EP504: A Back-to-Basics Roadmap Through the Perverse Incentives to Advanced Primary Care, With Ryan Jacobs

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It's been a while since we started from the beginning, so let's just take stock of the basics in this show, refresh ourselves if you're a longtime listener, or welcome if you're new around here. Today we are digging on and about what I would call the poster child for proven healthcare strategies: advanced primary care, otherwise known as APC.

For a full transcript of this episode, click here.

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If you look at the data, APC, well done and with the right segmentation—neither of which should be underestimated—but done well, APC should be a slam dunk. It improves patient outcomes. It reduces costs. Listen to the episode with Kenny Cole, MD (EP431) for more on what good advanced primary care looks like and the show with Beau Raymond, MD (EP455) on pulling it off in a community.

Now I wanna make one thing really clear. When I say advanced primary care (APC), please note I do not mean some kind of seven-minute patient visit during which the clinician tells the patient he or she is limited to but one concern only and if they wanna talk about anything else, they gotta make another appointment and pay another co-pay.

I'm also not talking about any kind of model where a doctor takes a capitated payment and then doesn't even see the patient. They just process a referral, which I saw a post about by Stacy Mays the other day. So, nothing of that ilk. We're talking about real advanced primary care, which is managing risk, not symptoms.

So anyway, here is the probably multibillion-dollar question: If the evidence for APC is so robust, why isn't APC everywhere? Why aren't we tripping over high-value primary care clinics on every street corner? And if you're a clinician trying to do APC, why isn't it super easy to stand up a practice and get paid?

The answer, as usual, lies in the pachinko machine that is the U.S. healthcare industry. You throw a great idea—even when with lots of evidence—into our industry, into our sector; and the results that bounce out the other side are rarely what anybody may have expected, intended, or wanted.

So, on the show today first, we are exploring the pit traps, I'll call them—the blockades that keep APC from really scaling, starting with two root causes, the first one being conflicting fiduciary duties. Because look, when we talk about your average—let's just say hospital board, let's just start there—health system board's fiduciary responsibility, we aren't just talking about mission.

There's a reason for the epidemic of burnout and moral injury amongst clinicians in this country. There's a reason why fewer than half (45%) of frontline clinicians trust their organization's leadership to do what's right by patients. At the board or C-suite level, it's all about heads in beds, as they say.

A health system drives revenue by driving volume, profitable surgeries, infusions that are tens of thousands of dollars more than you can find at an indie practice, and, again, filling those beds.

Meanwhile, the entire goal of advanced primary care is to keep patients out of the hospital and out of the ER. As my guest, Ryan Jacobs, today points out, there is a very steep uphill battle when your innovation actually threatens the revenue of some of the largest players in the nonmarket that we have here.

Listen to the episode with Scott Conard, MD (EP391) talking about his, he calls it his Pelican Brief moment when he was dealing with a local health system. It is a really stunning, just stop you in your tracks perfect example of this whole conflicting fiduciary duties thing playing out in real life.

So then, after that, we get to a second reason why APC is not available on every corner. Ryan Jacobs, again, my guest today, he calls this second reason the black box of complacency.

In our healthcare nonmarket, innovators and those looking to improve quality or lower costs often don't lose to better competitors. They lose to the status quo. I mean, you think about this—it is often a rational move for "lazy networks" and consolidated health systems to do nothing because they get the volume anyway, especially when self-insured employers buy on discounts and not much else.

Listen to the episode with Jonathan Baran (EP483) on the healthcare flywheel for a really, really deep dive into this point.

All right … now let's make all this actionable. Ryan lays out a three-step roadmap for founders, clinicians, plan sponsors, anybody who is tired of waiting for the invisible hand to fix things because … yeah, exactly. There's no functioning market in most of the healthcare industry, so there is no invisible hand that's gonna level up quality or keep prices down. It does not work that way.

Here's the roadmap that Ryan Jacobs lays out today:

Step 1: Perform a reality-based assessment. Think about all the things that we just talked about. No magical thinking allowed. You have to follow the dollar. You gotta understand who has a negative financial incentive when patients stay healthy.

These fiduciary conflicts and these complacencies, they are material and they must be considered because that pachinko ball will bounce in response. And if you know what you're looking for because you follow the dollar, you can kind of predict what's gonna happen.

Step 2: Anticipate the stakeholders' math. If you wanna get buy-in from a CFO or a benefits pro or anybody else, you have to do the math the same way that they do. That's Step 2.

Step 3: Build your own strategic conclusions. So, take all this on board and maybe you arrive at direct contracting for advanced primary care, which is essentially finding a pathway that is outside of the traditional belly of the beast—or whatever you wanna call it—because when you are contracting for advanced primary care, you're going around conflicting fiduciary responsibilities.

What you are doing is bringing—Ryan Wells said this on the pod a couple of weeks ago (EP503)—you're bringing together the beginning of the road (ie, the ultimate purchaser of the plan sponsor) and the end of the road, which is the doctors, the entities that are actually providing care, and getting rid of everything that is going on in the middle, where a lot of those conflicting fiduciary responsibilities, where a lot of that complacency lies.

So, yeah, if you wanna understand why, on average, self-insured employer ER spend is now topping out at about 6% of total plan costs and how to actually start thinking about fixing the "pipes" of primary care, you're in the right place. Continue to listen.

My guest today, as I have mentioned several times at least, is Ryan Jacobs, who is SVP, Strategy and Partnerships, over at Marathon Health.

This episode is sponsored by Aventria Health Group, and we had an assist from Payerset. Payerset has price transparency data in a very elegant interface. You can use it to turn negotiations into partnerships. Certainly check them out. And I thank Payerset so much for offering financial support to keep this podcast on the air. Thank you very much, Payerset.

Oh, one last thing here. This show is part of, I don't know, a little bit of a tangent, a series on direct contracting that started off a couple of weeks ago with the show with Ryan Wells, Adam Stavisky, and Leo Spector, MD, MBA (EP503) and which will continue through next week when I interview Ahilan Sivaganesan, MD, about what is value, which you kind of gotta know if you're trying to buy value-based care or trying to pay for value. This is a rate critical to know what value means.

Okay … so, let's get to it.

Also mentioned in this episode are Marathon Health; Kenny Cole, MD; Beau Raymond, MD; Stacy Mays; Jerry DiMaso; Payerset; Scott Conard, MD; Jonathan Baran; Ryan Wells; Aventria Health Group; Adam Stavisky; Leo Spector, MD, MBA; Ahilan Sivaganesan, MD; Jacob Asher, MD; Chris Crawford; Elizabeth Mitchell; John Rodis, MD, MBA; John Lee, MD; and RxSaveCard.

For a list of healthcare industry acronyms and terms that may be unfamiliar to you, click here.

You can learn more at marathon.health, email hello@marathon.health, and follow Ryan on LinkedIn.

Ryan M. Jacobs serves as senior vice president of health plan strategy and partnerships at Marathon Health, where he leads the company's national strategy to expand, scale, and deepen payer relationships under value-based care arrangements. He is responsible for advancing Marathon's in-network growth strategy and building innovative partnerships that accelerate adoption of advanced primary care models across commercial and employer markets.

With more than 20 years of healthcare leadership experience, Ryan has driven the strategic design, commercialization, and national launch of population health and value-based care models that measurably improve access, affordability, and clinical outcomes. His career spans leadership roles across health plans, large national employers, provider organizations, and health technology companies, including Aetna, Optum, Cricket Health, and Interwell Health.

00:00 A refresher on advanced primary care (APC).

02:36 Why APC isn't everywhere.

04:39 The problem of complacency in the healthcare system.

05:27 Ryan Jacobs' roadmap.

08:59 The pitfalls of advanced primary care.

09:58 What primary fiduciary responsibility means.

10:51 Growth on the payer side.

11:51 SUMS5 with Jacob Asher, MD.

12:36 EP483 (Part 1 and Part 2) with Jonathan Baran.

12:48 EP465 with Chris Crawford.

13:27 The reality of the healthcare system in the United States.

14:11 The flywheel created by the tension within the healthcare system.