Episodes
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In Episode 439 of 'Relentlessly Seeking Value,' host Stacey Richter discusses the convoluted issues surrounding generic drug pricing with pharmacy consultant Luke Slindee.
To read the full article and show notes with links mentioned as well as a full transcript, click here.
They delve into the ways traditional Pharmacy Benefit Managers (PBMs) exploit the system to make immense profits, often leading patients to pay more even with insurance. The conversation explores various solutions, such as the removal of "Usual and Customary Prices" from PBM contracts, the advantages of bypassing insurance, and giving patients direct payment tools like health savings accounts.
Luke Slindee, with his extensive background in pharmacy and consulting, provides valuable insights into rebalancing the generic drug market to benefit patients, pharmacies, and plan sponsors alike. Additionally, the broader implications of these dysfunctional systems on pharmacy operations and staff conditions are discussed.
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08:12 Where do cash prices fall when pharmacies have contracts with PBMs?
08:39 What is a usual and customary price?
12:14 How is the usual and customary price affected by PBMs?
16:49 Should pharmacies be allowed to have two sets of cash prices?
17:14 Where does GoodRx fit into this because of the pharmacy/PBM dilemma?
19:06 What’s happening with Amazon and the anticompetitive contract lawsuit, and how does it relate back to pharmacy contracts with PBMs?
20:38 EP395 with Brennan Bilberry.
21:05 EP420 with Ge Bai, PhD, CPA.
23:27 Why is there a new wave of cash-only pharmacies?
24:02 EP418 with Mark Cuban and Ferrin Williams, PharmD, MBA, from Scripta.
25:41 What would allow the generic market to return to normal competitive pricing?
26:39 How does this dysfunction create a negative downstream effect?
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In this episode of Relentless Health Value we dive into the concept of Cognitive Dissonance in the healthcare industry with Dr. John Lee, an ER physician and chief medical information officer. We explore how healthcare professionals navigate the conflict between their beliefs and actions, especially in large healthcare organizations. Dr. Lee shares practical advice on celebrating small wins, incremental improvements, and fostering a supportive culture among colleagues.
This conversation sheds light on the challenges and solutions for those striving to deliver better patient care despite systemic obstacles.
To read the full article and show notes with links mentioned as well as a full transcript, click here.
Dr. John Lee is an ER (emergency room) doc by training, who is also an informaticist and chief medical information officer. I can tell you from personal experience that Dr. Lee is one of the most creative and pragmatic problem solvers that I have encountered. He says he’s dedicated to trying to help move the ball forward and changing our healthcare system using information technology and using our ability to be far more transparent with the things that we try to do in a positive way in healthcare.
Join us for an insightful discussion on balancing ideals and realities in modern healthcare.
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Missing episodes?
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The Unseen Influence of the RUC on Healthcare
This episode of 'Relentless Health Value' features a discussion with Brian Klepper, a healthcare analyst and former CEO of the National Business Coalition on Health, about the powerful yet obscure RUC (RBRVS Update Committee) and its significant impact on the economics of primary care and the broader healthcare system. The RUC, a committee within the American Medical Association, plays a critical role in determining the relative value of medical procedures, which directly influences Medicare payments. The episode reveals how the RUC's composition—dominated by specialists over primary care physicians—skews the financial incentives in healthcare, affecting the viability of primary care practices and mental health services. The discussion also explores the flawed assumption that the financial value assigned to healthcare services by the RUC equals their true value to patients, highlighting the need for a better understanding of the inner workings of American healthcare to address its shortcomings.
To Read the Full Article with Show Notes Including Links Mentioned, Visit Our Site.
00:00 Introduction
02:29 Unpacking the RUC: The Power Behind Healthcare Economics
04:26 The Financial Impact of the RUC on Primary Care
07:43 Exploring the Value of Healthcare Services
10:29 The Real-World Consequences of RUC Decisions
12:50 Debunking the Equivalence of Value and Money in Healthcare
15:09 Final Thoughts and How to Stay Informed
Brian Klepper, PhD, is principal of Worksite Health Advisors and a nationally prominent healthcare analyst and commentator. He speaks, writes, and advises extensively on the management of clinical and financial risk, on high-performance healthcare, and on realizing the potential of primary care.
His current focus is on high-performing healthcare organizations that consistently deliver better health outcomes at lower cost than usual approaches in high-value niches and how, integrated with advanced primary care, they can be configured into turnkey comprehensive high-value health plans that can disrupt the status quo.
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In this episode of Relentless Health Value we follow up on the topic of employer inertia discussed with Lauren Vela in episode 406, turning our focus to third-party administrators (TPAs), administrative services only (ASOs), and health plans.
Elizabeth Mitchell from the Purchaser Business Group on Health (PBGH) joins us to discuss the roles of TPAs and ASOs, highlighting the gap in the market for independent, efficient TPAs not owned by health plans. We also delve into the trend of direct contracting between employers and providers to enhance access, quality, and outcomes.
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.
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.
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.
Join us for a deep dive into these critical components of the healthcare system and their impact on self-insured employers.
To read the full article and show notes with links mentioned as well as a full transcript, click here.
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For a full transcript of this episode, click here.
I’m gonna encore this episode with David Scheinker, PhD, for several reasons; but here’s a big one: Why are we as an industry not doing what David Scheinker suggests in this episode?
Why are we not doing, I don’t know, kinds of logical things to reduce admin burden in this country when everyone agrees admin burden is a problem?
But let me back up for a moment for context. Two things happened since this show originally aired. One is that I was invited to a fireside chat by the Advisory Board to talk with Abby Burns, one of the amazing hosts over at Radio Advisory; and we talked about value in the healthcare industry. And if you define value as benefit divided by costs, and you can cut costs—like cut admin burden costs in half—then you have created some really nice communal value, which we talked about at length during that aforementioned fireside chat.
Here’s the other thing that happened since this show originally aired. I read the book by Mike Leavitt, mainly because Steve Schutzer, MD, kept talking about it. The title of the book is Finding Allies, Building Alliances. Maybe I will do a book report about this at some point, but let me share a couple of key quotes just to get the party started here.
Mike Leavitt wrote, “A diverse alliance, well led and well managed, can bring resources to bear on a problem that no organization can match—even the largest of organizations. The synergy of resources—from financial to intellectual—can deal effectively with a wide range of issues confounding organizations today.”
I found that very interesting. Here’s the second quote, which deals with what the top reason is that such diverse alliances may wish to hook up. “[It’s] a common pain: A shared problem that motivates people and groups to work together in ways that could otherwise seem counterintuitive.” Hmm … so, back to administrative burden.
Let’s review the facts that David Scheinker, PhD, shares in the interview that follows. He says any given transaction will cost provider organizations 14% of the total transaction costs to manage to get paid. Yes, it costs 14% of a transaction merely to get paid for the transaction. This is a big reason why both Peter Hayes, in the episode with him (EP424), and also Marshall Allen (EP425) talk about for why cash prices can be a whole lot less than going through insurance prices because you can skip a lot of insurance burden.
Now, on the payer side, add to that 14% an additional 5% to 15% to pay said transaction. That 30% of healthcare is waste stat that keeps getting tossed around. Listen to the show with Will Shrank, MD (EP413) for more on that. But, yeah … here’s 20% to 30% of every transaction that is waste. And we haven’t even gotten into redundant care or inappropriate back surgery yet. Our industry spends up to 30% of our money just trying to get paid and pay.
Here’s a case study for you. You know who has already solved for this whole “it’s really hard to get paid and pay” dilemma? Derivative traders. It used to cost derivative traders $100,000 to do a contract, any given contract. And they worked together and got this down to $5000 by doing some of the stuff that David Scheinker talks about in the show. And, I don’t know, I feel like the healthcare industry could also do this, too, if they wanted to. But there are a whole bunch of reasons why our industry cannot seem to get together and be as ruthlessly practical as derivative traders—or banks, who have figured out how to work together to process credit cards to reduce their own common pain.
Here are but a few of the reasons, potentially, why the healthcare industry doesn’t get together to reduce administrative burden in some of the ways that Dr. Scheinker talks about.
1. Some organizations actually make a lot of money off of that transactional waste. As but one example—and not to just pick on one, but we don’t have all day—how about some RCM (revenue cycle management) companies who may or may not be owned by the same vertically integrated stacks as the payers themselves? As I have said any number of times, one person’s—or potentially an entire country’s, as the case may be—one party’s waste, is somebody else’s honeypot; and I am not sure if this is any exception.
2. Legacy technology and data systems and all the sunk costs therein
3. As Kaye Davis and Katrina Hubbard reminded me about the other day, there are some serious regulations in healthcare due to everybody being a vendor of CMS that adds a layer of regulatory complication to many collaborations. Also, state laws sometimes have an unintended side effect of making it tough to collaborate.
Now, are there any precedents for this type of collaboration in the healthcare industry? Yeah, actually Surescripts, which, don’t forget, was created by an alliance of PBMs (pharmacy benefit managers) who worked together because they all wanted to enable e-prescribing and needed a joint platform to do it.
Look, I could say a lot about this one, but nonetheless, so much of what gets talked about in the show today with Dr. David Scheinker is very, very actionable. Just want to note that since David Scheinker was on the show, he and his team have done some major research over the past few years into ways that contracts can be standardized. If enough of you reach out and say that you’re interested, we, for sure, can have David come back on the show and discuss.
David Scheinker, PhD, is a clinical professor of pediatrics. He’s the executive director of systems design and collaborative research at Stanford Children’s Health. He also founded and directs SURF Stanford Medicine.
And with that, here is your original episode.
Administrative costs in the United States have a bad rap. You don’t have to look too far to find an article about how there’s now, like, 10 administrators for every 1 physician in this country. Or 3 to 4 billing people for every physician.
Or consider what Dan O’Neill was talking about in episode 359. He was talking about IPAs (independent physician associations) and other managed care entities. As Dan mentions, contracting with some of these IPAs is like an “I love 1990” flashback. The contracting process transpires via mail. Not email, mind you. Mail. Like, stick-a-stamp-on-the-envelope mail.
So, in sum, there’s a lot of pretty well-founded complaining about administrative costs in this country. A lot of this administrative stuff is truly inefficient and a fantastical waste of time. So, here we are freaking out about staffing shortages, overlooking that doctors at the heights of their careers are spending some percentage of their time not counseling, treating, or diagnosing patients but twiddling their thumbs on hold with one insurance company or another slowly burning out by the inefficiency of it all. Or doing pajama time, and we all know that too much pajama time means also burnout on a silver platter.
So then, let’s get granular here. If we’re trying to quantify admin costs, how you do that is to quantify how much each transaction costs. How much does it cost to send a bill and get paid for it? How much does it cost to file an appeal and a denial of a prior auth? Add all those transactions together and you get the full cost of the administrative burden.
In this healthcare podcast, we’re digging into a paper about admin costs written by David Scheinker, PhD (my guest today); Barak Richman, PhD, JD; Arnold Milstein, MD, MPH; and Kevin Schulman, MD, MBA.
I have the pleasure of speaking with David Scheinker, PhD (as I mentioned), who is the lead author on this paper. Just to underline a major takeaway from this conversation with Dr. David Scheinker, he reiterates a recommendation to eliminate a big proportion of administrative costs.
I guess I should say spoiler alert here, but the major takeaway/recommendation is this: Standardize healthcare contracts between payers and providers. Every payer and every provider finds one contract template and uses it. I don’t mean one template per payer or per provider, although that probably would be a revelation in and of itself. But I mean that all payers use one basic provider contract.
A couple of specifics here: The template that I’m referring to (and that Dr. David Scheinker is referring to) consists of parameters. What do I mean when I say parameters? Consider what Airbnb does when you’re looking for a place to stay, as an example. How many bedrooms (that’s a parameter)? How many bathrooms (that’s a parameter)? How many amenities (that’s a parameter)?
After everybody picks their standard set of parameters, at that point, all parties can negotiate and come up with whatever they want for what is the price of an extra bedroom or whatever value you’re gonna assign to that parameter. Go nuts there, but from a data collection and analytic perspective and a getting paid perspective, it is way easier to do it that way—meaning it’s way easier to execute and report when all of the contracts use the same parameters. Also, you can build tech to do a lot of that because you don’t have to write algorithms with exponential variables.
You can learn more by connecting with David on LinkedIn and following him on X (Twitter).
David Scheinker, PhD, started his career as a research mathematician and switched to healthcare operations to work on an interdisciplinary team and have a more immediate impact. He is a clinical professor of pediatrics, the executive director of systems design and collaborative research at Stanford Children’s Health, and a member of the Clinical Excellence Research Center (CERC) at Stanford University. He founded and directs SURF Stanford Medicine, which brings together students and faculty from the university with physicians, nurses, and administrators from the hospitals. He studies clinical care delivery, hospital operations, sensor-based and algorithm-enabled telemedicine, the socioeconomic factors that shape healthcare, and healthcare policy.
10:39 What’s the quantitative administrative cost in an average transaction?
11:05 What’s the quantitative administrative cost in a healthcare transaction?
11:58 What does the healthcare billing and administration cost add to the US’s overall healthcare spend?
12:53 Is it possible to cut billing and administrative costs in healthcare?
14:17 “In some ways, the problem for healthcare should be simpler.”
15:30 What does the complexity of the current system look like in a doctor’s office?
18:42 How did David go about studying healthcare administrative costs?
21:34 “It doesn’t have to be simple; it should be standardized.”
24:50 What would be the pushback on standardizing contracts in healthcare?
25:43 Why is it possible to gain more value by losing customization in contracts?
27:20 “Never let a good crisis go to waste.”
27:41 “It’s much easier in healthcare to build something new than to change something that exists.”
30:47 What benefits does telemedicine have to cutting administrative costs?
32:17 What is another significant benefit of using standardized contracts?
33:26 Why haven’t standardized contracts become a common thing in the current healthcare system?
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Optimizing Pharmacy Benefits in Value-Based Care: A Conversation with Dan Mendelson
In Episode 435 of 'Relentless Health Value,' Stacey Richter hosts Dan Mendelson from Morgan Health to discuss the importance of integrating pharmacy benefits into the broader context of value-based care. The conversation stems from a LinkedIn post by Mendelson outlining five key considerations for optimizing pharmacy benefits. Topics include the total cost of care, the need for value-based decision-making in pharmacy benefits, the integration of clinical teams in formulary development, and the critical role of patient engagement. The episode also explores how employers can better manage healthcare costs by aligning incentives and navigating the complexities of the pharmaceutical landscape. Key advice for various healthcare stakeholders, including pharma companies, hospitals, and primary care doctors, is also provided.
To read the full article and show notes with links mentioned as well as a full transcript, click here.
Love the show? Please consider signing up for our weekly newsletter. We'll send you an article covering the latest episode with show notes, mentioned links and a transcribed intro. Join the RHV Tribe.
00:00 Introduction
00:28 The Intersection of Pharmacy Benefits and Value-Based Care
00:57 The Critical Role of Pharmacy in Healthcare Outcomes
03:16 Exploring Pharmacy Benefits Optimization with Dan Mendelson
03:39 Morgan Health's Mission and Healthcare Innovation
04:46 The Conversation with Dan Mendelson: Deep Dive into Pharmacy Benefits
06:13 Strategies for Optimizing Pharmacy Benefits in Value-Based Care
11:19 The Future of Pharmacy Benefits and Employer Concerns
12:40 Advice for Pharma Companies in a Value-Based Healthcare System
16:13 Innovative Approaches to Managing Pharmacy Benefits
16:56 Engaging Patients in Pharmacy Benefit Decisions
18:06 Experimental Drug Tiers and Formulary Design
21:49 The Importance of Value-Based Contracting for Pharma
31:23 Lightning Round: Advice for Various Healthcare Stakeholders
34:47 Closing Thoughts and Invitation to Engage Further
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Five Surprising Facts About Bundled Payments in Healthcare
In Episode 434 of 'Relentless Health Value,' host Stacey Richter interviews Dr. Ben Schwartz, an orthopedic surgeon and prolific writer, about bundled payments in the healthcare industry. The discussion focuses on four key surprises related to bundled payments: the all-encompassing nature of the 90-day post-surgery cost coverage; the reluctance of commercial payers to engage with bundled payment models; the shifting dynamics towards more integrated care between primary care physicians and specialists; and the complex realities of Centers of Excellence (COE) programs. The episode also highlights lessons learned from existing bundled payment models and potential future directions for more sustainable and efficient healthcare practices.
To read the full article and show notes with links mentioned as well as a full transcript, click here.
Love the show? Please consider signing up for our weekly newsletter. We'll send you an article covering the latest episode with show notes, mentioned links and a transcribed intro. Join the RHV Tribe.
06:07 Where are we in the development of the bundled payments space?
08:09 What are the four types of bundled payments?
09:52 How can bundled payments create perverse incentives?
11:04 What are the positives in bundled payments, and how can they help push us toward value-based care?
13:02 What is surprising about bundled payments?
18:50 EP415 with Rob Andrews.
27:03 How do Centers of Excellence connect back to bundled payments?
29:00 EP346 with Peter Hayes.
30:29 EP294 with Steve Schutzer, MD.
33:38 EP331 with Al Lewis.
33:43 EP372 and EP373 with Cora Opsahl.
37:13 What does Dr. Schwartz think the future is for bundled payments?
Recent past interviews:
Click a guest’s name for their latest RHV episode!
Justin Leader, Dr Scott Conard (Encore! EP391), Jerry Durham (Encore! EP297), Kate Wolin, Dr Kenny Cole, Barbara Wachsman, Luke Slindee, Julie Selesnick, Rik Renard, AJ Loiacono (Encore! EP379)
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Unveiling Hidden Fees in Weekly Claims: What Plan Sponsors Need to Know
Episode 433 of Relentless Health Value dives into the complexities of weekly claims wires that self-funded employers receive. Host Stacey Richter speaks with Justin Leader about the hidden fees embedded in these claims, including shared savings fees, prior authorization fees, prepayment integrity fees, pay and chase fees, and TPA claims review fees. Learn how these undisclosed charges impact plan sponsors and why transparency is crucial for fiduciary responsibility. This episode is a must-listen for plan sponsors, HR executives, and healthcare entrepreneurs seeking to understand and manage their healthcare costs better.
To read the full article and show notes with links mentioned as well as a full transcript, click here.
I am going to use the term TPA (third-party administrator) and ASO (administrative services only) vendor kind of interchangeably here. But these are the entities that a plan sponsor—for example, a self-insured employer is a plan sponsor—but these plan sponsors will use to administer their plan. And one of the things that TPAs and ASOs administer is this so-called weekly claims wire.
Every week, self-funded employers get a weekly claims run charge so they can pay expenses related to their plan in weekly increments. The claims run usually comes with a register or an invoice. This invoice might be just kind of a total (“Hey, plan. Pay this amount.”). Or there might be a breakdown like, “Here’s your medical claims, and here’s your pharmacy claims.” Maybe there’s another level down from that of detail if the plan or their advisor is sophisticated enough and/or concerned enough about the fiduciary risk to dig in hard about what the charges are actually for.
Dana Erdfarb was the first one to really bring to my attention just the level of hidden fees that are buried (many times) in these claims wires … because when I say buried in the claims wire, I mean not charged for via an administrative invoice. These hidden fees are also not called out in the ASO finance exhibit in the contract, by the way. So, yeah … hidden.
In this healthcare podcast, we’re gonna talk about the five fees that tend to be tucked in to many claims wires. We also talk about one bonus—not sure if it’s a fee—one bonus way that plan sponsors give money to vendors in ways the plan sponsor might be unaware of and then I’ll cover the bonus:
To read the rest of the article here, click here.
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Mission vs. Margin: Dr. Scott Conard's Journey in Transforming Primary Care
In this encore episode, Stacey Richter discusses the challenges and opportunities in primary care transformation with Dr. Scott Conard. The conversation explores the conflict between mission-driven healthcare and profitability, drawing from Dr. Conard's personal and professional experiences. Key topics include advanced primary care models, perverse incentives in the healthcare system, the impact of large health systems on local communities, and the complex dynamics of healthcare management. The episode illustrates the importance of leadership, systemic change, and balancing patient care with business imperatives.
To read the full article and show notes with links mentioned as well as a full transcript, click here.
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06:54 What triggered Scott’s career journey?
07:31 What caused Scott to rethink what is good primary care?
08:11 Why did Scott realize that he is actually a risk-management expert as a primary care doctor rather than someone who treats symptoms?
09:25 EP335 with Brian Klepper, PhD.
09:53 How did Scott’s practice change after this realization?
10:04 What is a “Whole-Person Risk Score”?
11:08 Scott’s book, The Seven Numbers (That Will Save Your Life).
13:05 “You start to move from a transactional model to a relationship model.”
15:31 Did Scott have any risk-based contracts?
16:08 Why is it so important to look at total cost of care and not just primary care cost?
21:08 Scott’s book, The Art of Medical Leadership.
22:13 EP381 with Karen Root.
30:43 Why did Scott move over to help corporations?
33:10 EP364 with David Muhlestein, PhD, JD.
33:51 “Everybody thought they were honoring their fiduciary responsibility, and the incentives are completely misaligned.”
34:31 EP384 with Wendell Potter.
34:43 “It’s the system that’s broken; it’s not bad people.”
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Unlocking the Front Desk: The Overlooked Key to Patient and Clinician Success
In this encore episode of Relentless Health Value, host Stacey Richter delves into a crucial yet often ignored aspect of patient engagement and clinical success with Jerry Durham from the Client Experience Company. The discussion emphasizes how the front desk can significantly influence positive patient outcomes and mitigate clinician burnout. Jerry outlines the 'patient life cycle' and the vital role of the front desk in establishing trust and setting up provider success. Highlighting real-world examples and research, the conversation explores how proper front desk management can enhance patient satisfaction, retain patients, and contribute to the overall efficiency of healthcare practices. The episode also addresses common issues in patient-provider interactions and offers practical solutions for integrating the front desk into a cohesive, patient-centered care team.
To read the full article and show notes with links mentioned as well as a full transcript, click here.
Love the show? Please consider signing up for our weekly newsletter. We'll send you an article covering the latest episode with show notes, mentioned links and a transcribed intro. Join the RHV Tribe.
05:49 What is the patient life cycle?
06:48 What are the milestones of the patient life cycle? When does it start?
10:05 “This isn’t a business solution; this is a patient-driven solution.”
10:21 “What is best for the patient is best for business.”
13:25 “The takeaway there is that your team members are all driving toward the same goal.”
14:34 How does the front desk impact health outcomes?
16:41 What is the objective of a front desk to reduce provider burden?
20:03 EP236 with Liliana Petrova.
21:18 “There’s actually three roles at the front desk.”
30:37 EP228 with Julie Rish, PhD.
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Balancing Mission and Margin in Healthcare: Lessons from Kate Wolin
In Episode 432 of 'Relentlessly Seeking Value,' host Stacey Richter discusses with behavioral epidemiologist and digital health entrepreneur Kate Wolin about the challenges and opportunities in merging clinical care with efficient business practices. They explore the pitfalls of scaling healthcare services while maintaining patient outcomes and why human-centered approaches are vital. They stress the importance of aligning investors, founders, and clinical leaders, measuring meaningful outcomes, and fostering a mission-driven culture to ensure both financial sustainability and high-quality patient care. The episode also highlights relevant episodes and resources for further exploration.
To read the full article and show notes with links mentioned as well as a full transcript, click here.
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00:00 Welcome to Episode 432: Navigating Healthcare's Margin and Mission 00:32 Gratitude and Progress in Healthcare 01:25 The Peril of Cutting 'Clinical Waste' in Healthcare 04:00 Kate Wolin's Optimism and Advice for Healthcare Entrepreneurs 05:56 Exploring Effective Healthcare Interventions and Their Challenges 14:33 The Impact of Money on Healthcare Mission and Margin 26:51 Advice for Healthcare Entrepreneurs and Investors 37:51 Closing Thoughts and Invitation to Subscribe -
For a full transcript of this episode, click here.
There’s this meme that’s going around on the interwebs with the caption, “Sometimes the shortest distance in between two places isn’t a straight line.” What? Yeah, because actually there’s three dimensions in the real world.
So, when we all consider the real world, understanding the contours of reality and aligning with them is the only way to devise a winning strategy—not only if you’re timing rubber balls getting dropped off straight or curved slopes. I’m saying this because I’ve seen (and you’ve seen) a whole lot of great ideas fail because someone draws a very elegant straight line on a whiteboard, calls it the fastest and most efficient way to get from here to a desired outcome … and then the plan ultimately fails.
What contours am I talking about taking into account right now? Oh, pretty much the entirety of US healthcare. If you combine the complexities and perverse incentives of the industry itself plus the art and science of medicine plus epidemiology and social determinants and I’m probably forgetting other dimensions, you have contours that are mountain ranges. Not considering the reality of those elevations and just thinking there’s some kind of straight line here to be found is really a kind of delusion. Now, investors and C-suites may like these delusions, but let’s just get real: It’s not gonna actually work out as written.
One case study that I am talking about is digital health solutions or pharma companies even or pretty much anyone who thinks that the fastest way to increase sales is to talk about the product, let’s just say as one example. That’s the straight line to growth: Talk about the product. Another one is stripping away things that feel like they’re a waste of time in the name of efficiency without actually checking if you’re cutting into essential stuff. I talk about this at length with Kate Wolin, ScD, in an episode coming up. Jodilyn Owen has a thing or two to say on this point in episode 421 also.
But let me be clear: I’m not talking about anyone listening to the show today making this mistake, at least wholesale. We all make it incrementally; it’s hard to avoid. But you get this. That’s why you’re here.
You get that the fastest path anywhere is truly understanding the problems faced by customers. And then it’s showing how the product or whatever you’re doing helps solve those problems. No one cares how efficient or safe your thing is if it’s accomplishing something that no one cares about, no one gets paid for, and/or can figure out how to deploy or use. This is what the entire episode last week, episode 430 with Barbara Wachsman, was about.
Why is all of this relevant? It’s actually what makes Relentless Health Value relevant, frankly.
Many listeners—and shout-outs to Nate Walker and MaryCarol Evans—say that this is why they listen to Relentless Health Value and what Relentless Health Value helps them with: finding those contours, understanding reality so that it can be aligned with. And on the show today, Kenny Cole, MD, I gotta say, could be really impactful in this regard as well as in others.
Nate Walker wrote, “[Relentless Health Value] inspires me every day to stay true to my desire to make a difference in healthcare for patients by adding transparency and helping to connect the dots within this fragmented system.”
MaryCarol Evans has alluded to the same thing multiple times as well and often highlights that Relentless Health Value helps her think through and identify the small things that are possible—she says there’s plenty of them—that have a huge impact on the lives of plan members.
Dr. Kenny Cole is from Ochsner Health System, and I love this conversation today because it has lessons for anybody working in a clinic or managing a clinic who wants to learn from a master. But it also is really interesting for anyone who’s trying to work with, alongside of, or sell to a clinical practice or health system that is pulling away from the status quo, that is standardizing care and working as a team, one that is earning the trust of its patients, and also one that is figuring out how to reinvent the business model of healthcare such that clinical pathways and care flows are aligned with financial viability. That’s really, obviously, the holy grail here.
We talk today about how to achieve clinical and financial success, even if the financial models are all over the map. We talk about how to create a practice model or a clinical model that might appeal to clinicians and keep them from being burnt out while, at the same time, ensure that patients are getting the kind of outcomes everyone can be proud of and the place doesn’t go bankrupt either.
This episode reminded me a lot of the conversation with Scott Conard, MD (EP391)—there’s lots of complementary points. The shows with David Carmouche, MD (EP316, AEE15, EP343) from when he was at Ochsner are also pretty relevant here. Some of the points that Dr. Kenny Cole makes today also align very much with what Rik Renard (EP427) was talking about a few weeks ago.
But regardless of where you sit or what you’re trying to do, this show is a great one to really get a bead on the lay of the land to find the actual shortest path between here and there, which is not gonna be (most likely) an obviously straight line.
Dr. Kenny Cole makes, I’m gonna say, four main points by my counting; and they are as follows:
1. Clinical teams have to deliver care wherein outcomes are measurable, and it has to be done in such a way that those clinical teams are accountable for the outcomes that are generated.
2. Clinical teams need to really see with their own two eyes and believe that a clinical goal that they’ve been given is possible.
3. Care flows are critical here, which means getting everyone on the same page about what best-practice care looks like and operationalizing how that clinical excellence will be achieved.
4. Building trust with patients and connecting with patients cannot be underestimated, and care flows need to not only standardize care so that it can be delivered quicker and easier but also facilitate patient relationships.
Dr. Kenny Cole is a primary care internist. He sees patients one day a week. The other days, he serves as a system vice president for Ochsner Health, which is a large integrated delivery system. In this role, he designs and develops new care models.
If I’m making recommendations for what to listen to next, I’d go with episode 412 with Robert Pearl, MD—he talks about a model to lead healthcare transformation and clinical excellence. Then episode 391 with Dr. Scott Conard gets into what happens in the real world when the financial model is misaligned with excellent care. Lastly, episode 343 with Dr. David Carmouche.
Oh, two last things and new topics:
First, thanks to Santos-L-Halper, Nina Lathia, and KC64789 for some really nice reviews this month. I read them. They make me happy. Thanks so much for leaving them.
And lastly, heads up that Rule of Three (ro3) has an annual March Healthcare Classic that is currently ongoing. It’s pretty cool what they do. They have a very august panel that debates which trends will reign supreme in their impact on healthcare in 2024. The committee includes:
· Dr. David Carmouche, SVP Healthcare Delivery, Walmart Health
· Eric Gallagher, CEO, Ochsner Health Network
· Leah Binder, CEO, The Leapfrog Group
· Anisha Sood, Chief Financial & Strategy Officer, First Choice Health
Follow along with the experts through the ro3 March Healthcare Classic at https://ro3.com/healthcare-classic/.
Also mentioned in this episode are Jodilyn Owen; Barbara Wachsman; Nate Walker; MaryCarol Evans; Scott Conard, MD; David Carmouche, MD; Rik Renard; Robert Pearl, MD; Nina Lathia, RPh, MSc, PhD; Josh M. Berlin; Rule of Three, LLC; Eric Gallagher; Leah Binder; Anisha Sood; John Rodis, MD, MBA, FACHE, CPHQ; Bob Matthews; Marty Makary, MD, MPH; Sanat Dixit, MD, MBA, FACS; and Rob Andrews.
You can learn more at Ochsner Health. You can also follow Dr. Cole on LinkedIn.
Kenny Cole, MD, began his role as System VP, Clinical Improvement, for Ochsner Health in New Orleans in September 2019. He is a practicing primary care internist with advanced degrees from LSU Health Sciences Center and Dartmouth, as well as executive training from Harvard Business School. Prior to joining Ochsner Health, Dr. Cole was the chief clinical transformation officer for Baton Rouge General Medical Center, where he designed, developed, and implemented a completely reimagined multidisciplinary team-based model of primary care that focused on aligning clinical with financial outcomes. His current work at Ochsner Health built on that prior foundation to design and help develop Ochsner 65 Plus, a group of redesigned primary care clinics focused on the needs of older adults.
07:38 Is there an optimal care pathway where there might be a lot of treatment variability?
11:01 Why doesn’t Dr. Cole like the terms “noncompliant” and “nonadherent”?
11:45 EP412 with Robert Pearl, MD.
13:50 Why is it important to start with the end in mind?
17:20 How do you scale clinical excellence?
20:21 EP315 with Bob Matthews.
21:15 EP242 with Marty Makary, MD.
23:49 Why is it important simply to demonstrate what’s possible for better health outcomes?
24:58 EP427 with Rik Renard.
26:10 How do we reinvent the business model of healthcare?
27:50 EP415 with Rob Andrews.
30:06 EP391 with Scott Conard, MD.
38:37 Dr. Cole is published in various healthcare journals; check out his most recent article.
You can learn more at Ochsner Health. You can also follow Dr. Cole on LinkedIn.
Kenny Cole, MD, discusses #accountability for #healthoutcomes on our #healthcarepodcast. #healthcare #podcast #digitalhealth #healthcareleadership #healthcaretransformation #healthcareinnovation
Recent past interviews:
Click a guest’s name for their latest RHV episode!
Barbara Wachsman, Luke Slindee, Julie Selesnick, Rik Renard, AJ Loiacono (Encore! EP379), Nina Lathia, Marshall Allen, Stacey Richter (INBW39), Peter Hayes, Joey Dizenhouse
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For a full transcript of this episode, click here.
We have been spending a bunch of time here on Relentless Health Value talking about PBMs (pharmacy benefit managers) lately and pharmacy benefits, but we are moving into a new topic area. It sort of kicked off three weeks ago with the pod with Rik Renard (EP427) on the importance of care flows if you are a digital health vendor trying to get consistent outcomes. But then I actually went back to the PBM/pharmacy benefits topic to talk with Luke Slindee, PharmD (EP429) and Julie Selesnick (EP428) because, you know, the J&J lawsuit. But now we’re back on the “let’s talk about digital health and point solutions” bus.
I wanted to talk today about the trend to sell to employers and advice for digital health solutions who want to sell to employers, but there’s a little bit of advice here for employers themselves. At a minimum, this conversation affords a little bit of transparency to employers about what’s going on on the other side of the table.
So, as I just said, in this healthcare podcast we talk about selling to employers. Why sell to employers is probably a first question. Well, one reason Barb offers is because that’s where the money is. It’s like that Willie Sutton quote. Someone asked him why he robbed banks, and he replied, “Because that’s where the money is.” I mean, hospitals know this. Have you seen their commercial rates and their multiples over Medicare? Payers know this, too. Payers who use their ability to raise commercial rates as leverage to get lower MA (Medicare Advantage) rates for themselves … they know this. So, yeah. Why wouldn’t a point solution entrepreneur take a page out of that business model? It’s saying the quiet part out loud, but … yeah, I guess it’s good to know when you’re the numero uno healthcare industry sugar daddy (or sugar mommy, as the case may be). Every employer listening right now has already opened up their phone and started an email to me.
Barb gets into four pieces of advice for entrepreneurs looking to sell to employers:
1. There has to be a market that has a need for what you are selling, and there won’t be a market with a need unless the problem you’re solving for is big enough—and right now, I am recapping things that Barb says on the show—because when she talks about whether the problem is big enough, she means as per the employer and maybe because the fallout from that big problem accrues to the employer in a way that the employer fully appreciates.
As I say in the pod that follows, the ground is littered with entrepreneurs, often really smart people who oftentimes I truly admire. These are individuals who found a problem for patients (or sometimes even clinicians) and solved for it and then discovered that no one will pay them for whatever they’ve done, because we can’t forget that, in the healthcare industry, one person’s waste is somebody else’s profit. There is show after show here at Relentless Health Value that showcases the sacred honeypots where these perverse incentives lie, so if you are an entrepreneur, please follow the dollar and see where it leads before getting too far. That would be my advice. I’d recommend the show with Rob Andrews (EP415) and the one with Jodilyn Owen (EP421) as a great place to start.
One comment about the whole “it’s gotta be a need that employers appreciate” point that Barb makes which caught my ear, she rhetorically asks, “Should HR purchasers be buying solutions that improve health and well-being?” And the short answer is no. Barb says none of that should be the primary driver. The primary driver, Barb mentions, should be about optimization of human capital to drive business outcomes. She says every decision a business makes should be about maximizing business outcomes.
Now, I could take this a bunch of different ways; and viscerally it has, again, kind of a “quiet part out loud” vibe. But in certain ways, it also means buying decisions should be bigger than just cutting costs. First of all, no one is arguing here that cutting wasteful spending isn’t always a good thing; but neither are cost-containment strategies that undermine employee health to the extent that they can’t complete their work role or their job. Listen to the show with Nina Lathia, RPh, MSc, PhD (EP426) for more on this cost containment versus value-based purchasing, specifically in the pharmacy benefit space, but same rules apply pretty much everywhere.
2. Be truly differentiated in terms of what you’re trying to sell. Barb gives a bunch of examples of “secret sauces” she thinks are kind of compelling right now.
3. Navigate the internal politics of the employer. And this is kind of Selling 101, but find a champion and help them navigate their own organization. We talk at length about how long the sell process can take, especially in some of these jumbo employers.
4. Manage your investors as closely as you manage your possible clients. And this is an interesting point that also comes up in the conversation with Kate Wolin, ScD, that’s coming up in a few weeks.
Also in this conversation, we have a sidebar about PMPM (per member per month) and performance guarantees and just some nuances about how to get paid.
Oh, and one last point here: If you are an entrepreneur who is thinking about selling to brokers, employee benefit consultants, or practice leads, do listen to the show with AJ Loiacono (EP379), which I encored a couple of weeks ago.
My guest today, Barbara Wachsman, has had experience in every single element of the healthcare ecosystem. She has worked in public health. She’s worked for an HMO. She’s worked for a hospital system. She’s run benefit consulting practices and also spent the last dozen or so years at Disney running strategy and benefits. Today she is a limited partner in several private equity funds at Frazier Healthcare Partners.
Oh, and hey, you might want to subscribe to our weekly email, which includes this introduction transcribed as well as links to the full episode transcribed. We also sometimes send out invitations to Zoom meetups and other ways to get involved or support us in our quest to get Americans better healthcare. So, go to relentlesshealthvalue.com and get yourself on that list
Also mentioned in this episode are Rik Renard; Luke Slindee, PharmD; Julie Selesnick; Rob Andrews; Jodilyn Owen; Nina Lathia, RPh, MSc, PhD; Kate Wolin; AJ Loiacono; Elizabeth Mitchell; David Claud, MD, PhD; Al Lewis; Kenny Cole, MD; and Cora Opsahl.
You can learn more at Frazier Healthcare Partners. You can also follow Barbara on LinkedIn.
Barbara E. Wachsman, MPH, is the former director of strategy and engagement for enterprise benefits for the Walt Disney Company. In this position, she led the strategic initiatives and designed the programs that addressed Disney’s long-term healthcare and goals and objectives, headed operations of large on-site clinics and full-risk physician partnerships, and was the creator of the Strategy Lab, the home for innovation in healthcare delivery. She is a speaker on the national stage regarding direct contracting and the value of primary care.
Barbara currently serves as a senior advisor to an $8 billion growth-buyout private equity firm specializing in healthcare and as head of employer strategy for a virtual primary care company with a unique medical practice model. She sits on the Boards of the Duke-Margolis Center for Health Policy Institute and the QueensCare Foundation, serving the low-income and underserved population of Los Angeles. She remains a senior advisor and founding member of the Employer Healthcare Innovation Roundtable (EHIR) and is a faculty member of the EHIR Academy. Barbara serves on the Executive Committee of the American Board of Medical Specialties and on the Advisory Boards of several healthcare start-ups as well as the corporate board of a large metabolic health company. She is also an advisor to the Purchaser Business Group on Health and to the Silicon Valley Employers Forum.
Barbara received her Master of Public Health and Master of City Planning/Architecture degrees from the University of California, Berkeley, and is a Phi Beta Kappa graduate of Scripps College, where she received her bachelor of arts degree.
06:55 Why have people cottoned on to selling to employers, and is it a good direction to focus?
07:28 What are the three ways healthcare gets paid for in America?
07:46 Where is the profit in the healthcare system?
08:32 What does an entrepreneur really need to understand in order to sell to employers?
13:05 “It really is about producing a productive employee.”
17:49 Why it’s not enough to understand the market but you must also differentiate.
21:01 What’s the biggest misunderstanding entrepreneurs have about per member per month?
24:10 What companies are standing out right now as differentiators?
28:02 Why is it important to also show that you are improving quality?
28:51 EP331 with Al Lewis.
28:55 EP427 with Rik Renard.
29:33 EP372 with Cora Opsahl.
30:07 Why is it important to find a strong champion who will advocate for you as a partner?
35:05 Why is it important to manage your investors and set appropriate expectations around the timeline of a sale?
36:21 What’s the lesson to be learned behind Livongo?
You can learn more at Frazier Healthcare Partners. You can also follow Barbara on LinkedIn.
Barbara Wachsman discusses #digitalhealthvendors selling to #employers on our #healthcarepodcast. #healthcare #podcast #digitalhealth #healthcareleadership #healthcaretransformation #healthcareinnovation
Recent past interviews:
Click a guest’s name for their latest RHV episode!
Luke Slindee, Julie Selesnick, Rik Renard, AJ Loiacono (Encore! EP379), Nina Lathia, Marshall Allen, Stacey Richter (INBW39), Peter Hayes, Joey Dizenhouse, Benjamin Jolley
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For a full transcript of this episode, click here.
In this healthcare podcast we’re talking about pharmacy acronyms or terms like AWP and WAC, and, not really an acronym, but we’ll also talk pharmacy list prices, rebates, discounts. We also have NADAC, but that’s slightly off to the side for reasons we’ll get to in a sec.
Most of these acronyms refer to a number with a dollar sign in front of it, and it’s hell on wheels to figure out if and/or to what extent that number reflects what is going on in the real world, especially if you are a patient or a plan sponsor and all you see is the list price that Pharma puts out on one side of the storyboard, and then what the patient pays or (if you’re lucky) what the plan pays for the drug on the way other side of the whole chain of events. What’s a black box a lot of times for patients and plan sponsors is what goes on in the middle, wherein many middle people get their mitts on the transaction.
Real quick here, let’s run through the Mister Rogers’ neighborhood of all of these middle people right now; and we’re gonna do this really briefly. Most of you are already going to know most of this, but I just want to remind you so that when my guest today, Luke Slindee, and I kick into the conversation about the acronyms and the terms and we try to follow the dollar … yeah, you can put a name to a face.
Alright, so first we have pharma manufacturers. The pharma manufacturer—and this is largely gonna be true whether it’s a branded drug or a generic pharma manufacturer—but the manufacturer sets a list price. This list price is gonna be called an AWP or a WAC price, and we’re gonna get into the differences and what those terms actually mean in the show that follows.
But Pharma decides their price point. They go to wholesalers with that price. Wholesalers say they want a discount to purchase the product. Some kind of rebate or discount is negotiated. Now the wholesalers have the drug, and they get calls from pharmacies. Pharmacies have patients who have scripts for that, so the pharmacies need to buy the drug. What price does the pharmacy now pay the wholesaler for the drug?
Short answer: It’s nuts. It’s nuts how the wholesalers decide what to charge the pharmacies for the drug. We talk about that in the interview that follows, but suffice to say that now we have the list price turning into whatever price the pharmacies wound up paying to get the drug from the wholesalers for. Any way you cut it, the wholesalers are making some money.
Okay … now we get to the part where we’re figuring out how much the patient or the plan sponsor will pay to pick up that drug that started at the pharma manufacturers and went to the wholesalers and now is at the pharmacy. How much are the patients gonna pay? How much are the plan sponsors gonna pay?
If you spend any time in the real world (not the drug supply chain world), what you’d expect to happen next is that the patient would go into the pharmacy and the pharmacist would charge a markup and/or a dispensing fee on the price that they bought the drug from the wholesaler for. That’d be normal. And this can be the case when patients pay cash. Listen to the show with Mark Cuban (EP418, along with Ferrin Williams, PharmD, MBA), who started a pharmacy called Cost Plus Drugs. Get it? Their prices are cost plus. You have had other pharmacies for years doing similar things, like Blueberry in Pittsburgh. They get the drug. They buy it from a wholesaler or etc. But they buy the drug for some price, and then they sell it to their customers (ie, patients) at their cost plus.
But most of the time in pharmacy supply chain world, things don’t work that way because many patients have insurance. When a patient walks into the pharmacy, someone has to figure out how much the patient owes and how much their insurance will cover, right? So, enter PBMs (pharmacy benefit managers). They originally started out doing this math (ie, adjudicating claims), figuring out what the out-of-pocket will be for the patient and then what the insurance will cover. Then drugs started to get really expensive and a few other developments, and then, all of a sudden, we have PBMs negotiating with Pharma for how much of a rebate the PBM is going to demand for the PBM to put the manufacturer drug on formulary. The PBM also is determining how much they will pay the pharmacy for said drug on behalf of plan sponsors, in addition to doing the math for how much the patient will pay.
So, let me say that again because it kind of begs a “what now?” with eyebrows sky-high as the appropriate response to what I just said, especially if you think through the ramifications here, ramifications which I discuss at length with Vinay Patel (EP241); Benjamin Jolley, PharmD (EP422); Scott Haas (EP365); Paul Holmes (EP397); and others.
So, again, the PBM is not just adjudicating claims. They are also negotiating rebates from Pharma so plan sponsors do not have to pay the full amount that the wholesalers paid Pharma and that the pharmacies paid the wholesalers, which maybe is a lot of money. The PBMs are like, “Hey, Pharma. You need to give me a piece of your action because we, the PBM, have big market power. I serve 100 million patients or something. So, if you want access to my 100 million lives, you gotta shell it out. You gotta shell me out some rebates.”
So, fine, Pharma gives the PBM some amount of money in the form of a rebate. And it has to work that way, if you think about it, because the drug was originally sold to the wholesaler. You see what I’m saying? So, the pharma company has to give the PBMs a separate rebate amount. This is in addition to how much the PBM told the plan sponsor the plan sponsor owes for the drug, which is also paid to the PBM. But now, PBM is also still in charge of adjudicating the claim. So, they’re telling the pharmacy how much to charge the patient. Somehow or another also, the PBM also got itself in charge of deciding how much money the pharmacy itself would be reimbursed by that PBM.
In the rest of the world, the pharmacy might tell the PBM, “Hey, this is the price.” But not in pharmacy supply chain world. In pharmacy supply chain world, the PBM tells the pharmacy how much it’s gonna pay. The end.
And this, my friends, is how so often pharmacies get themselves in the pickle of having to pay the wholesaler one price to get the drug while they get reimbursed a totally different price to dispense the drug. And because independents have very little negotiating leverage on actually either side of that equation, they so very often buy high and sell low. Please listen to the shows with Benjamin Jolley (EP422) and Vinay Patel (EP241), where we get into this in a lot of detail.
But I just want to emphasize this point: All of that whole drug supply chain I just went through, where the manufacturer sells to the wholesaler who sells to the pharmacy and the PBM pays the pharmacy and the patient is paying something and the plan sponsor is paying something—many of the middleman transactions in there happen under the cover of darkness a lot of times. If I’m a plan sponsor, do I have any idea how much the PBM paid the pharmacy for any particular drug? Unless you’re good at looking at the NADAC numbers (more on this coming up), no. I do not have any idea what a fair price for that drug actually is and how much people are making on the back of that drug as it goes through the supply chain.
And this, my friends, is how come spread pricing can exist. Because spread pricing is when the PBM charges the plan sponsor more than they are paying the pharmacy, pocketing the difference, and then calling what they pocket a trade secret—even if it’s the plan sponsor whose butt is on the line to make sure that what the PBM is pocketing is fair and reasonable compensation. I mean, if only J&J had listened to this show (EP428). Here’s a link to the lawsuit, which is about J&J paying ridiculous amounts in spread pricing.
If what I just said is really confusing, I’m gonna validate that and say, “Yeah, it is really confusing.” And to a certain extent, that might be the main point. Where there’s mystery, there’s margin and all of that.
Here’s what Dawn Cornelis said on LinkedIn in response to an article about the lawsuit: “Data accessibility lies at the heart of mitigating a fiduciary lawsuit. It all begins with gaining access to your data. But let’s be clear—it’s not an easy feat. The major hurdle? Procuring accurate data from your TPA [third-party administrator]. And that’s just the first step. The subsequent challenge involves analyzing this data, a task best handled by a skilled healthcare data analyst—yet another formidable undertaking.”
The one acronym in this whole stew that is not questionable at all is the NADAC. So, let’s talk about the NADAC for a moment, the National Average Drug Acquisition Cost Price Benchmark. I was really thrilled to get Luke Slindee to be my guest today—or one reason I was so thrilled—is because Luke works for the accounting firm who, on behalf of CMS (Centers for Medicare & Medicaid Services) and the federal government, administers this NADAC, the National Average Drug Acquisition Cost. (Here’s a good NADAC explainer if you’re interested.)
In brief, NADAC was jointly developed by the Centers for Medicare & Medicaid Services, and it calculates the average price that pharmacies pay for prescription drugs. NADAC is based on a retail price survey.
My guest today, as aforementioned, is Luke Slindee. He is a second-generation pharmacist. His family owned a pharmacy in Minnesota when he was growing up. Now he is a senior pharmacy consultant for Myers and Stauffer, which is the accounting firm that calculates the NADAC Price Benchmark on behalf of CMS and the federal government.
Also mentioned in this episode are Mark Cuban; Ferrin Williams, PharmD, MBA; Blueberry Pharmacy; Vinay Patel; Benjamin Jolley, PharmD; Scott Haas; Paul Holmes; Dawn Cornelis; Capital Rx; Myers and Stauffer LC; Adam Fein; Joey Dizenhouse; Steven Quimby, MD; and Antonio Ciaccia.
For additional information, go to data.medicaid.gov. You can also follow Luke on LinkedIn.
Luke Slindee, PharmD, is a second-generation pharmacist with a background in independent pharmacy, chain pharmacy, data analytics, and prescription drug pricing. He currently supports public drug pricing transparency benchmarks and is an advocate for pharmacy reimbursement reform and antitrust enforcement in healthcare.
09:52 Why is it important for plan sponsors to understand the going rate for every point in the supply chain?
10:21 How do manufacturers come up with a list price?
10:40 What does AWP stand for?
10:59 What does WAC stand for?
11:06 How are AWP and WAC numbers chosen by the manufacturer?
13:22 What is the difference between AWP and WAC?
14:54 How much are wholesalers paying to manufacturers?
16:43 How much is the pharmacy paying for branded drugs from a wholesaler?
17:34 Why might pharmacies be buying drugs for less than what wholesalers are paying?
18:17 Substack article by Benjamin Jolley, PharmD, on this topic.
19:22 EP423 with Joey Dizenhouse.
20:33 Why do things get weird when a PBM gets involved?
21:58 How does all of this work for generic manufacturers?
25:20 EP344 with Steven Quimby, MD.
26:15 How did Civica Rx come about?
32:21 What’s the difference between the NADAC and the AWP value?
36:04 Luke discusses the downstream effects to pharmacies.
For additional information, go to data.medicaid.gov. You can also follow Luke on LinkedIn.
Luke Slindee discusses #followingthedollar through #WAC, #AWP & #NADAC on our #healthcarepodcast. #healthcare #podcast #digitalhealth #healthcareleadership #healthcaretransformation #healthcareinnovation
Recent past interviews:
Click a guest’s name for their latest RHV episode!
Julie Selesnick, Rik Renard, AJ Loiacono (Encore! EP379), Nina Lathia, Marshall Allen, Stacey Richter (INBW39), Peter Hayes, Joey Dizenhouse, Benjamin Jolley, Emily Kagan Trenchard (Encore! EP392)
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Practical Steps for Plan Sponsors Post-J&J and DOL vs. BCBS Lawsuits
In Episode 428 titled 'Do It Now Advice From the J&J and the DOL versus BCBS lawsuits,' host Stacey Richter discusses the implications of two major legal cases on plan sponsors with guest Julie Selesnick, an attorney specializing in fiduciary responsibilities. The episode covers essential actions for plan sponsors, brokers, and employee benefit consultants to avoid conflicts of interest and ensure fiduciary compliance. Selesnick, a senior counsel at Berger Montague's Employee Benefits and ERISA Group, emphasizes the importance of obtaining and effectively using claims data, renegotiating administrative services agreements, and conducting independent claims reviews. The discussion also highlights practical strategies like carving out certain high-cost services and establishing a health and welfare fiduciary committee.
To read the full article and show notes with links mentioned as well as a full transcript, click here.
Love the show? Please consider signing up for our weekly newsletter. We'll send you an article covering the latest episode with show notes, mentioned links and a transcribed intro. Join the RHV Tribe.
05:48 What’s happening with the J&J lawsuit?
07:38 What’s going on with the DOL v BCBS case?
08:49 What do these cases mean for plan sponsors?
09:21 Why is engaging with claims data critical?
12:30 EP408 with Chris Deacon.
14:20 EP379 with AJ Loiacono.
16:58 What’s one solution to avoiding a conflict of interest?
18:02 Why there’s still not a total understanding about what to do with claims data once acquired.
20:58 NADAC (National Average Drug Acquisition Cost) to check pharmacy prices.
21:31 What advice do plan sponsors need to know that never gets recommended to them when dealing with conflicting interests?
27:02 EP337 with Olivia Webb.
28:41 EP285 with Dawn Cornelis.
30:24 “As a fiduciary, your money should only go to pay your plan’s benefits, not to other plan benefits.”
30:59 What’s Julie’s advice to advisors?
33:17 “Giving nonconflicted advice … is something you really can only do if you have no conflicts.”
35:57 What’s Julie’s advice for administering whole plans?
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The Importance of Standardized Care Flows in Digital Health: An Interview with Rik Renard
To read the full article and show notes with links mentioned as well as a full transcript, click here.
In this episode of Relentless Health Value, host Stacey Richter speaks with Rik Renard from Awell about the significance of standardized care flows in digital health. The discussion covers the impact these care processes have on patient outcomes, clinician efficiency, and the healthcare system's overall performance. Highlights include an overview of a survey conducted with Health Tech Nerds, revealing that while 84% of digital health vendors use care flows, only 16% are based on evidence. The episode emphasizes the need for real-time data integration, continuous improvement, and addressing clinician autonomy to ensure the effective and scalable implementation of care flows. Renard shares insights from experts like Dr. Ali Khan of Oak Street Health and the importance of transitioning from basic documentation to advanced, integrated systems.
Love the show? Please consider signing up for our weekly newsletter. We'll send you an article covering the latest episode with show notes, mentioned links and a transcribed intro. Join the RHV Tribe.
09:26 Why should clinicians care about care processes and care flows?
12:05 Why do care flows and care processes have a bad reputation?
12:31 What components does a good pathway include?
14:51 Why pathways need to be looked at as a process of continuous reconfiguration.
17:15 Who did Awell survey about care processes and flows?
18:42 How many clinicians were using care flows, and what did those care flows look like?
25:45 EP315 with Bob Matthews.
26:44 EP392 with Emily Kagan Trenchard.
28:21 EP412 with Robert Pearl, MD.
30:01 “Just document something.”
30:14 What was a shocking find from this care process survey?
31:06 Is AI the answer?
34:13 Why is it important to get the foundation of data correct before introducing AI?
34:51 How should employers use this information to vet vendors
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Unveiling Hidden Compensation: How Employee Benefit Consultants and Brokers Profit from Plan Sponsors
To read the full article and show notes with links mentioned as well as a full transcript, click here.
In this encore episode of 'Relentlessly Seeking Value,' Stacey Richter interviews A.J. Loiacono, CEO of CapitalRx. They delve into the hidden compensation practices of Employee Benefit Consultants (EBCs) and brokers engaging with plan sponsors. The discussion unveils the potential conflicts of interest and self-serving behaviors of these intermediaries, who sometimes prioritize their own financial gain over the best interests of employers and employees. With the enforcement of the Consolidated Appropriations Act (CAA), plan sponsors now have the power and responsibility to request full disclosure of all direct and indirect compensations being made. The conversation brings to light the murky and often unethical practices within the industry and emphasizes the importance of transparency and diligence for self-insured employers to avoid unreasonable and secretive fees that ultimately increase their total costs.
Love the show? Please consider signing up for our weekly newsletter. We'll send you an article covering the latest episode with show notes, mentioned links and a transcribed intro. Join the RHV Tribe.
07:09 Who can get in trouble for mismanaging employee funds?
07:48 “When you talk about conflicts of interest, they’re everywhere.”
13:13 “You’re paying for access.”
13:34 Why is it important to request that they disclose direct and indirect compensation?
14:04 What are the layers to these hidden fees and compensations?
18:13 What is a reasonable fee for a good plan admin?
19:27 “I think people need to take a step back and say, ‘How many different ways are they getting compensated?’”
24:50 “The compensation is not just unreasonable, but if they were to move it, they would lose access to an entire column of revenue.”
25:06 “For every good broker consultant, there’s a horrible individual lurking out there and it’s easy to figure out: Ask for them to disclose their fees.”
28:08 “You can’t win if you can’t even pay the house fee to come in.”
31:35 Why do you need to ask for disclosure, and what do you need to ask specifically?
32:21 What are some of the characteristics of a good plan consultant?
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Cost Containment vs Value-Based Drug Purchasing with Nina Lathia
To read the full article and show notes with links mentioned as well as a full transcript, click here.
In this episode of 'Relentless Health Value,' host Stacey Richter discusses with Nina Lathia the complex debate between cost containment and value-based drug purchasing strategies. They delve into the negative impacts of poor pharmacy benefit strategies, such as increased healthcare costs, bankruptcies, and reduced member satisfaction. They explore why employers struggle with value-based purchasing due to factors like lack of price negotiation power, siloed pharmacy spending, short-term actuarial horizons, and FDA's approval based on limited evidence. The episode provides actionable advice on establishing a value-based formulary, including having a clear goal, considering overall healthcare spend, understanding drug value-based pricing, exploring risk-sharing agreements, and ensuring effective communication with plan members. Lathia, a pharmacist and consultant with a Ph.D. in health economics, shares her expertise on making evidence-based drug purchasing decisions that balance cost and clinical effectiveness.
Love the show? Please consider signing up for our weekly newsletter. We'll send you an article covering the latest episode with show notes, mentioned links and a transcribed intro. Join the RHV Tribe.
06:34 What does cost containment mean?
07:43 Why is it important to consider health outcomes?
10:00 What does value-based purchasing mean in Pharma?
11:09 What are the principles of cost-effectiveness analysis?
12:50 Pharmacy plan time horizons versus employer time horizons.
14:42 Why is it increasingly important for payers to take a more global look at health and cost outcomes?
16:14 Why is the first step establishing a value-based price for drugs?
16:43 Why is the second step thinking about risk-sharing agreements with manufacturers?
18:57 LinkedIn article by Bryce Platt, PharmD.
19:20 What should an employer do if there’s only one drug option and the price is too high?
21:20 What’s a specialty carve-out solution?
21:26 EP352 and EP353 with Pramod John, PhD, of VIVIO.
22:10 Why should employers get more comfortable with saying “no” to certain drugs?
25:36 Why is patient engagement key?
28:23 What does “good” look like for employers implementing drug-spend changes?
29:51 EP337 with Olivia Webb.
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Episode 425: Operationalizing Cash Payments in Clinical Practices with Marshall Allen
To read the full article and show notes with links mentioned as well as a full transcript, click here.
In this episode of Relentless Health Value, Stacey Richter speaks with Marshall Allen about how clinical practices can implement cash payment options for patients, which can often be cheaper than using insurance. They discuss the growing trend of patients struggling with high deductibles and the legal considerations for providers accepting cash, including using HIPAA to navigate insurance constraints. Allen shares insights on setting competitive cash prices, the potential financial benefits for practices, and resources like fairhealthconsumer.org to benchmark pricing. He also touches on the broader movement towards direct contracting and the importance of fostering healthcare financial literacy among patients.
Love the show? Please consider signing up for our weekly newsletter. We'll send you an article covering the latest episode with show notes, mentioned links and a transcribed intro. Join the RHV Tribe.
07:04 What Allen Health Academy is doing.
11:01 What’s the problem with the system now?
14:19 EP363 with David Scheinker, PhD.
14:27 EP413 with Will Shrank, MD.
14:34 What’s the hack Marshall Allen shares for insured patients paying cash?
15:06 How can patients cite HIPAA to pay cash instead of using their insurance?
19:00 What’s the first recommendation Marshall Allen has when dealing with healthcare billing?
21:26 EP297 with Jerry Durham.
21:48 What are the other benefits of a clinic accepting cash payments?
25:36 Why do we need to have more direct pay happening?
26:36 How should a medical provider set a cash price?
27:12 Research tools for fair pricing: fairhealthconsumer.org, BILLY, colonoscopyassist.com, Jason Health, Green Imaging.
32:36 How do you find the win-win between a patient and a doctor?
32:51 What’s the final tier of partners in creating more direct-pay opportunities?
34:30 What’s Marshall Allen’s opinion on having to pay credit card fees?
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The Narcissism of Small Differences in Healthcare: Building a Unified Village for Patient-Centric Solutions
To read the full article and show notes with links mentioned as well as a full transcript, click here.
In this inbetweenisode of 'Relentlessly Seeking Value,' Stacey Richter discusses the concept of the 'Narcissism of Small Differences' and its implications for the American healthcare industry. Richter explores how minor disagreements can prevent collaboration among healthcare professionals who share the same overarching goals. She emphasizes the need for unity to combat the profit-driven motives of large healthcare corporations and improve patient care. The episode also examines the role of conferences, the moral complexities faced by individuals within large entities, and the importance of focusing on collective goals rather than getting bogged down by insignificant differences. Richter encourages building a village of diverse yet aligned individuals to achieve meaningful healthcare reform.
Love the show? Please consider signing up for our weekly newsletter. We'll send you an article covering the latest episode with show notes, mentioned links and a transcribed intro. Join the RHV Tribe.
00:42 What “the narcissism of small differences” means.
02:18 How does this narcissism of small differences show up in the effort to fix the healthcare industry?
05:26 Quote from Jeff Hogan.
10:12 “What did the work we do add up to?”
16:31 Why we shouldn’t judge someone for working within the “belly of the beast.”
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