Encore! EP413: The Intersection of Healthcare Waste, Value-Based Care, and the Potential Rising Power of PCPs, With Will Shrank, MD

[00:00:01] [SPEAKER_02]: On core of one of the most popular shows of the past year episode, The Intersection of

[00:00:07] [SPEAKER_02]: Healthcare Waste, Value-Based Care, and the Potential Rising Power of PCPs.

[00:00:13] [SPEAKER_02]: Today I speak with Will Shrank, MD.

[00:00:24] [SPEAKER_00]: American healthcare entrepreneurs and executives you want to know.

[00:00:30] [SPEAKER_00]: Relentlessly seeking value.

[00:00:32] [SPEAKER_02]: Before we kick into the show today, I just want to thank, first of all, Elkins Econ,

[00:00:38] [SPEAKER_02]: is a state legislator who wrote in the review, RHV is my single most valuable source of insights

[00:00:46] [SPEAKER_02]: into ways to improve healthcare policy.

[00:00:48] [SPEAKER_02]: Thank you so much, Elkins Econ.

[00:00:50] [SPEAKER_02]: I also want to thank Stockpicker, who the title of this review is Complexity Demystified.

[00:00:56] [SPEAKER_02]: And Stockpicker talks about how it's appreciated that we talk about complex issues in a way

[00:01:02] [SPEAKER_02]: that enables listeners to follow and understand.

[00:01:05] [SPEAKER_02]: That's really nice of you to say.

[00:01:06] [SPEAKER_02]: Thanks so much for writing that review.

[00:01:08] [SPEAKER_02]: And then lastly, Sergey at AI Health Uncut.

[00:01:12] [SPEAKER_02]: Thank you so much, first of all, for your LinkedIn posts, which I really appreciate.

[00:01:16] [SPEAKER_02]: He also mentions if you choose only one US healthcare system podcast, this should be the one.

[00:01:20] [SPEAKER_02]: I really appreciate that.

[00:01:21] [SPEAKER_02]: And with that, here is your encore.

[00:01:24] [SPEAKER_02]: My conversation today is with Will Shrank, MD.

[00:01:28] [SPEAKER_02]: Dr. Shrank led the evaluation group at CMMI.

[00:01:31] [SPEAKER_02]: He has spent time in the private sector, first at CVS Health and UPMC as chief medical officer

[00:01:38] [SPEAKER_02]: of the health plan in Pittsburgh, and then as the chief medical officer for Humana.

[00:01:43] [SPEAKER_02]: Now he is a venture partner at Andreasen Horowitz and doing some consulting for CMMI.

[00:01:49] [SPEAKER_02]: We start out this conversation talking about waste in healthcare.

[00:01:53] [SPEAKER_02]: In fact, Dr. Shrank was on a team who did a study about waste in the US healthcare system.

[00:02:00] [SPEAKER_02]: CMMI will link to it in the show notes.

[00:02:02] [SPEAKER_02]: In that study, it says estimates suggest we have upwards of a trillion dollars of waste a year.

[00:02:08] [SPEAKER_02]: There's two main groupings of said waste, turns out.

[00:02:11] [SPEAKER_02]: The first is in administrative failures.

[00:02:15] [SPEAKER_02]: There's three subcategories here, fraud, waste and abuse, administrative complexity, and

[00:02:21] [SPEAKER_02]: pricing failures.

[00:02:22] [SPEAKER_02]: Then there's the clinical failures side of the waste house.

[00:02:26] [SPEAKER_02]: There's three subcategories here as well, and they are failures in care coordination,

[00:02:33] [SPEAKER_02]: failure in care delivery, and then low value care.

[00:02:37] [SPEAKER_02]: Dr. Shrank digs in a bit on each of these in the interview that follows, but I have

[00:02:43] [SPEAKER_02]: to say I go in fast for the now what.

[00:02:47] [SPEAKER_02]: Great that we know where the waste is coming from because got to know the problems to solve

[00:02:51] [SPEAKER_02]: for them, but really what's the best way to solve for this waste?

[00:02:56] [SPEAKER_02]: You know me by now.

[00:02:58] [SPEAKER_02]: So I of course point out immediately that someone's waste is someone else's profit.

[00:03:03] [SPEAKER_02]: So that's a wrinkle and it's a really rough wrinkle because now you have groups lobbying

[00:03:08] [SPEAKER_02]: to basically protect the waste.

[00:03:10] [SPEAKER_02]: As just one example, what are pricing failures after all, if not someone else's margin?

[00:03:16] [SPEAKER_02]: Major spoiler alert here, but Dr. Shrank says one sort of broad stroke solution is aligning

[00:03:23] [SPEAKER_02]: incentives with higher quality care, paying for the longitudinal patient journey and paying

[00:03:29] [SPEAKER_02]: for outcomes.

[00:03:30] [SPEAKER_02]: If you do this, then at least the clinical failures side of the equation could improve.

[00:03:36] [SPEAKER_02]: The implication here is that if the incentive is to be accountable for value, which is,

[00:03:44] [SPEAKER_02]: you know, numerator quality denominator cost, then the supply chain has an incentive to

[00:03:50] [SPEAKER_02]: reduce its own waste because effectively at that point it's coming out of their pocket

[00:03:54] [SPEAKER_02]: as opposed to somebody else's.

[00:03:57] [SPEAKER_02]: Will this resetting of the financial model happen overnight?

[00:04:00] [SPEAKER_02]: That was a rhetorical question that we all know the answer to.

[00:04:02] [SPEAKER_02]: Commercial payers are slow to change and all but the best employers have been historically

[00:04:07] [SPEAKER_02]: at least busy making extremely lateral moves and going nowhere fast.

[00:04:12] [SPEAKER_02]: Few seem super inclined to reward and pay for what they care about rather than just

[00:04:17] [SPEAKER_02]: negotiating a price.

[00:04:20] [SPEAKER_02]: I sort of say this to Dr. Shrank and he says, yeah, true enough.

[00:04:23] [SPEAKER_02]: I'm paraphrasing with a lot of creative license right now, but he says, let's reset our

[00:04:27] [SPEAKER_02]: expectations with reality.

[00:04:28] [SPEAKER_02]: We've actually come a pretty long way, baby, in not a particularly long time if you

[00:04:34] [SPEAKER_02]: consider the whole value based thing really only started not that long ago, relatively

[00:04:39] [SPEAKER_02]: speaking. So there will be problems to overcome and bumps in the road.

[00:04:43] [SPEAKER_02]: We should expect that.

[00:04:44] [SPEAKER_02]: And we haven't had the time to work them all out yet.

[00:04:46] [SPEAKER_02]: I think a couple of other interesting insights for me, one was a little sidebar we go off

[00:04:52] [SPEAKER_02]: on about the power that PCPs might find themselves wielding if they can gang up and

[00:04:57] [SPEAKER_02]: harness it. And this is kind of starting.

[00:04:59] [SPEAKER_02]: We'll see if it goes anywhere.

[00:05:01] [SPEAKER_02]: I recently heard a story about a bunch of employed PCPs who went to their health system

[00:05:06] [SPEAKER_02]: bosses and asked to stand up in a PCP, an advanced primary care practice, able to

[00:05:12] [SPEAKER_02]: coordinate care, etc., do all the things that at this juncture we know are the right

[00:05:16] [SPEAKER_02]: things to do for patients.

[00:05:17] [SPEAKER_02]: Now, they got shot down, bam with the backhands from above.

[00:05:21] [SPEAKER_02]: I hope those engaged and activated PCPs quit and start up their own thing.

[00:05:26] [SPEAKER_02]: Maybe they will.

[00:05:27] [SPEAKER_02]: PCPs getting together here could be a way to solve for waste if they can gang up and

[00:05:32] [SPEAKER_02]: harness it. And that's actionable if you happen to be a PCP or are looking to continue

[00:05:37] [SPEAKER_02]: to employ them moving forward.

[00:05:39] [SPEAKER_02]: The potential rising power of PCPs might cause some health systems to rethink some of

[00:05:44] [SPEAKER_02]: the choices they are making, i.e.

[00:05:47] [SPEAKER_02]: the choice to employ PCPs as RVU referral machines.

[00:05:51] [SPEAKER_02]: PCPs better than anyone can see the harm inflicted by the business model that forces a

[00:05:56] [SPEAKER_02]: drive-by PCP level of care.

[00:05:58] [SPEAKER_02]: Moral injury is at an all-time high.

[00:06:01] [SPEAKER_02]: And in addition, I just saw that study recently that showed to do all the administrative

[00:06:05] [SPEAKER_02]: work of a PCP these days, it would take longer than 24 hours in a day.

[00:06:10] [SPEAKER_02]: If you're a self-insured employer, I'd also kind of take note of this because it also

[00:06:15] [SPEAKER_02]: could be actionable for you.

[00:06:17] [SPEAKER_02]: Someone who would know told me recently that if enough employers demanded some value

[00:06:22] [SPEAKER_02]: based accountability, some advanced primary care going on, even a dominant consolidated

[00:06:27] [SPEAKER_02]: health system would listen.

[00:06:28] [SPEAKER_02]: So there seems to be some alignment here between employers and PCPs if these groups

[00:06:33] [SPEAKER_02]: can come together and collaborate.

[00:06:35] [SPEAKER_02]: In sum, we have a waste problem in this country.

[00:06:38] [SPEAKER_02]: Aligning incentives might be one way to curb that waste.

[00:06:41] [SPEAKER_02]: My name is Stacey Richter.

[00:06:43] [SPEAKER_02]: This podcast is sponsored by Aventria Health Group.

[00:06:46] [SPEAKER_02]: Will Schrank, MD.

[00:06:47] [SPEAKER_02]: Welcome to Relentless Health Value.

[00:06:49] [SPEAKER_01]: It is great to be here.

[00:06:50] [SPEAKER_01]: So let's explore this topic.

[00:06:51] [SPEAKER_02]: Can we cut health care waste and lower cost while actually improving patient care?

[00:06:56] [SPEAKER_02]: Maybe the best place to start is talking about this word waste or wasteful spending.

[00:07:02] [SPEAKER_02]: Could you just categorize what this waste tends to consist of?

[00:07:06] [SPEAKER_01]: I think it's really important to have a standard framework for how you think about waste because

[00:07:12] [SPEAKER_01]: you are correct that many people think about certain features but not necessarily the whole

[00:07:16] [SPEAKER_01]: set of potential sources of waste.

[00:07:19] [SPEAKER_01]: So the Institute of Medicine came up with a definition and it's been reused by a number

[00:07:24] [SPEAKER_01]: of organizations over the last 12 years with six categories of waste.

[00:07:31] [SPEAKER_01]: The overall definition is dollars or effort being spent that doesn't meaningfully improve,

[00:07:37] [SPEAKER_01]: cannot be thought of as oriented around improving the health or the experience or the outcome

[00:07:43] [SPEAKER_01]: of the patient.

[00:07:43] [SPEAKER_01]: The six categories, three of them are focused on health care delivery and three are focused

[00:07:49] [SPEAKER_01]: more administratively.

[00:07:50] [SPEAKER_01]: So the health care delivery, one is low value care providing a service that would not be

[00:07:56] [SPEAKER_01]: considered appropriate for a patient, something that would not be indicated for a patient.

[00:08:01] [SPEAKER_01]: The second is failure in care delivery, the right care isn't provided to a patient at

[00:08:05] [SPEAKER_01]: the right time.

[00:08:07] [SPEAKER_01]: And the third is around failures and care transitions which is a place that we know there

[00:08:11] [SPEAKER_01]: are huge challenges around patients moving from sites of care.

[00:08:16] [SPEAKER_01]: The other three categories are more administrative in nature.

[00:08:19] [SPEAKER_01]: One is fraud, waste and abuse.

[00:08:21] [SPEAKER_01]: Another is pricing failures which is something that we spend a lot of time thinking about

[00:08:26] [SPEAKER_01]: here in the US.

[00:08:27] [SPEAKER_01]: And the last is administrative complexity which really is a result of the complexities

[00:08:32] [SPEAKER_01]: of the fragmented billing system we have in the US whether it's prior authorization or

[00:08:37] [SPEAKER_01]: coding.

[00:08:38] [SPEAKER_01]: A lot of the work that's just focused on documentation for authorizing a treatment rather than actually

[00:08:45] [SPEAKER_01]: delivering care.

[00:08:46] [SPEAKER_01]: So it's really a pretty broad definition of waste and there's a lot of what we do in

[00:08:52] [SPEAKER_01]: health care can kind of ultimately fit into many of those categories.

[00:08:55] [SPEAKER_02]: And I could definitely see that there, it's not like there's a bright line either in a

[00:08:59] [SPEAKER_02]: lot of these categories which I'll recap in a sec.

[00:09:02] [SPEAKER_02]: Like it's not clear what is appropriate care especially when some of these things take

[00:09:09] [SPEAKER_02]: potentially years or even decades to accrue, right?

[00:09:13] [SPEAKER_02]: Like if we didn't do the X intervention then this outcome would or would not have happened.

[00:09:20] [SPEAKER_02]: So as you said, you need a standard framework though to even start conceiving of this because

[00:09:25] [SPEAKER_02]: if everybody's just bandying about this term waste and no one's quite clear what that means

[00:09:30] [SPEAKER_02]: you can't come up with a solution to a problem that you haven't clearly defined.

[00:09:37] [SPEAKER_02]: You could at least consider it a start.

[00:09:38] [SPEAKER_02]: And you had said that the definition is dollars that don't improve health or outcomes or the

[00:09:44] [SPEAKER_02]: experience of a patient.

[00:09:46] [SPEAKER_02]: You gave six categories of said waste starting with the care delivery grouping.

[00:09:52] [SPEAKER_02]: We have low value care that's not appropriate.

[00:09:55] [SPEAKER_02]: We have failure in the care delivery system, i.e. botched surgeries or whatnot.

[00:10:01] [SPEAKER_02]: Then we have the third which is failure in care transitions, lack of coordinated care,

[00:10:07] [SPEAKER_02]: etc.

[00:10:08] [SPEAKER_02]: So those are three biggies and then we move into the administrative area.

[00:10:13] [SPEAKER_02]: We got fraud, waste and abuse, FWA.

[00:10:16] [SPEAKER_02]: We have pricing failures.

[00:10:17] [SPEAKER_02]: Is the market actually dynamic?

[00:10:20] [SPEAKER_02]: Then administrative complexity which we talked about actually at some length with Dr. David

[00:10:25] [SPEAKER_02]: Schenker in a show last year.

[00:10:28] [SPEAKER_02]: If you're just going to quantify what all this adds up to, what's your take on what these

[00:10:33] [SPEAKER_02]: six things total?

[00:10:34] [SPEAKER_01]: We went through a pretty rigorous exercise in 2019.

[00:10:39] [SPEAKER_01]: I was working with a couple of colleagues at University of Pittsburgh and at Humana.

[00:10:43] [SPEAKER_01]: We published a review in JAMA where we assessed the published literature and also government

[00:10:49] [SPEAKER_01]: reports to try to come up with an estimate for each of those six categories and rolled

[00:10:55] [SPEAKER_01]: them up.

[00:10:55] [SPEAKER_01]: They're relatively rough estimates.

[00:10:57] [SPEAKER_01]: But our estimate was that somewhere in the order of $750 billion to close to a trillion

[00:11:04] [SPEAKER_01]: dollars in the U.S. is wasted every year on care that meets one of those six categories.

[00:11:11] [SPEAKER_01]: To put that into context, that's more than we spend on defense.

[00:11:14] [SPEAKER_01]: That's more than the GDP of most countries and virtually any country.

[00:11:18] [SPEAKER_01]: It's more than a quarter of the U.S. healthcare spending.

[00:11:21] [SPEAKER_01]: It is really an astounding number.

[00:11:23] [SPEAKER_01]: As we think about the total cost of care in the United States, we think about affordability

[00:11:29] [SPEAKER_01]: of healthcare and the impact that healthcare costs is having on our economy more broadly

[00:11:34] [SPEAKER_01]: and the extent to which healthcare costs are really kind of squeezing out opportunities

[00:11:38] [SPEAKER_01]: to invest in other things that potentially could offer more value, certainly more value

[00:11:43] [SPEAKER_01]: than the waste.

[00:11:43] [SPEAKER_01]: We are wasting so much money in healthcare.

[00:11:46] [SPEAKER_01]: If we could just do a better job of figuring out the right way to create incentives and

[00:11:53] [SPEAKER_01]: infrastructure and strategies and tactics to reduce waste, it would alleviate a huge

[00:11:58] [SPEAKER_01]: amount of stress on our healthcare system and on our economy in general.

[00:12:02] [SPEAKER_02]: It's a pretty sassy number here, this $1 trillion.

[00:12:05] [SPEAKER_02]: I would almost say that dollar amount in and of itself could beg the question, why existentially

[00:12:13] [SPEAKER_02]: does this amount of waste exist if we have a functioning market-driven healthcare system?

[00:12:20] [SPEAKER_02]: So is one potential conclusion that we do not actually have a market-driven healthcare

[00:12:24] [SPEAKER_02]: system or that we have a market-driven healthcare system, but some parties are a whole lot better

[00:12:29] [SPEAKER_02]: at it than others.

[00:12:30] [SPEAKER_02]: Because I think the one thing that doesn't get talked about maybe enough is that obviously

[00:12:35] [SPEAKER_02]: it's not like that waste is plunging off the side of a cliff and sinking to the bottom

[00:12:38] [SPEAKER_02]: of the sea like some kind of lost treasure here.

[00:12:40] [SPEAKER_02]: We have a trillion dollars that's going into somebody's pocket.

[00:12:44] [SPEAKER_02]: Our waste is their profit.

[00:12:45] [SPEAKER_02]: So what we're discussing here really isn't cutting the fat off a pork chop, it's literally

[00:12:50] [SPEAKER_02]: preventing someone from taking money that they have been taking.

[00:12:54] [SPEAKER_02]: And do you feel like that is actually the heart of this?

[00:12:58] [SPEAKER_02]: That we're prying dollars out of somebody's hand and that exponentially makes this harder to do?

[00:13:05] [SPEAKER_01]: Yes.

[00:13:05] [SPEAKER_01]: So certainly one person's waste can absolutely be another person's profit.

[00:13:11] [SPEAKER_01]: There's a pretty good explanation for all these sources of waste and it's very much

[00:13:15] [SPEAKER_01]: aligned with how the incentives are structured in the US healthcare system.

[00:13:20] [SPEAKER_01]: You can come up with a pretty good explanation for every one of those categories of why it happens.

[00:13:25] [SPEAKER_01]: There are incentives to promote waste in every one of those categories, whether it's the

[00:13:30] [SPEAKER_01]: payment models themselves, whether it's the fragmentation and the sort of adversarial

[00:13:35] [SPEAKER_01]: nature of payers and providers, whether it's the way the government protects monopolies

[00:13:41] [SPEAKER_01]: for patented products.

[00:13:44] [SPEAKER_01]: You walk through each of those categories and you can come up with a pretty clear explanation

[00:13:48] [SPEAKER_01]: of why it happens.

[00:13:50] [SPEAKER_01]: And I think the good news is that evidence has been published to suggest that we can

[00:13:55] [SPEAKER_01]: reduce waste in each of those categories.

[00:13:57] [SPEAKER_01]: We estimated how we would reduce waste if we were able to scale successful strategies.

[00:14:03] [SPEAKER_01]: And in particular, in the care delivery area, when you look at some of the evidence that's

[00:14:08] [SPEAKER_01]: come out of these progressive value-based models that have really taken off over the

[00:14:13] [SPEAKER_01]: last 10 years, there's pretty compelling evidence that we can meaningfully reduce waste through

[00:14:18] [SPEAKER_01]: aligning payment models with producing the outcomes we want to produce.

[00:14:22] [SPEAKER_01]: And certainly, it doesn't happen instantaneously, but over time as you build the right kind

[00:14:28] [SPEAKER_01]: of infrastructure and you really transform care delivery models, be more integrated, less

[00:14:33] [SPEAKER_01]: fragmented, a lot of these sources of waste should be able to be addressed.

[00:14:38] [SPEAKER_01]: I don't think we'll ever have a waste-free health care system.

[00:14:42] [SPEAKER_01]: That's impossible to fathom.

[00:14:44] [SPEAKER_01]: But I think we're seeing evidence today of approaches we can leverage, whether it's new

[00:14:50] [SPEAKER_01]: payment models, whether it's transformed integrated delivery approaches, whether it's

[00:14:55] [SPEAKER_01]: leveraging technology in new and better ways that we can reduce waste in really important

[00:15:01] [SPEAKER_01]: and meaningful ways.

[00:15:02] [SPEAKER_02]: Just recapping what you said there, there is either hypothetically or proven or both

[00:15:08] [SPEAKER_02]: ways that some of this waste can be reduced.

[00:15:13] [SPEAKER_02]: And you mentioned reducing the fragmentation that causes a whole host of issues that if

[00:15:21] [SPEAKER_02]: care is not integrated, then patients slip through the transitions of care in a kind

[00:15:27] [SPEAKER_02]: of big, bad, expensive way.

[00:15:29] [SPEAKER_02]: You talked about solving for the adversarial nature of payers and providers.

[00:15:34] [SPEAKER_02]: I could also say solving for the incentive that both of them have, which is another thing

[00:15:38] [SPEAKER_02]: that you mentioned when you said the system has incentives to create waste.

[00:15:42] [SPEAKER_02]: There are any number of examples actually where either through vertical integration

[00:15:47] [SPEAKER_02]: or through kind of this symbiotic desire to raise the price of care, both payers and providers

[00:15:54] [SPEAKER_02]: actually win.

[00:15:55] [SPEAKER_02]: You talked about the government protecting monopolies.

[00:15:58] [SPEAKER_02]: So there's a number of reasons why this whole thing happens, which we've probably had 50

[00:16:03] [SPEAKER_02]: shows on, so not to delve into those.

[00:16:05] [SPEAKER_02]: But you mentioned solving for this could be new payment models, for example, and I'm sure

[00:16:11] [SPEAKER_02]: other things as well.

[00:16:13] [SPEAKER_02]: Do you want to just dig into that a little bit?

[00:16:15] [SPEAKER_02]: Like either from a hypothetical or from a proven standpoint, what leverage do we have

[00:16:19] [SPEAKER_02]: right now or frameworks could we use to think about cutting out this $1 trillion that's

[00:16:25] [SPEAKER_02]: not accruing to better patient health?

[00:16:28] [SPEAKER_01]: Yeah, there are a couple different ways of looking at the transition from fee-for-service

[00:16:34] [SPEAKER_01]: to value-based care over the last 11, 12, 13 years.

[00:16:38] [SPEAKER_01]: Some would argue that during this time period, I think we set very aggressive goals largely

[00:16:46] [SPEAKER_01]: to signal to the sector that there is an inevitability, that there's going to be a dramatic movement

[00:16:51] [SPEAKER_01]: towards value-based adoption.

[00:16:53] [SPEAKER_01]: We also set these very audacious goals that we haven't come close to meeting.

[00:16:56] [SPEAKER_01]: So, you know, there was Secretary Burwell talked about 100% adoption of value-based care in

[00:17:03] [SPEAKER_01]: a relatively short timeframe, which was probably unrealistic, although I think a useful message

[00:17:09] [SPEAKER_01]: at the time.

[00:17:10] [SPEAKER_01]: And some would say it's moved slowly or that we haven't gotten the results we had anticipated

[00:17:14] [SPEAKER_01]: and that a lot of the models that CMMI have tested haven't been scaled, that there have

[00:17:19] [SPEAKER_01]: been incremental benefits and changes, but they haven't been able to scale the majority

[00:17:22] [SPEAKER_01]: of the models that have been tested.

[00:17:24] [SPEAKER_01]: That is not my read of where we are in the movement towards value-based care.

[00:17:30] [SPEAKER_01]: My read is that over 12 years ago, value-based care was a nascent concept.

[00:17:36] [SPEAKER_01]: We, I think naturally, threw a lot of spaghetti at the wall.

[00:17:40] [SPEAKER_01]: We tried to encourage really a wildfire of innovation and test a whole host of models.

[00:17:46] [SPEAKER_01]: There are some certain themes that are really kind of coming through during this time period.

[00:17:51] [SPEAKER_01]: We're learning that the shared savings program, which is the largest, it is a scaled model,

[00:17:56] [SPEAKER_01]: is available for any provider in the traditional Medicare program.

[00:18:00] [SPEAKER_01]: Now represents about 40% of traditional Medicare.

[00:18:03] [SPEAKER_01]: And that program, year over year, we're seeing more and more savings.

[00:18:08] [SPEAKER_01]: The last time it was measured, I believe it was about $1.6 billion in savings.

[00:18:12] [SPEAKER_01]: And the overwhelming majority of participants are saving money.

[00:18:16] [SPEAKER_01]: And those numbers are all improving every single year in terms of the amount saved

[00:18:20] [SPEAKER_01]: and the proportion of providers that are in the savings.

[00:18:23] [SPEAKER_01]: There's not a switch you flip to be able to deliver higher quality,

[00:18:28] [SPEAKER_01]: lower waste, better value care.

[00:18:31] [SPEAKER_01]: You got to work at it.

[00:18:32] [SPEAKER_01]: And I think we're starting to really learn those lessons around how to do it.

[00:18:35] [SPEAKER_01]: The shared savings program is the best example.

[00:18:38] [SPEAKER_01]: I think across the CMMI models, similarly, we're starting to see really important themes about the

[00:18:43] [SPEAKER_01]: success or the utility of having better primary care and leveraging total cost of care models

[00:18:49] [SPEAKER_01]: as the framework for driving better care at lower cost with bundled care underneath.

[00:18:55] [SPEAKER_01]: And when all this work started, I think there was more of a

[00:18:58] [SPEAKER_01]: throw a bunch of spaghetti at the wall.

[00:19:00] [SPEAKER_01]: I think today we kind of know what the payment model of the future is.

[00:19:03] [SPEAKER_01]: It's a model where we have a total cost of care,

[00:19:05] [SPEAKER_01]: primary care oriented model with bundles underneath, a nested model.

[00:19:09] [SPEAKER_01]: And back to your question, what are we learning?

[00:19:12] [SPEAKER_01]: How are we progressing?

[00:19:13] [SPEAKER_01]: That's where all the evidence is coming from through those models around how to reduce waste,

[00:19:18] [SPEAKER_01]: how to deliver better care, better outcomes and lower healthcare costs.

[00:19:22] [SPEAKER_01]: You know, I'm really bullish from what I'm seeing in the marketplace.

[00:19:27] [SPEAKER_01]: You know, we, yes, we don't have 100% participation in value-based care,

[00:19:31] [SPEAKER_01]: but in Medicare, we got over 50%.

[00:19:34] [SPEAKER_01]: And if you told me 12 years ago, we'd move more than half of the Medicare market,

[00:19:37] [SPEAKER_01]: a lot of people would've been very excited about that.

[00:19:39] [SPEAKER_01]: We've seen massive transformation in how care is delivered,

[00:19:42] [SPEAKER_01]: integration of physical behavioral health, complex care case management,

[00:19:46] [SPEAKER_01]: leveraging data and new ways to risk stratify and be more proactive

[00:19:50] [SPEAKER_01]: in managing patients with complex conditions.

[00:19:52] [SPEAKER_01]: I think there's just a lot to be excited about

[00:19:54] [SPEAKER_01]: in terms of how these models continue to progress and how we're learning.

[00:19:59] [SPEAKER_02]: Nicole Lotta, M.D.: Which is a fair statement.

[00:20:00] [SPEAKER_02]: I just finished reading Dr. Robert Pearl's book on caring.

[00:20:05] [SPEAKER_02]: He basically wrote a whole book about just how physicians slash medical culture in this country

[00:20:12] [SPEAKER_02]: really can inhibit change.

[00:20:15] [SPEAKER_02]: There's a whole culture that is really tough to move for a number of good and really bad reasons,

[00:20:25] [SPEAKER_02]: frankly.

[00:20:26] [SPEAKER_02]: Dr. Justin Marchegiani Yeah.

[00:20:26] [SPEAKER_02]: Nicole Lotta, M.D.: It's an interesting read.

[00:20:29] [SPEAKER_02]: And because of that, I do feel like there is a lot of focus on the negative,

[00:20:34] [SPEAKER_02]: just how slow going this is.

[00:20:35] [SPEAKER_02]: And anybody who wants to find a problem can always find a problem.

[00:20:40] [SPEAKER_02]: And sometimes it's easier to talk about the failures of the journey than what the successes

[00:20:47] [SPEAKER_02]: may have been.

[00:20:49] [SPEAKER_02]: At the same time, if we're saying that MSSP, the shared savings program has netted 1.6 billion

[00:20:56] [SPEAKER_02]: and we're staring down the face of a trillion dollars worth of simply waste using cost savings

[00:21:02] [SPEAKER_02]: as a success metric there may not be the best way to go.

[00:21:07] [SPEAKER_01]: Dr. Justin Marchegiani No, I think that's right.

[00:21:07] [SPEAKER_01]: But I think it's important to think about that in the setting of the counterfactual.

[00:21:11] [SPEAKER_01]: We've built a backbone of extraordinary waste on a fee-for-service chassis in the U.S. healthcare

[00:21:18] [SPEAKER_01]: system.

[00:21:18] [SPEAKER_01]: We are not gonna fix that waste problem on a fee-for-service chassis.

[00:21:23] [SPEAKER_01]: The places where we're seeing evidence of improvement are where we're aligning financial

[00:21:28] [SPEAKER_01]: incentives with the outcomes we're trying to produce.

[00:21:30] [SPEAKER_01]: I wouldn't—I'll be first to say that this is not easy to change culture, change behavior,

[00:21:35] [SPEAKER_01]: to manage change.

[00:21:36] [SPEAKER_01]: And there is not a simple switch to flip.

[00:21:39] [SPEAKER_01]: But I think we're getting better at it.

[00:21:40] [SPEAKER_01]: And I think that's the right direction for us to head.

[00:21:43] [SPEAKER_01]: And I think that those who argue that we're not going fast enough or this is not what

[00:21:48] [SPEAKER_01]: it was cracked up to be, give me a better alternative.

[00:21:51] [SPEAKER_02]: Tanaa Ransom, PhD I think many of them would say it's actually

[00:21:53] [SPEAKER_02]: all this value-based stuff and all of its—you know, the consultants, I just saw some very

[00:21:59] [SPEAKER_02]: cynical posts where someone wrote the consultants have made more on value-based care than what

[00:22:03] [SPEAKER_02]: we've managed to save.

[00:22:04] [SPEAKER_02]: So, there certainly is this cynicism.

[00:22:07] [SPEAKER_02]: But to your point, you look at like we had Larry Bauer on the show talking about three

[00:22:12] [SPEAKER_02]: bright spots where frail elderly patients are getting really good care as opposed to

[00:22:19] [SPEAKER_02]: the really bad care that you frequently hear about when you even say the words frail elderly

[00:22:25] [SPEAKER_02]: patient.

[00:22:26] [SPEAKER_02]: And all of these examples that he talked about were built on a capitated model or on

[00:22:33] [SPEAKER_02]: a model that facilitated patients getting coordinated care and there being clinicians

[00:22:42] [SPEAKER_02]: who were not worried about what code they were going to put in the computer when they

[00:22:47] [SPEAKER_02]: helped a patient's behavioral health or helped a patient figure out how they're going to

[00:22:50] [SPEAKER_02]: get transportation or help them access community services or whatnot.

[00:22:55] [SPEAKER_02]: So, viscerally and intuitively, the points that you're making makes sense.

[00:22:59] [SPEAKER_01]: I would just encourage folks to take a good look at different primary care models that

[00:23:06] [SPEAKER_01]: are managing the health of vulnerable complex seniors.

[00:23:09] [SPEAKER_01]: You take one good look at a senior-focused, team-based, fully capitated, really patient

[00:23:15] [SPEAKER_01]: centered model, that is the care you want your mom or your dad or your aunt or your

[00:23:20] [SPEAKER_01]: uncle to get.

[00:23:21] [SPEAKER_01]: You're not going to want your aunt or uncle to get care from the local primary care doc

[00:23:26] [SPEAKER_01]: that is focused on having your relative come into the office as frequently as possible

[00:23:31] [SPEAKER_01]: and to bill as much as they can for each individual visit.

[00:23:34] [SPEAKER_01]: You're going to want somebody that can help manage pharmacy, that can help man, you know,

[00:23:39] [SPEAKER_01]: the complexity of the pharmaceutical regimens, that can help manage social issues, that can

[00:23:44] [SPEAKER_01]: help manage the sort of complex care across multiple specialties, that can help managing

[00:23:50] [SPEAKER_01]: God forbid someone needs oncology services, that can help navigate the complexity of those

[00:23:56] [SPEAKER_01]: of services.

[00:23:57] [SPEAKER_01]: That is what primary care and that's what the healthcare system needs to be and that

[00:24:01] [SPEAKER_01]: doesn't, it just never has evolved in a fee-for-service arrangement.

[00:24:05] [SPEAKER_02]: Maika Leibbrandt Here's, I'm not sure if this is a counter

[00:24:07] [SPEAKER_02]: example or a reason why in certain markets, if you are a provider organization in the

[00:24:15] [SPEAKER_02]: community, this is actually really hard.

[00:24:18] [SPEAKER_02]: We did have Dan O'Neill on the podcast.

[00:24:20] [SPEAKER_02]: He's a provider organization in California and he cannot get a hold of his payer.

[00:24:27] [SPEAKER_02]: You know, he's trying to be value-based and no one is helping.

[00:24:31] [SPEAKER_02]: Payers are completely not interested.

[00:24:32] [SPEAKER_02]: The payers or the IPAs themselves are maybe engaged in value-based contracting but they're

[00:24:38] [SPEAKER_02]: paying all of the physicians fee-for-service and then just scraping up all the value-based

[00:24:45] [SPEAKER_02]: incentives that are out there because turns out the physicians are pretty good and despite

[00:24:50] [SPEAKER_02]: the fact they're not necessarily getting, you know, in air quotes, incented, they're

[00:24:53] [SPEAKER_02]: still able to deliver the benchmark level of care.

[00:24:58] [SPEAKER_02]: Then I also had a listener write in the other day that she asked her payer for some kind

[00:25:05] [SPEAKER_02]: of incentive to provide a value-based more longitudinal program and the payer told her

[00:25:11] [SPEAKER_02]: and this is a local nonprofit payer that in quotes, all fee-for-service is high value

[00:25:16] [SPEAKER_02]: care so why would we give you more money?

[00:25:18] [SPEAKER_02]: So like this is the environment that some provider organizations are living in.

[00:25:24] [SPEAKER_02]: What's your advice there if you have any?

[00:25:27] [SPEAKER_01]: Dr. O'Neill I think it is challenging in particular

[00:25:30] [SPEAKER_01]: if you're taking care of a higher proportion of commercial younger healthier patients.

[00:25:36] [SPEAKER_01]: I will say though and if you look at sort of the Medicare Advantage market as a bellwether,

[00:25:41] [SPEAKER_01]: increasingly you're seeing primary care providers and communities really align more with the

[00:25:46] [SPEAKER_01]: payer taking more risk and together working to commoditize specialists and health systems.

[00:25:55] [SPEAKER_01]: And if there's a warning to providers out there, I think it's if you work in a health

[00:25:59] [SPEAKER_01]: system, you're a specialist and you're not figuring out how to be part of a broader population

[00:26:05] [SPEAKER_01]: health management strategy, there's a path to being really deeply commoditized in a relatively

[00:26:11] [SPEAKER_01]: short amount of time if the sort of primary care value-based model continues to propagate.

[00:26:19] [SPEAKER_01]: And I think it's gonna.

[00:26:20] [SPEAKER_02]: Kaitlin Luna Can you dig into that?

[00:26:21] [SPEAKER_02]: It's like you said that if you're a specialist, subspecialist and you're not figuring out

[00:26:25] [SPEAKER_02]: how to integrate within a population health-based approach, I'm taking it working with some

[00:26:33] [SPEAKER_02]: of these advanced primary care groups who are really mining data and really thinking through

[00:26:38] [SPEAKER_02]: referral patterns, etc.

[00:26:40] [SPEAKER_01]: Whether it's as a sub-cap, whether it's as like a center of excellence, source of bundles for

[00:26:46] [SPEAKER_01]: high-performing primary care.

[00:26:49] [SPEAKER_01]: Like if you're a health system and you think you're just gonna kind of continue to squeak

[00:26:54] [SPEAKER_01]: out margins based on the number of beds you have and a steady stream of patients coming

[00:27:01] [SPEAKER_01]: in for often preventable hospitalizations, I think you should think differently because

[00:27:07] [SPEAKER_01]: we're gonna keep getting better at taking care of things in the home and we're gonna

[00:27:10] [SPEAKER_01]: keep getting better at keeping people out of the hospital for admissions that don't

[00:27:14] [SPEAKER_01]: need to be hospitalized or for social reasons.

[00:27:17] [SPEAKER_01]: And I think if you're a hospital, you have to be deeply aligning with primary care and

[00:27:21] [SPEAKER_01]: thinking about how you manage populations in the area, the region that you operate.

[00:27:26] [SPEAKER_01]: In a lot of ways, I think that's a better model from a longer-term perspective, a better

[00:27:30] [SPEAKER_01]: model of care.

[00:27:31] [SPEAKER_01]: You have health systems that are deeply aligned with their communities, with community-based

[00:27:35] [SPEAKER_01]: organizations that they really think about improving the health of a local region.

[00:27:41] [SPEAKER_01]: It's a really appealing model for driving better health at lower cost.

[00:27:44] [SPEAKER_01]: It's not really what we're seeing across the country with relatively few exceptions.

[00:27:49] [SPEAKER_01]: The places where you're seeing real movement towards population health prioritization and

[00:27:54] [SPEAKER_01]: a focus on managing the health of a local community is these risk, fully capitated primary

[00:28:00] [SPEAKER_01]: care organizations that are really changing the model around how they care for seniors

[00:28:05] [SPEAKER_01]: in an area.

[00:28:07] [SPEAKER_02]: Kaitlin Luna, M.D.: So I heard what you just said about how despite the fact that there

[00:28:12] [SPEAKER_02]: are some very successful advanced primary care groups, comprehensive primary care groups

[00:28:17] [SPEAKER_02]: who are producing some pretty great outcomes at maybe even approximately the same cost.

[00:28:24] [SPEAKER_02]: I do sometimes think to myself that the object of the game could equally be having the same

[00:28:32] [SPEAKER_02]: being cost neutral if you're producing far better outcomes and a far better patient experience.

[00:28:37] [SPEAKER_02]: I wouldn't consider that a fail by any stretch.

[00:28:40] [SPEAKER_02]: But despite the fact that this whole idea of advanced primary care, comprehensive primary

[00:28:47] [SPEAKER_02]: care becoming fairly inarguable at this juncture, you also just said that we're not really seeing

[00:28:56] [SPEAKER_02]: hospital systems embrace this across the country.

[00:28:59] [SPEAKER_02]: What is being embraced across the country, if I'm just going to make probably a slightly

[00:29:03] [SPEAKER_02]: unfair broad stroke here, is that health systems bought up all the local PCPs and are rewarding

[00:29:11] [SPEAKER_02]: our views to those who refer early and often inside the health system and reduce network

[00:29:19] [SPEAKER_02]: leakage and you know all the typical things that a fee for service hospital is going to

[00:29:24] [SPEAKER_02]: do to drive up heads in beds.

[00:29:27] [SPEAKER_02]: Are they just going to continue doing that until they can't anymore?

[00:29:31] [SPEAKER_02]: And is that a good strategy?

[00:29:34] [SPEAKER_02]: What's your advice to a health system who may have PCPs coming to them who are saying

[00:29:41] [SPEAKER_02]: because it's a much nicer, less morally injurious, less burnout-y model for PCP as an individual

[00:29:48] [SPEAKER_02]: to have a smaller patient panel, a team that supports them, etc.

[00:29:52] [SPEAKER_02]: You hear over and over, it was just a summer short with Dr. Scott Kennard where they

[00:29:56] [SPEAKER_02]: transformed a practice and then somebody came in and tried to untransform the practice and

[00:30:00] [SPEAKER_02]: it was basically mutiny on the bounty with clinicians.

[00:30:03] [SPEAKER_02]: Like they were like, I am not going back.

[00:30:04] [SPEAKER_02]: This is so much better.

[00:30:06] [SPEAKER_02]: So you do have PCPs kind of rising up to a certain degree asking their employer, can

[00:30:11] [SPEAKER_02]: we do this?

[00:30:12] [SPEAKER_02]: And then I have heard several examples where the health system employer was like, no.

[00:30:17] [SPEAKER_01]: If I were to guess, if I were to be finishing my residency in July of this year, I guess

[00:30:24] [SPEAKER_01]: I would have just finished my residency.

[00:30:26] [SPEAKER_01]: And I had my choice of working at oriented primary care organization associated with

[00:30:33] [SPEAKER_01]: a local health system here or working at a local CVS in an Oak Street clinic.

[00:30:40] [SPEAKER_01]: Obviously, that transition hasn't happened yet.

[00:30:43] [SPEAKER_01]: Or one of the many sort of burgeoning new primary care models.

[00:30:48] [SPEAKER_01]: I don't think that's a hard decision for me.

[00:30:50] [SPEAKER_01]: I would unquestionably pick a model where there's better technology to help me, that

[00:30:55] [SPEAKER_01]: there's a team around me to help manage the complexities of the patients that I care for

[00:31:01] [SPEAKER_01]: and where my incentives are really aligned with the reason I went to medical school

[00:31:04] [SPEAKER_01]: and chose to be in a primary care doc in the first place.

[00:31:08] [SPEAKER_01]: I'm betting on the fact that's where younger doctors' hearts and minds are.

[00:31:13] [SPEAKER_01]: I think it's hard to change some older doctors, of course, who have made a great career taking

[00:31:18] [SPEAKER_01]: great care of people and whose intentions and motivations are nothing but good, but for

[00:31:23] [SPEAKER_01]: whom change is hard.

[00:31:24] [SPEAKER_01]: But I think we're going to see a new generation of primary care providers that are excited

[00:31:29] [SPEAKER_01]: to participate in these new models.

[00:31:31] [SPEAKER_02]: Kaitlin Luna, M.D.: So the message to some of these maybe old school health systems is

[00:31:37] [SPEAKER_02]: maybe not today, but you're going to have a terrible time recruiting and retaining primary

[00:31:42] [SPEAKER_02]: care doctors in the future if you continue along this path.

[00:31:45] [SPEAKER_02]: So it's going to be a bit of a generational shift, but you're going to get caught in

[00:31:50] [SPEAKER_02]: the compactor.

[00:31:50] [SPEAKER_01]: Look, if you've got United and Humana and CVS all hiring literally, they're all going

[00:31:58] [SPEAKER_01]: to be hiring many hundreds of primary care docs in the years to come.

[00:32:02] [SPEAKER_01]: There's going to be a lot of competition for primary care talent and I think you're going

[00:32:07] [SPEAKER_01]: to see primary care docs getting paid more and more of a premium and I think they're going

[00:32:12] [SPEAKER_01]: to be calling their shots and I don't imagine that they're going to want to be in an RVU

[00:32:16] [SPEAKER_01]: oriented, you know, volume premium kind of setting.

[00:32:21] [SPEAKER_02]: Kaitlin Luna, M.D.: Yeah.

[00:32:21] [SPEAKER_02]: And speaking of clinicians finding their voice, obviously we just had because it's all over

[00:32:27] [SPEAKER_02]: the news the UHC utilization of this algorithm to deny care and not letting clinicians override

[00:32:34] [SPEAKER_02]: said algorithms.

[00:32:35] [SPEAKER_02]: So patients who needed care as per their clinicians were not able to get it.

[00:32:39] [SPEAKER_02]: I'm taking this whole thing actually as good news because there was a huge outcry, enough

[00:32:46] [SPEAKER_02]: of an outcry that there was a change.

[00:32:50] [SPEAKER_02]: So between that and the rest of this conversation it almost feels like PCPs and other clinicians

[00:32:55] [SPEAKER_02]: almost have two choices that may be potentially viable.

[00:33:01] [SPEAKER_02]: One is speak up because enough voices who are pointing out some really egregious stuff

[00:33:08] [SPEAKER_02]: could actually get listened to but if not there's the opportunity to vote with your feet.

[00:33:13] [SPEAKER_02]: It almost sounds like if primary care physicians have a choice where they want to work and where

[00:33:18] [SPEAKER_02]: they want to go that through the power that is afforded in that equation it holds everybody

[00:33:25] [SPEAKER_02]: accountable to patient care assuming that the PCPs and I think we can assume this by

[00:33:30] [SPEAKER_02]: and large that the PCPs are thinking of their patients and are patient oriented.

[00:33:35] [SPEAKER_01]: Dr. Will Schrank, M.D.: I think that's right.

[00:33:35] [SPEAKER_02]: Kaitlin Luna, M.D.: Well thank you.

[00:33:36] [SPEAKER_02]: Dr. Will Schrank, thank you so much for being on Relentless Health Value today.

[00:33:40] [SPEAKER_01]: Dr. Will Schrank, M.D.: I just really appreciate that you're trying to shine a light on some

[00:33:44] [SPEAKER_01]: of these challenges we're having as a healthcare system as we're trying to make changes.

[00:33:48] [SPEAKER_01]: Changing the healthcare system is hard.

[00:33:50] [SPEAKER_01]: We saw a couple of things that changed really fast during the pandemic like virtual care

[00:33:54] [SPEAKER_01]: adoption but for the most part these cultural changes are really hard and I love that you're

[00:34:00] [SPEAKER_01]: engaging in these conversations trying to get people to think about it, to talk about it because

[00:34:05] [SPEAKER_01]: we need to get more and more energy and alignment and focus if we're going to see real meaningful

[00:34:11] [SPEAKER_01]: improvement.

[00:34:12] [SPEAKER_02]: Kaitlin Luna, M.D.: So let's talk about going over to our website and typing your email

[00:34:16] [SPEAKER_02]: address in the box to get the weekly email about the show that has come out.

[00:34:21] [SPEAKER_02]: Sometimes people don't do that because they have subscribed on Apple Podcasts or Spotify

[00:34:26] [SPEAKER_02]: and or we're friends on LinkedIn.

[00:34:29] [SPEAKER_02]: What you get in that email is the introduction of the show transcribed.

[00:34:33] [SPEAKER_02]: There's also show notes with timestamps just apprising you of the options that are available.

[00:34:38] [SPEAKER_02]: Thanks so much for listening.