How Margin Shoves Mission Off of the Bus: A Primary Care Case Study, With Stan Schwartz, MD—Summer Shorts

Starting off here with a heads-up … hey, heads up! A bunch of you in the tribe who I find inspiring as all get-out, and just the good kind of people who, yeah, you would be the type who would want something like this, but in the newsletter that Relentless Health Value sends out on a weekly basis—the weekly email that you can (for free) subscribe to if you go to the Web site and click on the box that will pop up sooner or later—I am going to link to the so-called Guiding Principles Policy that Doug Geinzer and Amy Mecham from High Performance Providers put together.

For a full transcript of this episode, click here.

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I had referenced said policy in the show with Ben Schwartz, MD, MBA (EP481) about mission and margin. In that show, I called this document the more professional version of a “no a-holes” policy. But anyway, I said it’s something that Doug, Amy, and team ask anyone they have to do with to sign, like, literally sign. So, yeah.

If you would like to get a copy of this personal integrity and “are you in healthcare for the right reasons” policy, please either check your inbox for the newsletter this week that you just got when this show went live and find the link to download or sign up for the newsletter and I will include it again next week on Thursday.

After that, I am not gonna post this on the Web site or anything. So, yeah … call it a limited-time offer.

Let’s do this Summer Short. Did you listen to the show with Al Lewis about ER (emergency room) spending being now around 6% of many plan sponsors’ total plan costs. If not, it’s episode 464. Go back and take a listen when you have a moment.

So, 6% of total plan sponsor costs can go to the ER these days, which is insane, mind you. But it got this breathtakingly high (one reason at least) because so many patients/members are getting what amounts to the most expensive primary care money can buy in the emergency department.

That right there was the big takeaway from the primary care/ER follow the dollar show I did this past spring, which is episode 467. Look at me, saving you time. You wait long enough, and you’ll get a one-sentence summary of every single Relentless Health Value episode. So, let me continue.

Turns out, advanced primary care, comprehensive primary care, can and often will reduce emergency room admissions (EP409). Advanced primary care will also, therefore, reduce resulting hospital admissions, since as many as a third of hospital admissions come through the emergency room. And this matters, considering that around 50% of a lot of plan sponsors’ total costs go to health systems … 50%! Yeah, right … one half!

At this point, every time I hear a plan sponsor talking about health system spend, it’s right around 50%.

So, let’s just say 50% of plan sponsored dollars are going to health systems and 6% go to ERs as just, like, the top of the funnel in a lot of cases.

Let’s put all these pieces together now, shall we? Let’s just say we’ve established that advanced primary care saves lives, saves money, makes clinicians happier (which is also true). Listen to the Summer Short called “What Happens When Someone Tries to Un-transform a Transformed PCP Practice?” Let’s just say from a Quadruple Aim perspective, advanced primary care makes all the sense in the world.

Now I mean advanced primary care. We are not talking about transactional primary care. I’m talking good, comprehensive, longitudinal, data-driven team-based with behavioral health and navigation. We’re managing health, not just symptoms. We’ve just established it’s good for patients, it’s good for members, affordability, just all the things, clinicians.

So, you’d think that everyone in the healthcare industry—the medical industrial complex, if I wanna be snarky—should really have, if they’re interested in the Quadruple Aim, they should really have a vested interest in promoting good advanced primary care.

Well, let’s open the door and invite the real world in, shall we?

I want to mention episode 391. This is the episode where Scott Conard, MD, for the first time ever, talked about his, he calls it his “Pelican Brief” moment when the local health system bought his advanced primary care practice. It is a really compelling show. It is a tale of how healthcare in this country actually works.

And let me tell you, I have people with very big jobs who have come up to me. They’ve sent me emails, they’ve come up to me at conferences, they pull me aside and they say that this show, the one with Dr. Scott Conard, it really got to them. It really affected them and how they think.

So, right, this Summer Short today is another such tale of perverse incentives and health system administrators doing stuff that is clearly endorsed and encouraged by their boards and leadership but smells very, very bad when it hits the open air, I would say. I mean, I think anyway, but you know, nihilism is just not my brand.

So, let me introduce you to a real OG in the healthcare industry, Stan Schwartz, MD. I know you are used to spoilers in these introductions, but I’m gonna throw you for a loop today. No spoilers for you except to say that this story isn’t rainbows and unicorns, but you probably guessed that already.

It’s another example of and now (okay, fine … I’ll give you one little, I’ll call it a trailer) and I’m quoting Dr. Schwartz here. But he says his experience was an example of a major variation on fee for service that occurred within a fee-for-service universe. And the problem was one leg was going one direction and the body wants it to go another direction. And Dr. Schwartz said that is not a sustainable endeavor.

Yep. Not the first time that we have heard this. These days, Dr. Stan Schwartz is a co-founder over at ZERO.health. ZERO gets members access to high-quality providers for $0 out of pocket, leveraging bundled payments and direct contracting.

Apropos nothing except I was intrigued and just thought of something that Dr. Schwartz told me, he says members rarely have an incentive to opt out of surgery, because surgery is so often cheaper than conservative care. That struck me. So, yeah … points of ponder. ZERO, by the way, generously offered financial support to Relentless Health Value. And for that, I and the entire team over here are extremely grateful.

It was such an honor to have Dr. Schwartz on the show and especially talking about an experience that is so instructive, I think, for everybody listening from plan sponsors to hospital executives, to clinicians. Just everybody. This is another case study with a lot of learnings.

This Summer Short, as I just said, is sponsored by ZERO.health, with a small assist from Aventria Health Group.

Also mentioned in this episode are ZERO.health; Doug Geinzer; Amy Mecham; High Performance Providers; Benjamin Schwartz, MD, MBA; Chris Deacon; Al Lewis; Larry Bauer, MSW, MEd; Healthcare Purchaser Alliance; Scott Conard, MD; John Lee, MD; Andreas Mang; Claire Brockbank; Cora Opsahl; and Jim Millaway.

You can learn more at ZERO.health or email info@zero.health. You can also follow Dr. Schwartz on LinkedIn.

Stan Schwartz, MD, FACP, FIDSA, is the co-founder and chief medical officer at ZERO.health, an employer-facing digital health company created by Stan and his co-founder James Millaway in 2016.

ZERO provides direct contracting services between self-funded employers and providers offering pre-priced bundled healthcare services at significant savings. All ZERO services are at no cost to the covered members—healthcare simplified to $0.

His time at Warren Clinic and participation in Centers for Medicare and Medicaid Innovation’s landmark Comprehensive Primary Care initiative sparked a drive to work on future transformative projects.

He founded WellOK, the Oklahoma Business Coalition on Health, a not-for-profit organization dedicated to improving the value of healthcare for Oklahoma businesses. The coalition later became the Oklahoma Business Coalition on Health at Oklahoma State University.

Dr. Schwartz serves on the Medical Director Advisory Council of the National Alliance of Healthcare Purchaser Coalitions and on the Clinical Quality Committee of MyHealth Access Network, a multistate Oklahoma-based health information exchange.

08:11 What was Dr. Schwartz’s “Pelican Brief” moment?

09:09 How Dr. Schwartz’s advanced primary care structure and health information exchange beat out competing states for CMMI funding.

12:53 What did “good” look like with this advanced primary care program?

15:06 EP391 with Scott Conard, MD.

15:42 EP438 with John Lee, MD.

16:57 What got Dr. Schwartz interested in employer-sponsored healthcare?

18:46 EP419 with Andreas Mang.

18:48 EP453 with Claire Brockbank.

18:50 EP452 with Cora Opsahl.

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Preston Alexander, Dr Tom X Lee (Take Two: EP445), Dr Tom X Lee (Bonus Episode), Dr Benjamin Schwartz, Dr John Lee (Take Two: EP438), Kimberly Carleson, Ann Lewandowski (Summer Shorts), Andreas Mang and Jon Camire (EP479), Justin Leader (Take Two: EP433), Andreas Mang and Jon Camire (EP478), Stacey Richter (EP477), Charles Green (Bonus Episode)