EP436: Let’s Talk About TPA and Health Plan Inertia Instead of Jumbo Employer Inertia, With Elizabeth Mitchell

[00:00:00] Episode 436.

[00:00:03] Let's talk for a sec about TPA and health plan inertia instead of jumbo employer inertia.

[00:00:11] Today I speak with Elizabeth Mitchell.

[00:00:22] American healthcare entrepreneurs and executives you want to know.

[00:00:25] Talk relentlessly seeking value.

[00:00:30] The episode today is somewhat of a follow on to the show with Lauren Vela, which was

[00:00:35] episode 406 about employer inertia.

[00:00:39] If we're talking about inertia, though, we'd be remiss not to get a little circumspect

[00:00:44] about the whole affair and subject some other stakeholders to our microscope.

[00:00:49] One of these stakeholders is EBC's, Employee Benefit Consultants, Practice Leads and Brokers,

[00:00:54] which AJ Loiacono talked about in episode 379 to some extent.

[00:01:00] So we can check that box at least for now.

[00:01:03] That leaves TPAs, ASOs and health plans.

[00:01:07] Third party administrators, administrative services only and health plans.

[00:01:12] And this hotbed of inertia is what I talk about today with Elizabeth Mitchell from PBGH,

[00:01:18] the purchasers business group on health.

[00:01:21] Similar to earlier shows, one disclaimer is that I am using the TPA and ASO terms sort

[00:01:27] of interchangeably here.

[00:01:29] Again, TPA is third party administrator and ASO is administrative services only, which

[00:01:36] is generally the term used when an insurance carrier offers services to a plan sponsor

[00:01:42] like a self-insured employer.

[00:01:44] And these services don't include insurance because self-insured.

[00:01:48] So the services are administrative only.

[00:01:51] One point to make clear before we dive in.

[00:01:54] This conversation is not about these carriers slash payers slash health plans in general

[00:01:59] and what they may or may not be doing.

[00:02:01] This conversation is very specifically focused on how well are those entities helping jumbo

[00:02:06] employers deploy their health benefits?

[00:02:09] And first, we talk about the role of a TPA or ASO, both in terms of what a jumbo employer

[00:02:15] might want them to be doing versus what they are often actually doing.

[00:02:21] Spoiler alert, what they are often actually doing is acting like a full on health plan

[00:02:26] and charging as such.

[00:02:28] Even if the health plan part is not what the self-insured employer wants or needs, especially

[00:02:32] when somebody figures out exactly how much additional is getting charged for those ancillary

[00:02:38] health plan services.

[00:02:39] Listen to the show with Justin Leder, that's episode 433 for a beat on just a piece of

[00:02:45] the how much additional that gets baked into the weekly claims wires many self-insured

[00:02:50] employers get.

[00:02:51] Bottom line, right now there's a gap in the market.

[00:02:53] What is needed are indie TPAs who are effective and efficient and not owned by a health plan

[00:02:59] because if history is any predictor of the future, the second the TPA gets owned by a

[00:03:04] health plan, the TPA sort of ceases to be a TPA and becomes a health plan with all the

[00:03:10] attendant bells and whistles that a lot of times an employer can't opt out of.

[00:03:14] And also the whole not sharing data becomes a thing, both cost data and also quality

[00:03:20] data.

[00:03:21] Now, just because there's a gap in the market, does that mean all jumbo employers are paralyzed

[00:03:26] into inertia?

[00:03:27] Well, it makes it harder for sure, but it's also a reason to start figuring out how to

[00:03:34] solve for a problem when it has as many zeros at the end of it as this problem has.

[00:03:39] Have you seen these lawsuits popping up all over the place and just the numbers that

[00:03:43] are involved?

[00:03:44] Aramark's lawsuit against Aetna is just one example.

[00:03:48] Not to single out just this one, but in the interest of time, let's talk about this one.

[00:03:53] Aramark, a big employer, alleged that since 2018, Aetna has taken more than $200 million

[00:04:02] from it to pay for medical services that should not have been paid out and retains millions

[00:04:08] of dollars in undisclosed fees.

[00:04:11] Mark Flores posted about this one the other day, link in the show notes.

[00:04:15] Also there was that Cigna lawsuit where an electrician's union health plan was surprised

[00:04:21] to learn that the fees charged by Cigna had risen from around 550 grand in 2016 to 2.6

[00:04:29] million in 2019.

[00:04:31] Again, link in the show notes.

[00:04:32] That was from a New York Times article.

[00:04:34] For more on stuff like this, follow Doug Aldean and or Chris Deacon on LinkedIn.

[00:04:40] They're a great resource.

[00:04:41] I'd also listen to the Who's Suing Who episode with Chris Deacon, which was episode 408.

[00:04:47] Because of all of this, the conversation today with Elizabeth Mitchell pretty quickly gets

[00:04:53] into the shift toward direct contracting between employers and providers to improve access

[00:04:59] quality and outcomes.

[00:05:01] If you can't beat them, get ruthlessly practical is my takeaway.

[00:05:04] I have to say, I truly admire some of these HR folks and their leadership willing to do

[00:05:09] what it takes on behalf of protecting the people that work for them.

[00:05:13] Now important side note, there are certainly some health plans at least trying here, so

[00:05:18] I don't want to imply otherwise.

[00:05:21] There are some interesting initiatives that are afoot at, I'm going to say usually regional

[00:05:27] health plans.

[00:05:28] Elizabeth Mitchell has talked about some of these and made this clear also elsewhere.

[00:05:31] Lastly, if you aren't familiar with the CAA, which comes up in the episode today, there's

[00:05:37] a show on the Consolidated Appropriations Act, which is what CAA stands for.

[00:05:43] I'll put that in the show notes.

[00:05:44] Elizabeth Mitchell, my guest today currently serves as the president and CEO of the Purchaser

[00:05:50] Business Group on Health.

[00:05:51] PBGH members are really focused on innovating and implementing change.

[00:05:56] We talk about some of this innovation and implementation on the show today, and it is

[00:06:00] very inspiring.

[00:06:02] Stay tuned on this topic, given just the absolute need for TPA services like we discuss

[00:06:08] in the show that follows and given the smart, innovative, action-oriented people who are

[00:06:13] affected.

[00:06:14] One plus one equals yes.

[00:06:16] Stay tuned.

[00:06:17] Very, very lastly, I just want to give a shout out and thanks to Brad Brockbank for posing

[00:06:22] some great questions, which I pretty much turned around and asked Elizabeth Mitchell

[00:06:26] today.

[00:06:27] My name is Stacey Richter.

[00:06:28] This podcast is sponsored by Aventria Health Group.

[00:06:32] Elizabeth Mitchell, welcome to Relentless Health Value.

[00:06:33] Thanks Stacey.

[00:06:34] I'm really glad to be here.

[00:06:35] Well, it is a pleasure to have you here today.

[00:06:38] What I would love to drill into is a focus on TPAs and ASOs and what they are and what

[00:06:45] they're supposed to be doing or not supposed to be doing.

[00:06:47] But before we go there, is there any overarching context?

[00:06:52] There is because the entire environment for healthcare purchasing has changed and is changing,

[00:07:00] which is why we need to revisit the role of health plans in healthcare purchasing.

[00:07:06] Jumbo self-insured employers are spending their own money and their employees' money

[00:07:12] on healthcare services.

[00:07:13] And they do that because they want their employees and their workforce and their families to

[00:07:18] be healthy.

[00:07:20] They want to retain talent.

[00:07:22] So they go into this with all the best intentions.

[00:07:27] They are spending enormous amounts of money.

[00:07:30] Our members spend over $350 billion a year on healthcare services and people's health

[00:07:35] is not improving.

[00:07:37] All of those dollars seem to be getting lost in the system.

[00:07:42] And it is particularly ironic because that money is also not going to providers in the

[00:07:50] way that our members would like to see.

[00:07:53] They are very much aligned with providers, particularly primary care providers and mental

[00:07:57] health providers.

[00:07:58] They want them to be properly reimbursed, to be paid well for the important work that

[00:08:04] they do.

[00:08:06] And yet there is some disconnect between the amount they are paying and the amount the

[00:08:11] providers are getting.

[00:08:12] It's just really important we look at that entire chain because employers are paying

[00:08:17] a lot and yet the value is diminishing.

[00:08:21] If value is defined as quality over cost, value is going down.

[00:08:25] So the members of PBGH that you serve are spending $350 billion a year at least to get

[00:08:34] members, employees better health.

[00:08:37] Absolutely.

[00:08:38] And they want it to be easily accessed.

[00:08:41] One of our members, C-suite representatives concluded they lose as much on lost productivity

[00:08:50] of people bouncing around an unnavigable healthcare system and needing to take days off and try

[00:08:55] to find appointments for them and their family members as they actually spend on healthcare services.

[00:09:01] And Olivia Webb on the pod said something very similar.

[00:09:05] She's a specialty pharmacy patient and she's just like office hours are nine to five.

[00:09:09] So basically this means I'm calling provider offices or my insurance plan or the prior

[00:09:14] offline or whoever I need to call the appeals line during working hours.

[00:09:18] And I probably spend like a full day a month, eight hours a day a month just trying to get

[00:09:23] my drug that I have been on for years.

[00:09:25] And people do that because they have to during the workday.

[00:09:29] There is so much room for improvement.

[00:09:32] Again, this money is coming from US businesses and US families.

[00:09:38] Health plans are a pass through.

[00:09:39] It is not their money.

[00:09:41] The money belongs to the employers and the employees and they should be expecting much

[00:09:48] better value for their spend.

[00:09:49] It's interesting that you use the term pass through and that's something that I definitely

[00:09:53] want to drill in on today because as you said at the very top of this conversation, on one

[00:09:58] side you have employer commercial entities paying $350 billion.

[00:10:03] And then on the other side, you have those that are actually providing the care who are

[00:10:10] arguably to a certain extent really the ones that are providing the value to the patient.

[00:10:16] There is certainly an intimate connection between doctors and other clinicians and

[00:10:21] the patients themselves.

[00:10:23] That's kind of where the value at a minimum is realized.

[00:10:26] And then you have this whole space in the middle where the dollars are ostensibly passing

[00:10:32] through and that's what I want to talk about today because it kind of feels like there's

[00:10:36] some dollars that go missing in the middle there.

[00:10:40] 30%.

[00:10:41] 30% go missing in the middle?

[00:10:42] Well, if it were just a pass through, if health plans did what jumbo self-insured employers

[00:10:47] needed, they would simply pay the claims at a fair cost for agreed upon quality standards.

[00:10:55] It is so simple.

[00:10:57] I've heard Mark Cuban say that about drugs.

[00:11:00] It is so simple.

[00:11:01] They want high quality, accessible care and they want to pay a fair price.

[00:11:05] But then you get these middlemen.

[00:11:08] It's like the Middle Earth of healthcare.

[00:11:10] Money goes in and it doesn't come out.

[00:11:13] It doesn't reach the providers.

[00:11:15] We know because we measure this at PBGH annually, the amount of money going into primary care

[00:11:22] as a percentage of total spend is going down.

[00:11:25] This is despite our members and many, many others saying they want to increase investment

[00:11:31] in primary care.

[00:11:32] The employers are asking for one thing.

[00:11:35] We believe we are very much aligned with providers because healthy employees or healthy patients,

[00:11:39] we want the same thing, but then something gets lost in translation in the middle.

[00:11:44] We have got to reconnect and reestablish the direct connection between the people paying

[00:11:51] for care and the people providing the care without all of the waste in the middle.

[00:11:56] So I'm going to circle back on the exactly what you just said at the end there, the reestablish

[00:12:00] the direct connection between the ultimate purchasers, i.e. self-insured employers or

[00:12:06] other plan sponsors and the provider organizations themselves.

[00:12:10] But what I want to do right now is talk a little bit about that middle aspect or that

[00:12:14] middle entity.

[00:12:16] Self-insured employers retain all the financial risk.

[00:12:19] They're self-insured, it's their money, it's their risk.

[00:12:22] They hire health plans to administer the benefits and to develop the contracts with the providers

[00:12:30] because they do not have the capacity to go and create a contract with every primary care

[00:12:36] practice or every hospital or specialist.

[00:12:39] So they need an administrative partner to establish those contracts and to pay claims.

[00:12:45] And frankly, that's kind of it.

[00:12:48] But what happens is even when you have a really flexible, effective TPA, they tend to want

[00:12:58] to be a health plan when they grow up.

[00:12:59] They add lots of services and care management or care coordination or all these things that

[00:13:07] really are better done on the provider side.

[00:13:11] Optimal care management is actually done in a primary care practice.

[00:13:14] But health plans like to take on larger and larger roles in the management of healthcare.

[00:13:21] So they retain more and more of the money when they do that.

[00:13:24] And many health plans will not unbundle it even when the employer asks them to.

[00:13:30] Even when they say, I would prefer my primary care partner to do this, they say, nope, all

[00:13:36] or nothing package of services.

[00:13:38] If they just paid the claims effectively in a timely way, provided transparent information

[00:13:45] on cost and quality and managed the contracts, that would be great.

[00:13:49] But that is not happening typically.

[00:13:53] And what also happens is when you get an effective TPA, they tend to be bought by a very large

[00:14:01] insurer.

[00:14:02] It's like catch and kill, right?

[00:14:04] So they are acquired and then they go in a different direction.

[00:14:07] So summing up what you just said, the need of a self-insured employer have somebody who

[00:14:13] can do three things.

[00:14:14] Number one, pay the claims.

[00:14:16] Number two, transparently provide data back relative to said claims.

[00:14:21] And then thirdly, do contract negotiations.

[00:14:25] It should be the day job of this middle person to do those three things.

[00:14:31] Because as you said, a self-insured employer, they're doing benefits.

[00:14:33] Your quote from you, which I love, a lot of times human resources groups are doing health

[00:14:38] benefits off the sides of their desks.

[00:14:40] They simply do not have time to be doing primary care contracts across the country or negotiating

[00:14:46] bundles with every single orthopedic practice across the country.

[00:14:50] So like you need an entity sitting in the middle wherein it is their day job to be doing

[00:14:54] those three things.

[00:14:55] What I'm understanding you saying is that should be the definition of a third party

[00:14:59] administrator.

[00:15:00] However, because a lot of times this third party administration is being offered as a

[00:15:06] service from a larger carrier, what they try to do is throw some of the other services

[00:15:12] that they may have available into these contracts.

[00:15:16] And that's when things start getting muddy because then the employer starts to get charged

[00:15:20] for stuff that they may not want or need.

[00:15:23] But because there isn't a lot of options in the marketplace right now, they wind up getting

[00:15:28] saddled, paying for stuff that they may not need.

[00:15:31] That's right.

[00:15:32] There is a myth that when an employer, even a self-insured employer asks a health plan

[00:15:37] to do something that it will happen.

[00:15:40] You would be amazed at how resistant many of the plans are to doing what employers ask

[00:15:47] them to do, even sharing data effectively or adding a doula benefit or things that employers

[00:15:56] know are the right thing for their employees and to effectively manage their plan.

[00:16:01] It is remarkably challenging.

[00:16:03] That said, they are increasingly stepping into that space.

[00:16:08] We have employers who are literally taking the time to design bundles for maternity care.

[00:16:14] For an example, negotiate those contracts directly with health systems because that

[00:16:19] is their best way of getting what they actually want and need for their employees.

[00:16:25] We have multiple members who are directly contracting for advanced primary care.

[00:16:31] They are saying this is what we want to buy.

[00:16:34] This is what we're prepared to pay for it.

[00:16:36] These are the metrics to which we will hold you accountable.

[00:16:40] And then they are having direct relationships with those providers.

[00:16:44] They're understanding their barriers like they can't integrate behavioral health because

[00:16:48] it's all carved out by the health plan, as an example.

[00:16:51] So they are understanding the barriers that their provider partners face and they're working

[00:16:56] to address them.

[00:16:57] What is happening is in every case, they are seeing a 10 to 30% reduction in total cost

[00:17:04] of care, much better access, much better patient experience and better outcomes.

[00:17:10] So we know this is possible and it should be scalable.

[00:17:15] Yet many of the administrators have not achieved those same results.

[00:17:21] So what I predict, particularly under the new umbrella of the Consolidated Appropriations

[00:17:27] Act where self-insured employers are being held accountable for high value care, they

[00:17:33] are going to be moving more and more into these direct relationships where they understand

[00:17:38] exactly what's going on.

[00:17:40] It's all visible and transparent, and they have more control.

[00:17:44] Because one of the key changes under the CAA is they are now being held to an expert standard.

[00:17:51] They can't say, well, my consultant told me to do it or my health plan said it was a good

[00:17:56] idea.

[00:17:57] They are being held to an expert standard.

[00:17:59] They have to take this in-house.

[00:18:02] They have to really dive into what is happening, where the money's going, what are the outcomes

[00:18:07] that they're getting, and they've got to own it.

[00:18:09] This is going to be a very different dynamic going forward.

[00:18:13] They are accountable and that accountability will be passed on to all of their partners.

[00:18:18] So let me paraphrase in summary.

[00:18:20] You have some employers, large employers, they have asked their current third party administrator,

[00:18:28] ASA, ASO, whatever acronym we want to use here, to help them improve maternal health

[00:18:34] benefits, including a doula or do something.

[00:18:38] And just banged their head against the wall for so long, just not being helped.

[00:18:44] So these employers said, you know, it might just be easier if I go to my local providers

[00:18:48] myself.

[00:18:50] So they go directly to the providers in the area or where their employees are and they

[00:18:54] negotiate these direct contracts.

[00:18:56] And when they do, you start to see exactly what we started talking about at the very

[00:19:02] beginning.

[00:19:03] That 10 to 30% of spend, which is getting sucked up by a vacuum in the middle and is

[00:19:08] not actually passing through.

[00:19:11] Plus you start doing these direct contracts.

[00:19:14] The data becomes transparent because the providers and the employers themselves have a lot of

[00:19:19] incentive to be aligned there.

[00:19:22] My friend Harold Miller says having a health plan in the middle between an employer and

[00:19:26] a provider is like being at the UN with a bad translator.

[00:19:31] Because we lose the plot of trying to simply pay for high value care.

[00:19:38] It is doable.

[00:19:39] And it's remarkably simple.

[00:19:41] We're in the process right now of supporting a couple of our members negotiate direct contracts.

[00:19:47] I kept thinking there was going to be more complexity to it.

[00:19:51] We set the quality metrics, we set the payment level, and then they pay it.

[00:19:57] It is so amazing to me how much we have complexified this if that's a word.

[00:20:03] Once you just determine what you want to buy, you set the standards like they do procurement

[00:20:08] for anything else, you find a partner who is willing to meet those standards, you write

[00:20:14] a check and then you monitor performance.

[00:20:17] This is doable.

[00:20:18] It is happening right now.

[00:20:20] I think part of the challenge is that self-insured employers don't talk about this very much,

[00:20:26] right?

[00:20:27] They're not like the breathless VCs on LinkedIn all day.

[00:20:29] We got a new customer.

[00:20:31] We have a new investor.

[00:20:32] They're just keeping their heads down and they are doing this work.

[00:20:35] So let me dig in on the example that you just gave.

[00:20:39] First of all, you said you had a group of self-insured employers, they directly contracted,

[00:20:44] they were just like, this is really not that hard.

[00:20:47] Did they have the TPA in the middle, the third party administrator actually paying because

[00:20:52] the employer still needed to figure out how to pay the provider or was the employer actually

[00:20:56] cutting a check?

[00:20:57] It depends on the arrangement and it depends on the scale.

[00:21:00] If it is multi-region or multi-practice, you tend to still need the TPA.

[00:21:05] They have got to just do the basic administration.

[00:21:09] But if it is a direct contract with one practice or one hospital or one system, sometimes it

[00:21:15] can be as easy as writing a check.

[00:21:17] Now I'm not downplaying the regulatory burdens of some of this because there are states like

[00:21:24] California that make it very hard for providers to assume financial risk.

[00:21:28] So I am simplifying it, but I am doing that on purpose because it is doable.

[00:21:36] And our members have done direct contracts that have been very successful with all types

[00:21:41] of organizations.

[00:21:42] Alright, if I'm thinking this through the timeline here, it was kind of like employers

[00:21:47] went to provider organizations and they cooked up their own deal.

[00:21:50] They're just like, you know, handshake, we're going to pay you some amount, PM, PM.

[00:21:55] At that point, if the TPA wants to administer it, like their pricing kind of has to be transparent

[00:22:00] because everybody knows what the dollar amount they should be paying and what they should

[00:22:05] be receiving.

[00:22:06] So if there's dollars that go missing in that equation, it is obvious.

[00:22:11] So if the TPA chooses to accept the challenge, they have to be transparent.

[00:22:15] Do TPAs agree to terms like that?

[00:22:18] There is a reason that it took federal action to get transparency from health plans and hospitals.

[00:22:26] It's not like people weren't asking for it for decades.

[00:22:29] The resistance to the transparency was high.

[00:22:33] And as we start to get visibility into what was going on in all of those arrangements,

[00:22:39] it's starting to become clear why.

[00:22:42] So yes, transparency is presumed.

[00:22:44] I really want to point out though that there are very few if any TPAs out there who are

[00:22:52] as flexible and responsive and transparent as employers want.

[00:22:57] There are some newcomers, I'm wishing them all the luck in the world.

[00:23:01] But I really think it's important to understand how challenging it is for a jumbo employer

[00:23:07] to negotiate contracts all over the country without a partner like that.

[00:23:11] Yeah, because I actually have heard stories of employers working with provider organizations

[00:23:16] and they spend a lot of time and they come up with a great contract.

[00:23:20] And then they go to their ASO, TPA, ASA, and that entity is like, no.

[00:23:26] Remember, all the health plans have their own quality metrics or their own payment arrangements,

[00:23:32] their own networks that they have already established.

[00:23:36] I do think though there is a more basic challenge for health plans.

[00:23:41] And I say this with all due respect, their legacy claim systems are built to pay fee

[00:23:47] for service and they have sunk billions of dollars into those systems.

[00:23:51] I believe the new transparency that is upon us is going to expose all of the money that

[00:24:00] has been wasted in traditional healthcare procurement.

[00:24:04] It is going to be very awkward for those who have signed those contracts.

[00:24:10] We are seeing our members using newly available data like transparent hospital pricing.

[00:24:15] They are literally going to the websites of their regional hospitals and seeing what is

[00:24:19] the average charge because they're now required to post it.

[00:24:23] And they're looking at their own claims and say, wait a minute, I paid like five times

[00:24:26] that and actually getting refunds from the hospitals.

[00:24:31] In that same example, however, where that employer said, hold the phone, I am paying

[00:24:36] way too much.

[00:24:37] I want my money back.

[00:24:38] The health plan in that scenario actually tried to block that because they were going

[00:24:44] to get a lower rate than their network charge.

[00:24:48] Just think about this.

[00:24:49] The health plan who was supposed to be representing the employer as the negotiator of the best

[00:24:56] was trying to stop said employer from getting a better rate directly from the provider.

[00:25:03] And that was not the only example.

[00:25:05] We had another employer try to do this in another state and the health plan told them

[00:25:09] to stop.

[00:25:10] So we have thought about the health plans acting on behalf of the self-insured employer.

[00:25:16] But I think that relationship is really going to be called into question as information

[00:25:21] becomes more and more transparent.

[00:25:23] Yeah, and just another example of what you're talking about there is the bricklayers case

[00:25:29] in Massachusetts.

[00:25:30] There's a show with Chris Deacon who's suing who, but that's also the premise there.

[00:25:34] The bricklayers looked at transparently available hospital pricing information and just realized

[00:25:40] how much their plan was charging them in the middle there.

[00:25:45] So yeah, it's a thing.

[00:25:47] Can I talk also about the entire ecosystem?

[00:25:51] I feel so bad for some of these employer purchasers who have trusted so many people in their supply

[00:25:59] chain of health care, brokers, consultants, health plans, PBMs.

[00:26:03] Now with this newly transparent information, they are realizing they were not always working

[00:26:09] on their behalf.

[00:26:10] They have said, well, my consultant advised this.

[00:26:13] I really trust them.

[00:26:14] I like them.

[00:26:15] I've known them for years.

[00:26:16] I'm paying them 20 to $30 PMPM so they should be giving me the best ideas and the best deals.

[00:26:23] And as this starts to come to light, it is really unnerving for the purchasers who thought

[00:26:29] they were doing the right thing.

[00:26:31] They trusted people who weren't aligned with their needs.

[00:26:35] So we have members right now saying, I don't know who to get unconflicted, trusted guidance from.

[00:26:41] One of the things that we have done, my board has approved the creation of a new advisory

[00:26:46] services arm where we as a neutral nonprofit are advising on what are some good contract

[00:26:53] standards, what are the right quality measures.

[00:26:56] There needs to be an entire industry shift to actually enabling accountability and supporting

[00:27:03] purchasers in this very big job of buying health care.

[00:27:08] It is so fraught on a number of levels and it's almost like a crisis of trust that some

[00:27:13] of these employers are having because they've been working with their broker, EBC or practice

[00:27:19] lead for years.

[00:27:21] And sometimes it's like maybe that person is actually trustworthy.

[00:27:24] It's that that individual doesn't understand what their company is doing.

[00:27:27] I mean, there's big companies that sit behind a lot of these entities.

[00:27:31] So you know, it is even possible that the individual is telling the truth when they

[00:27:35] say that there's no fees here or there or whatever, because they're not even cognizant

[00:27:39] of what their organization is doing on the back end.

[00:27:42] Stacey, I want to pause right there because that is so important.

[00:27:46] This is not about individual bad actors.

[00:27:48] I am not suggesting everyone was shady and trying to do the wrong thing.

[00:27:53] The systems, the incentives, the companies and who they're actually accountable to, that

[00:28:00] is not aligned with the needs of the people paying for health care.

[00:28:04] Are there any concrete examples of provider organizations and employers being aligned

[00:28:08] and accountable to each other in ways that are tough when there's parties in the middle

[00:28:13] disintermediating?

[00:28:15] We just released an RFP in a market for high quality, whole person primary care on behalf

[00:28:22] of three of our jumbo self-insured employers.

[00:28:26] They want to take this on themselves.

[00:28:28] This is so new and different.

[00:28:31] A lot of the providers like didn't even understand the dynamic.

[00:28:34] What do you mean we're responding to you?

[00:28:36] What do you mean there's no health plan?

[00:28:38] And yet it was wildly successful.

[00:28:40] It is around quality and equity and access and all the things that these employers want

[00:28:45] on behalf of their employees.

[00:28:47] This is starting to happen because there are employer purchasers out there.

[00:28:53] And I really want to include public purchasers.

[00:28:55] They are ready to take this on and help their employees, help make sure that they are getting

[00:29:00] the care that they deserve.

[00:29:01] I am seeing more and more provider organizations and doctors themselves really aligned with

[00:29:07] what you're saying because, you know, the enemy of your enemy is your friend.

[00:29:11] Just that whole international relations statement that if you have a doctor really looking to

[00:29:16] do the right thing by patients, the employer just based on again going back to the very

[00:29:21] beginning of this conversation is another entity which is concerned about whole person health.

[00:29:26] So working together can have a lot of alignment.

[00:29:31] You're exactly right.

[00:29:32] I can't describe the number of times we are approached by providers who want to work directly

[00:29:38] with employers.

[00:29:39] Maybe not all of them, but there are a lot of them out there who are ready for that type

[00:29:44] of relationship.

[00:29:45] Moby Parsons, Ben Schwartz, those are two orthopedic surgeons who talk about this kind

[00:29:50] of thing a lot.

[00:29:51] Right now, there is no forum for that.

[00:29:54] There is no platform to talk directly to an employer other than literally calling them

[00:29:59] up on the phone and that is happening.

[00:30:01] This is a really exciting opportunity, particularly in regions where you have high concentrations

[00:30:06] of headcount across multiple employers.

[00:30:09] We're going into our fourth market now.

[00:30:11] Providers who raise their hand and say, well, great because that's what we want to provide.

[00:30:15] That is how we want to practice.

[00:30:17] It's clear that they want the same thing.

[00:30:19] I guess there's like MISHI in New York.

[00:30:23] What you're saying is resonating maybe philosophically because if you think about this from an employer

[00:30:28] standpoint, another word for an employer is a customer.

[00:30:33] We all realize that as customers of almost every other thing, it's up to us to set the

[00:30:39] standard.

[00:30:40] It's hard sometimes, can you blame a vendor for being self-interested and giving you a

[00:30:46] bid that is wildly high?

[00:30:49] I guess that's how capitalism works that they sure feel free to give me a super high bid,

[00:30:54] but then it's kind of like my job to say, no, I'm not.

[00:30:57] Basically applying purchasing discipline, right?

[00:30:59] That they probably apply elsewhere in the business.

[00:31:03] It's difficult, but it's almost the responsibility as a customer, as a fiduciary to the employees

[00:31:09] on the plan to apply the same purchasing discipline and others have said this on the show that

[00:31:15] we do elsewhere to healthcare and to understand what we want and to figure out how to get

[00:31:20] it because otherwise the wolves are in the henhouse.

[00:31:23] I completely agree with that.

[00:31:25] In a market, someone gives you a bad bid, you don't take it, you don't buy it.

[00:31:29] Here's the challenges.

[00:31:30] One, there's been no transparency and they have not been able to get their data to actually

[00:31:36] even evaluate the performance.

[00:31:39] One of the changes within the CAA, it absolutely clarifies that employers are entitled to the

[00:31:45] data they need to evaluate cost and quality.

[00:31:48] But then the other problem, there are not any alternatives.

[00:31:51] If all of the plans are doing the same thing, where are they supposed to go?

[00:31:57] I think that there are some new market entrants.

[00:32:00] I also think there's a big opportunity.

[00:32:02] If you could just have a platform that does flexible payments, innovative payment models

[00:32:09] without all the other stuff that no one wants to buy, I think that would be pretty compelling.

[00:32:15] I do think those are starting to emerge.

[00:32:17] But right now, if you are looking for a big health plan administrator, there's not a lot

[00:32:23] of options for something really different.

[00:32:26] If you're an entrepreneur and you're looking for a need in the marketplace, set up a third

[00:32:30] party administrator where you, and I'm going back to what you said earlier, where you pay

[00:32:35] the claims, you do that well, you're transparent with the data and that you do contract negotiation

[00:32:40] really well.

[00:32:41] Just do those three things really well and there's a big market out there.

[00:32:45] This is really important.

[00:32:46] A lot of the new market entrants, they come with VC backing or whatever.

[00:32:53] Their investors want them to make money.

[00:32:57] Totally makes sense.

[00:32:58] No problem.

[00:33:00] However, their incentives must be aligned with the self-insured employer for this to

[00:33:06] work.

[00:33:07] They need to make money by doing the right thing, not just maximizing healthcare spending.

[00:33:13] That just has to be clear from the outset.

[00:33:15] And the fees have to be transparent, right?

[00:33:17] I think as more employers become sophisticated enough or see transparent data enough to realize

[00:33:24] getting the best price doesn't mean negotiating the fixed fee and picking the entity that

[00:33:32] has the lowest fixed fee because it's like an iceberg.

[00:33:35] If we have an alignment between those who need a plan administrator and the plan administrators

[00:33:42] What is a fair fixed fee so that I can actually administer the plans and make my investors

[00:33:47] happy and you make your investors happy, right?

[00:33:50] That would seem to be a true handshake as opposed to kind of like what's going on now

[00:33:55] where I pretend to have very low fees but I'm just showing you the tip of the iceberg

[00:34:00] because I'm making all this money in ways that are misaligned with my customers incentives.

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

[00:34:09] You've got all of this super confusing rebates, spread pricing.

[00:34:15] And if you just had a transparent price with fair profit built in a lot like the Mark Cuban

[00:34:22] model, you could do that on the TPA side.

[00:34:25] It is not impossible to have a TPA that is making a healthy amount of money and yet is

[00:34:32] responsive and transparent and accountable.

[00:34:36] One other thing that is extremely important, we've talked a lot about setting a fair price

[00:34:42] and it should absolutely be transparent.

[00:34:45] What my members care even more about though is the quality of care.

[00:34:49] They need to know their employees are going to high quality, safe providers.

[00:34:56] And to date, most health plans have not been terribly innovative around quality measurement.

[00:35:03] It's not that we don't have the quality measures.

[00:35:05] I was on the board of the National Quality Forum a decade ago.

[00:35:08] We've got meaningful quality measures that have been vetted and are valid.

[00:35:12] They are not being used in contracts.

[00:35:17] And that is very important to employers because frankly, all the evidence shows that better

[00:35:23] care costs less.

[00:35:25] You can actually pay more for care and if it's really high quality, there's no readmission

[00:35:31] or you avoid a hospitalization or procedure in the first place and you get that really

[00:35:36] high quality care from the outset, you save money downstream.

[00:35:39] You save on the total cost of care.

[00:35:42] That is such a win because patients are healthier, they don't have unnecessary procedures and

[00:35:48] they save money.

[00:35:49] Better care costs less but you have to be really clear about the quality standards you

[00:35:56] are using to measure better care.

[00:35:59] That is entirely doable.

[00:36:01] We have just developed core measure sets for primary care, for maternity care.

[00:36:06] Our members are putting those into their contracts because this is what they want to pay for.

[00:36:13] These are the quality standards they expect.

[00:36:15] That coupled with a fair price and a fair cost, that's value.

[00:36:19] I mean, that's the actual literal definition of value, quality at a fair price and it's

[00:36:26] a real call to action frankly to provider organizations themselves.

[00:36:29] We had Rick Renard on the show a couple of weeks ago and one of the things that he made

[00:36:33] very clear is that a small, small, small, single digits really, percentage of provider

[00:36:38] organizations themselves are measuring absolutely anything.

[00:36:43] Patient reported outcomes, clinical outcomes, the efficiency of the services that they're

[00:36:47] providing and in the absence of provider organizations themselves measuring and then continuously

[00:36:53] improving because you can't continuously improve unless you measure stuff.

[00:36:56] It becomes, you know, how do you become a high quality provider?

[00:37:01] So I am also hearing a real call to action for providers.

[00:37:05] If you want a commercial contract, it's going to become more and more important to figure

[00:37:09] out how you're measuring what you're doing and that is not something that you can like

[00:37:12] figure out next Tuesday.

[00:37:14] I want to be really clear.

[00:37:15] There is going to be change required on all sides.

[00:37:18] Employers have not been terribly clear about what quality metrics matter to them or access

[00:37:23] standards.

[00:37:24] And so we took it upon ourselves over the last couple of years to really articulate

[00:37:28] that.

[00:37:29] We're trying to do our part being clear.

[00:37:32] Any provider group that wants to partner directly though is going to have to figure out how

[00:37:38] to measure and report their own quality transparently because to quote Lauren Bella, employers don't

[00:37:44] want to pay more for the same old crap.

[00:37:46] They want to pay more for high quality care.

[00:37:50] So there is an expectation that partners really step up and do that quality measurement

[00:37:56] and transparent reporting.

[00:37:58] They can continue to not be transparent, but if they want to work directly with employers,

[00:38:04] they're going to have to share their quality performance.

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

[00:38:12] One thing that I think is somehow missing from the entire conversation, even though

[00:38:18] I really do believe things are changing.

[00:38:22] We seem to have this strange Stockholm syndrome, identifying the folks who have made the system

[00:38:29] as bad as it is.

[00:38:30] We blame employers for not having purchased more effectively.

[00:38:35] Sure, there is blame to go around, but why aren't we holding health system and health

[00:38:40] plan executives accountable?

[00:38:42] Why aren't their boards asking them to ensure affordability, equity, quality?

[00:38:48] I really believe we need to put that accountability where it belongs.

[00:38:54] Yes, it should be shared on all sides, but it's not enough to have the purchasers buying

[00:39:01] effectively.

[00:39:02] We have got to have accountable partners to work with.

[00:39:06] Do you feel like that's happening because everybody seems to inherently agree that those

[00:39:12] entities are accountable to their shareholders, whereas somehow or another the employers

[00:39:17] are the only ones that are accountable to members and patients?

[00:39:20] Well, I guess they get a pass because everyone says, oh, well, we can't expect anymore.

[00:39:26] They have to do that for their shareholders, but they are not providing what we need as

[00:39:32] a healthcare system.

[00:39:34] We are seeing more and more evidence of this massive growth in these health plans and their

[00:39:40] profits not translating to affordable, equitable, accessible care.

[00:39:46] Maybe we find alternative partners who don't just have to answer to their stockholders.

[00:39:51] But right now, even though it is working for the health plans, they're having amazing profits

[00:39:56] and wild growth.

[00:39:59] It isn't working for the people paying for, providing or receiving care.

[00:40:05] Which is pretty much Americans.

[00:40:06] Everyone else.

[00:40:07] Yeah, I was just going to say America.

[00:40:10] Elizabeth Mitchell, is there someplace where you would direct people if they want to learn

[00:40:14] more about some of the things that you were mentioning today?

[00:40:17] Well, I am going to share a video we did recently with a few of our members who are doing direct

[00:40:25] contracting, all of whom are having real success.

[00:40:30] As I mentioned, we have launched PBGH advisory services for unconflicted guidance for employers.

[00:40:36] We are also launching a major data project to enable actual transparency and use of cost

[00:40:43] and quality data in purchasing.

[00:40:45] And we have launched an advanced primary care network in several markets.

[00:40:49] That is going to be a place where employers and providers come directly together to design

[00:40:57] an entirely new approach to healthcare delivery.

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

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

[00:41:06] It's such a pleasure.

[00:41:07] Thank you.

[00:41:08] So let's talk about going over to our website and typing your email address in the box to

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[00:41:32] Thank you.