Encore! EP415: Some Jumbo Employers Buying Better Healthcare Outcomes While Saving 15% on Total Cost of Care, With Rob Andrews

This encore is very relevant after the shows with Cora Opsahl (EP452), Claire Brockbank (EP453), and Marilyn Bartlett (EP450). Getting better health for the 160 million Americans covered by commercial insurance is all about rates, rights, and power.

For a full transcript of this episode, click here.

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So, for sure, go back and listen to those shows if you haven’t already. They are very revealing. And if you listened to this particular episode, 415, last year when it first came out, you might want to listen to it again because in the context of those earlier shows, there’s points of contemplation that might become clear.

By the way, also, the show with Ann Kempski (EP444) is relevant to this end (ie, sometimes government intervention doesn’t achieve the stated goal). This is a very nuanced world that we live in, and those nuances impact Americans both clinically and also very much financially. I’m saying this partially because maternal and newborn outcomes and costs are part of this conversation.

Now, in this conversation, maternity care and outcomes gets brought up mainly because a lot of employers, for a lot of them, maternity constitutes one of the highest areas of spend for both the employer and then also employees. It costs a lot to have a baby in this country. Strategy 101 does, in fact, suggest that if you look at your data and you discover outsized problems and costs in any one area, fixing those problems and costs is going to have an outsized impact on employee health and plan spend.

And this is even more of a strategic consideration just given everything going on with maternal health and rising infant and mom death rates in this country.

So, with that, here’s Rob Andrews, who is the CEO of the HTA, the Health Transformation Alliance, which is a group made up of jumbo employers. I had wanted to get Rob on the show ever since I heard him say at the thINc360 conference in DC. He said, “Morally abhorrent doesn’t move the needle. What moves the needle is financial implications.”

This interview was my chance to ask Rob Andrews, what are these financial implications of which you speak that move needles? What kinds of financial implications are we talking about? And when that needle moves, what happens?

In the show that follows, Rob says that when you improve the health of employees and dependents and actually just the health of the community, you as an employer improve your financials directly and also indirectly.

But let me focus on the direct bucks out of pocket right now because … yeah, study after study shows that, for self-insured employers, if you pay for the right things and you steer to the right providers in the right care settings, a self-insured employer and the member do a whole lot better than if the employer kind of laissez-faire pays for any manner of things provided by anybody who can manage to submit a billing code—even if that billing code comes with a too-good-to-be-true discount.

Rob talks about how the HTA has data to suggest that if you, as a self-insured employer, lean in on paying for the right things, readmissions go down 29%. Total cost of care is 15% lower. Drugs cost 25% less. So, none of this is theoretical, as we talk about how employers can create a win-win—better health, lower costs. There are jumbo employers in the HTA right now who are doing this.

I love how Will Shrank, MD, has put it; and I’m paraphrasing, but it’s a point that keeps getting reiterated in episode after episode here on Relentless Health Value: There’s a difference between paying for what you want and just negotiating allegedly cheaper prices.

Buying things is not a strategy. And that is true no matter what price you think you’re paying. Also not a strategy is buying things and then cost shifting to plan members, by the way. Strategy means addressing root causes. It’s a considered plan of action to achieve an optimized ambition.

Here is the strategic stepwise that Rob offers on this:

1. Discern the difference between rumor and data. Get your data and get it objectively analyzed by an objective third party, self-insured employers. Then you have what you need to figure out the delta between the worst performers and the best performers on a risk-adjusted basis.

2. Now that you know what normal is and what good looks like, gang up and negotiate contracts that hold intermediaries accountable for outcomes and with performance guarantees. Address root causes and the excess and wasteful spend, in other words. Listen to the show with Dr. Will Shrank (EP413) for more on wasteful spend.

3. Be transparent with consumers/employers about relative quality. Educate them. You may also want to reward members who go to see those high-quality docs and/or make it expensive for them to go to the worst performers. There are lots of win-win case studies here on how well this works.

Rob Andrews and I talk a bunch using maternal outcomes as a case study for lots of the points made, and this was done for several reasons.

One is that, for some employers, maternity is a large chunk of their healthcare spend. As a case study, it is undeniably superb. Avoidably bad outcomes for moms and babies here is not only scandalous, as Rob Andrews puts it, in a country as wealthy as ours but also really costly—and many times avoidably so. Keeping even one mom and/or one baby out of the ICU or NICU can save hundreds of thousands of dollars. I said this already, and it’s a brutal number worth repeating.

It’s really interesting how employers in a geography wind up footing (indirectly) a rather shockingly large bill for babies and uninsured or underinsured moms or moms on Medicaid avoidably going to the ICU and the NICU, which the hospitals tally up as hundreds of thousands of dollars in billed charges. The term million-dollar baby is a term, after all.

Listen to the episode that follows for more on these indirect costs and how they happen. But the good news is that there are really cost-effective pathways that actually work to keep moms and babies out of the most expensive care settings money can buy. Jodilyn Owen (EP421) talks about one of them in detail: how her maternal health clinic, which serves ZIP codes with, let’s just say, a lot of social determinants of health going on, moms in her clinic have a lower rate of NICU admissions than even the fancy ZIP codes nearby. So, this can be done. Purchasers of healthcare just have to demand that it happens and pay for it to happen. Rob Andrews talks about this, and he also talks about why it is quite unlikely that payer or provider organizations themselves are gonna pick up this torch and make this happen unilaterally of their own volition. Now, he offers some nuance, and you should listen to that nuance.

Also mentioned in this episode are Health Transformation Alliance; Cora Opsahl; Claire Brockbank; Marilyn Bartlett; Ann Kempski; William Shrank, MD; Jodilyn Owen; and Tom Nash. 

You can learn more by emailing Rob at randrews@htahealth.com. 

Robert E. Andrews is the chief executive officer (CEO) of the Health Transformation Alliance (HTA), an original author of the Affordable Care Act, and a former member of Congress. As CEO of the HTA, Robert oversees the strategic direction of approximately 70+ major corporations that have come together in an alliance to do one thing: fix our broken healthcare system. Formed by four founding members in September 2015, the HTA member companies collectively are responsible for more than 8 million employees, dependents, and retirees with an annual healthcare spend of $30+ billion.

Through Robert’s leadership, the HTA has launched value-driven solutions specifically designed to improve patient care and economic value through world-class data and analytics, pathbreaking pharmaceutical solutions, high-quality medical networks, and robust consumer engagement initiatives. To date, the cooperative has saved its member companies well over $2 billion in healthcare costs. Robert’s leadership has been equally important in the HTA developing programs addressing racial and ethnic disparities in healthcare, mental health issues, and safe return-to-work programs following the pandemic.

Robert served as a member of the United States House of Representatives for nearly 24 years. Upon his departure from Congress, President Barack Obama praised Robert’s service as “an original author of the Affordable Care Act … and a vital partner in its passage and implementation.”

07:34 How did Rob get to his current role?

09:08 The problem of maternal health and mortality rate, and how self-insured employers wind up directly and indirectly paying for this.

10:27 Why economic consequences move the needle, and why sometimes they don’t.

12:26 Why the best way to address costs isn’t to re-shift costs but to address them directly.

13:22 Why compensation that isn’t dependent on outcomes is a problem.

16:23 “Strategy’s not what people say; it’s what they do.”

18:21 How do you operationalize saving money with better outcomes?

26:26 How do employers turn conflict into collaboration?

28:20 What is the win-win-win structure among employers, payers, and providers in Rob’s eyes?

30:53 To whom should the task of risk adjustment fall?

34:43 “Better contracts do improve outcomes.” 

Recent past interviews:

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Brian Reid, Dr Beau Raymond, Brendan Keeler, Claire Brockbank, Cora Opsahl, Dan Nardi, Dr Spencer Dorn (EP451), Marilyn Bartlett, Dr Marty Makary, Shawn Gremminger (Part 2), Shawn Gremminger (Part 1)