot of power over employers.
Listen to the show with AJ Loiacono and Paul Holmes. For more on this, links in the show notes. Number three, as Wendell Potter put it, the commercial market is as a whole stagnant, no real growth nationally, and in many states, the real money for carriers is not in the self-funded market. So they don't care much about aggressively competing for market share.
Given that chart that just came out the other day showing the insane relative gross margins that carriers are making on Medicare Advantage patients, which is over double other lines of business. Yeah, totally. Links in the show notes. Number four reason. Just keep this in mind before we barrel into reason four here.
For a stagnant and maybe not exactly competitive market, Kaiser excluded all of the rest of the California payers have what amounts to largely the same provider network. I'm exaggerating slightly here, but largely the same hospitals, the same consolidated, integrated delivery networks. And one thing that's pretty clear, not just in California, but across the country, plans who bring the most members, get the best prices from these hospitals and other provider organizations.
Also, as Dr. Asher mentions on the show today, he never saw an employer buy on quality. Most are far more concerned about discounts, so right. We have some circular reasoning here, or circular logic. The big plans get the best prices, and then because they have the best prices, they maintain their market share.
But wait, there's more to this one, and it's not just big gets you lower prices. Remember from episode 3 9 5 with Brennan Bilberry, he talked about the concept of the most favored nation, MFN, anti-competitive clauses in hospital contracts. This concept is also super relevant here for payers as well. If you think about it, this MFN most favored nation anti-competitive clause.
This is where a big hospital and a in air quotes, big carrier have a chat in a back room. The hospital agrees to not give any other carrier a lower price than the big carrier. These MFN clauses are of course, terrible for competition and plan sponsors in any patient with cost sharing. A lot of states have started to ban, restrict, and limit these clauses.
The DOJ brought a case in Michigan about this, and here's a great federal government summary of the problem. The department And the state of Michigan alleged that the MFN clauses in Blue Cross Blue Shield of Michigan's contract with Michigan hospitals decreased competition amongst health plans. Some clauses required hospitals to charge competitors more than the hospitals charged. BCBSM often by a specified percentage.
Moreover, B-C-B-S-M often agreed to raise the prices that it paid hospitals in part to obtain the MFN clauses. Oh, hey, I'll let you raise your price so I can have a most favored nation clause just as long as I get a lower price, which is higher than it was originally, and this was actually back in 2013.
I have no insight at all or knowledge or I am not suggesting in any way that what was going on in Michigan is going on in California. However, this practice, this anti-competitive practice is common enough. If you're interested in how common count the lawsuits, number five reason why the commercial payer market in California and likely elsewhere is so completely boring.
Employers are unaware a lot of times of how they are being charged, more than what might be appropriate, and they are largely unaware of options other than Blue Cross, United, Cigna, Aetna, the big payers. Number six, reason for the stagnant market, as Dr. Asher talks about, and which I never really thought about.
Kaiser doesn't have Medicaid patients and because their network and hospitals to a large extent are closed, they also don't have uninsured patients to a large extent. So no charity care to speak of, and therefore, at least as it is posted, they can be cheaper because they don't have to cost offset. So their price advantage has a structural element here that.
Could make it even more untouchable. So there's your six reasons you can start to see basically all of these things solidify into the same thing. It's less about trying to get new business and more about locking in the existing business. It's not really a secret that this market is rock hard. Plans realize that they realize that the cost of keeping an enrollee is cheaper than acquiring a new enrollee.
So carriers focus, sales and marketing efforts on holding on to their existing customers, especially the coveted jumbo accounts. Interestingly, and I was talking about this with Lauren Vela, the more clinical programs a carrier has deployed for an employer, the more the carrier is lacked in there. So the more the clinical value proposition resonates, the more clinical stuff that gets integrated, changing plans becomes even more disruptive, and employers are even more likely to remain where they are.
So there's more to clinical programs than payers catching themselves a little PMP something, something up, charge recurring revenue, or trying to get new business. It's also locking in customer retention. Is any of this specific to California? Some of it is like a lot of the Kaiser stuff, but most not.
Meaning a lot of the country doesn't exactly have a functioning commercial small group or large group marketplace either. To a certain extent, it's no wonder big employers don't change plans that often. Why would they bother given probably fairly incremental differences between these big payer carriers?
I realize I'm scrambling out on a limb here and making assumptions, but to achieve more than incremental improvements, buca Blue Cross United, Cigna, Etna. We need to invest all kinds of resources into being that shining star and kind of like, why would they do that when nobody can take down Kaiser? And for all the reasons that we just talked about, it's a hard road, a hoe to grab new clients.
There's a lot of ramifications to this, but this show can't be seven hours long. I would invite anyone who has thought through potential consequences or has things to add. If you go to our website, there is a leave a voicemail button, And we might do an upcoming show that includes listener thoughts.
My name is Stacey Richter. This podcast is sponsored by Aventria Health Group.
Jacob Asher, md Welcome to Relentless Health Value.
[00:09:59] Dr. Jacob Asher: Pleasure to be here.
[00:10:00] Stacey Richter: Just starting at the very beginning here. What is the California Health Plan competitive picture?
[00:10:08] Dr. Jacob Asher: By way of background, I guess it's a little hard to explain what my job was and would certainly cause my wife endless problems defining what I actually did for the health plans.
But broadly speaking, I was the lead clinical officer for a market and had leadership engagement with the business leaders, including sales, cost of care, network pricing, and so forth. Through that experience, I gained market level insight into essentially the sales picture and membership growth picture.
And reflecting back after 14 years, I suddenly realized that very little had changed. The relative membership rankings of the large plans in California, despite on paper being what appears to be quite a competitive market.
[00:10:48] Stacey Richter: When you say nothing changed in in 14 years.
[00:10:51] Dr. Jacob Asher: I'm not talking about earnings or income or financial performance.
I'm simply talking about membership totals And the relative rankings did not seem to budge again. And to be clear, my comments are largely restricted to the commercial market, not to the Medicare or Medicaid markets.
[00:11:07] Stacey Richter: The situation is we've got a bunch of different carriers. We have Anthem, we have Blue Shield, we have Health Net, Aetna, United, Cigna, Kaiser, obviously, and they all are in the market and they all are scuffling for market share.
Basically trying to grow their membership base and nothing has changed in 14 years. Now, were they trying anything unique? Do you have any comments relative to what everybody was trying to do to take market share?
[00:11:34] Dr. Jacob Asher: The market has multiple segments and has numerous individual drivers of market share within segments.
From small group fully insured to individual business to large groups, single state to national account customers who have business in California and members in California. There are sort of micro markets and micro drivers within each. Obviously Kaiser more in Northern California than Southern California was standing out there as a major competitor, and among the things I came to observe was what is the marketing plan?
What is the focused industry approach to the biggest competitor in whatever segment they might be vulnerable, be it small group, large group, and so forth.
[00:12:13] Stacey Richter: You mentioned two words that I'm very interested in. You mentioned micro markets and you mentioned drivers in each. What are some examples of that?
What's a micro market and then what's a driver?
[00:12:23] Dr. Jacob Asher: I'm not sure it's the right micro, but there's public sector, there's unions, there's small employers, there's private employers, there's self-funded employers. There's tech, tech employers. There are heavy industry. They're agricultural employees. You know, the Sacramento area And the Central Valley might have a different mix of employers who are funding insurance than Orange County and, and Los Angeles, which might be different obviously, than my area, Silicon Valley and Northern California.
And so each market would have a, a, a, an employed population with a range of employers and. They sort out into various areas. Unions negotiate their health benefits as part of their contract negotiations. You have very large California cooperative buyers like CalPERS and teachers trusts and so forth.
That negotiate healthcare benefits for hundreds of thousands of public sector employees, often including unions, and that's an entire sector unto itself, for example.
[00:13:21] Stacey Richter: It sounds like what the carriers are doing, like how they're figuring out what their strategy is. They take the whole market. They're not just, here's our commercial strategy.
It's more complicated than that. They will segment the market into exactly some of the things that you said, like you've got your public sector employ employers who tend to maybe behave in a certain way and want certain things. Private tech, heavy industry, union, CalPERS, like we often hear for the tech industry, they're a little bit less concerned about price and a little bit more concerned about ample and attractive benefit options.
So what is is going on behind the scenes is the market's getting split into these micro, micro. Cohort segments and then figuring out what the drivers are in each segment, what the carriers are gonna focus on, which they are deciding they may have a competitive differentiation in, and then going hard into that particular segment in order to steal share from somebody else it, did I get that right?
[00:14:15] Dr. Jacob Asher: Basically, it's the brokers who represent the employers and advise them on how they should choose their health benefits. The sales teams cultivate their relationships with the brokers. Again, who each are. Also have their focuses on different groups of employers or different industry sectors, public, private.
Within that milieu, the marketing and targeting of new clients and new business of new employers exists. The ultimate is to get into, in the door, to be able to make a new business pitch.
[00:14:42] Stacey Richter: The EBCs, the Benefit consultants are a wrinkle here, right? We've done a number of different shows, so if anyone is interested, they should go back and listen to those shows.
Would this potentially be a reason why it's really tough to take market share from somebody else? Because from an EBCs employee benefit consultants. Perspective being quite cynical, but everybody knows that many EBCs are getting paid by carriers in many different indirect ways. Betsy Seals talks about this quite crisply.
In an earlier Medicare Advantage episode, she talks about the impact of brokers and sales agents on the Medicare Advantage side of the house. And just how these commissions or or payments impact the ability of competitors to really compete. AJ Loiacono talks about this on the PBM side also, Paul Holmes.
[00:15:26] Dr. Jacob Asher: It's an interesting question that I obviously am not the expert on, but I think it's also not asked often enough of those folks.
As a matter of course. There's a, there can be a fair amount of inertia changing health plans can be a bureaucratically complicated maneuver, new ID cards, explanations, let alone if you're changing health plans. And then you have to negotiate your employees actually having to change doctors, which obviously can be disruptive for folks.
So. Usually requires a significant push to go through with the effort because it is a significant business effort on many levels.
[00:15:57] Stacey Richter: Okay. Even if the EBCs are in there, let's just say adding another layer of complexity, we also have the inertia that you mentioned, and then also the employers who are looking disruption in the face and deciding that this is also a major decision making or not decision making factor.
When you were in these meetings that you're talking about, who were you pitching to? Were you pitching to large employers that your team that you were sitting in on these meetings, or were you pitching the large employer and an EBC, or are you pitching directly to EBCs as my first question and then I have another one for you?
[00:16:33] Dr. Jacob Asher: First of all, it's not my team. Let me be crystal clear. I totally understood that I was a consultant to the accounting and as one of my early mentors explained to me. Jack, your job here is to support this account executive whose compensation and whose business is utterly dependent on winning clients and keeping clients.
So in the room would be the account executive, there'd be representatives of wellness teams. There would be from our side, there would be the brokers are always there. And then from the employer there is, usually it's the hr, some representatives of the HR team. Rarely. It was extremely rare that a C-suite level person ever attended these meetings in my experience.
[00:17:12] Stacey Richter: As the clinical consultant was there, data pulled and then somebody said, oh, hey, employer, whatever percentage of your employees have diabetes, and this is what we're gonna do. Like, how did this get back to. The actual health of the population.
[00:17:30] Dr. Jacob Asher: You're on the right track. That is essentially my role.
So what I would call, it's a bit of jargon, but I think the industry would call it a clinical value proposition On top of the financial value proposition that the employer might be interested in. I would be representative of the health plan clinical toolbox, be it case management, disease management, care coordination, utilization management, medical policy.
Essentially explaining how my company was going to deliver healthcare in a, in a way that took the best care of your employees and as you've told the brokers you were looking for, be it greater diabetes management, better maternity care, better cancer care, we could, whatever there were, it really varied.
And this is usually in the mid to larger employer segment, over 500 to a thousand employees usually.
[00:18:16] Stacey Richter: This is a great transition to Kaiser because based on what you just said, I could see how Kaiser. We'd have both that clinical and that financial value prop, obviously, in such a way that they can manage to be the big coa in California because they not only have historically the best financial story, the lowest prices that they're charging, but then also they have an integrated delivery system.
So if we're talking about how they're doing running some of these programs, they seem to be very well equipped to be able to pull that off.
[00:18:47] Dr. Jacob Asher: Those are interesting questions. I eventually got to the point where I would ask sales reps, did an employer ever buy a plan because of quality, essentially that bluntly, and I never got a yes answer.
Frankly, Kaiser, they are certainly known and lead and all usual quality studies in California. More often than the quality, though I think the integrated experience can be a selling point for them where the, no matter where you go, they have your medical record. You don't have to fill out the same form 10 times.
It's a, there was a simplicity of the integrated network that's integrated with your benefits that I think is an appeal to some folks. I don't have, like I say, I don't know whether those are the deciding factors in gaining new business. And my final comment is certainly historically they were enormously price advantaged in the market.
But increasingly what I would hear from the brokers and sales folks is that in certain markets, they were no longer the cheapest plant. They've made enormous investments in new hospitals, earthquake compliance, and hiring much more specialist specialty care, enormous IT investments, and so they are often cheaper, but they are not always the cheapest anymore in every single market in California is my understanding from my sales colleagues.
[00:20:01] Stacey Richter: To overlay my experience, I have spoken with more than one employer, working with people who are making plan selections and have heard more than once. A message that very much appeals to employees is the integration, the integrated care message. Potentially even more than the low cost message. So I think that kind of corroborates what you just said, that the idea of having integrated care is very appealing.
And so if I'm an employer and I wanna make sure that I give a variety of options to my employees, I could see how I would certainly want the Kaiser option And the mix there.
[00:20:42] Dr. Jacob Asher: And probably that a significant portion of their employees have long been members. So if it's not, if you don't list it as an option, there's gonna be a significant disruption issue.
[00:20:52] Stacey Richter: Alright? You've got Kaiser, and obviously they are a payvider, and everyone who's listening knows exactly what that means. Kaiser employs the physicians, most of them, and they also run the plan. Let's just pretend, just so that we won't, don't wind up having a seven hour conversation that all of the Kaiser physicians are employed by Kaiser, right?
So take them off the table, then you've got all the doctors that are left. Well, keeping in mind that Kaiser is the biggest plan in, in, in California. If I am one of the whatever, five or six competitive plans, I'm assuming that there's some PPO network and most of the physicians that are in that PPO network take all of the rest of the insurance carriers.
Right. So all the carriers have this, uh, maybe a Venn diagram that has a lot of overlap relative to the physicians that are in network. Is that correct?
[00:21:46] Dr. Jacob Asher: So Kaiser is a closed, narrow network integrated provider. We're a health plan exclusively contracts with two medical groups, one in Northern California, one in southern California for medical services through a capitated arrangement, and all the financials are then dealt with, dealt internally between the two entities.
And the physicians are salaried. They're not paid fee-for-service, at least when I was practicing there. In the non-key world, there are a variety of networks of providers. It's don't forget that there is also a non-key HMO or capitated provider network, more in Southern California, the Northern California with.
Providers like Healthcare Partners, Monarch Heritage Network and so forth, who are, they're not integrated, but they are capitated networks that contract with all the other health plans. But Kaiser, but your point is essentially in the world of open network physicians, they are free to contract with any health plan that pays their price essentially. That's correct.
[00:22:43] Stacey Richter: So just thinking about this from a payer perspective. If you have a whole bunch of providers who are going to significantly contribute to the cost and quality of the plans you have on offer, and any improvement to the standard of care that those providers make, is an all boats rise kind of scenario.
From a payer perspective, it kind of diminishes the incentive for a payer to get in there and really do a whole lot.
[00:23:08] Dr. Jacob Asher: One point I wanted. To talk about with you, I think we talked about it before regarding the competitive situation. When I was at these plans, the frequent comment was about unit price advantage.
And this is inside baseball jargon, but the non-key health plans negotiate prices with providers, which is called a unit price. And they have a concept called a discount from retail, essentially. And the plans have achieved different discounts through their contracting efforts. And I came to learn that as far as I could tell, the biggest factor in driving how much a discount a provider would give a health plan had to do with how many members that health plan brought to that provider.
And then it struck me that this sort of leads to a bit of a circular reasoning, so that. The largest plan gets the best price from major providers because of their volume, which in turn allows them to deliver a premium based on their lower network price than their competitors, which guarantees that they continue to be the largest.
Membership and it was one of these factors regarding the competitive stasis issue we talked about earlier. And the other observation added to that is I also worked with folks who had worked at AT plans where they claim to have achieved what's called parody or equal discount level with. The market leader, which has been Anthem for a long time in California, in the non-key market in terms of this contract rate, and I didn't ask them at the time, if you achieved unit price parity, why has there been no movement higher up in the rankings closer to Anthem?
And it's a dynamic that I think it's not discussed a lot.
[00:24:42] Stacey Richter: Despite the fact that on the surface, as you said, it appears that there's a competitive market, meaning there's a lot of competitors. It's not like one of the plans comes up with something amazing and then all of a sudden they are at the top of the market share.
They have the biggest slice of the pie chart. And as you said earlier, just tucking this in here, you've, you haven't necessarily seen employers particularly, at least they're not saying they're doing it. Buying anything based on quality, it seems to be a price competition. While at the same time in negotiations with provider organizations, it seems like the major negotiating point is how many patients, how many members a plan has.
That's the negotiating point. So therefore, the bigger plans have the negotiating advantage. Like you can see how that ends in a stalemate And the big stay big And the small, stay small. You have spoken with some. Who have said that they've managed to negotiate just the same rates, but then their market share doesn't change, so something doesn't add up.
[00:25:40] Dr. Jacob Asher: Exactly. And even with the larger employers or self-funded employers who might have additional. Benefit needs the RFP process, it was my understanding, often as a first pass would use this unit price ranking to even to get to a finalist position where you could present customized care management, population health, concierge level services, whatever the market might be interested in doing.
So it was, it was a hill to climb, just to get in the door to get to a finalist presentation.
[00:26:08] Stacey Richter: And if you're gonna hypothesize on the why there, and I do understand this is all complete speculation.
[00:26:14] Dr. Jacob Asher: We talked about this earlier about their, the non-Kaiser plans are essentially using the same hospitals and doctors very often, so the actual care delivered is very hard to differentiate, And the unit price continues to be a factor, but it doesn't seem to budge.
[00:26:29] Stacey Richter: We just keep hearing over and over again that the, the Americans utilization of healthcare may not be strikingly larger than it is in every other country. It's just that it's the price is stupid. Ey Reinhardt.
[00:26:41] Dr. Jacob Asher: I would ask physicians, are you aware that my health plan has this and this? And they would point to a pile of paper on their desk and say, I got eight, eight health plans with 27 different programs.
So I don't, I good to know, but I don't have, how am I gonna get the patient into it easily? These kinds of workflows. Then there, there's improvement on that. Uh, the challenge has been engagement to get folks into the programs.
[00:27:02] Stacey Richter: When you say there's improvement on that, what do you mean?
[00:27:04] Dr. Jacob Asher: I think the plans have gotten more sophisticated and have worked on making the user experience And the telephone experience better, and partnering particularly with larger employees, with HR benefit teams to reinforce the message that your health plan benefits includes this and this.
And if you want help with your smoking or your diabetes, your obesity, your mental health, your depression, this is all covered and here's this wonderful apps available. Or there are dedicated teams standing by ready to work with you and your doctor or your therapist to coordinate your care for complicated illnesses.
I think that they invested a great deal in that, and I don't have the numbers, but I sense it's slowly improving. There just may be a chronic issue where. The plans are not seen as an ally and more as just as the transactional. Service. And so they, they're continually trying to work on that to either partner with providers to co label services under the provider to increase engagement.
The ACO movement has tried to make health plan services more available to the providers and to increase enrollment and engagement and available services.
[00:28:11] Stacey Richter: So we have carriers and they're trying to improve the quality for a whole bunch of different reasons. Which may be related to improving market share or whatever, but the confounding issue is that, as you said, patient gets a letter in the mail from the carrier.
It's not like they at least traditionally, at least, have skipped up the driveway and their eagerness to open it up. Plans, as you said, are not necessarily regarded as a. Trusted ally and just as consequentially on the provider side, providers are round filing your, Hey, let's work together. Letters, IE, sliding a lot of them off the side of the desk into the trash unopened.
It'd be really tough to produce much of a competitive advantage either financially or clinically given this issue with both patients and providers and. A him? Is it a self-inflicted wound? Just given other things that the plans may be doing to patients and providers elsewhere in their business? Have the carriers gotten better at reaching employees, maybe through employers?
[00:29:12] Dr. Jacob Asher: I don't have a lot of data for you on exactly how much more penetration there is, but I think there's much better communication and then I would assume that the plans are doing much better, direct marketing kind of stuff. And open enrollments and health fairs at larger employers and working with like, again, internal HR teams at employers to propagate value added programs to increase engagement.
[00:29:33] Stacey Richter: If we're talking about carriers ability to improve the quality of care, as you said, working with employers to help them improve their ability to engage employees. Could be a good thing to do because it's shocking sometimes how not good employers are at that. You were saying going to health fairs, potentially there's, I don't know, maybe templates for communications or best practices that get shared or like what's going on there?
[00:30:00] Dr. Jacob Asher: Yeah, no, exactly. I think. Particularly in the self-funded space as you go up market And the, again, the more higher margin profitable and industry is, the more add-on services they can afford or believe is a virtue as a employee benefit to retain employees. In tech in particular was this was common and there's lots of new entrants.
There's a fair amount of innovation to enable easier access to these kinds of services. Onsite clinics, near site clinics, they're on the campuses to remove barriers to accessibility for a lot of primary care, occupational health, mental health kinds of services for employees. And then again the, uh, all the telemedicine.
[00:30:36] Stacey Richter: Dr. Asher, is there anything I forgot to ask you that you wanna mention here?
[00:30:39] Dr. Jacob Asher: The other part about Kaiser that always struck me is also it's very hard to compare their clinical performance to the non-key world. So in the non-key world, everyone lives on bed day metrics, days per thousand and so forth, and procedures per thousand.
I'm not. Aware of Kaiser's numbers in that space, I presume they're good. And when I practiced there, they were good. And you presume there had the aligned incentives to avoid excessive utilization of discretionary procedures. But their financial model is so different that it's very hard to compare their hospital cost structure to the non-Kaiser hospital cost structure.
And that presents cost advantage that the non-Kaiser hospitals point out. Is a challenge particularly having to do with, uh, Medicaid burden and uninsured care burden that the non-key hospitals have. I, I think a reasonable argument that they do more of and deliver more of than Kaiser does, and therefore is that a structural cost disadvantage to them.
But the actual comparison is incredibly complicated And the data's very hard to get to understand exactly how many fewer spinal fusions is Kaiser doing than the outside market, that kind of thing. What are their average lengths of stay for this or that? You can get some maternity data from some of the collaboratives and their C-section rates are public, but I, it was a challenge.
For me to try and understand that from inside their competitors, to look back and say what clinical elements are driving their pricing advantage? Because you don't have a unit price metric easily available.
[00:32:04] Stacey Richter: Yeah. So circling back on our quality costs. Those are the two factors here, which could potentially lead to competitive differentiation and competitive advantage.
And we have a big entity in California, obviously, where this information is tough to get your hands on. And then also to your exact point that many hospitals say that they have to charge the prices that they're charging due to. Cost shifting in order to support their uncompensated care, and Kaiser does not have that burden.
That's gonna lead to more difficulty competing with Kaiser for sure. For others in the market.
[00:32:46] Dr. Jacob Asher: Exactly. I never heard anyone actually break it down as. This percentage of their pricing advantage is due to this structural issue on the hospital side, for example. I just never saw that kind of in depth of analysis.
It, maybe it doesn't, maybe it exists, but I certainly, I never saw it.
[00:33:00] Stacey Richter: The Sage Transparency Project, which I talked about with Gloria Satch Dub and Chris Skisak attempts to do that, and it's not something that necessarily a hospitals are super thrilled about.
[00:33:10] Dr. Jacob Asher: I had never heard of that dashboard before. I listened to your podcast.
I was stunned. I I did forwarded it to a bunch of, uh, network contracting colleagues to see if they'd ever heard about it and I haven't heard back, but I thought that was fascinating data.
[00:33:22] Stacey Richter: Dr. Asher, if someone is interested in learning more about your work, where would you direct them?
[00:33:26] Dr. Jacob Asher: I can be reached on LinkedIn pretty easily and would be happy to answer any questions,
[00:33:30] Stacey Richter: and that would be Jacob Asher, MD on LinkedIn.
Dr. Asher, thank you so much for being on Relentless Health Value today.
[00:33:36] Dr. Jacob Asher: It's been a pleasure. Enjoy the conversation.
[00:33:37] Stacey Richter: So let's talk about going over to our website and type in your email address in the box to get the weekly email about the show that has come out. Sometimes people don't do that because they have subscribed on iTunes or Spotify and or we're friends on LinkedIn.
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