You can listen to the episode here.

[00:00:00] Stacey Richter: Episode 436, "Let's Talk for a Sec About TPA and Health Plan Inertia Instead of Jumbo Employer Inertia". Today, I speak with Elizabeth Mitchell.

American Healthcare Entrepreneurs and Executives You Want to Know, Talking. Relentlessly Seeking Value. 

Exploring Health Plan Inertia and Stakeholder Impact

[00:00:30] Stacey Richter: The episode today is somewhat of a follow on to the show with Lauren Vela, which was episode 406 about employer inertia. If we're talking about inertia, though, we'd be remiss not to get a little circumspect about the whole affair and subject some other stakeholders to our microscope.

One of these stakeholders is EBC's, Employee Benefit Consultants Practice Leads and Brokers, which AJ Loiacono talked about in Episode 379, to some extent, so we can check that box at least for now. That leaves TPAs, ASOs, and health plans, third party administrators, administrative services onlys, and health plans.

And this hotbed of inertia is what I talk about today with Elizabeth Mitchell from PBGH, the Purchaser's Business Group on Health. Similar to earlier shows, one disclaimer is that I am using the TPA and ASO terms sort of interchangeably here. Again, TPA is Third Party Administrator. And ASO is Administrative Services Only, which is generally the term used when an insurance carrier offers services to a plan sponsor, like a self-insured employer.

And these services don't include insurance, because self-insured. So the services are administrative only. One point to make clear before we dive in, this conversation is not about these carriers slash payers slash health plans in general and what they may or may not be doing. This conversation is very specifically focused on how well are those entities helping jumbo employers deploy their health benefits.

The Role and Challenges of TPAs and ASOs

[00:02:09] Stacey Richter: And first we talk about the role of a TPA or ASO, both in terms of what a jumbo employer might want them to be doing versus what they are often actually doing. Spoiler alert, what they are often actually doing is acting like a full on health plan and charging as such, even if the health plan part is not what the self-insured employer wants or needs, especially when somebody figures out exactly how much additional is getting charged for those ancillary health plan services.

Listen to the show with Justin Leader, that's episode 433, for a beat on Just a piece of the how much additional that gets baked into the weekly claims wires many self-insured employers get. 

Market Gaps and the Need for Independent TPAs

[00:02:51] Stacey Richter: Bottom line, right now, there's a gap in the market. What is needed are indie TPAs who are effective and efficient and not owned by a health plan.

Because, if history is any predictor of the future, the second the TPA gets owned by a health plan, the TPA sort of ceases to be a TPA and becomes a health plan. With all the attendant bells and whistles that a lot of times an employer can't opt out of. And also, the whole not sharing data becomes a thing. Both cost data and also quality data. 

Now, just because there's a gap in the market, does that mean all jumbo employers are paralyzed into inertia? Well, it makes it harder. For sure. But it's also a reason to start figuring out how to solve for a problem when it has as many zeros at the end of it as this problem has.

Have you seen these lawsuits popping up all over the place and just the numbers that are involved? Aramark's lawsuit against Aetna is just one example. Not to single out just this one, but in the interest of time, let's talk about this one. Aramark, a big employer, alleged that since 2018, Aetna has taken more than $200 million from it to pay for medical services that should not have been paid out.

And retains millions of dollars in undisclosed fees. Mark Flores posted about this one the other day, link in the show notes. Also, there was that Cigna lawsuit where an electrician's union health plan was surprised to learn that the fees charged by Cigna had risen from around $550,000 in 2016 to $2.6 million in 2019. Again, link in the show notes that was from a New York Times article. 

For more on stuff like this follow Doug Aldeen and or Chris Deacon on LinkedIn. They're a great resource. I'd also listened to the "Who's Suing Who", episode with Chris Deacon, which was episode 408. 

Direct Contracting as a Solution to Inertia

[00:04:47] Stacey Richter: Because of all of this, the conversations today with Elizabeth Mitchell pretty quickly gets into the shift toward direct contracting between employers and providers to improve access quality and outcomes.

If you can't beat them, get ruthlessly practical is my takeaway. I have to say, I truly admire some of these HR folks and their leadership willing to do what it takes on behalf of protecting the people that work for them. 

Now, important side note, there are certainly some health plans at least trying here. So I don't want to imply otherwise. There are some interesting initiatives that are afoot at, I'm going to say, usually regional health plans. Elizabeth Mitchell has talked about some of these and made this clear also elsewhere. Lastly, if you aren't familiar with the CAA, which comes up in the episode today, there's a show on the Consolidated Appropriations Act, which is what CAA stands for.

I'll put that in the show notes. Elizabeth Mitchell, my guest today, currently serves as the president and CEO of the Purchaser Business Group on Health. PBGH members are really focused on innovating and implementing change. We talk about some of this innovation and implementation on the show today, and it is very inspiring.

Stay tuned on this topic, given just the absolute need for TPA services like we discuss in the show that follows, and given the smart, innovative, action oriented people who are affected, 1 plus 1 equals yes. Stay tuned. 

Very, very lastly, I just want to give a shout out and thanks to Brad Brockbank for posing some great questions, which I pretty much turned around and asked Elizabeth Mitchell today.

My name is Stacey Richter. This podcast is sponsored by Aventria Health Group. 

Elizabeth Mitchell, welcome to Relentless Health Value. 

[00:06:34] Elizabeth Mitchell: Thanks, Stacey. I'm really glad to be here. 

[00:06:35] Stacey Richter: Well, it is a pleasure to have you here today. What I would love to drill into is a focus on TPAs and ASOs and what they are and what they're supposed to be doing or not supposed to be doing.

But before we go there, is there any overarching context? 

The Shift Towards Transparency and Accountability

[00:06:51] Elizabeth Mitchell: There is because the entire environment for healthcare purchasing has changed and is changing, which is why we need to revisit the role of health plans in healthcare purchasing jumbo self-insured employers are spending their own money and their employees money on healthcare services, and they do that because they want their employees and their workforce and their families to be healthy.

They want to retain talent. So they go into this with all the best intentions. They are spending enormous amounts of money. Our members spend over $350 billion a year on healthcare services, and people's health is not improving. All of those dollars seem to be getting lost in the system, and it is particularly ironic because that money is also not going to providers in the way that our members would like to see.

They are very much aligned with providers, particularly primary care providers and mental health providers. They want them to be properly reimbursed, to be paid well for the important work that they do. And yet, there is some disconnect between the amount they are paying and the amount the providers are getting.

It's just really important we look at that entire chain because employers are paying a lot and yet the value is diminishing. If value is defined as quality over cost, value is going down. 

[00:08:25] Stacey Richter: Members of PBGH that you serve are spending $350 billion a year. 

[00:08:32] Elizabeth Mitchell: At least. 

[00:08:32] Stacey Richter: At least, to get members, employees, better health.

[00:08:36] Elizabeth Mitchell: Absolutely. And they want it to be easily accessed. One of our members, C-suite representatives, concluded they lose as much on lost productivity of people bouncing around an unnavigable healthcare system. And needing to take days off and try to find appointments for them and their family members as they actually spend on healthcare services.

[00:09:01] Stacey Richter: And Olivia Webb on the pod said something very similar. She's a specialty pharmacy patient and she's just like office hours are nine to five. So basically this means I'm calling provider offices or my insurance plan or the prior offline or whoever I need to call the appeals line during working hours.

And I probably spend like a full day a month, eight hours a day a month just trying to get my drug that I have been on for years. 

[00:09:25] Elizabeth Mitchell: And people do that because they have to during the workday. There is so much room for improvement. Again, this money is coming from U.S. businesses and U.S. families.

Health plans are a pass through. It is not their money. The money belongs to the employers and the employees. And they should be expecting much better value for their spend. 

[00:09:49] Stacey Richter: It's interesting that you use the term pass through and that's something that I definitely want to drill in on today because as you said at the very top of this conversation, on one side you have employer commercial entities paying $350 billion.

And then on the other side, you have those that are actually providing the care who are arguably to a certain extent, really the ones that are providing the value to the patient. There is certainly an intimate connection between doctors and other clinicians and the patients themselves. That's kind of where the value at a minimum is realized.

And then you have this whole space in the middle where the dollars are ostensibly passing through. And that's what I want to talk about today because it kind of feels like there's some dollars that go missing in the middle there. 

[00:10:40] Elizabeth Mitchell: 30 percent. 

[00:10:40] Stacey Richter: 30 percent go missing in the middle. 

[00:10:42] Elizabeth Mitchell: Well, if it were just a pass through, if health plans did what jumbo self-insured employers needed, they would simply pay the claims at a fair cost for agreed upon quality standards, right?

It is so simple. I've heard Mark Cuban say that about drugs. It is so simple. They want high quality, accessible care, and they want to pay a fair price. But then you get these middlemen. It's like the middle earth of healthcare. Money goes in and it doesn't come out. It doesn't reach the providers. We know because we measure this at PBGH annually.

The amount of money going into primary care as a percentage of total spend is going down. This is despite our members and many, many others saying they want to increase investment in primary care. The employers are asking for one thing. We believe we are very much aligned with providers because healthy employees are healthy patients.

We want the same thing. But then something gets lost in translation in the middle. We have got to reconnect and reestablish the direct connection between the people paying for care and the people providing the care without all of the waste in the middle. 

Direct Contracting Success Stories and Future Predictions

[00:11:56] Stacey Richter: So I'm going to circle back on the exactly what you just said at the end there, the reestablish the direct connection between the ultimate purchasers, i.e. self-insured employers or other plan sponsors and the provider organizations themselves. But what I want to do right now is talk a little bit about that middle aspect or that middle entity, 

[00:12:15] Elizabeth Mitchell: Self-insured employers retain all the financial risk.

They're self-insured, it's their money, it's their risk. They hire health plans to administer the benefits and to develop the contracts with the providers because they do not have the capacity to go and create a contract with every primary care practice or every hospital or specialists. So they need an administrative partner to establish those contracts and to pay claims.

And frankly, that's kind of it. But what happens is even when you have a really flexible, effective TPA, they tend to want to be a health plan when they grow up. They add lots of services and care management or care coordination or all these things that really are better done on the provider side.

Optimal care management is actually done in a primary care practice. But health plans like to take on larger and larger roles in the management of healthcare. So they retain more and more of the money when they do that. And many health plans will not unbundle it, even when the employer asks them to.

Even when they say, I would prefer my primary care partner to do this, they say, nope, all or nothing package of services. If they just paid the claims effectively in a timely way, provided transparent information on cost and quality, and managed the contracts, that would be great. But that is not happening typically.

And what also happens is when you get an effective TPA, they tend to be bought by a very large insurer. It's like catch and kill, right? So they are acquired and then they go in a different direction. 

[00:14:07] Stacey Richter: So, summing up what you just said, the need of a self-insured employer, have somebody who can do three things.

Number one, pay the claims. Number two, transparently provide data back relative to said claims. And then thirdly, do contract negotiations. Like it should be the day job of this middle person to do those three things. Because as you said, a self-insured employer, they're doing benefits. This is your quote from you, which I love, you know, a lot of times human resources groups are doing health benefits off the sides of their desks, like they simply do not have time to be doing primary care contracts across the country or negotiating bundles with every single orthopedic practice across the country, right? So like, you need an entity sitting in the middle wherein it is their day job to be doing those three things.

What I'm understanding you saying is that should be the definition of a third party administrator. However, because a lot of times this third party administration is being offered as a service from a larger carrier, what they try to do is throw some of the other services that they may have available into these contracts.

And that's when things start getting muddy because then the employer starts to get charged for stuff that they may not want or need but because there isn't a lot of options in the marketplace right now. They wind up getting saddled, paying for stuff that they may not need. 

[00:15:31] Elizabeth Mitchell: That's right. There is a myth that when an employer, even a self-insured employer, asks a health plan to do something, that it will happen.

You would be amazed at how resistant many of the plans are to doing what employers ask them to do. Even sharing data effectively or adding a doula benefit or things that employers know are the right thing for their employees and to effectively manage their plan. It is remarkably challenging. 

That said, they are increasingly stepping into that space. We have employers who are literally taking the time to design bundles for maternity care, for an example. Negotiate those contracts directly with health systems because that is their best way of getting what they actually want and need for their employees.

We have multiple members who are directly contracting for advanced primary care. They are saying, this is what we want to buy. This is what we're prepared to pay for it. These are the metrics to which we will hold you accountable. And then they are having direct relationships with those providers.

They're understanding their barriers, like they can't integrate behavioral health because it's all carved out by the health plan, as an example. So they are understanding the barriers that their provider partners face and they're working to address them. What is happening is in every case, they are seeing a 10 to 30 percent reduction in total cost of care, much better access, much better patient experience.

And better outcomes. So we know this is possible and it should be scalable. Yet many of the administrators have not achieved those same results. So what I predict, particularly under the new umbrella of the Consolidated Appropriations Act, where self-insured employers, are being held accountable for high value care.

They are going to be moving more and more into these direct relationships where they understand exactly what's going on. It's all visible and transparent and they have more control because one of the key changes under the CAA is they are now being held to an expert standard. They can't say, well, my consultant told me to do it or my health plan said it was a good idea.

They are being held to an expert standard. They have to take this in house. They have to really dive into what is happening, where the money is going, what are the outcomes that they are getting, and they've got to own it. This is going to be a very different dynamic going forward. They are accountable and that accountability will be passed on to all of their partners.

[00:18:18] Stacey Richter: So let me paraphrase in summary. You have some employers, large employers, they have asked their current third party administrator, ASA, ASO, whatever acronym we want to use here, to help them improve maternal health benefits, including a doula, or do something, right?

And just banged their head against the wall for so long, just not being helped. So, these employers said, you know, it might just be easier if I go to my local providers myself.  

So they go directly to the providers in the area or where their employees are. And they negotiate these direct contracts, and when they do, you start to see exactly what we started talking about at the very beginning, that 10 to 30 percent of spend, which is getting sucked up by a vacuum in the middle and is not actually passing through, plus you start doing these direct contracts.

The data becomes transparent, because the providers and the employers themselves have a lot of incentive to be aligned there. 

[00:19:21] Elizabeth Mitchell: My friend Harold Miller says having a health plan in the middle between an employer and a provider is like being at the UN with a bad translator.

Because we lose the plot of trying to simply pay for high value care. It is doable. And it's remarkably simple. We're in the process right now of supporting a couple of our members negotiate direct contracts. I kept thinking it was going to be more complexity to it. We set the quality metrics, we set the payment level, and then they pay it.

It is so amazing to me how much we have complexified this, if that's a word. Once you just determine what you want to buy, you set the standards like they do procurement for anything else, you find a partner who is willing to meet those standards, you write a check, and then you monitor performance. This is doable.

It is happening right now. I think part of the challenge is that self-insured employers don't talk about this very much, right? They're not like the breathless VCs on LinkedIn all day. Ooh, we got a new customer. Ooh, we have a new investor. They're just keeping their heads down and they are doing this work.

[00:20:35] Stacey Richter: So let me dig in on the example that you just gave. First of all, you said you had a group of self-insured employers, they directly contracted. They were just like, this is really not that hard. Did they have the TPA in the middle, the third party administrator, actually paying because the employer still needed to figure out how to pay the provider, or was the employer actually cutting a check?

[00:20:57] Elizabeth Mitchell: It depends on the arrangement and it depends on the scale. If it is multi-region or multi-practice, you tend to still need the TPA. They have got to just do the basic administration, but if it is a direct contract with one practice or one hospital or one system, sometimes it can be as easy as writing a check.

Now, I'm not downplaying the regulatory burdens of some of this, because there are states like California that make it very hard for providers to assume financial risk. So I am simplifying it, but I am doing that on purpose because it is doable. And our members have done direct contracts that have been very successful with all types of organizations.

[00:21:42] Stacey Richter: Alright, if I'm thinking this through the timeline here, it was kind of like employers went to provider organizations and they cooked up their own deal. They're just like, you know, handshake, we're going to pay you some amount, PMPM. At that point, if the TPA wants to administer it, like their pricing kind of has to be transparent because everybody knows what the dollar amount they should be paying and what they should be receiving. 

So if there's dollars that go missing in that equation, it is obvious. So if the TPA chooses to accept the challenge, they have to be transparent. Do TPAs agree to terms like that?

[00:22:18] Elizabeth Mitchell: There is a reason that it took federal action to get transparency from health plans and hospitals. It's not like people weren't asking for it for decades. The resistance to the transparency was high. And as we start to get visibility into what was going on in all of those arrangements, It's starting to become clear why.

So yes, transparency is presumed. I really want to point out though that there are very few, if any, TPAs out there who are as flexible and responsive and transparent as employers want. There are some newcomers, I'm wishing them all the luck in the world, but I really think it's important to understand how challenging it is for a jumbo employer to negotiate contracts all over the country without a partner like that.

[00:23:11] Stacey Richter: Yeah, because I actually have heard stories of employers working with provider organizations and they spend a lot of time and they come up with a great contract and then they go to their ASO, TPA, ASA, and that entity is like, no. 

[00:23:25] Elizabeth Mitchell: Remember, all the health plans have their own quality metrics or their own payment arrangements, their own networks that they have already established.

I do think though there is a more basic challenge for health plans. And I say this with all due respect, their legacy claim systems are built to pay fee for service and they have sunk billions of dollars into those systems. I believe the new transparency that is upon us is going to expose all of the money that has been wasted in traditional healthcare procurement.

It is going to be very awkward for those who have signed those contracts. We are seeing our members using newly available data like transparent hospital pricing. They are literally going to the websites of their regional hospitals and seeing what is the average charge because they're now required to post it and they're looking at their own claims and say, wait a minute, I paid like five times that.

And actually getting refunds from the hospitals. In that same example, however, where that employer said, hold the phone, I am paying way too much. I want my money back. The health plan in that scenario actually tried to block that because they were going to get a lower rate than their network charge. 

Just think about this. The health plan who was supposed to be representing the employer as the negotiator of the best rate was trying to stop said employer from getting a better rate directly from the provider. And that was not the only example. We had another employer try to do this in another state and the health plan told them to stop.

So we have thought about the health plans acting on behalf of the self-insured employer. But I think that relationship is really going to be called into question as information becomes more and more transparent. 

[00:25:23] Stacey Richter: Yeah, and just another example of what you're talking about there is the Bricklayers case in Massachusetts.

There's a show with Chris Deacon, "Who's Suing Who", but that's also the premise there. The Bricklayers looked at transparently available hospital pricing information and just realized how much their plan was charging them in the middle there. So, yeah, it's a thing. 

Challenges and Opportunities in Healthcare Procurement

[00:25:47] Elizabeth Mitchell: Can I talk also about the entire ecosystem? I feel so bad for some of these employer purchasers who have trusted so many people in their supply chain of healthcare.

Brokers, consultants, health plans, PBMs, now with this newly transparent information, they are realizing they were not always working on their behalf. They have said, well, my consultant advised this, I really trust them, I like them, I've known them for years. I'm paying them $20 to $30 PMPM so they should be giving me the best ideas and the best deals.

And as this starts to come to light, it is really unnerving for the purchasers who thought they were doing the right thing. They trusted people who weren't aligned with their needs. So we have members right now saying, I don't know who to get unconflicted, trusted guidance from. 

One of the things that we have done, my board has approved the creation of a new advisory services arm, where we, as a neutral non-profit, are advising on what are some good contract standards?

What are the right quality measures? There needs to be an entire industry shift to actually enabling accountability and supporting purchasers in this very big job of buying healthcare. 

[00:27:08] Stacey Richter: It is so fraught on a number of levels and it's almost like a crisis of trust that some of these employers are having because they've been working with their broker or EBC or practice lead for years.

And sometimes it's like maybe that that person is actually trustworthy. It's that that individual doesn't understand what their company is doing. I mean, there's big companies that sit behind a lot of these entities. So you know, it is even possible that the individual is telling the truth when they say that there's no fees here or there or whatever, because they're not even cognizant of what their organization is doing on the back end.

[00:27:42] Elizabeth Mitchell: Stacey, I want to pause right there because that is so important. This is not about individual bad actors. I am not suggesting everyone was shady and trying to do the wrong thing. The systems, the incentives, the companies, and who they're actually accountable to, that is not aligned with the needs of the people paying for healthcare.

[00:28:04] Stacey Richter: Are there any concrete examples of provider organizations and employers being aligned and accountable to each other in ways that are tough when there's parties in the middle disintermediating? 

[00:28:15] Elizabeth Mitchell: We just released an RFP in a market for high quality whole person primary care on behalf of three of our jumbo self-insured employers.

They want to take this on themselves. This is so new and different. A lot of the providers like didn't even understand the dynamic. What do you mean we're responding to you? What do you mean there's no health plan? And yet it was wildly successful. It is around quality and equity and access and all the things that these employers want on behalf of their employees.

This is starting to happen because there are employer purchasers out there, and I really want to include public purchasers. They are ready to take this on and help their employees, help make sure that they are getting the care that they deserve. 

[00:29:01] Stacey Richter: I am seeing more and more provider organizations and doctors themselves really aligned with what you're saying because, you know, the enemy of your enemy is your friend.

Just that whole international relations statement that if you have a doctor really looking to do the right thing by patients, the employer just based on, again, going back to the very beginning of this conversation, is another entity which is concerned about whole person health. So working together can have a lot of alignment.

[00:29:31] Elizabeth Mitchell: You're exactly right. I can't describe the number of times we are approached by providers who want to work directly with employers. Maybe not all of them, but there are a lot of them out there who are ready for that type of relationship. 

[00:29:45] Stacey Richter: Moby Parsons, Ben Schwartz, those are two orthopedic surgeons who talk about this kind of thing a lot.

[00:29:51] Elizabeth Mitchell: Right now, there's no forum for that. There's no platform to talk directly to an employer other than literally calling them up on the phone. And that is happening. This is a really exciting opportunity, particularly in regions where you have high concentrations of headcount across multiple employers.

We're going into our fourth market now. Providers who raise their hand and say, well, great, because that's what we want to provide. That is how we want to practice. It's clear that they want the same thing. 

[00:30:19] Stacey Richter: I guess there's like mishe in New York. What you're saying is resonating maybe philosophically, because if you think about this from an employer standpoint, the, you know, another word for an employer is a customer.

We all realize that as customers of almost every other thing. It's up to us to set the standard. It's hard. Sometimes, you know, can you blame a vendor for being self interested and giving you a bid that is wildly high? You're like, I guess that's how capitalism works. That they, sure, feel free to give me a super high bid, but then it's kind of like my job to say, no, I'm not.

Basically applying purchasing discipline, right? That they probably apply elsewhere in the business. It's difficult, but it's almost the responsibility as a customer, as a fiduciary to the employees on the plan to apply the same purchasing discipline, and others have said this on the show, that we do elsewhere to healthcare and to understand what we want and to figure out how to get it because otherwise the wolves are in the henhouse.

[00:31:23] Elizabeth Mitchell: I completely agree with that. In a market, someone gives you a bad bid, you don't take it, you don't buy it. Here's the challenges. One, there's been no transparency, and they have not been able to get their data to actually even evaluate the performance. One of the changes within the CAA, it absolutely clarifies that employers are entitled to the data they need to evaluate cost and quality.

But then the other problem there are not any alternatives. If all of the plans are doing the same thing, where are they supposed to go? I think that there are some new market entrants. I also think there's a big opportunity. If you could just have a platform that does flexible payments, innovative payment models without all the other stuff that no one wants to buy, I think that would be pretty compelling.

I do think those are starting to emerge. But right now, if you are looking for a big health plan administrator, there's not a lot of options for something really different. 

[00:32:26] Stacey Richter: If you're an entrepreneur and you're looking for a need in the marketplace, set up a third party administrator where you, and I'm going back to what you said earlier, where you pay the claims, you do that well, you're transparent with the data, and that you do a contract negotiation really well.

Like just do those three things really well and there's a big market out there. 

[00:32:45] Elizabeth Mitchell: This is really important. A lot of the new market entrants, they come with VC backing or whatever. Their investors want them to make money. Totally makes sense. No problem. However, their incentives must be aligned with the self-insured employer for this to work.

They need to make money by doing the right thing, not just maximizing healthcare spending. That just has to be clear from the outset. 

[00:33:15] Stacey Richter: And the fees have to be transparent, right? I think as more employers become sophisticated enough or see transparent data enough to realize getting the best price doesn't mean negotiating the fixed fee and picking the entity that has the lowest fixed fee.

Because it's like an iceberg. If we have an alignment between those who need a plan administrator and the plan administrators themselves, what is a fair fixed fee so that I can actually administer the plan and make my investors happy and you make your investors happy, right?

That would seem to be a true handshake as opposed to kind of like what's going on now where I pretend to have very low fees, but I'm just showing you the tip of the iceberg because I'm making all this money in ways that are misaligned with my customers incentives. 

[00:34:05] Elizabeth Mitchell: It is the equivalent of what we're seeing in the PBM space just on the medical side.

You've got all of this super confusing rebates, spread pricing. And if you just had a transparent price with fair profit built in a lot like the Mark Cuban model, you could do that on the TPA side. It is not impossible to have a TPA that is making a healthy amount of money and yet is responsive and transparent and accountable.

One other thing that is extremely important, we've talked a lot about setting a fair price. And it should absolutely be transparent. 

The Importance of Quality in Healthcare Contracts

[00:34:44] Elizabeth Mitchell: What my members care even more about, though, is the quality of care. They need to know their employees are going to high quality, safe providers. And to date, most health plans have not been terribly innovative around quality measurement. It's not that we don't have the quality measures. I was on the board of the National Quality Forum a decade ago. We've got meaningful quality measures that have been vetted and are valid. They are not being used in contracts.

And that is very important to employers. Because, frankly, all the evidence shows that better care costs less. You can actually pay more for care and if it's really high quality, there's no readmission or you avoid a hospitalization or a procedure in the first place. And you get that really high quality care from the outset, you save money downstream.

You save on the total cost of care. That is such a win because patients are healthier, they don't have unnecessary procedures, and they save money. Better care costs less, but you have to be really clear about the quality standards. You are using to measure better care. That is entirely doable. We have just developed core measure sets for primary care, for maternity care.

Our members are putting those into their contracts because this is what they want to pay for. These are the quality standards they expect. That coupled with a fair price and a fair cost, that's value.

[00:36:20] Stacey Richter: I mean, that's the actual literal definition of value, quality, at a fair price. And it's a real call to action, frankly, to provider organizations themselves.

We had Rik Renard on the show a couple of weeks ago. And one of the things that he made very clear is that a small, small, small, small, single digits, really, percentage of provider organizations themselves are measuring absolutely anything. Patient reported outcomes, clinical outcomes, the efficiency of the services that they're providing.

And in the absence of provider organizations themselves measuring and then continuously improving, because you can't continuously improve unless you measure stuff, it becomes, you know, how do you become a high quality provider? So I am also hearing a real call to action for providers. If you want a commercial contract, it's going to become more and more important to figure out how you're measuring what you're doing.

And that is not something that you can like figure out next Tuesday, right? 

[00:37:13] Elizabeth Mitchell: I want to be really clear. There is going to be change required on all sides. Employers have not been terribly clear about what quality metrics matter to them or access standards. And so we took it upon ourselves over the last couple of years to really articulate that.

We're trying to do our part being clear. Any provider group that wants to partner directly though is going to have to figure out how to measure and report their own quality transparently.

Because to quote Lauren Bella, employers don't want to pay more for the same old crap. They want to pay more for high quality care. So there is an expectation that partners really step up and do that quality measurement and transparent reporting. They can continue to not be transparent, but if they want to work directly with employers, they're going to have to share their quality performance.

[00:38:07] Stacey Richter: Elizabeth Mitchell, is there anything I neglected to ask you that you want to mention here? 

Concluding Thoughts and Call to Action

[00:38:12] Elizabeth Mitchell: One thing that I think is somehow missing from the entire conversation, even though I really do believe things are changing, we seem to have this strange Stockholm Syndrome identifying the folks who have made the system as bad as it is.

We blame employers for not having purchased more effectively. Sure, there is blame to go around, but why aren't we holding health system and health plan executives accountable? Why aren't their boards asking them to ensure affordability, equity, quality? I really believe we need to put that accountability where it belongs.

Yes, it should be shared on all sides, but it's not enough to have the purchasers buying effectively. We have got to have accountable partners to work with. 

[00:39:06] Stacey Richter: Do you feel like that's happening because everybody seems to inherently agree that those entities are accountable to their shareholders, whereas somehow or another the employers are the only ones that are accountable to members and patients?

[00:39:20] Elizabeth Mitchell: Well, I guess they get a pass because everyone says, oh, well, we can't expect any more. They have to do that for their shareholders, but they are not providing what we need as a healthcare system. We are seeing more and more evidence of this massive growth in these health plans and their profits.

Not translating to affordable, equitable, accessible care. Maybe we find alternative partners who don't just have to answer to their stockholders. But right now, even though it is working for the health plans, they're having amazing profits and wild growth. It isn't working for the people paying for, providing, or receiving care.

[00:40:04] Stacey Richter: Which is pretty much Americans. Yeah, I was just gonna say America. Elizabeth Mitchell, is there someplace where you would direct people if they want to learn more about some of the things that you were mentioning today? 

[00:40:17] Elizabeth Mitchell: Well, I am going to share a video we did recently with a few of our members who are doing direct contracting, all of whom are having real success.

As I mentioned, we have launched PBGH Advisory Services for unconflicted guidance for employers. We are also launching a major data project to enable actual transparency and use of cost and quality data in purchasing. And we have launched an advanced primary care network in several markets. That is going to be a place where employers and providers come directly together to design an entirely new approach to healthcare delivery.

[00:40:59] Stacey Richter: And we will put links in the show notes. 

Final Remarks and Resources

[00:41:02] Stacey Richter: Elizabeth Mitchell, thank you so much for being on Relentless Health Value today. 

[00:41:06] Elizabeth Mitchell: It's such a pleasure. Thank you. 

[00:41:08] 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 we're friends on LinkedIn. What you get in that email is the whole introduction of the show transcribed. There's also show notes with timestamps, thanks so much for listening.