For a full transcript of this episode, click here.
So, let’s continue themes from prior episodes, most particularly the episode from last week with Christine Hale, MD, MBA (EP471), which was also about high-cost claimants and just the impact that they have on the wallets of self-insured employers and any other plan sponsor.
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This is such a fantastic article by Craig Gottwals, distilling the conversation into such an actionable format.
We could have 0.5% to 1% of total plan members costing upwards of 40% of total plan dollars. And I bring this up just to highlight the magnitude of the money here. In that show from last week, we take the issue of high-cost claimants from the standpoint of the plan sponsor.
Today, however, we’re gonna be looking at this from the standpoint of the hospital system. If I were gonna come up with a motto for the show today with Dr. Eric Bricker, it’s that all costs are somebody else’s revenue. And when it’s revenue and profit of the magnitude that we’re talking about with many high-cost claimants, it starts to be less of an accidental “Oh, wow! How did that CABG patient wind up in our clinic? What are the odds?” and more of a “Whoever is not steering patients is letting someone else with a big profit incentive lock down that steerage in deeply embedded ways.”
But before I get too much further, let me tell you how this show came to be. And frankly, it’s beginning to get a little repetitive. But in my defense, Cora Opsahl works like a block for me; and apparently, we are both not opposed to happy hour.
So, Cora started telling me that, right now, you have some pretty astute plan sponsors who know a thing or two about the magnitude of hospital spend. Total hospital costs are usually around half of most total plan spend. So, sure, you have plan sponsors doing direct contracts or really scrutinizing underlying hospital charges.
Except … in contract negotiations with plan sponsors either doing direct deals or doing hospital RFPs (requests for proposal) through their carrier or just even negotiating with carriers and looking at the underlying hospital costs, hospital charges to plan sponsors in the aggregate can go up, while hospitals are still able to say, “I’m gonna be net-net 0% increase across the board,” or even “I’m gonna do a decrease.” They are able to show lower prices. Wait, what? Yep, that’s happening.
I was like, “Seriously, how are they doing this?” Cora said, “You should get Dr. Eric Bricker back on the pod to explain exactly how hospitals are going about this.” Dr. Bricker did a video about it, but the show that you’re about to hear digs in hard on the playbook as well. But I’m getting ahead of myself.
So, anyway, after I talked to Cora, I firm up a plan with Dr. Bricker to make a return appearance on the pod. And wouldn’t you know it, that exact same day, Kurt Christie messages me and says, “You should have Dr. Bricker come back on the pod and talk about how hospitals profit from high-cost claimants.”
So, yeah … love it when a plan comes together, especially because so many of you in our tribe have, at various points, asked for a return appearance of the one and the only Dr. Eric Bricker. So, here you have it.
You’ll need to listen to the show to get to the bottom of the well-honed (at this point) contracting strategy that some big, consolidated hospitals—Centers of Excellence, if you will—deploy to maximize revenue from high-cost claimants. It’s like a three-prong playbook from what I have been gathering, but yeah, if you are on the hook to pay for hospital claims, do be aware of this. It is material.
Slight spoiler alert, but the playbook has to do with how hospitals negotiate with plan sponsors on their provider stop-loss contract provisions. It also has to do with how they choose to consolidate and how they engineer their chargemaster.
Sounds boring, but it’s really not if you are on the hook for millions and millions of dollars as a result.
Okay … so, do I really need to introduce Dr. Eric Bricker? Dr. Bricker began as an internist. He also worked in hospital finance. Then he started one of the very first, actually, healthcare navigation companies and also, kind of out of necessity, one of the first get serious about transparency initiatives.
Dr. Bricker says when you help 1.8 million people navigate the U.S. health system for 11 years, you learn a thing or two. So, after he sold Compass Professional Health Services, he decided he’d use what he knew to help set people straight.
And, yeah, go to Dr. Bricker’s YouTube channel AHealthcareZ, for sure, if you want to learn anything about the A to Z of healthcare.
Also mentioned in this episode are AHealthcareZ; Christine Hale, MD, MBA; Cora Opsahl; Kurt Christie; Matt McQuide; Scott Conard, MD; John Torinus; Robert Pearl, MD; and Tom Nash.
You can learn more at AHealthcareZ and by following Dr. Bricker on LinkedIn and at @DrEricB on X.
Eric Bricker, MD, is an internal medicine physician and former co-founder and chief medical officer of Compass Professional Health Services. Compass is a healthcare navigation service that grew to 1.8 million members across 2000+ clients, including T-Mobile, Southwest Airlines, and Chili’s/Maggiano’s Restaurants. Compass was acquired by Alight Solutions in July 2018.
Dr. Bricker then went on to found AHealthcareZ, which provides 400+ healthcare finance educational videos with 100,000+ subscribers/followers across YouTube and LinkedIn.
Additionally, Dr. Bricker serves on the board of directors for Frontier Direct Care and provides consulting services to a variety of clients.
05:06 From a hospital revenue perspective, where do high-cost claimants fall?
08:45 How do hospitals structure their stop-loss provisions so that they ensure they’re always maximizing their revenue?
12:15 How hospitals acquire providers to steer as many patients as possible through specific service lines.
20:21 Why do carriers let hospitals get away with these rates and stop-loss negotiations?
21:06 How do Medicare Advantage and Medicare rates play into all of this?
22:00 What should a benefit consultant be doing here?
23:37 What are the keys to direct contracting?
26:22 EP468 with Matt McQuide.
27:18 EP462 with Scott Conard, MD.
27:21 Why is it important to get trusted relationships set up ahead of time?
28:04 The Company That Solved Health Care by John Torinus Jr.
28:31 EP471 with Christine Hale, MD, MBA.
28:52 EP412 with Robert Pearl, MD.
29:23 What needs to be the clinical consideration for specialists?
30:46 What is the advantage that employers have in all of this?
33:06 Dr. Bricker’s video on 32 examples of healthcare deception.
Recent past interviews:
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Dr Christine Hale, Nikki King, James Gelfand (Part 2), James Gelfand (Part 1), Matt McQuide, Stacey Richter (EP467), Vivian Ho, Chris Crawford (EP465), Al Lewis, Betsy Seals, Wendell Potter (Encore! EP384)