This is a transcript of episode 441 which you can listen to on our site or your favorite podcast player. You can also find the show notes with mentioned links.
Introduction
[00:00:01] Stacey Richter: Episode 441, "Tables Get Turned. This Is Me Interviewed by Abby Burns From Radio Advisory About What Is Value."
The show today is a recording of an earlier conversation between Abby Burns and myself. This original conversation happened during the Raising the Bar Summit, which was a summit all about value and the what, why, and how of it all.
The Origin of Relentless Health Value
[00:00:46] Stacey Richter: Abby asks me questions like, why did I start the podcast? Which fits the value theme because this show is entitled Relentless Health Value, after all.
Defining Value in Healthcare
[00:00:56] Stacey Richter: I get asked how I define value. Fair question. Also, trick question. Because value is in the eye of the beholder. All any of us ever have is a capability, a capacity.
The sorcery by which any given capability transmogrifies into value happens. When somebody else's problem or pain or need or want is solved for by said capability. Oh, you thought that was the tricky part? No, not in the healthcare industry, that's probably the easy part, which is saying something because product market fit is never easy.
Challenges in the Healthcare Industry
[00:01:28] Stacey Richter: The tricky part here is that in health care, as I've often said and heard, health care is an industry where one person eats the dinner, somebody else orders the dinner, and a third person pays for it. So the patient may see immense value in whatever it is that somebody's doing. But if the orderer and the payer don't, well, the capacity is going to remain a caterpillar that never turns into a butterfly, most likely.
Said another way, the tricky part in healthcare is if you don't create win wins across a bunch of different boards, value won't be realized for patients. And the problem with that is the number of zero sum games we have afoot around here in the healthcare industry, which make this really difficult.
Before we kick into this show, I just want to mention, because it comes up several times in the conversation that follows, there was a talk by Daniel Kuzmanovich, who is Managing Director and Expert Partner over at Advisory Board.
Daniel had given a talk earlier during that same value summit. And during this talk, he mentioned the idea that when measuring value in healthcare, there's four tensions.
And if different stakeholders or different people, actually, even within one stakeholder have different perspectives on how value is created in light of these tensions, Yeah, that's where spheres collide and value drains away, never to be realized.
Before we roll tape, I just want to thank Abby Burns, who is my interviewer today and a great one at that. She even managed to keep the likes of me mostly on track and on topic, which is no small feat. Thank you so much, Abby.
Abby Burns is an Expert Partner over at Advisory Board. She's also a frequent host on the Radio Advisory Podcast and a strategy lead.
My name is Stacey Richter. This podcast is sponsored by Aventria Health Group.
[00:03:19] Abby Burns: Stacey, I'm so glad that you could be here this morning.
[00:03:21] Stacey Richter: Well, I am so glad to be here also.
[00:03:23] Abby Burns: Stacey, I know a lot of folks here and certainly a lot of Board Advisory listeners are intimately familiar with you and with Relentless Health Value, but for those who might not be, can you give us a little bit of background?
What is the goal of Relentless Health Value and what made you see the need to create a space like that?
[00:03:41] Stacey Richter: Relentless Health Value has been around for 10 years now. We started in 2014. But the original goal, which remains the original goal, the goal, is to equip those who are looking to transform and fix healthcare with the information that you need about what's going on with other stakeholders to ensure that you can actually succeed without encountering a series of unfortunate events.
[00:04:06] Abby Burns: Certainly no shortage of need there, but there are specific experiences that sort of, you indicated to you that there would be essentially an audience for this?
Insights from Dr. Scott Conard's Story
[00:04:16] Stacey Richter: Yes.. So the one that I like to point to is what happened to Dr. Scott Conard. I convinced Scott to come on the podcast after literally years to tell his story.
But Dr. Conard, PCP, graduated top of his class. He said he thought he was all that in a bag of chips. That's kind of how he describes how he felt when he went into practice. He was doing his PCP thing. He had three patients who came to him who were relatively young and all of them died and they died within 90 days of seeing him.
And he was devastated, just devastated. He went back and looked at the chart notes after he had seen these patients and he noticed that they all had risk factors, but what they told him was, doc, I feel fine. I feel fine. And what he realized was, is that if you take that at face value, you're treating symptoms as a PCP.
And if you really want to afford patients better health, the way that he puts it, if you want to add years to your life and life to your years by taking ownership of your health, as a PCP, you really have to be a risk manager almost. So he disassembled his whole practice and basically put it back together again.
And he's probably one of the first advanced primary care practices. And they started doing, in his practice, all kinds of things. They did, you know, if someone had diabetes, they followed a whole care flow to ensure that that patient's diabetes were taking, was taken care of. They did the vaccination schedules.
They did all kinds of things. They had a whole team that surrounded the doctors. Through some mergers and acquisitions, they eventually grew to 500 physicians.
[00:06:04] Abby Burns: Wow.
[00:06:04] Stacey Richter: Yeah.
[00:06:05] Abby Burns: 500 PCPs.
[00:06:06] Stacey Richter: 500 PCPs. So this was a big practice in North Texas. It was interesting, actually, the payer reactions to what was going on over there.
You had one payer, regional, who had calculated the total cost of care of Dr. Conard's patients, Scott's patients, and the whole, I mean the whole group's patients. And gave them an award for saving 17 percent off the total cost of care.
[00:06:32] Abby Burns: So, in the, in the context of driving value, I think it's a, it's a pretty clear value win.
[00:06:38] Stacey Richter: You would think, except there's two national payers who are about ready to kick him out of network. Because the PCP, his, you know, as per benchmark, he was 2 percent or 3 percent over benchmark for what a PCP should cost. Because if you have a patient with diabetes and you keep bringing them back to ensure that they are following their prescribed therapy, your PCP costs are going to be higher.
[00:07:00] Abby Burns: The preventive cost is higher. The acute cost is lower.
[00:07:03] Stacey Richter: Yeah. So despite the fact that if he did the math, he's saving 17 percent overall, if he didn't do the math, he's more expensive.
The Role of Primary Care and ACOs
So fast forward, the group decides that maybe it would be a good idea to form an ACO. So they decide that they want to form an ACO with a hospital.
[00:07:21] Stacey Richter: There's a big local hospital system that is in the area. It had like 16 hospitals or something. So his group approaches that hospital system and says, Hey, we should form an ACO together. This is at the very beginning of the whole ACO launch. The hospital says, you know what, thanks for the pitch. We'll get back to you.
Couple of days later, they, call up and they say, you know what? We'd love to do an ACO with you. Here's the thing though. We were kind of thinking about it and it probably would be easier, lots of paperwork, et cetera. If we have two tax ID numbers in this mix. So we should just have one tax ID number. So we think that the best idea here would be if we buy you.
So we're going to buy you and then we're going to do the ACO together.
[00:08:06] Abby Burns: Seems like a good idea.
[00:08:08] Stacey Richter: You'd think. Uh, so the sale transpires. Scott says he describes what happened within a relatively short period of time as his pelican brief moment. He's sitting all by himself in his office. His whole entire team is reassigned or let go or he's all alone in his office.
He goes to the chief strategy officer at the health system and he says, what just happened here? And the chief strategy officer at the hospital says, look, Scott, we looked over, you know, when you approached us, we actually looked at your doctors. And we realized that your physicians had so many fewer ER admits, so many fewer heads in bed, so many fewer acute events, that it was our fiduciary responsibility as a health system to shut you down.
It was our duty to our community that you had to go.
[00:09:06] Abby Burns: Wow. So the primary care practice was dissolved. The way they're operating was dissolved.
[00:09:12] Stacey Richter: Oh, it was totally dissolved. The next year, actually, the healthcare expenditure in that community was $100 million more. So that practice of 500 physicians had reduced healthcare spend in that North Texas area by $100 million.
[00:09:28] Abby Burns: So bringing it back to why you originally started the podcast, what that tells me is really the podcast is about creating a community and a forum for folks that want to drive positive change within the healthcare industry from within. And it's not just about driving change but sustaining it, which I think is the important second piece that didn't happen in that story.
[00:09:50] Stacey Richter: Yes. This is what I take away from these stories and why I continue to do this podcast even after 10 years. You know, I do believe that the show is for mission driven individuals who are just looking to make sure that they don't get themselves in a similar situation. So that's kind of like one goal.
Another one though, is the chief strategy officer working at that health system, he quit within a very short period of time. Because one of the things I think that he realized in the course of that was that his values did not align with what happened there, right? So like, that was a big disconnect for him.
So the other, I think, big cohort of listeners of Relentless Health Value are those who work for larger corporations who want to understand exactly how they may be contributing to something or not contributing to something that their organizations are doing because they really want to feel like they're in control of the legacy that they leave behind.
So, so that's, I think, a second group.
[00:10:53] Abby Burns: Well, one thing I think is so important about the way you approach it is you do take a very cross industry approach. So you spend time every week talking with smart people from provider organizations, payer organizations, digital health, pharma, employers, really, you name it. I think that gives you unique depth of insight into how the component parts of our industry are and maybe aren't working together effectively in order to create value.
And so I'd love to, I'd love to lean into that this morning because you've done over 430, by my last count, recorded conversations. I know there are many more that weren't, weren't recorded. So with our time this morning, I would love to work through what are some of the common threads in terms of, where are we falling down as an industry? What are some of the common places you see there?
What are some of the common areas of tension or maybe potentially negotiation for where we can do a better job driving value? And what does it look like when this goes right? So Stacey, let's start with candid conversation of as you think across your conversations with folks across the industry, your work with folks across the industry, what are some of the common ways that we are falling down collectively in terms of creating and delivering value.
[00:12:06] Stacey Richter: I loved how Dan put it yesterday, that when you optimize within your own sphere, and then your sphere encounters somebody else's sphere, you could get yourself in a lot of trouble. Like that, that's when just the value evaporates from the equation.
Heart Failure and Systemic Issues
One big example that I often think about is heart failure.
[00:12:28] Stacey Richter: So, heart failure, this is from CMS, is the most common discharge diagnosis among Medicare beneficiaries and the most common cause of hospital readmissions. It's the most costly condition and accounts for $39 billion a year in health care expenditures. It's not subtle. One of the reasons why this is a little bit close to my heart is my grandfather had heart failure and watching a loved one, it's like watching your loved one get waterboarded.
I mean, they're just like drowning in their own lung fluid. I remember one time I went to the ER with my grandparents. We walk in the front door, get triaged. They want to put my grandpa in one of the exam rooms. My grandma, who is a piece of work, um, says, no, we will not go in that exam room. The TV is on the fritz in that one.
[00:13:15] Abby Burns: She knew the rooms well enough to know that the TV in room 7B wasn't working.
[00:13:19] Stacey Richter: They had been in that ER so many times. She's familiar with the pros and cons of the various exam rooms. So, he'd get admitted, he'd get discharged a couple of days later, he'd get the hospital acquired dementia, he'd get the muscle wasting that elderly patients get when they go in the hospital.
He'd come home, it was kind of this downward depression spiral, and it was kind of like, don't let the door hit you in the butt on the way out to the parking lot, old man. Like he'd get no med rec, I don't know if this PCP even knew he'd been there. One percent of heart failure patients in this country are on optimal medical therapy.
[00:13:52] Abby Burns: One percent?
[00:13:52] Stacey Richter: One percent. And yet, if you look across the literature, it's pretty clear what you're supposed to do. Maybe three or four years ago, I was at a physician summit, and a doctor got up on the stage talking about a heart failure program that he had started in his hospital system, and it had had amazing results.
They were doing some RPM, you know, they had connected scales, it was really cool. I was reminded of this because I was talking to Dr. John Lee, who's an ER doctor recently and he, like, two months ago, went to a similar physician summit and another doctor, completely unrelated to this first one, got up on the stage and talked about a heart failure, non, you know, a reduced readmission program that they had set up.
So similar story, amazing results. Both of us approached the speaker after the presentation and said, wow, that's so amazing. How is it, you know, have you expanded the program? How's it going? And both of those speakers sheepishly said, Ugh, the second it was over, we got shut down.
[00:15:01] Abby Burns: Pilot didn't move beyond pilot.
[00:15:03] Stacey Richter: We, you know, or maybe it did for a little bit, and then it was ended.
[00:15:07] Abby Burns: So what does that tell you in terms of the, the ways that value was inhibited?
[00:15:13] Stacey Richter: So here's a perfect example. Thank you for asking that question. So here's a perfect example of its unimpeachable patient value. From any angle that you look at it, this is good for patients.
[00:15:23] Abby Burns: Preventing that ED visit so that your grandmother no longer knows which TV in which room is broken.
[00:15:28] Stacey Richter: I mean, you think about it from the patient perspective, you think about it from the ultimate purchaser perspective, i. e. taxpayers, self-insured employers and other plan sponsors and patients themselves from a financial standpoint, for them, this is unimpeachable value.
But if you look at it from the hospital system value at the executive level, obviously there was a choice to shut this down. If you look at it from the payer perspective, whoever was involved in that, you know, generally speaking, there's actions and reactions, right? So, you think about why did that program shut down?
I don't probably have to do the math for anybody in this room, so I won't, but that's the net net of a program that has value for patients unimpeachably and value for the ultimate purchasers unimpeachably, but it still gets shut down. So the spheres colliding.
Yeah, the way that I have heard it put so many times is that healthcare is the only industry or one of the few industries where one person orders the dinner, someone else eats it, and someone else pays the bill.
[00:16:33] Abby Burns: I love that. That's such a easy to imagine representation of the healthcare industry. Two other points of weakness that I heard in the story that you were telling. One was the fragmentation. You said your grandfather would leave the ED and there's no follow up care and it was see you next time, essentially.
And then the other piece is the holistic care, which it sounds like the readmissions programs that you were talking about took the holistic approach to creating value for end user patient, but that might not be a status quo.
[00:17:05] Stacey Richter: I would say no.
[00:17:08] Abby Burns: Stacey, you mentioned you've been doing Relentless Health Value since 2014.
The Evolution of Healthcare Conversations
[00:17:12] Abby Burns: And I'm curious how this conversation would have looked different back then. Like how, how your answer to this question would have evolved over time. So if I can, for a moment, I want to transport us all back to 2014. Amazon has just released Alexa. The FDA just approved a new class of drugs to be used, to combat or for and to drive weight loss called GLP-1s. If anyone remembers the launch of Saxenda. And digital health funding in the US more than doubled from the year before. An eye watering $4 billion.
Now for anyone who's keeping track at home, Q1 digital health funding this year was $2.7 billion already. GLP-1s are projected to hit, I think a hundred billion dollars by the end of the decade, and our AI has graduated from telling us the weather to offering differential diagnoses and acing medical licensing exams. So with that as a backdrop, how has your answer to this question evolved over time?
Financial Toxicity and Patient Affordabili
[00:18:07] Stacey Richter: I think one of the things that's becoming increasingly clear is that as healthcare becomes more financialized, patient affordability is becoming an increasing difficulty. Like, I don't think in 2014 it was on the radar a little bit, but right now there was a survey done of commercially insured patients.
48 percent of them had delayed or foregone care, due to fear of cost.
[00:18:36] Abby Burns: Historically, we think of that as being more prevalent among the uninsured or underinsured population.
[00:18:42] Stacey Richter: But these are commercially insured patients who are functionally uninsured. They have insurance, but they can't afford to use it. I mean, if you have $400 in your bank account and your deductible is more than that, you can't afford to use your insurance.
You can't pay up to the level of your deductible. So, you have people making clinical decisions for themselves based on financial, you know, I've said a million times on the podcast, so I sort of stopped saying it. Financial toxicity is clinical toxicity.
[00:19:13] Abby Burns: Which I see more and more, when we think about social determinants of health, I see financial health as an increasingly large or increasingly common factor that physicians, clinicians, social workers, really anybody on the care team is looking at.
So that certainly resonates.
[00:19:29] Stacey Richter: Yeah. I mean, 41, it was on KFF the other day, 41 percent of Americans have medical debt. You know, it's just like, oh, what's the spot on my arm? Is it melanoma? I don't know, but it's going to cost me 600 bucks to find out. So I'm just gonna see, I guess.
Cultural Norms and Accountability in Healthcare
[00:19:44] Abby Burns: You're starting to get at almost some cultural realities that we have created.
One of the things that I love that you talk about on your podcast is, this idea of cultural norms that we've created for ourselves within the healthcare industry specifically and how they can actually actively inhibit us from driving value. One that stands out to me is the NMP problem. Can you talk a little bit about that?
[00:20:07] Stacey Richter: The "Not My Problem", problem? I mean, you think about that table. You've got the orderer at the table, right? So call that the provider organization. You've got the payer at the table. Call that the carrier. You've got, I mean, at this juncture, the patient really is sitting at the table deciding what they're going to do or what they're not going to do. Um, you have the wallet at the table, which again is, call it plan sponsor, self-insured employers.
So it's really easy for things to fall through the cracks if, like, think about it this way. value is always in the eye of the beholder. There is a space between, you know, if I have a capability or a product or a service, all I have is a capability, a product or a service. It is meaningless until somebody else ascribes it in value. Like the sorcery happens when my capability hits the magic of somebody else who thinks it's valuable. So, I think sometimes we forget that whatever we're doing over here has to make it the whole way around that table, such that value can be realized.
And if everyone around the table is like, not my problem, and the orderer doesn't see not the orderer's problem to order it. It's not the payers, you know, they're like, no, I don't really see how this benefits me.
[00:21:23] Abby Burns: To me, it's a, it's an issue of accountability, essentially. And if nobody's in the driver's seat, then how do you drive accountability for the patient outcome essentially?
And what we're, what you're saying is it's the patient who's in the driver's seat, they aren't the ones that, you know, their feet can't reach the pedals and they're, they don't have the key to the ignition, which is a suboptimal way to operate.
[00:21:43] Stacey Richter: Totally. But you know, you also think about it, healthcare is local.
It's also very intimate, and it's between, it's a relationship between a doctor and the patient. And if that relationship isn't there, if there's not trust and a relationship between the patient and the...
[00:21:56] Abby Burns: So glad brought up trust.
[00:21:58] Stacey Richter: Then nothing's gonna happen, ultimately. Like, the patient is not gonna, is gonna walk out and say, I don't really trust my doctor, he told me to take this, but, you know, I don't trust big, insert some name here, right?
So I'm not gonna do it, right, if you don't have that trust . So you've got healthcare is local. But a lot of organizations are national. So it's also not just a not my problem problem. It also could be it's not a big enough problem for me to worry about problem. Or it's a, I can't figure out how to scale that problem.
So, you know, I can't figure out how to solve that problem in all these local markets nationally. So we can't really do it. So there's a lot of different ways. That a problem can become a not my problem problem, or it's not a big enough problem, or a national problem. So there's, I guess, a whole bunch of flavors of that.
[00:22:47] Abby Burns: It's not always clear to whom you are accountable for driving value. Are we prioritizing driving value for a single patient, or driving value for a population? And there's not one right or wrong answer to that question. But, in the examples that you're sharing, Stacey, I'm hearing more, value for one stakeholder might be diametrically opposed to value for another stakeholder.
Or not even diametrically opposed, but maybe not 100 percent aligned.
[00:23:13] Stacey Richter: Totally. And the one thing that I would also say is that a lot of times we talk about "The Stakeholder" like a homogenous blob. You know what I mean? And like, payer, and it's everybody or hospital system. Everybody. But not only is there a variation between hospital systems and payers and, you know, just amongst the entities that comprise that grouping, but also, I mean, here's another example.
You remember the Scott Conard story that I started with? There's another doctor, Dr. Mike Tuggy in Washington, and he had had a similar PCP practice. In his case, his practice was owned by the hospital and he was doing very similar things to Dr. Scott Conard. In fact, they hadn't realized that his practice was saving $100 PMPM for diabetes patients.
[00:24:03] Abby Burns: PMPM, per member per month?
[00:24:04] Stacey Richter: Per member per month, yeah. And it was going gangbusters for a number of years. One executive changed. The executive at the hospital who was, I guess, overseeing the, the ambulatory stuff. And the new guy shut it down. We're talking about these health systems also, like, they kind of move lockstep, but they don't.
Right? Like, it's not like the democratic votes get taken. Should we do this? All say aye.
[00:24:29] Abby Burns: Which can also, on the flip side, be a very motivating statement. It takes convincing one individual, and then that individual can convince other individuals.
[00:24:40] Stacey Richter: So let's talk about going over to our website and typing 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 were friends on LinkedIn. What you get in that email is a full and unredacted, unedited version of the whole introduction of the show transcribed.
There's also show notes with timestamps, so you get everything that you need to decide if you want to listen or not. Just apprising you of the options that are available.
[00:25:14] Abby Burns: I want to talk about what are some of the bargaining chips, I'm going to do a positive reframe of the four tensions, because I think it's, I think it's accurate.
What are some of the bargaining chips that stakeholders in their, in all their forms of diversity have available to them to try and align more closely on value?
[00:25:32] Stacey Richter: You could consider those, um, four bars, tensions.
[00:25:37] Abby Burns: Where we looked at value to who, value on what timeline.
[00:25:39] Stacey Richter: What is it output or outcome, and then the last one was proven experimental.
You could also look at them, I think, as continuums. Because it's interesting, if you think about the when timeline, is it short term or is it long term? There's kind of this implicit assumption a lot of times that those two things are at counterpoint. Like if we achieve short term gains, then that is at the expense of long term something.
And that might be true. It is true sometimes, but it doesn't have to be true.
[00:26:09] Abby Burns: In other words, there's not necessarily a trade off, a zero sum trade off.
[00:26:15] Stacey Richter: Yeah. You think about, okay, let's just think about short term. You could also, here's some other words for short term. Minimum viable product. Right? Like, that's the whole point of doing something short term is to create a minimum viable product so that you can suss out what's going to work in your quest to build it out further and then achieve long term value. So I would say that one of the biggest ways to try to figure out how to bargain for value is to try to figure out if you are working with someone who needs short term wins, how to make that short term win actually be the first step toward a long term win, which gets you closer to all of the things that were on the right side of that, like working for outcomes and not outputs, et cetera.
[00:27:04] Abby Burns: So almost the timeline as the stepping stone to drive value in different ways.
[00:27:09] Stacey Richter: Yeah, if you're sitting around a table trying to collaborate, everybody around that table has to, you know, like you think about the orderer. In our business, the orderer also gets paid. So like everybody around that table, they have some self interest in that equation.
[00:27:27] Abby Burns: Let's use an example.
[00:27:28] Stacey Richter: Okay. SureScripts is an example of competitors getting together, creating a value alliance. Right? I mean, the PBMs are the ones that stood up SureScripts, which is the electronic prescribing pipes. Like, why'd they do that? It's, these are fierce competitors who worked together to stand up e-prescribing.
There's a book, it's called "Finding Allies". It was written by Mike Leavitt, who was the former governor of Utah. It's an interesting book, actually. And one of the things that he said is that in order for entities to work together at the corporate level, there has to be a common pain that's bigger than anybody's kind of day to day, I'm going to fight you.
[00:28:13] Abby Burns: Which is almost the flip side of, we need to find, finding common values, start with, with a common pain or common detractor of value.
[00:28:21] Stacey Richter: Yes.
[00:28:22] Abby Burns: And then when we're thinking about, okay, what are these bargaining chips that we can use? We talked about timeline short. I don't wanna say short term versus long term.
Short term on a spectrum to long term. What about metrics? If you and I are trying to negotiate work together and we represent different stakeholder entities, what's on the, like, what are the things that we can try and align on?
[00:28:46] Stacey Richter: You can only measure value four ways. Clinically identified outcomes. So clinician identified outcomes, like a clinician says, that's an outcome patient. PROMs, patient reported outcomes.
[00:28:58] Abby Burns: Okay.
[00:28:59] Stacey Richter: Then you have the financial outcome and then some kind of performance outcome.
Like, for example, some are better than others, patient engagement, patient satisfaction, number of prescriptions written, that was the one Cerebral used.
[00:29:11] Abby Burns: So like process metric.
[00:29:13] Stacey Richter: Some kind of process metric. So those are the four ways that you can measure value. If you're thinking about how do you collaborate with a different stakeholder, what you have to be thinking about is what do they want to do?
[00:29:25] Abby Burns: Back to your idea of values in the eye of the beholder.
[00:29:27] Stacey Richter: Yeah. So a huge success story is Rosen Hotels in Florida, which gets talked about a lot in employer circles, but maybe not so much here. Rosen Hotels, they have a big workforce of hotel workers, right?
So lower paid, expensive population typically, high turnover. They worked together with local providers, for the most part, and did a number of different things in conjunction with local providers. They saved like a hundred million dollars a year, their turnover reduced. They saved so much money that they now have a college fund, not just for their employees, but for their local community.
[00:30:07] Abby Burns: Wow.
[00:30:07] Stacey Richter: So, how did they align?
[00:30:09] Abby Burns: Right.
[00:30:10] Stacey Richter: You had the employer, who was looking to, you know, legit increase value, benefit over cost.
[00:30:18] Abby Burns: And they're defining value in terms of?
[00:30:20] Stacey Richter: In terms of employee productivity, in terms of lower turnover, in terms of presenteeism and absenteeism.
[00:30:27] Abby Burns: Which I think is important to mention because it might not be top of mind for the provider organization who may or may not measure value in terms of employee absenteeism.
[00:30:37] Stacey Richter: Exactly, but you had enough provider organizations with amazing, dedicated clinicians who also wanted to, you know, what is health? It's making sure that you can show up at work and you can do your job. So they worked with provider organizations and they pay them in capitated ways, right? So you know, it's kind of a great thing if you tell a primary care doctor, oh, by the way, you're not going to have to put all those little codes in the computer anymore.
And you know, your job is to keep my members healthy. You have Morgan Health right now investing in primary care. Lots going on in Ohio along those, those same lines, because there is actually a lot of alignment between employers and in particular primary care at this juncture, but they're looking to expand into specialty, into pharmacy, actually, to do total cost of care stuff.
Employer Perspectives on Value and Innovation
[00:31:26] Abby Burns: I am actually, I want to stick with this employer lens for a minute because I'm particularly interested in how employers are thinking about the fourth tension, which is this idea of proven versus experimental treatments. I think this is a tension that's going to be more important in the next five years than it was in the past five years.
When we think about the pace of innovation and the pace of change, I mean the FDA approved more new therapeutic treatments in 2023 compared to the average of the previous decade. It was 71 last year compared to 53 for the past decade. That's a lot, and when we look at the graph that we had up yesterday, there were a lot of payers that said, we measure value or we, we, on the spectrum of proven to experimental, we like 10 years of evidence.
That means that 71 therapeutics might not be showing up as covered benefits for a decade. And that number is only going to increase. So I'm curious about the employer angle, or lens, on this idea of proven versus experimental.
[00:32:28] Stacey Richter: Employers, I have never, I think every single day I get invited to four webinars on what are we going to do with GLP-1s and what are we going to do with cell and gene.
Literally every day.
[00:32:41] Abby Burns: Yeah. I'm not surprised.
[00:32:43] Stacey Richter: You know, if you think about a self-insured employer, they're the ultimate purchaser. So it's coming out of their pocket. You can have one patient that costs as much as everybody else combined.
[00:32:56] Abby Burns: Well, and, and just like we talk about, not all of any stakeholder group, it's not a modulist group.
So you've got large employers that might be able to do some risk pooling and you've got really small employers that absolutely couldn't. And what does that mean for patient access?
[00:33:10] Stacey Richter: Exactly, and so I'm I'm hearing there's a lot of creativity actually going on right now because this is, it's existential for even some jumbos.
They're talking about having, generally speaking, pharma drugs are tiered. So you'll have the proven tiers and then another one that's called the experimental tier.
And effectively they're basically saying, look member, if you recognize that this drug is experimental, it may or may not work. And if you want it, then you're going to have to pay more for it.
And if you want to take that risk, then we'll contribute also, but we're not going to contribute as much as if the drug is proven. So I'm hearing that bandied about. I'm hearing employers trying to get together directly to talk about collaboration and doing some risk pooling, doing some stuff with stop loss, right?
Like it's just we're in this weird spot where, you know, you talk about time being short term, long term. That's a huge issue for employers because if you have a cost effectiveness study that's being done over a lifetime...
[00:34:15] Abby Burns: You probably don't have an employee for their entire lifetime.
[00:34:18] Stacey Richter: Most of the time that's not the case. So there's just this kind of time disconnect that's happening right now, which is causing a lot of friction. Right now.
[00:34:26] Abby Burns: Yeah. I also say, I mean, we talk about employer lens and, and I don't mean to position it as though everybody in this room is also not from an employer organization because we are. I think, I think something that is important as, as folks are going through that conversation is having a concept of what is value to our organization.
I know this is something that you're particularly passionate about is having your stake in the ground around how do I define value for myself, for my work, to guide my decision making.
Personal Values and Incremental Change
[00:34:54] Abby Burns: You've actually created a manifesto or a charter of, you know, what is value to me. Will you share that with us?
[00:35:01] Stacey Richter: Absolutely. And Manifesto makes great radio. Um, I, I would basically say it's more of a statement of values. It's what are my values so that I can ensure that at the end of the day, the actions that I take are aligned with my feelings of what is personal integrity here. So here's my manifesto.
[00:35:19] Abby Burns: Okay.
(sounded wierd I think they did a regen)
[00:35:20] Stacey Richter: The first part is everything that I do will be a net positive for patients.
[00:35:25] Abby Burns: For patients.
[00:35:25] Stacey Richter: Yeah. Net positive for patients. The second and third parts are kind of clarifications, I think, of the first. One of them is that I personally tend to focus on short term to medium term timeline.
And then the third bit is that it will take a village. And that can kind of take two parts.
One of the parts is, who do I need to work with to ensure that it is actually a net positive? But then the other piece of that is, who do I need to make sure is doing something else to make sure?
[00:35:55] Abby Burns: Say more..
[00:35:56] Stacey Richter: Think about it this way. You've got incremental change and you've got disruptive change. And a lot of times those two things are put on counterpoint, right? Like, I was reading this LinkedIn exchange the other day and somebody wrote, this is my goal. I think I'm going to dedicate my life to ensuring that patients get better value for the dollar of healthcare that gets spent.
Something like that. I read it and I'm like, I don't know, like literally 30 seconds later, someone responds, that's a toxic way of thinking. If you're not putting patients in cash pay models, you're part of the problem. So therein is the tension between incremental thinking. So the first guy was like, you know, I'm going to work within the existing system and I want to make sure that, you know, grandpa doesn't get readmitted.
This one was like, you know what? It's that Buckminster Fuller quote. If you're going to change a system, you can't work within the existing system. You got to rip it down and start again. Right? So this guy was in this school of thought.
So a lot of the things that we do, we're doing, you know, we just talked about, you got to satisfy all the self interested parties around the table.
Like a lot of the stuff that we do is we're creating programs that actually work in the real world. And for them to work in the real world, you've got to satisfy, you know, is it optimal if you think about it? Like, let's start from scratch. We got to do this. And then we got to pay our rebate and blah, blah, blah, right?
So like, if you think about it in the actual world, you have to do these things because you're not going to get any value realized if your 500 physician practice gets shut down. On the other side, if you, again, if you had to start again, you would not do those things. Right. So I guess the way that I think about it is I am more in the incremental world.
I'm going to do incremental things, but I kind of want to be keeping my eye out and making sure that there's entities that are working on disruptive things also.
[00:38:03] Abby Burns: Which, which to me actually goes back a little bit to the proven versus experimental. The proven, if, if we use almost an analogy of the proven is the system that we have the experimental or the innovation is what's coming in. It's let's work within what we know well, while being able to adapt and adopt what, what might be coming or what we hope is coming.
One thing that I think is important to underscore and why I so appreciate that you have a value statement that you have written down is because we actually all, whether intentionally or inadvertently, we create definitions of value for ourselves in our work, in the work that we do every day, and then we either recreate it or reinforce it.
And I think hearing that from you pushed me to think about, am I, am I exercising the definition of value that I want to be for the customers that I serve, for the organization that I'm within? So I very much appreciate that.
Closing Thoughts and Call to Action
Stacey, as we close down our time, what parting advice would you give to folks from across the industry that we have here about how they can take what they learned this week and go forth and drive value in their roles?
[00:39:07] Stacey Richter: The one thing that I would say is everybody in this room, I'm assuming that you come to a value summit because you are very interested in trying to do the right thing. And that can be hard and it can be dispiriting and you take three steps forward and five steps back. So the one thing that I always say is really be kind to yourself and not strive for perfect.
If you look back and you see that six months ago, it's better than it was before, then really take a lot of pride in that.
[00:39:41] Abby Burns: Celebrate progress is what I'm hearing.
[00:39:43] Stacey Richter: Celebrate progress, please.
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