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

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

For a full transcript of this episode, click here.

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One of these stakeholders is EBCs (employee benefit consultants), practice leads, and brokers, which AJ Loiacono talked about in episode 379 to some extent; so we can check that box at least for now. That leaves TPAs (third-party administrators), ASOs (administrative services onlys), and health plans. And this hotbed of inertia is what I talk about today with Elizabeth Mitchell from PBGH, the Purchaser Business Group on Health.

Similar to earlier shows, one disclaimer is that I am using the TPA and ASO terms sort of interchangeably here. Again, TPA is third-party administrator, and ASO is administrative services only, which is generally the term used when an insurance carrier offers services to a plan sponsor, like a self-insured employer. And these services don’t include insurance, because … self-insured. So, the services are administrative only.

One point to make clear before we dive in, this conversation is not about these carriers/payers/health plans in general and what they may or may not be doing. This conversation is very specifically focused on how well are those entities helping jumbo employers deploy their health benefits.

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

Listen to the show with Justin Leader (EP433) for a bead on just a piece of the how much additional that gets baked into the weekly claims wires many self-insured employers get.

Bottom line, right now, there’s a gap in the market. What is needed are indie TPAs who are effective and efficient and not owned by a health plan because, if history is any predictor of the future, the second the TPA gets owned by a health plan, the TPA sort of ceases to be a TPA and becomes a health plan—with all the attendant bells and whistles that, a lot of times, an employer can’t opt out of. And also, the whole not sharing data becomes a thing, both cost data and also quality data.

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

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

Also, there was that Cigna lawsuit where an electrician’s union health plan was surprised to learn that the fees charged by Cigna had risen from around $550,000 in 2016 to $2.6 million in 2019. That was from a New York Times article.

For more on stuff like this, follow Doug Aldeen and/or Chris Deacon on LinkedIn. They’re a great resource. I’d also listen to the “Who’s Suing Who?” episode with Chris Deacon, which was episode 408.

Because of all of this, the conversation today with Elizabeth Mitchell pretty quickly gets into the shift toward direct contracting between employers and providers to improve access quality and outcomes. If you can’t beat them, get ruthlessly practical is my takeaway. I have to say, I truly admire some of these HR folks and their leadership willing to do what it takes on behalf of protecting the people that work for them.

Now, important side note: There are certainly some health plans at least trying here, so I don’t want to imply otherwise. There are some interesting initiatives that are afoot at, I’m gonna say, usually regional health plans. Elizabeth Mitchell has talked about some of these and made this clear also elsewhere. Lastly, if you aren’t familiar with the CAA, which comes up in the episode today, there’s a show (EP342) on the Consolidated Appropriations Act, which is what CAA stands for.

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

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

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

Also mentioned in this episode are Lauren Vela, MBA; AJ Loiacono; Justin Leader; Mark Flores; Doug Aldeen; Chris Deacon; Brad Brockbank; Olivia Webb; Mark Cuban; Harold Miller; Moby Parsons, MD; Benjamin Schwartz, MD, MBA; Mishe Health; Sidney Haitoff; and Rik Renard.

You can learn more at PBGH and by connecting with Elizabeth on LinkedIn.

You can also watch a video on success with direct contracting.

Elizabeth Mitchell, president and CEO of the Purchaser Business Group on Health (PBGH), supports the implementation of PBGH’s mission of high-quality, affordable, and equitable healthcare. She leads PBGH in mobilizing healthcare purchasers, elevating the role and impact of primary care, and creating functional healthcare markets to support high-quality affordable care, achieving measurable impacts.

Elizabeth leverages her extensive experience in working with healthcare purchasers, providers, policymakers, and payers to improve healthcare quality and cost. She previously served as senior vice president for healthcare and community health transformation at Blue Shield of California, during which time she designed Blue Shield’s strategy for transforming practice, payment, and community health. Elizabeth also served as the president and CEO of the Network for Regional Healthcare Improvement (NRHI), a network of regional quality improvement and measurement organizations. She also served as CEO of Maine’s business coalition on health, worked within an integrated delivery system, and was elected to the Maine State Legislature, serving as a state representative and chair of the Health and Human Services Committee.

Elizabeth served as vice chairperson of the US Department of Health and Human Services Physician-Focused Payment Model Technical Advisory Committee, board and executive committee member of the National Quality Forum (NQF), member of the National Academy of Medicine’s “Vital Signs” Study Committee on core metrics, and a Guiding Committee member for the Health Care Payment Learning & Action Network. She now serves as a board member of California’s Office of Healthcare Affordability.

Elizabeth holds a degree in religion from Reed College and studied social policy at the London School of Economics.

06:48 What is the overarching context for health plans in healthcare purchasing?

09:00 EP337 with Olivia Webb.

11:44 Why is it important to reestablish a connection between the people paying for care and people providing care?

14:07 What are the needs of a self-insured employer when managing employee benefits?

19:41 Is it doable for employers to set their own contracts?

22:11 Is transparency presumed?

23:25 Will the new transparency upon us actually expose wasted expense?

27:45 “This is not about individual bad actors. … The systems … that is not aligned.”

29:32 Are there providers who want to work directly with employers?

32:46 Why is it important that incentives need to be aligned?

34:25 Why is the quality of care even more important than transparency?

36:29 EP427 with Rik Renard.

38:08 What’s missing from the conversation on changing health plans?

Recent past interviews:

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David Scheinker (Encore! EP363), Dan Mendelson, Dr Benjamin Schwartz, Justin Leader, Dr Scott Conard (Encore! EP391), Jerry Durham (Encore! EP297), Kate Wolin, Dr Kenny Cole, Barbara Wachsman, Luke Slindee