Let us chat about today the inches all around us and also about how there is no market in healthcare all at once in this show. Today I am talking with Ivana Krajcinovic. And let me give you some examples of the inches.
Two members of a plan get infusions at a hospital. And if these two members had gone down the street to get their infusions, the total cost of the two of them would have been $1 million less … $1 million less! How many inches is a million dollars?
Or the examples Ivana Krajcinovic talks about coming up where an independent practice was charging $135 for a chemo infusion and the hospital down the street was charging for the same exact drug, by the way—the same exact infusion—$13,560 … $135 versus $13,560!
We talk about affordability in this country? Member's paying coinsurance off that 13K, by the way. And if you're doing the math at home, that is a 10,000% markup. Or if we start from the Medicare price, it was a 40,000% markup.
Then there's another example that Ivana talks about where a plan member went to a hospital and got a $90,000 bill for a series of infusions that, again, down the street would have been $185—all in. Inches much?
For a full transcript of this episode, click here.
If you enjoy this podcast, be sure to subscribe to the free weekly newsletter to be a member of the Relentless Tribe.
So, it's pretty clear why the show is part of "The Inches Are All Around Us" series. Why do I say this is part of the "No Market" series? Because look, functioning markets rationalize prices. That's just what they do. So, if you have two places in the exact same geography and one of them is charging 500 times or whatever the other one, you don't have a market if they're both still in business a year later. Ongoing wild price variations is a big tell that there's no market to be had.
Another tell, though, is that carrier networks, who are supposed to be the demand curve here—or at least that's what their marketing says or what we are all kind of led to believe—they advertise as high-value networks, right?
The fact that any given network experiences essentially no business repercussions for spending a million dollars extra of its plan sponsors' (its customers') money—because that's who's paying for this, the self-insured employer or union, at the end of the day—and the network, the carrier network doesn't lose business as a result … Right?
Listen to the show from last week with Jacob Asher, MD (Take Two: EP398) about the carrier nonmarket and why this is the case. But bottom line, if anyone is waiting on a market to constrain prices for them, that is very magical thinking.
Where this whole thing is gonna wind up, by the way, is with my guest today, Ivana Krajcinovic, suggesting a roadmap to make a whole lot more likely that you'll pay $135 for an infusion instead of 13 grand. For more on this, do go back and listen to the show with Keith Hartman, RPh, by the way. We teed this off a couple of years ago. That was episode 369.
But in Ivana's upcoming roadmap that you're gonna hear about (just doubling down on the spoilers—if I'm gonna do something, I might as well do it well), but in that roadmap, direct contracts with indie practices will feature a starring role. I'm telling you this because if you're one of those folks that listens to like 23 minutes of any given podcast and then bails, make sure you make it to around the 30-minute mark of the show.
As I have said several times already, my guest today is the incomparable Ivana Krajcinovic, the outgoing vice president of healthcare delivery at UNITE HERE HEALTH.
Ivana has just retired, but she spent over three decades with her team protecting the health and the hard-earned wages of 230,000 hospitality workers. She is exactly the kind of "dangerous expert" that we love to have on the show—someone with the wisdom about how the system actually works and the articulate willingness to talk about it.
Okay … so, this conversation about the inches and the nonmarket for infusions specifically in this country, for more information, do go back and read the really excellent Bloomberg News exposé by John Tozzi. It's a really good article, and you'll see everything that we talk about today in writing with all the fact-checking that one would expect from Bloomberg News.
So, okay … what we'll do in this episode is, first, we're gonna talk about the infusion nonmarket, the inches and its implications, such as an infusion costing 500 times Medicare when there are 1.5x Medicare options in the same exact health system. Sometimes I just can't even with some of this stuff.
But another nonmarket tell, again, is that carrier networks are still in business. We talk all about that. What happens next in this episode is we deconstruct the roadmap that Ivana used to fight back, which starts with (no surprises) drilling into data and ends with direct contracting with independent doctors. And how that happens is by carving out utilization management so that there is site-of-care steerage.
So, this is a conversation about fiduciary duty. It's a conversation about transparency, the power of collective action.
This podcast is sponsored by Aventria Health Group with an assist from Payerset. And I thank Payerset very much for the financial support.
Also mentioned in this episode are UNITE HERE HEALTH; Jacob Asher, MD; Keith Hartman, RPh; Stan Schwartz, MD; ZERO.health; John Tozzi; Aventria Health Group; Payerset; Cora Opsahl; 32BJ Union Health Fund; Jonathan Baran; Peter Hayes; Erik Davis; Autumn Yongchu; Brian Cotter; Bright Spot Insights; John Quinn; Mark Newman; Nomi Health; Preston Alexander; Health Here; Ann Lewandowski; HealthCheck360; Sam Flanders, MD; Shane Cerone; Kada Health; and Cristin Dickerson, MD.
For a list of healthcare industry acronyms and terms that may be unfamiliar to you, click here.
You can learn more at uhh.org and by connecting with Ivana on LinkedIn.
Ivana Krajcinovic, PhD, recently retired as vice president for healthcare delivery at UNITE HERE HEALTH (UHH), a national Taft-Hartley Fund that purchases healthcare for over 200,000 unionized hospitality workers and their families. Combining her training as a health economist with more than 30 years working directly with immigrants and the working poor, Ivana oversaw a wide variety of projects. She has deep expertise in engaging participants, ranging from benefit education to chronic disease self-management, as well as in developing peer-to-peer programs.
Ivana led a team whose challenge was to radically bend the cost curve while maintaining quality coverage as every dollar that UHH spends on healthcare is a dollar that could go to a worker in wages—higher wages that are likely to do more for workers' health than increasing spending on their healthcare. Ivana and her team have utilized narrow networks, value-based contracts, and direct contracting and have established health centers designed for their members.
Ivana has a PhD in economics from Yale University and is the author of From Company Doctors to Managed Care: The United Mineworkers' Noble Experiment (Cornell University Press).
00:00 $135 vs $13,560: How infusion drug prices play into the "Inches All Around Us" series.
02:02 How infusion drug pricing fits into the "No Market" series.
03:19 A roadmap and more episodes on this topic.
04:36 Introducing this week's expert, Ivana Krajcinovic, PhD.
05:10 A must-read Bloomberg News article on infusion pricing.
05:33 An overview of what to expect from this episode.
06:54 The first tell of the infusion nonmarket.
07:41 The price variations that Ivana has seen in the infusion nonmarket.
11:39 How hospital spend affects wage increases affects patients and employees twice over.
13:43 The second tell of the infusion nonmarket.
14:33 Take Two: EP398 with Jacob Asher, MD.
14:55 EP483 with Jonathan Baran.
16:15 Why networks are apathetic to this pricing discrepancy.
17:55 The factors that play into the nonmarket issue of infusion drug pricing variations.
19:18 EP370 with Erik Davis and Autumn Yongchu.
19:45 Are pricing discrepancies easy to spot?
22:38 Where we have power in a nonmarket situation.
23:22 A recap of the advice in the show so far.
25:51 How you place pricing pressure on an entity.
28:47 EP482 with Preston Alexander.
29:34 How an improved market creates time for better care coordination.
30:52 EP486 with Stan Schwartz, MD.
33:23 The fourth part of the roadmap.
36:41 EP492 and EP490 with Sam Flanders, MD, and Shane Cerone.
36:49 Why serving the community and being fiscally responsible should go hand in hand.