Latest / CareTalk: Healthcare. Unfiltered. / Dr. Eric Bricker on Healthcare Finance

Transcript

Dr. Eric Bricker on Healthcare Finance · CareTalk: Healthcare. Unfiltered.

0:00
David: Have you ever found yourself trying to understand healthcare financial topics, like how health insurance works, how hospitals get paid, what drives prescription drug costs, or the workings of government programs like Medicare and Medicaid?
0:12
David: Well, then there's a good chance you've come across AHealthcareZ healthcare Finance explained a leading YouTube channel hosted by today's guest, Dr.
0:19
David: Eric Bricker, who shares an insider's view of how this 4 trillion sector of the economy really works.
0:25
David: Some of my favorite recent episodes include, Full risk primary care.
0:30
David: Sorry.
0:30
David: Your request is denied disease management versus case management for C versus utilization management.
0:35
David: And my favorite, where's my money?
0:37
David: Part two.
0:38
David: Welcome to CareTalk, America's home for incisive debate about healthcare, business and policy.
0:42
David: I'm David Williams, president of Health Business
0:44
John: Group.
0:45
John: And I'm John Driscoll, the president of Walgreens Health.
0:47
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0:50
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0:52
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0:55
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1:02
David: Click the link in the description to subscribe.
1:05
John: So, Eric, it's great to have you on.
1:07
John: I mean, there are very few people who can unpack healthcare as wisely and as entertainingly as you, and you've developed quite a following, um, because of it.
1:18
John: Um, are there any.
1:20
John: Particular topics you wanna start with or should we just dig in with questions that we'd like you to, to to topics we'd like you to explain?
1:29
Eric: Yeah.
1:29
Eric: Um, the only thing I'm gonna say is, is I'm gonna try to keep this as positive as possible.
1:34
Eric: Cause it's very easy in healthcare to get very negative.
1:37
Eric: So I'm gonna try to be as positive as I can with positive examples of success instead of getting bogged down in the doldrums.
1:44
David: I think that's a good idea.
1:45
David: You know, I was, last, uh, episode, I was calling John, Dr.
1:47
David: Dummy gloomy, not because he's a.
1:49
David: Not cuz he's a doctor by the way.
1:52
John: Let's talk about providers taking risk.
1:54
John: How would you grade the industry on that?
1:57
John: You know, we've got, at Walgreens, we've got Village and we've got a bunch of doctors there taking risk.
2:02
John: We're trying to partner with taking risk, but, but, Eric, as you know, we've been talking about doctors taking risk, um, you know, probably since the beginning of nasa.
2:12
John: Like, what, what, what, how, how are we doing?
2:14
John: What are we doing?
2:15
John: And, and where do we stand?
2:16
Eric: Yeah.
2:16
Eric: And so I would say that the answer to that question is sort of a, a Dr.
2:19
Eric: Jekyll and Mr.
2:20
Eric: Hyde.
2:20
Eric: I'd give ourselves an A and an F.
2:22
Eric: Simultaneously.
2:23
Eric: So I guess that's what a c So, um, I think what it, what it comes down to is that, as in many professions, look, doctors are not a monolith.
2:32
Eric: And so, you know, at the end of the day, if you were to split up physicians into two camps, they would be called primary care physicians and procedure-based specialists.
2:43
Eric: And those two physician groups are sort of diametrically.
2:49
Eric: Uh, incentivized in the traditional world of fee for service.
2:54
Eric: So, uh, procedure-based specialists, uh, an e n t, an orthopedist, even a cardiologist, they are very highly reimbursed for doing more.
3:07
Eric: And a primary care physician whose primary job is actually to prevent you from getting sick in the first place or treat your illness when it's small, before it becomes catastrophic, are largely.
3:18
Eric: Um, uh, given the short end of the stick when it comes to fee for service, and, and I, and another name for fee for service to your initial question is non-risk based reimbursement.
3:30
Eric: So, fee for service is non-risk based reimbursement.
3:33
Eric: So in other words, uh, specialists.
3:35
Eric: Really are not, uh, incentivized to take risks.
3:38
Eric: They don't want it.
3:39
Eric: Um, whereas primary care physicians are currently, generally not re reimbursed on a risk basis, and they really should be, they would really, uh, uh, benefit more if they were reimbursed in that, uh,
3:50
John: perspective.
3:51
John: I mean, I don't know whether you agree with my glib description of what is an, uh, uh, a primary care doctor knows everything and does nothing, and a procedure-based specialist knows nothing but does everything and, and the pay kind of follows that.
4:04
John: And, and is it, is it fair to say that the risk based piece is really just for folks who don't kind of speak fluent healthcare performance based?
4:13
John: That that's the part that I think people don't get.
4:15
John: That risk doesn't necessarily mean a bad thing.
4:18
John: It means you're actually, I, in an ideal world, at least in a well managed world, paying for better.
4:23
John: Performance or better health.
4:24
Eric: Is that fair?
4:25
Eric: Yeah, I agree.
4:26
Eric: And to a certain extent, I think the word accountable has gotten a bad rap.
4:31
Eric: Um, because, you know, quote unquote accountable care organizations have been around for so long and they've had a variety of degrees of, of fits and starts.
4:40
Eric: And so I feel like the word accountability has sort of become synonymous with a lot of things that it doesn't really mean.
4:47
Eric: And so I think of when I think of, uh, risk.
4:50
Eric: I'd just be like, look like you're kind of accountable.
4:53
Eric: I like that.
4:54
Eric: For lack of a better, for lack of a better.
4:57
Eric: And that is, and that, and that's not unique to like doctors.
5:00
Eric: I mean, like, I think that we would like hold, you know, other professionals to that aspect as well.
5:05
Eric: Whether it be a lawyer or an accountant or even like the person cutting your hair.
5:10
Eric: Like, I don't know, maybe like how much, and, and, you know, if we return to them and how much we pay them, et cetera, like, you know, frankly, that should be, they should be accountable for that.
5:19
Eric: I don't think there's anything.
5:20
John: Well, the, the per, the person who cut David's hair is really still in trouble.
5:25
John: I'm gonna
5:25
David: say, I gotta say that is somebody who, if we could hold that person accountable, Eric, we would be good.
5:29
David: He told me it was gonna grow back.
5:30
David: You know, I don't know what happened.
5:31
David: It, it, I mean, I think it's just a matter of being patient perhaps.
5:34
David: So, Eric, the, you know, the newer physicians that are, that are coming out, so, you know, I mean, primary care, there's a lot of where the, you know, taking of risk is occurring.
5:42
David: Are they kind of embracing it, embracing the accountability?
5:44
David: Does it help 'em practice?
5:46
David: Better?
5:47
David: Or is it just kind of like one more sort of piece of paperwork or whatever that they need to do?
5:51
David: Yeah.
5:51
Eric: Oh, so, so it's a great question and I think the sort of the short answer is that the vast majority of existing practicing physicians today are still.
6:02
Eric: Largely, uh, in the dark about it.
6:04
Eric: And the newer physicians who are coming on board are largely in the dark about it, uh, as well.
6:12
Eric: And that really gets to the, the really, the lack of financial, uh, education that.
6:19
Eric: Doctors and residents are given, uh, in their training at all, which amounts to, uh, zero.
6:25
Eric: The vast majority of of doctors in America receive zero training in residency or medical school about how the money works in healthcare.
6:34
Eric: And so the whole idea of quote unquote risk or accountability is it's financial risk, it's financial accountability.
6:42
Eric: Well shoot.
6:43
Eric: How in the world are you gonna, you know, sell somebody or get them excited about the idea of accountability or, or financial risk when they don't even know how the money works to begin with.
6:52
Eric: So it is, they have, they have no clue.
6:56
Eric: It's like, get, it's like selling somebody a, uh, uh, one of those cages to swim with the sharks when they don't even know what a shark is.
7:03
Eric: We got this, we got this cage for you to protect you from sharks.
7:06
Eric: I don't know what's a shark?
7:07
Eric: So, It is.
7:08
Eric: It's, it's, it's, and that's, honestly, it's one of the reasons why I make these a healthcare c videos because I have medical students and residents email me frequently.
7:15
Eric: They're like, this is great.
7:16
Eric: No one ever told me.
7:18
David: I was gonna say that for sure.
7:19
David: One of the solutions, you know, is your, is your channel, but that can't be the, that can't be the only thing.
7:24
David: Are we seeing, uh, physician groups or others that are, you know, helping to educate the doctors now that they're, you know, in these type of arrangements about what they need to do differently?
7:32
Eric: Yeah.
7:33
Eric: So the short answer is yes.
7:35
Eric: And what's interesting is I'd say that within the world of primary care, probably the.
7:38
Eric: The biggest, um, direction that people hear about, because obviously phy unfortunately, one of the, obviously one of the greatest shortfalls of physicians with a lot of other, um, uh, professionals as well is our pride in our ego.
7:53
Eric: And so what does that mean?
7:55
Eric: In, in general, physicians tend to not listen very well and if they do listen to anybody, they tend to just listen to other physicians.
8:03
Eric: And so they, they did a survey of, you know, who do physicians trust, and a number one on the list was other doctors and.
8:10
Eric: Even above that was other doctors that they know that they practice with and pretty much everybody else, the government, health insurance companies, wall Street, you name it, everything else was really low on the list.
8:21
Eric: So what physicians are generally, what primary care physicians are generally hearing from other primary C primary care physicians is about direct primary care.
8:28
Eric: Which to a certain extent is like going at risk, but it's going at risk in a very different way.
8:34
Eric: It's going at risk completely outside of the system.
8:36
Eric: One, it's going at risk for a non-Medicare population because if you're direct primary care, you cannot see a Medicare patient.
8:43
Eric: It's against the law.
8:44
Eric: And it is going at risk in that you're getting a subscription of anywhere from a $50 to a hundred dollars a month, and you're at risk for taking care of that person for that fixed amount of money.
8:55
Eric: So it's not their overall healthcare cost spend, but they're still kind of going at risk, uh, and that seems to be sort of the most easily palatable or understood.
9:05
Eric: Um, form of going at risk that a lot of primary, and it's, you know, it's not a ton, but it's like 1500 doctors
9:11
John: just for those who, who may not understand as much as you do.
9:15
John: David, you know, primary care I includes internists, geriatrics, pediatricians, and family practitioners who are often paid, you know, 20 to 30% as much as.
9:27
John: The procedure based specialists of orthopedic surgeons, eye surgeons, you know, the folks who are heavily involved in doing a lot of those activities.
9:35
John: So in addition to them knowing everything and being key to actually managing care, they're actually paid 50 to 70% less than the higher paid specialties.
9:46
John: And, and that I think also tilts the table in a way that in this country, particularly as outta whack, you know, in the rest of the world, 70% of the doctors or specialists, uh, sorry, in the rest of the world, 70% of the world are primary care A as, as, as Dr.
10:01
John: Burke's talking about.
10:03
John: And 30% are specialists.
10:04
John: And it's completely flipped here.
10:06
John: So we've actually handed the keys.
10:09
John: To those, to the, to those doctors who charge the most and know the least.
10:12
David: John, I thought we were gonna keep it positive here.
10:14
David: That was, uh, Dr.
10:15
David: Bricker's admonition.
10:16
Eric: So, but, but here, but here is the positive.
10:18
Eric: I mean, there's real, there's real pockets of solutions here.
10:20
Eric: So those direct primary care physicians, if you were to think of them as quote unquote, population health managers for the pa, now typically your d, your direct primary care physician has a patient panel of about 800 people.
10:30
Eric: And I would argue that if you looked at the overall health of those 800 people, this are doing a pretty good job.
10:35
Eric: Now, uh, the sort of the closest thing for employers is onsite near site, uh, clinics and employers that have onsite near site clinics where they have a primary care physician who's typically on salary.
10:45
Eric: They're not billing fee for service.
10:46
Eric: It might be directly employed by the, uh, paid by the employer.
10:49
Eric: It might be through like a separate vendor that has an onsite clinic for them.
10:52
Eric: Hugely successful.
10:54
Eric: Um, One of the, one of the best known stories is a company called Sero in Wisconsin that makes dashboards for Ford and gm.
11:01
Eric: They got about a thousand folks.
11:03
Eric: They're self-funded through Anthem, and they kept their healthcare costs flat for 12 years, and they did it.
11:10
Eric: Through a consumer directed health plan with an HSA and price transparency.
11:14
Eric: This again, this was over 15 years ago that they did this.
11:16
Eric: They were doing price transparency 15 years ago.
11:18
Eric: They were doing bundled payments, blah, blah, blah.
11:21
Eric: And they had an onsite clinic with a nurse practitioner and a, a licensed counselor for depression and anxiety, et cetera.
11:28
Eric: And, uh, John Tous was the CEO of that company and he wrote a book called The Company That Solved Healthcare.
11:34
Eric: And I was fortunate enough to speak alongside Mr.
11:37
Eric: Tous at various.
11:38
Eric: Conferences, and I would sit with him, you know, at those round tables of 10 beforehand.
11:42
Eric: I'm like, John, you know, tell me about this, blah, blah, blah, blah, blah.
11:45
Eric: And he would tell me that the real secret was the onsite clinic.
11:49
Eric: He like 90 per, you know, yay.
11:51
Eric: You did cd, h P, yay.
11:52
Eric: You did price transparency.
11:53
Eric: Yay did direct contracting.
11:55
Eric: But like 90% of the value was in that onsite clinic.
11:58
Eric: In fact, he would have employees quit SKF and be like, I'm not gonna really miss working here.
12:04
Eric: Cause they didn't like working Atsf.
12:06
Eric: But they would say to him, but I'm gonna really miss the health plan.
12:09
Eric: I really liked the health.
12:10
Eric: Job.
12:11
David: So let's talk about the, the role of employers.
12:13
David: A lot of the discussion about healthcare course centers around the federal government, Medicare, Medicaid, you know, that's what you hear about.
12:20
David: But employers are out there, you know, trying to lower cost and improve quality.
12:23
David: You've just given, uh, an example.
12:25
David: I wonder how is it working out?
12:27
David: Sort of, you know, overall, and I, and I think especially it sounds like the onsite clinic is a, is a key piece of it and maybe a little bit harder with remote work.
12:34
David: Doesn't work the same for everybody.
12:35
David: What, what are you seeing in terms of employers are, are, are they making some, uh, some headway?
12:39
Eric: So the short answer is if they care, they can.
12:43
Eric: So the biggest problem is that the vast majority of employers, frankly, don't care about their employed benefits spend.
12:48
Eric: And when I say they don't care, they say they care.
12:51
Eric: But they don't act like they care.
12:54
Eric: Now, in order for John Tous to keep healthcare costs flat, for 12 years, he had to make a 15 million investment.
13:04
Eric: Now he got a.
13:07
Eric: And over eight to one ROI on that 15 million investment.
13:12
Eric: But think about it.
13:13
Eric: I mean, if you are at Walgreens and you gotta spend 15 million for every thousand employees you got, that's a ton of money that you have to spend.
13:21
Eric: And so the, the classic statistic that most people that work in employee benefits know is, is that the typical US C E O spends 30 minutes a year thinking about their employee health plan.
13:31
Eric: There is no way you are going to make any progress in your employee health plan when the CEO spends.
13:36
Eric: 30 minutes a year on the employee health plan.
13:39
Eric: I worked with a huge chip making company and, and their head of benefits, you know, you know all this stuff for their big strategic meeting with the executive team and they got 45 minutes in July.
13:52
Eric: That was it.
13:53
Eric: That's all they got.
13:54
Eric: How
13:54
John: much of that Eric is, they don't care or they aren't patient enough to really understand it because it really is a separate language.
14:02
John: And insurance companies in many ways make it
14:05
Eric: harder.
14:06
Eric: You're absolutely right.
14:07
Eric: And so listen, I'm at the end of the day, look, being a CEO is at a crazy hard job.
14:10
Eric: I'm not here to bash CEOs, okay?
14:12
Eric: Now, John Tous had a private company that he was the primary owner of.
14:17
Eric: Okay, so he was financially aligned for long-term gain in enterprise value.
14:24
Eric: Okay?
14:24
Eric: He was heavily focused on the long-term, uh, uh, growth of his company.
14:29
Eric: If you've got CEOs that are compensated in a short-term fashion based on, you know, stock price, yada, yada, yada, they're infatuated with short-termism.
14:38
Eric: And of course, you're gonna be focused on sales and revenue.
14:41
Eric: And listen, if you're gonna cut costs, you need to cut costs fast, and you need to cut costs big.
14:45
Eric: What's that?
14:45
Eric: You're just gonna cut FTEs.
14:47
Eric: Right, and so you're gonna use, you're not gonna take, you're gonna use a big blunt instrument instead of a surgical knife to be like, Hey, long term, what can we do?
14:55
Eric: We got this thing.
14:56
Eric: It inflates about six to 12% every year.
15:00
Eric: Now, not all employers are like this.
15:02
Eric: So the employers that really care about this tend to be low margin businesses, which is why Walmart is like the most astute company when it comes to their own employee health plan.
15:12
Eric: Absolutely amazing.
15:14
Eric: Yeah, they are.
15:14
Eric: They're a super SMO, low margin business, and there's an awesome video of Sam Walton in 1992, Sam Walton would meet with his executive team every Saturday.
15:24
Eric: If you were on the Walmart executive team, your Saturday morning was spent with Sam Walton.
15:29
Eric: You did not get Saturday mornings off.
15:31
Eric: And Sam Walton was sitting there talking about how Walmart was getting shellacked by a local hospital for expensive MRIs in 1992.
15:40
Eric: And he was like, we gotta do something about this.
15:42
Eric: And everybody was like, We better do something about this.
15:45
Eric: So, so they did, and I, you know, and I've talked with those folks and they get it and they're super smart, and guess what they do?
15:52
Eric: They do it themselves.
15:54
Eric: They, they take ownership.
15:55
Eric: They're accountable.
15:56
Eric: They don't outsource it to their carrier.
15:58
Eric: They don't outsource it to their benefit consultant.
16:00
Eric: They have the actuaries, they've got the staff, they've got the expertise themselves because they realize that it's a core competency that they at Walmart have to have, and they, and they've totally done it.
16:12
Eric: Guess what Walmart does?
16:13
Eric: Walmart has.
16:14
Eric: Zero co-insurance on their plans.
16:17
Eric: It's only copays because they knew that their employees could never understand the concept of co-insurance.
16:24
Eric: So they don't have it.
16:25
Eric: They have copays because they know that their employees can understand that and, and they, anyway.
16:30
Eric: The point is, is that, well, I think you can be
16:32
John: successful, but they, but they're, but they actually, I think we are making a really important point though, because I've served them, you know, both in the, from, uh, you know, Castlight, med Konos, they're the smartest buyers.
16:43
John: They're the toughest purchasers.
16:45
John: And if you're, if you, if you provide them a good deal, They're incredibly creative about doing a better job for their employees because ultimately they realize it's not just taming the, the, the, the cost dragon.
16:56
John: It's also driving better health outcomes, and they really see the, the full loop.
16:59
John: I, I completely agree with you.
17:01
John: And they're, they don't get credit.
17:03
John: They've, they have, I think it's almost 2 million employees in the United States.
17:06
John: It's as big as a health plan, and they're incredibly creative, but they're.
17:11
John: Rare, so, so independent of, of of large creative institutions.
17:15
John: Eric, where are we in terms of purchasing?
17:17
John: Where's the, where's the happy, hopeful view
17:19
Eric: gonna come from?
17:20
Eric: Well, and so, I mean, listen, when we were at, at, at Compass, at the healthcare, so I started a healthcare navigation business.
17:25
Eric: It was Bootstrap business started in 2007.
17:28
Eric: We grew it to 2000 employer clients, 1.8 million people that we supported with our health navigation, health pros that essentially did all the outpatient care, coordination, price, transparency, yada, yada, yada.
17:39
Eric: I.
17:40
Eric: Was the sales, marketing and account management guy.
17:42
Eric: So I spent 11 years outside of the building w uh, meeting with corporate America.
17:47
Eric: It was awesome.
17:47
Eric: It was like the most amazing experience because I got to literally work with, you know, small employers.
17:53
Eric: I mean, I, uh, uh, lemme tell you about the number of double wide trailers that I had meetings in for trucking companies, right?
17:59
Eric: And the owner always drove a Porsche.
18:01
Eric: Right.
18:01
Eric: It was like the office was a double wide trailer and he, he drove a Porsche Okay.
18:05
Eric: To like mid to mid-size employers.
18:07
Eric: I mean, municipalities, universities, you name it.
18:10
Eric: I've seen it.
18:10
Eric: I mean, we had T-Mobile as a client and we had Joe's Trucking as a client.
18:14
Eric: Everything in between and.
18:16
Eric: The, the common factor, and there were absolutely small, medium, and large size employers that had a high performance health plans that their average per employee per year spent was anywhere from six to $8,000.
18:29
Eric: I had other clients where their per employee per year spend was $18,000.
18:34
Eric: The record.
18:35
Eric: It wasn't one of my groups, but it was with a consultant that I worked with.
18:38
Eric: The record was $4,000 per employee per year, not per member, per employee.
18:44
Eric: So you divide that by two, that's$2,000 per member per year.
18:48
Eric: What were they?
18:49
Eric: They were a chain of Asian supermarkets in Southern California.
18:56
Eric: These folks were the healthiest people on the planet because they ate all of the healthy food from their Asian grocery stores.
19:04
Eric: And they had high deduct health plan, primary care, yada, yada, yada.
19:08
Eric: I mean, they had all the bells and whistles, so it's totally doable.
19:10
Eric: Anyway, the commonality across all those things is that when you had ANGA here, here it is you, when you had an engaged C e o, an executive team who then empowered HR to be creative and take risks, then they would do it.
19:27
Eric: What is the number one thing that HR people are scared of is getting fired?
19:31
Eric: Especially HR people that work in benefits.
19:33
Eric: Exactly.
19:33
Eric: Because they know HR people know that benefits jobs are few and far between.
19:37
Eric: If they lose their job, they're gonna have to uproot their family, move halfway across the country to get a new job.
19:42
Eric: And so they're scared to death of getting fired, so they won't try anything.
19:46
Eric: And I, if I was in their shoes, I wouldn't try anything either, because if anything goes wrong, they're fired.
19:51
Eric: Because the lesson is if you screw up as an HR person, and I'm the CEO or the cfo, you're fired.
19:57
Eric: Whereas these companies that had high performance health plans, they encouraged their HR people to experiment.
20:02
Eric: John Tous will tell you they failed constantly.
20:05
Eric: I'll give you another example of one.
20:06
Eric: I think I can say this.
20:07
Eric: Nebraska Furniture Mart.
20:08
Eric: Okay.
20:09
Eric: Berkshire Hathaway Company.
20:11
Eric: Okay.
20:12
Eric: Um, They, Nebraska Furniture Mart, again, their roots.
20:15
Eric: Mrs.
20:16
Eric: Bumpkin.
20:16
Eric: Yeah.
20:17
Eric: Mrs.
20:17
Eric: Bumpkin was super, I mean in a po I'm saying this in a positive way.
20:20
Eric: She was super cheap.
20:22
Eric: She was incredibly cheap, and that meant that she watched every single penny and her sons run the business now.
20:28
Eric: And so they're like, look, if we're gonna be spending all this money on healthcare for our employees, We're like Walmart, we're not gonna waste money.
20:34
Eric: And so they've empowered their head of benefits and their HR person to take chances and make risks, and make mistakes and mess up and try again, again, and again.
20:42
Eric: And Nebraska Furniture Mart has fantastic health plan
20:45
David: performance.
20:46
David: So, Eric, we've been talking how every, you know, every employer from, uh, you know, Joe's Trucking to, to Sam's, Walmart.
20:52
David: Can do well, uh, in healthcare if they put their, their effort into it from the employer, from the buyer side.
20:57
David: Now, what about those companies out there, the startup companies that are, you know, trying to do something, they see a problem, they're trying to go after it in a, you know, narrow kind of a focused way.
21:06
David: Are they able to make a difference or is it, or is it just little, you know, just little things that don't make much of an impact in the big system.
21:14
Eric: So on, on the startup side.
21:17
Eric: It is, it's very interesting because I would argue that the, the actual success of a startup in terms of improving people's health and lowering cost for an employer is not.
21:33
Eric: Correlated with the overall financial success of the startup.
21:39
Eric: You can have hugely successful, uh, financially successful startups in terms of revenue and going public and market capitalization, whatever.
21:48
Eric: But if you looked at how much money they actually saved, The employer and how much they improved the lives of the plan members.
21:56
Eric: That that is not correlated with the fin, with the financial performance.
21:59
Eric: And so really of, and I've, I've seen a lot of different, I've seen gobs of vendors out there because we, as, as Compass, we were sort of a, an integrator, right?
22:08
Eric: We were sort of a hub and all of our employer clients had all these different point solutions that they would use to help their, and we were, we were point solution agnostic.
22:17
Eric: So we'd be like, you know, you tell us what cancer program you have or what telemedicine program you have, or what weight loss program you have.
22:23
Eric: And we'll just, you know, we'll make sure that we point your employees in the direction of that program, uh, when it makes sense for them.
22:29
Eric: And so what we found is that we found these like little like niches of like golden nuggets of vendors that were just doing an amazing job.
22:37
Eric: But like, nobody had ever heard of them before and they weren't like backed by a venture capital company or anything like that.
22:44
Eric: And they were like, I mean, I'll, I'll give you an example of one there.
22:48
Eric: Um, there were, um, there are.
22:52
Eric: Uh, end stage renal disease, uh, dialysis vendors that go in to self-funded plan and change the way their plan documents are written so that they will reimburse Zenia and DaVita a percentage of Medicare and not the out of network egregious 3000 bucks per dialysis session that they normally do.
23:13
Eric: And they would pay them, you know, uh, you know, 200% of Medicare, which is only like 800 bucks per dialysis session.
23:19
Eric: And because the way.
23:21
Eric: That they had structured their plan documents, they could do that, and the dialysis facility couldn't go after the patient for the remaining balance.
23:30
Eric: And as a result of that, they saved those employers that did that millions of dollars, and these companies would make like 10 million.
23:38
Eric: They would make like 10 million in revenue and have like 6 million in ebitda.
23:42
Eric: That's amazing, Eric.
23:43
Eric: But you'd never heard of these companies before and all of their customers were like, again, Joe's Trucking self-funded with, you know, 500 employees that would get a dialysis patient once every three years, and they would do a fantastic job for them.
23:58
Eric: And so the key is, is.
24:02
Eric: These employers would not get caught up in the flashy PowerPoint presentations and the big name investors.
24:09
Eric: And in fact, in fact, one of the best things to do is, is there is an inverse correlation between the charisma of the salesperson and the effectiveness of the solution.
24:19
Eric: You want a company that has no salespeople.
24:21
Eric: The CEO walks in, he's disheveled, and he can barely talk, but he can save you money.
24:27
Eric: And if you have somebody who comes in and, and talks a great game and is so charismatic and has everybody eaten out of their hand, I would run for the door.
24:34
Eric: Eric, a couple of
24:35
John: quick questions for you.
24:36
John: What do you think This no surprises act, is that gonna help?
24:40
John: Is it a, is it a solution for consumers?
24:42
Eric: Yeah.
24:42
Eric: So, um, so.
24:43
Eric: The short answer is in the short term, yes, it has been helpful for solutions.
24:47
Eric: So if you are a patient and you go to an in-network hospital and you are seen by an out-of-network doctor, like an anesthesiologist, historically you would be balanced, billed outta network for like five grand for giving you some propofol for a colonoscopy.
25:01
Eric: You know, not, not, not screening, right?
25:03
Eric: Like literally I had a diagnostic colonoscopy, I had an out of network anesthesiologist.
25:08
Eric: Um, And, and it was, it was $3,500 outta network.
25:12
Eric: And, um, so, and this was before the No Surprises Act was passed.
25:16
Eric: So now that anesthesiologist cannot do that anymore.
25:19
Eric: Now it has to go to quote unquote arbitration between the anesthesia group and the insurance carrier that I have.
25:26
Eric: So Blue Cross Shield.
25:28
Eric: And, um, the problem is, is that that arbitration process is incredibly behind and bogged down, which means that ultimately the anesthesia group.
25:36
Eric: It doesn't have the money and the carrier does because the, the payment hasn't happened, right?
25:40
Eric: So nobody, nobody has, has no transaction has occurred yet.
25:44
Eric: So as of now, it's been a windfall for the carriers and it's really put the, um, ouch.
25:49
Eric: The o the, the physicians, like anesthesiologists in a, in
25:52
David: a tech box.
25:52
David: So another quick one is, um, you know, is it practical for consumers to compare hospital prices or is that just, uh, impossible?
26:01
Eric: It absolutely is.
26:02
Eric: That's like a number one thing that we did at Compass, and the biggest thing around it is you had to put those hospital prices.
26:10
Eric: One, it had to be a loud amount, none of this B, you know, build charges, malarkey.
26:14
Eric: And then two, it had to be put in context of what they were getting done, and it had to be explained to them.
26:23
Eric: So in other words, it was not like Expedia.
26:26
Eric: So we had, that's why we had people like explaining this to you because people, I mean, at the very basic level, like people don't get that.
26:33
Eric: If you go to a hospital, you're gonna have a facility fee of, uh, a surgeon's fee, an anesthesia fee, a pathology fee for the biopsy, and then if they do any imaging, you're also gonna have a separate radiology fee.
26:44
Eric: So you're talking like five different bills and they're like, what?
26:49
Eric: And so we would have to break all of those down and we would have to explain to them that, look, we can't know in advance exactly what it's gonna be, because some of it is depends upon how long you're in the or, because hospitals bill in 30 minute chunks of or time.
27:04
Eric: So if you're in the OR for 29 minutes or 31 minutes, that changes your bill.
27:08
Eric: So you never quote someone a price down to the penny.
27:12
Eric: In fact, we would say to them, we guarantee you that the price we tell you will not be your final price.
27:17
Eric: We would give them a range.
27:18
Eric: And we would say, look, you get your arthroscopic knee surgery at this ambulatory surgery center.
27:22
Eric: It's gonna be about 4,000 to 5,000 total, which with your plan design means that it's gonna cost you about 2000 to $2,500.
27:32
Eric: Whereas if you get it done at the hospital, the total allowed amount is gonna be about 20,000 to 25,000, which translated against your benefit plan design is gonna be about 7,500 to $8,500 for you.
27:45
Eric: A massive difference.
27:46
Eric: Yeah, massive.
27:47
Eric: And the point is, is that I can directionally tell you, That you're gonna be better off financially at the A s C than the hospital without giving you a quote unquote exact price.
27:57
Eric: And so check,
27:58
John: check that price, check about another, another, another question for you.
28:02
John: What do you think of these weight loss drugs?
28:03
John: Are they worth it?
28:04
John: Because it seems like they're gonna be awfully
28:06
Eric: expensive.
28:06
Eric: Yeah, so, so I, I, I will just tell you that I did a deep dive that, uh, on that on video on Ozempic and Wego and Manjaro, and the key to, to wait to these weight loss medications for people to understand is that their primary mechanism of action is appetite suppression.
28:27
Eric: So in order for you to lose weight with these medications, you need to eat less.
28:32
Eric: Now these medications help you eat less because being hungry is miserable.
28:36
Eric: Okay?
28:36
Eric: We've all been hungry before.
28:38
Eric: To be hungry day after day after day in an attempt to lose weight is miserable.
28:44
Eric: Um, however, People eat for reasons other than hunger.
28:49
Eric: A lot of people eat because they're stressed out.
28:51
Eric: I eat when I'm tired, man, after 9:00 PM it's game over.
28:55
Eric: I'll just eat just so I can stay awake.
28:57
Eric: Okay, so people eat for all sorts of reasons.
29:00
Eric: Okay.
29:01
Eric: These medications only I.
29:03
Eric: Suppress appetite.
29:04
Eric: So if you still like to eat because you're tired or stressed out or whatever, these medications aren't necessarily gonna help you.
29:11
Eric: So the key is, is that if you're, I'm not saying don't take these medications, but I'm saying if you do take these medications, they, when they were studied, they, the patients were given intensive weight, uh, calorie counting programs with intensive counseling with a person.
29:29
Eric: Okay with 30 minutes of exercise five days a week.
29:34
Eric: So I would argue if you take these medications, you need to have somebody as your coach and your nutrition counselor, you need to be counting calories to make sure you're eating 500 calories less a day.
29:44
Eric: You need to be having at least 30 minutes of exercise five days a week.
29:47
Eric: So if, if you can do all that.
29:51
Eric: And you can lose 30 to 50 pounds.
29:53
Eric: I mean, that's life changing, but you can't just take the medication and expect it to work with your same behavior.
30:00
David: John, I'm gonna take the last question if that's okay.
30:03
David: Uh, so Eric here, I, I liked, uh, I, I saw this news and it made me happy to see that it seems like health insurers are decreasing their use of prior authorization.
30:11
David: Nobody really likes prior authorization.
30:14
David: Is that a real thing or is it just sort of a, a headline?
30:18
Eric: Yeah, so that's where, you know, United just came out recently in the last couple of weeks and said, look, we're gonna decrease our prior authorizations from 10, uh, from 13 million a year to 10 million a year.
30:28
Eric: And first of all, let's do the math on that.
30:30
Eric: Okay.
30:31
Eric: If a prior authorization takes an hour to do, and sometimes it takes four hours to do, And if you take 13 million hours and divide it by 2000 hours in a year for one f t e, that means it takes 6,500 people working full-time all year just to get the prior authorizations from United.
30:50
Eric: That's their full-time job and that's just one health insurance company.
30:53
Eric: So this is a incredibly, it ha the, the, the one of the largest costs to, um, uh, prior authorizations is the opportunity cost of the clinicians in time that they could be spending with patients.
31:07
Eric: Instead, they are spending on prior authorizations.
31:10
Eric: That is a massive opportunity cost that in my opinion, Literally hurts patients.
31:15
Eric: Okay?
31:16
Eric: So prior authorization isn't just cute, in my opinion.
31:19
Eric: It literally hurts people.
31:20
Eric: Okay.
31:21
Eric: Second of all, all things in healthcare follow what is referred to as the Pareto principle or stratification, meaning that 80% of the results come from 20% of the inputs, meaning that 80% of the claims spend that goes through prior authorization only goes through.
31:39
Eric: 20% of the prior authorizations, the next 20% is 12%.
31:44
Eric: The next 20% is 5%.
31:46
Eric: The next 20% is 2%.
31:47
Eric: The bottom 20% is 1%.
31:50
Eric: Therefore, theoretically, an insurance company could not do.
31:55
Eric: The bottom 20% of their prior authorizations and only decrease their claim savings by 1%.
32:03
Eric: In other words, increase the payment to physicians and hospitals by only 1% by cutting 20% of their prior authorizations.
32:11
Eric: So I don't personally know which 20% United is cutting, but that entire concept of the Pareto principle.
32:19
Eric: Is super important for everybody in health.
32:21
Eric: Listen, if you are an employer or any, any sort of health plan, listen, like, you're like, well, I wanna lower costs.
32:27
Eric: Cancer, musculoskeletal, cardiovascular, like all day long.
32:31
Eric: You wake up breakfast, lunch, and dinner.
32:32
Eric: You think about those three things.
32:34
Eric: Okay?
32:34
Eric: You're like, yeah, but we got all these people with asthma.
32:37
Eric: Fantastic.
32:38
Eric: Treat them.
32:38
Eric: Treat them as long and as much as you want.
32:40
Eric: Cancer, cardiovascular, musculoskeletal, that's what you're gonna focus on because it's the Pareto principle.
32:45
David: Well, Dr.
32:46
David: Eric Ricker, I can see why you call your show a healthcare.
32:49
David: Z I feel like we've been today from a A to Z.
32:52
David: Range in, uh, the various healthcare topics, really sort of across the, uh, across the field.
32:56
David: It's been a great pleasure, uh, having you on care, talk to share, uh, your expertise today.
33:00
David: I very much appreciate it.
33:02
Eric: Well, John and David, listen, thank you so much for having this podcast.
33:05
Eric: I mean, it's super important for, for people to hear about these things, so I, I appreciate you spreading the word.
33:10
John: Well, you, you, you, you bring a passion, a perspective, and a philosophical approach that we really appreciate, and you're in the details without getting lost in them to help people navigate healthcare.
33:20
John: That's what our purpose is here, and, and you're leading the way.
33:23
John: On YouTube and elsewhere.
33:25
John: And I just wanna, again, I wanna rec reinforce the fact, and David, he even inspired you to show a little passion for this show,
33:31
David: I like.
33:32
David: I'll see what I can do, John.
33:33
David: Well, that's, why don't we leave it there.
33:34
David: That's gonna say, I'm gonna say that's it for yet another episode of CareTalk.
33:38
David: I'm David Williams, president of Health Business Group, and
33:41
John: I'm John Driscoll, the president of Walgreens Health.
33:43
John: If you like what you heard or you didn't, please subscribe on your favorite service, and thank you, Eric.