Price Transparency Arms Race
[00:00:00] Stacey Richter: Episode 506. How Other Employers, Shareholders, and Clinics Are Using Price Transparency Data, and It's an Arms Race. Today I speak with Jerry DiMaso.
[00:00:31] Stacey Richter: So we have a few miniseries afoot here on Relentless Health Value right now, and one of them is “The Inches That Are All Around Us”. Finding the hidden fees, the hidden friction for plans and members and clinics themselves a lot of times in those inches.
So how does transparent pricing data fit in here? Well, you can use it to find inches. They are all around us. You can see it in this data. So we talk about self-insured employers, plan sponsors, and their perspective on this price transparency data first in the conversation that follows. And then we get into the perspective of the provider organization or the clinic.
Let's take this from the top.
Three Employer Insights
[00:01:16] Stacey Richter: Plan sponsors such as self-insured employers or unions can gain three very interesting and maybe under appreciated insights from this price transparency data. Not limited, of course, to these three insights, but these were the three that Jerry DiMaso talked about and I lasered in on them with very single-minded ambition.
Okay, so here's the three insights of interest to plan sponsors. Insight 1. Benchmarking against a plan sponsor's competitors. We often forget about this, that every self-insured employer is actually a company trying to sell something, probably with competitors.
You can search for your own plan or a competitor's plan using an EIN to compare rates, specific carve outs, and identify if there are other companies in the same industry that are receiving better pricing.
Considering that paying for health benefits is often the second biggest line item on many corporate balance sheets, I wonder how long it's going to take for some activist shareholder group to figure out that they can find evidence of avoidable overspending. Especially, because of our Number 2 insight here, which is you can use this data to identify high cost codes.
Plan sponsors can pinpoint specific billing codes where they are paying way too much. And right now, maybe you are too, but I am thinking about the examples of infusions given in the recent episode with Ivana Krajcinovic and that Brian Cotter talks about all the time. Also, Nate Walker plans paying a million dollars too much for some infusion.
That would be a crazy thing for a corporate shareholder to figure out and bring up at some, I don't know, shareholder meeting or earnings call, right?
Insight 3, exposing the, I'm gonna call it “discount shell game”. This data allows plan sponsors to see through stuff like gross aggregated discounts they can verify. If a TPAs, I don't know, 90% discount is actually real savings.
What Sponsors Do Next
[00:03:13] Stacey Richter: Okay, so, what does one then do with these insights once found? Jerry DiMaso again, my guest today in the conversation that follows, talks through these at some length, but here's the very top line.
First thing a plan sponsor can do is use this information to direct TPA negotiations. Plan sponsors can get their TPA to go back to providers and negotiate better rates. I did not know that.
Number two thing that a plan sponsor can do with this information implement service, carve outs and direct contracts. Employers can identify expensive outliers and then steer and tier and maybe direct contract with specialized providers or Centers of Excellence as a result of that knowledge.
As a second bit to this, not to be underestimated, this data allows for objective calculation of savings a lot of times from, you know, direct contracts or other initiatives so that plan sponsors don't have to rely on vendors to grade their own homework, as they say. Plan sponsors can start to do their own math.
And here's the last thing that we discuss in the episode that follows that a plan sponsor can do with this price data. Model alternative plan types. Right? You can analyze whether switching from a PPO to an HMO or some other alternative model would save money while actually maintaining access to the same providers that employees are already using.
Why Indies Matter
[00:04:33] Stacey Richter: Okay, so now, and in the conversation that follows, at this moment, we pivot to clinical organizations and how they can use this information. And by the way, although what we talk about next is of great interest to clinical organizations, lots of this is also still relevant to self-insured employers because, right, any ultimate purchaser does not want the independent practices to go outta business.
So helping them make sure that they can stay in business is in everyone's best interest. I talk about this coming up with Patrick Nelli from Aligned Marketplace, and I talked about it with, Dan Greenleaf from Duly in an episode.
Indie practices are just cheaper than consolidated health systems. If they go out of business, now all of the volume goes to consolidated health systems who now well and truly have a monopoly and all the glorious unchecked pricing opportunities that go along with that. Anyway.
Provider Playbook
[00:05:33] Stacey Richter: According to Jerry DiMaso, clinical organizations can use transparency data to level the playing field in a traditionally very asymmetric market when dealing with large carriers, large anybodyies. And when I say asymmetric market, I mean many things, including asymmetric knowledge.
The specific ways that clinical organizations can leverage this data include, Number 1, benchmarking and rate comparison. Providers can see the negotiated reimbursement rates for every procedure code for every medical practice, infusion center and hospital in the country.
Sure, most know this one already, and there are also obvious pros and cons here, but this information is a plus for patients and members if it helps indie practices with strategic business planning forecasts. If it helps practices see when their internal costs are too high to trigger efficiency endeavors, or maybe some other market driven activity. It is a plus. If indie practices find codes that they are seriously under reimbursed for. Bottom line practices can make informed decisions and defend their value during contract negotiations.
Here's the second thing clinical organizations can do with this information. Identify new revenue channels. Smaller providers can discover contracts or carriers active in their geography that they were previously unaware of.
And then Number 3, justifying rate increases via quality. Pairing their price data with their own superior outcomes and quality metrics. So this data can be used as part of a larger strategic plan.
Meet Jerry DiMaso
[00:07:08] Stacey Richter: As I have mentioned at least three times already today I am speaking with Jerry DiMaso, who is the CEO of Payerset. Payerset is a price transparency and healthcare pricing data aggregation company. They provide data sets and self-service analytics in their software, which several people have told me has a very elegant interface.
I also right now, wanna take a moment to thank Payerset who just came out of the blue one day last year, and offered to help fund Relentless Health Value as a series underwriter.
They just wanted to help us stay on the air. And for reasons like this, my faith in humanity is restored every time I think about it. There are some amazing folks in this tribe of ours who really care and really try to do the right thing.
And with that, here is my conversation with Jerry DiMaso from Payerset.
My name is Stacey Richter. This podcast is sponsored by Aventria Health Group with an assist from Payerset.
Jerry DiMaso, welcome to Relentless Health Value.
[00:08:03] Jerry DiMaso: Thank you very much. Very happy to be here.
Transparency Rules Timeline
[00:08:05] Stacey Richter: So when was it, 2016, we had the first transparency acts that were passed. You wanna talk about this?
[00:08:13] Jerry DiMaso: It really started in 2016. The foundation was laid by the Affordable Care Act to provide transparency. That was part of the whole idea of the Affordable Care Act, is to be more transparent.
Started with the ACA and that laid the groundwork for the first Trump administration in 2016 to start building these regulations out for hospital and carrier price transparency. And then the first mandate really took hold in 2019 where the hospitals were forced to publish their prices.
So hospitals were forced to publish their prices, their discounted cash prices, their negotiated rates with all the different carriers, and what their gross charges were on their charge master.
Later in 2022, the enforcement for the carriers began, which was the mandate for all of the carriers to publish all of their contracts. Basically, they take all of their contracts, codify those contracts into a specific consistent data schema, and then publish those for every provider, for every billing code.
[00:09:07] Stacey Richter: So here we are now. It started with the hospitals, as you just said, and then in 2022, which is four years ago, carriers had to follow suit and publish their negotiated rates. When you look into that data, what are the insights that you can see?
[00:09:21] Jerry DiMaso: The insights that you can get from the data are pretty wide.
The main thing that you can see is what are the reimbursement rates by procedure code for every procedure for every hospital, and the hospital data, for every medical practice, for every infusion center, every single provider in the country has the negotiated rate data for every single billing code.
You would be shocked to see the rate disparities from one employer to another, they're huge.
[00:09:49] Stacey Richter: Just speaking about the ramifications here, let's just say I am a self-insured employer, right? Like and am paying out of my own pocket and or my members are paying co-insurance. Those rates matter.
If we're thinking about though a plan sponsor, such as a union, such as a self-insured employer and I'm thinking just intuitively this transparent information about what the negotiated payer rates like I viscerally there feels like this feels very interesting to me.
Employer Benchmarking by EIN
[00:10:19] Jerry DiMaso: Yeah. This is a treasure trove for employers, self-insured employers because one, they have the ability to see all the different carriers and whoever their TPA is, right. So one, they can start to see what the rates are for not just themselves, which can be even difficult to get if you're working through a TPA. It can be difficult to even see what your fee schedules are, but being able to see what other employers that are also in your space are getting from a rate perspective as well as what other carriers are offering.
So if you're paying,
[00:10:49] Stacey Richter: Well wait. So you can see like if I'm a large self-insured employer, I can look in that data and see my own, like I can find my own group number or something.
[00:10:57] Jerry DiMaso: Yeah. But you can find your own plan. Your name by EIN will be there. So you can put your EIN in and search your for your plan, or you can find other plans. So if you're, let's say a large airline and you have Aetna, your TPA, you can see your plans as well as maybe another competing large airline and see if there's any differences, any specific carve outs, and maybe they get better rates for particular services.
This is where employers really can use this data very effectively to look at the demographics and the makeup of their own employee base.
[00:11:29] Stacey Richter: And can you see the volume in the transparency data or basically you can see the code and you can see the rate, and then what you would want to do is look at what your volume of services are and then go downstream and say, okay, we have this many of this particular code and we're paying way too much for that particular code.
[00:11:47] Jerry DiMaso: Yes, the latter that that exactly that you would have your volumes and you'd be able to see, okay, well for these particular providers by code, you should be able to get that information from either from your TPA or you should hopefully have it.
But you'd be able to see what those volumes are. And then you could say, what if I were to, to have gotten this other carrier's plan, or even the same carrier, but a different plan. Because you can kind of see that the different, there's PPO plans and EPO plans, and then there's HMO plans. Like if we were on an HMO plan, maybe that restricts my employee base, but it actually doesn't matter because all of the providers that we went to for all my employees last year are part of this network.
[00:12:21] Stacey Richter: So it kind of cuts through the gross aggregated discount. You know, like if this is the discount off all the services, you can see right through that because you're like, okay, great. And I had a long conversation with Dr. Eric Bricker about this very topic. So if anyone is like, huh, go back and listen to that show where if I've got 900 OBGYN codes or something like that, but there's only two that are actually used. And the 898 are with huge discounts you can start to see right through those games, it sounds like.
[00:12:55] Jerry DiMaso: Yes, exactly, and you can also start to see that when you're paying for these services, you're getting a charged amount. You're seeing what the charged amount is from the provider. And then you're seeing what the negotiated rate is from the carrier or from your TPA, and you could say, wow, there's a huge difference. And I'm so glad that I had this TPA. Look at how much money they saved me.
But now you can start to see if you're an employer, you can go and say like, well, okay, well every other carrier also has basically the same rate, so you're not really saving me any money and really should be the difference in like what the, the next highest carrier is.
Like, we could just go to another carrier and we'd be paying the same amount, so it's not a real savings.
[00:13:32] Stacey Richter: So if I'm an employer, I can do a bunch of different things like, first of all, I'm competing in a marketplace against my actual competition. You gave the example of an airline.
If my competitor airlines are getting much, much better rates and healthcare is, as they often say, the second biggest line item. And that could be a really big deal just in the P&L department, which really matters. Shareholders care, right? So like that is not to be underestimated.
The second thing is if you can see all of the carriers, then you can kind of see through someone with some grand claim.
And then the third thing you can really see through the gross aggregate discount conversation because not all codes are created equally. You have some codes that are banged every single day, every single hour, and you have other codes that are never used. So you really don't really care what the discount is on a code that never gets used and that sounds incredibly enlightening as well.
But if you're an employer and you're not getting these transparency files, like consider yourself...
[00:14:34] Jerry DiMaso: Behind.
[00:14:35] Stacey Richter: Maybe you should get these transparency files.
[00:14:37] Jerry DiMaso: No, it's crazy what we see in the files, you would be shocked to see the rate disparities from one employer to another. They're huge.
Just people, one employer just considers like, oh, I should negotiate this. A lot of employers don't even know that they can negotiate with the TPA. Like help the TPA negotiate, negotiate in their own contracts. So the TPA is providing the network, but they can go on top of that and negotiate additional services and service lines.
[00:15:03] Stacey Richter: So if I'm a large employer and I see that my TPA is sucking it up in a particular service line, I can be just like, look, you need to go back and fix this.
[00:15:11] Jerry DiMaso: Yeah, you can work with your TPA and sometimes, they will work with you and work with the provider to get you a better rate.
[00:15:18] Stacey Richter: As an employer, should I be thinking about anything else here?
Carve Outs and Directing Care
[00:15:21] Jerry DiMaso: Yeah. One big thing is carving out services. So there's groups where you were able to carve out, just like musculoskeletal, for example.
That's what, you know, one of our customers does that where they have a series of providers, they have a method they can actually carve out from your existing insurance plan, just a handful of codes. It's like a thousand billing codes, and then they will cover those codes. And they claim that they have better, you know, better outcomes, better quality, lower rates, right?
So these are the types of things where you would be able to see like, hey, our knee surgeries are really, really expensive, and we have kind of an aging population in our employee base. There are providers that specifically carve those types of things out and you can send your employees to those places. And they, like I said, they may be able to say they have better outcomes, they have a lower rate, and that's all they do specifically.
[00:16:11] Stacey Richter: So we just had the show with Dr. Leo Spector, Adam Stavisky and Ryan Wells and Ryan's from Health Here. And what Jerry just said is a way to figure out that you need to direct contract. You need to figure out how to do some kind of Center of Excellence model or do something. Because if you look in any given geography and you just see that the price point for a TKR, like whatever you're looking for here, is like, the prices are just stupendously high and you've been talking to people and direct contracts are really all at low, or you can start to really quantify what the opportunity is and not use your selected carrier to do certain things.
Like you really can find those outliers, it sounds like.
[00:16:59] Jerry DiMaso: Yes, exactly.
[00:17:00] Stacey Richter: Yeah. So no guessing.
[00:17:01] Jerry DiMaso: No guessing. You can see the actual detailed rates exactly what the reimbursement is.
[00:17:07] Stacey Richter: And the interesting thing that there is that you actually can calculate your own savings.
[00:17:11] Jerry DiMaso: Yes, exactly.
[00:17:12] Stacey Richter: Because it's, what I find fascinating is that there's a lot of these vendors and the Chris Deacon just wrote a whole post on LinkedIn about this exact topic where you have, there's just such a grading of one's own homework that goes on in some of these programs, right?
Like if you know how much you would have spent objectively, then you can figure out exactly and specifically what the opportunity is or what the results are. That's fascinating.
[[Okay. Let's just sum up the advice for plan sponsors right now, and then this conversation takes a turn, because Jerry gives advice for clinical organizations next.
So plan sponsors who get their hands on this data can direct TPA negotiations, Number 1. They can implement service carve outs and direct contracts and evaluate the success of such efforts, Number 2. And they also can, Number 3, model alternative plan types.
What is gonna happen next in this conversation matters because Andrew Tsang wrote a post about this the other day. For any given plan, sponsor, or anyone concerned about affordability, having competition matters, having options available in any given market matters. Having indie primary care matters, and it matters oftentimes because the incentives to keep patients healthy and out of the hospital are at least not perverse.
But as we're contemplating what we need to do to defend indies, here's another problem for them that we all might wanna be keeping an eye on. And Pearly Chen wrote a post about this on LinkedIn the other day. I will link to it.
She wrote, "Mark Cuban dissects the playbook in plain language. Big insurance companies underpay independent doctors and pharmacies while overpaying their own vertically integrated providers. Gaming the ACA’s medical loss ratio rules and keeping profits circulating within the conglomerate. Left pocket. Right pocket. Regulatory compliance theater.”
Or seriously, this discount will save you money theater. This is me talking right now. Or the let's cut rates so low that the only games in town left standing are the games with billion dollar trust funds, who then have a monopoly and raise rates, which is just the oldest trick in the book for how to disappear the little guy’s playbook.
So in short, everybody who has an interest in affordability has an interest in ensuring that independent practices stay in business.]]
Provider Negotiation Wins
[00:19:32] Stacey Richter: What I wanna talk about right now is how rates get set, where you have, let's just say a little provider. If I, as a little provider can see the benchmark in my geography, I can see how much the consolidated entity down the street is making for this exact same service codes.
[00:19:50] Jerry DiMaso: Yeah. So if you're a smaller provider, being able to see not only what the carrier that you're currently working with offers and reimburses to, obviously yourself, but also other neighboring providers that are providing the same services as you, but also being able to see every carrier in the market. I think it does a couple of things.
One, it helps open you up to other insurance carriers that you may be able to accept. And we've seen examples of that where there are smaller providers that weren't even aware that certain carriers were in their area, right? So they're able to pick up the phone and say: Hey, we're missing this whole kind of population of people that are on one of your plans. Can we negotiate a deal and would you be willing to put us into your network?
And we've, we've heard that from a number of different smaller providers. That helps them to drive additional volume. That's definitely something that can be done very, very easily. Just seeing who is around you that's in network and where you may be able to improve or increase your market share. That's one great way to use the transparency data.
From a negotiation standpoint, it's also really helpful to be able to look at the data and say: Hey, we have really great outcomes on these, you know, 20 services. I mean, we do a great job and our patients are really happy and we're really helping the community. And we can see that we're under reimbursed relative to the other providers that are near us.
I can have a much more informed conversation with a carrier and I can come prepared with the quality data and the outcome data. And I can very easily justify a significant increase in our rates because we're also down the line costing a lot less money and kind of readmissions.
[00:21:30] Stacey Richter: And that actually works?
[00:21:31] Jerry DiMaso: And that actually works, right? Yes, it does actually work. There was one smaller provider, behavioral health practice that was relatively low on the reimbursement for their kind of main psychiatric services that they were providing. They were able to call, in this case, one of the larger carriers and talk through the outcomes that they were having, showing that their patients were actually being reintegrated appropriately into their communities and they were able to actually give concrete examples.
But knowing where to focus and saying like: Hey, we're actually are reimbursed pretty well for these three services. But we're under reimbursed for these ones and we're just as good at those.
And being able to do that resulted in a kind of obvious like: Hey, this is a win-win for everybody. So yeah, sure we can, we can increase your rates over there.
[00:22:18] Stacey Richter: And Dan Greenleaf also gave a similar example. He has a large multispecialty group in Chicago who is actually way less expensive than the area hospitals. And he was able to use the transparency information to basically say like, look carriers, you don't want me to go outta business, I'm your hedge against them.
So make sure that you're compensating so that we stay in business, which would seem to be also something that primary care could eyeball.
[00:22:51] Jerry DiMaso: Yes, yes, definitely. And there's, there's also opportunity here in the transparency to understand from a disruption standpoint, right? Like you can start to get an idea when you're starting to build a business. Well, what are the reimbursement rates that I can expect?
Or if you are currently running a practice and you're seeing that, hey, everybody else is getting reimbursed a little bit less than we are, and maybe our costs are a little bit too high, maybe there's some introspection that we can do to reduce our costs. Or maybe even go talk to those providers and see what they're doing to to maybe lower their costs. Right? So there's there's other opportunities there as well.
But that's a great point, is like there's a, there's kind of a mutually assured destruction that you don't want to trigger where the carriers need the providers. The providers need the carriers and so can both sides having the information that they need, it only helps to inform a negotiation that is often very complicated. There's a lot of different services. The carriers are negotiating with thousands, tens of thousands, millions in some cases, different providers.
And so being able to be targeted and focused is a huge benefit to the transparency data and just being able to see what is being reimbursed kind of across the spectrum.
[00:24:08] Stacey Richter: At a minimum, you know, we often talk about the problem of an asymmetry of information in a whole bunch of different contexts. Like how often have you heard that, oh, there's an asymmetry of knowledge, and it's sort of understood that is an issue for the loser in the knowledge game.
What at a minimum this does is it starts to equalize who knows what and level, at least the knowledge playing field. It sounds like what a provider organization, especially an independent chooses to do with that information, certainly, in the success that they may achieve could vary depending on a lot of different things that are maybe intrinsic to the practice itself. Maybe, it's the market, right? Like there's, there's probably a lot of variables there.
But at a minimum, knowledge is power, it sounds like.
[00:25:01] Jerry DiMaso: Yes, exactly. Like knowing more is invariably gonna be better than not knowing more, especially when it's available.
Pitfalls and Price Effects
[00:25:07] Stacey Richter: Let's talk pitfalls now, And the one that I definitely wanna bring up, because everyone in the audience is currently thinking about this. Well, two things. One, that transparency makes prices go up, And the other one is that there's a transparency arms race.
In other words, someone just wrote me a note the other day and said that a carrier walked in, told him that this is a practice told him that they saw that his cash rate was a lot less than they wanna match the cash rate, right?
So let's take the first thing first. Have prices, I was gonna say, have prices gone up. That is a ridiculous question of causation and correlation. But like, do you see any indication that people are using, or that there's a use of these transparency files which has resulted in either anecdotally or across the board, like, you know, there's causation for higher prices.
[00:26:00] Jerry DiMaso: Yes, and we do have a number of customers where we have seen them negotiate better rates. Thus increasing the price to the carrier and presumably to the end consumers.
[00:26:14] Stacey Richter: And I guess the question would be, was that already the highest price consolidated health system in the area? Or is that an independent who arguably should get paid like a PCP, who's was gonna go outta business and sell to the consolidated health system.
So by enabling that, them to have slightly higher rates, we prevented them from not being available in the marketplace and then losing that lower priced opportunity. Right? So.
[00:26:39] Jerry DiMaso: We've actually seen that a number of times as well, and we've helped organizations like that not have to sell their practice because prior to price transparency, they're sitting there thinking like, how is it possible that these other companies, you know, I'm being told that my rates are really, really high and you know, in every negotiation I can't get any higher rates.
I don't understand how these other practices are even operating. I may as well just sell, sell my practice and go work for somebody else. Right?
We have held a number of those practices where they see like, no, our rates are not that high. Nobody is getting reimbursed as low as we are. And we can actually take this data and get that rate increase and then sort of save our practice and remain independent.
And that has a direct impact because as soon as a practice gets acquired all the prices go up.
[00:27:22] Stacey Richter: Do you see incidences where the consolidated health system, like the high priced entity in the market or one that was in the middle, do you actually see indications though that prices overall have gone up?
[00:27:35] Jerry DiMaso: So yeah, there's definitely a possibility that the larger providers already had the leverage to increase their reimbursements. But having the knowledge that they are under reimbursed in the first place and just being able to know where to look and where to spend your time.
That's the really key thing is that you can look at these files, you can understand that like: Hey, yeah, for these 25 codes, we are under reimbursed relative to our competitors. And without the transparency data, like yeah, we have the breadth, we have the leverage.
We know we can go into the negotiation and say, we want an increase for these codes, but to know where to look and to know where you're gonna get your most bang for your buck in terms of the volumes that you're doing, that's really where the transparency data for a larger system becomes much more useful.
[00:28:23] Stacey Richter: There are definitely upsides if you're a smaller provider because the knowledge asymmetry gets closed to some extent. You still have to contend with the market power dynamic and you still have to contend with the, you know, you're negotiating with someone who's negotiating as their day job while you're trying to do this off the side of your desk, right? So like there's a bunch of asymmetries that still exist.
There have been a bunch of studies that have been done granted a few years ago, and it was sort of determined that on the whole, you know, transparency doesn't actually raise prices across the board, but I guess in, in certain ways, the jury may still be out.
[00:29:03] Jerry DiMaso: Yeah, I, I think it still remains to be seen at the macro level whether transparency will have an increasing effect. Now, I personally, I don't think it's gonna be a situation where you have a huge adjustment where it's like, oh, transparency's gonna make everybody's rates go up and then insurance premiums are gonna go through the roof.
I mean, that's somewhat already happening.
[00:29:25] Stacey Richter: I'll tell you what winds up happening. It becomes incumbent on the demands curve, ie, plan sponsors to steer. Because the more transparency there actually is in the market, the more that a lazy network, in other words, one where you have Ivana Krajcinovic talked about (Episode 501) a circumstance where literally two patients cost an excess million dollars because they got an infusion at a place that cost a million dollars more than literally a place that was on the same block, on the same street or something. Right? Like right down the street.
So if you have a plan that just accidentally spend an extra million dollars. Like so the more transparency data that there is, the more that it starts to look and feel very much like a plan that does not have its, UMCM games straight, very clear.
The more that there is not steering and tiering. In the face of some of these very, very obvious questions, start to get asked.
[00:30:27] Jerry DiMaso: Yeah, agreed. I think that's probably one of the bigger levers is the fiduciary responsibility of the employers.
Like, are you being responsible with your funds? You're responsible for those expenditures, and there is no reason for you to spend that extra million dollars and that's just one example, right?
[00:30:46] Stacey Richter: Yeah. It's just like in the olden days before this transparency, like you could probably say, I didn't know. I didn't know.
[00:30:52] Jerry DiMaso: Right.
[00:30:52] Stacey Richter: Now you can't, since 2019 there was an enforcement 2022, right? Like we're coming up on five years of this information being out in the marketplace.
[00:31:01] Jerry DiMaso: Yeah, exactly. It's, available and so you should, you should be using it.
The Transparency Arms Race
[00:31:07] Stacey Richter: And speaking of it's available, you should be using it, let's also talk about the Transparency Arms Race, which I keep hearing like whoever has the most transparency information is the winner.
[00:31:18] Jerry DiMaso: Yeah. Getting a letter from one of your carriers that's saying that we see in the transparency files that you're willing to accept from our competitor a much lower rate. So we'll be renegotiating our contract based on the fact that you can clearly bear these lower reimbursements.
I mean, that's the kind of a nightmare scenario for any provider. And we see that, we see that head is happening all over the country and it's, you know, it's the responsibility of the carrier, right?
The carrier is also running a business. So they're able to look through all this data and they're able to see, oh, here's all the hospitals where our closest competitors are reimbursing a lot less, so let's go reach out to them and, and start the renegotiations.
So there is a bit of a race there. There's a lot more providers, but as that provider, whether you're a large provider or a large health network, or just an individual more rural provider, having as much information at your fingertips as possible is really critical.
So it is incumbent, I think, on providers and, and carriers and employers to be using this data to make better informed decisions on how they negotiate rates.
[00:32:21] Stacey Richter: Yeah, it's definitely a tangled web, right? Especially because as much as we talked about, Hmm, well rates rise across the board due to this data. Like you just gave an example of how, hmm, our rate's gonna fall across. As a result of it as well.
And maybe it's just a like regress to the mean kind of situation where if someone's high, if someone's super low, you wind up kind of normalizing at some level and maybe for any given market that could look different.
[00:32:49] Jerry DiMaso: That's really the best we can sort of hope for is just a regression to the mean of like, here's what this procedure should cost in this given area based on the geography and the demographics. And, that's, and that's reasonable.
[00:33:02] Stacey Richter: And you know, I just thought of something, you know, what the definition is of a functioning market? Prices within a corridor, right? In other words, you have the invisible hand that regresses to a mean. It is a sign of a dysfunctional market actually, if you have wildly divergent prices for exactly the same thing in the exact same geography. Right?
[00:33:24] Jerry DiMaso: And that was the initial goal of the Affordable Care Act, at least in its early iterations. And things have happened since, but that's the goal, is the of transparency. The more transparency we have, the more we can sort of understand what a reasonable price is for a given procedure for a given provider.
Once we have all of that, then it starts to be based on quality. The costs are roughly the same, so there's better quality here, so I'm gonna make sure I go there for my procedure.
And that's really the goal.
Wrap Up and Payerset
[00:33:51] Stacey Richter: Right. Which is probably a great way to wrap up this conversation because that was an excellent statement of the goal, which is let's get a fair price, for a high quality service.
Jerry DiMaso, is there anything I neglected to ask you.
[00:34:08] Jerry DiMaso: I don't think so. The only thing I can think of is that we work pretty closely with the administration. The current administration and with CMS and what we're seeing with, with policymakers is that there is a continued and renewed push for additional transparency, more transparency. The data quality is getting better and better and we we're seeing a lot more compliance just throughout, like across the spectrum from hospitals and from carriers, and we're excited to kinda see this continue.
[00:34:36] Stacey Richter: Do you wanna talk a little bit about Payerset?
[00:34:38] Jerry DiMaso: Yeah, sure. So Payerset is, like I mentioned before, we're healthcare pricing intelligence, price transparency company. So we aggregate these data sets from all the different carriers. We go and crawl around the internet and get all the files, and we process them. And we put them into an easy to use data sets and formats for people to be able to really quickly grab, you know, provider A, these sets of services, for these carriers and just see all the transparency data in like a nice little interface.
[00:35:05] Stacey Richter: And if someone is interested in learning more about Payerset, where would you direct them, Jerry DiMaso?
[00:35:10] Jerry DiMaso: I would direct them to payerset.com.
[00:35:15] Stacey Richter: Thank you so much for being on Relentless Health Value today.
[00:35:17] Jerry DiMaso: Thank you so much, Stacey.