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

I just want to stop here and have a gratitude moment. I wanted to thank the Pittsburgh Business Group on Health for inviting me to do the keynote at their annual symposium. It was a big honor. But in doing so, I had the opportunity to play clips from both the podcast and also from people who helped out and gave me a custom clip special for the occasion. So, thanks to Matt Ohrt; Jodilyn Owen; Justina Lehman (who provided a clinical pathway example); Andreas Mang; Larry Bauer; Rob Andrews (my guest in this episode); Nicole Bradberry; Amy Scanlan, MD; Rebecca Etz, PhD; David Muhlestein, PhD, JD; Lisa Trumble; and Doug Eby, MD, MPH, CPE. If you’d like a copy of that presentation, which is all about care gaps and the impact of care gaps especially as it might relate to self-insured employers, click here to request it.

I also again want to thank Havarti Risk Services and Keith Passwater for a super nice donation to support the show, as well as Employees First. Please support these organizations who have supported us and help us keep the lights on over here.

I am so looking forward to the show today. It is with Rob Andrews, who is the CEO of the Health Transformation Alliance (HTA), 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 earlier this summer, “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? Financial implications to whom? 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, which Rob talks about relative to maternal health outcomes as his exemplar because, as a case study, it’s undeniably superb. 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 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 known to actually improve health, 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. I love how Josh Butler uses a grocery analogy to describe but one possible flashpoint. Strategy, on the other hand, 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. Similar to what Justina Lehman was talking about last week (EP414), 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, as aforementioned, 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; so 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.

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 (on an episode coming up in about three weeks) 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.

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 60+ 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.”

07:29 How did Rob get to his current role?

09:11 The problem of maternal health and mortality rate, and how self-insured employers wind up directly and indirectly paying for this.

10:36 Why economic consequences move the needle, and why sometimes they don’t.

12:36 Why the best way to address costs isn’t to re-shift costs but to address them directly.

14:34 Why compensation that isn’t dependent on outcomes is a problem.

18:09 “Strategy’s not what people say; it’s what they do.”

21:40 How do you operationalize saving money with better outcomes?

29:46 How do employers turn conflict into collaboration?

31:41 What is the win-win-win structure among employers, payers, and providers in Rob’s eyes?

34:13 To whom should the task of risk adjustment fall?

38:03 “Better contracts do improve outcomes.”

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

Rob Andrews of HTA Health discusses how employers can save money and get better #healthcareoutcomes on our #healthcarepodcast. #podcast #digitalhealth #valuebasedcare #healthcare

Recent past interviews:

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