Latest / Healthcare is Hard: A Podcast for Insiders / Insider Susan DeVore on Reducing Waste and the Path to Alternative Payments in Healthcare

Transcript

Insider Susan DeVore on Reducing Waste and the Path to Alternative Payments in Healthcare · Healthcare is Hard: A Podcast for Insiders

• 0:02
  Speaker 1: Welcome to healthcare is hard, a podcast for insiders.
• 0:06
  Speaker 1: Each episode, Lrv helps Keith Viglione.
• 0:09
  Speaker 1: We'll talk to the health care insiders who are helping to fundamentally transform our healthcare industry.
• 0:20
  Speaker 2: All right, well welcome back to the healthcare is hard pod tasks.
• 0:24
  Speaker 2: We are recording under a new system right now.
• 0:26
  Speaker 2: We're actually face to face with key out, which isn't a true pleasure.
• 0:31
  Speaker 2: We, uh, we, we usually do this over the phone, but we're in the same building.
• 0:34
  Speaker 2: So we're doing this in person and this is a week after jp Morgan.
• 0:37
  Speaker 2: We're gonna launch our third podcast with Susan devor.
• 0:40
  Speaker 2: In a moment I want to get into that conversation, but let's talk a little bit about Jpmorgan.
• 0:45
  Speaker 2: Very Short, uh, on the social media.
• 0:48
  Speaker 2: There's a lot of, it's getting too big.
• 0:50
  Speaker 2: It's getting too hard to, to handle.
• 0:52
  Speaker 2: I was there for just a day and frankly that was enough.
• 0:55
  Speaker 2: But Jesus, an effective way to meet people.
• 0:57
  Speaker 2: What was your, what was your take about the social impact of the social effect of Jp Morgan?
• 1:03
  Speaker 2: And then if you have an observation we can get into in a minute.
• 1:05
  Speaker 3: Yeah, I mean go for a long time and I was joking with some this morning, I think I'm fully detox just as of today and it's, it's, you know, two or three days since I've, um, you know, I think it really, uh, there's a lot of social media noise, it feels like this year because I think it's up to 40,000 attendees and I think, you know, really as I tell everybody, you will always says, hey, should I go?
• 1:26
  Speaker 3: I've never been.
• 1:28
  Speaker 3: You've got to make it the priorities for, for what you want to achieve there.
• 1:31
  Speaker 3: And I think because you have so many people there, I know what I like about it is it saves me a lot of flights.
• 1:37
  Speaker 3: And so I think from that standpoint it's very productive from us from a cost standpoint.
• 1:40
  Speaker 3: I think it's crazy for everybody, even some of the largest players at the event, but I found it to be a very good event and you know, it's really burgeoned past sort of where it started with life science and a lot of people don't understand the heritage.
• 1:52
  Speaker 3: Going back to Hamburg Hamburg and questions right now, because of this digital health investment activity that's been taking place with a bit of power almost a decade now, there's just this huge ecosystem as burden up around all the different sides of healthcare and I appreciate that because, you know, this past event I happened to meet somebody at one of the biotech side events which I had never know knew even existed and I was amazed at that ecosystem.
• 2:17
  Speaker 3: So, you know, my one critique frankly is just, you know, I just heard that they re upped for 17 years in San Francisco and like a lot of people, I just, I think the venue is outlived itself and so I just think at some point in time they really got to think about a different kind of venue, but there's so much money tied up in it.
• 2:34
  Speaker 3: I doubt all happened read for 17 years.
• 2:36
  Speaker 3: That's what I heard.
• 2:38
  Speaker 2: Yeah.
• 2:39
  Speaker 2: No, I agree with you.
• 2:40
  Speaker 2: It's like fish in a barrel and coming to meet, but you can just send up the corner and you can, you can, you can reconnect with folks.
• 2:45
  Speaker 2: That's great.
• 2:46
  Speaker 2: But, uh, let's look more to just observations, any takeaways that are going to help steer you in 2019 that we spent a lot of time,
• 2:55
  Speaker 3: um, in the event actually in a little bit out of the event and you know, three continual
• 3:00
  Speaker 4: recurring themes which we heard a lot of an 18 but 19 I think, you know, the social determinants of health is just continue to be a, just a heart pounding theme.
• 3:09
  Speaker 4: And I think there's a lot of momentum there on the innovation front.
• 3:11
  Speaker 4: There's a lot of momentum there on the established players.
• 3:15
  Speaker 4: Um, I think the whole virtual care push and getting that to a utilization was also talked about a ton, you know, over telemedicine has been going on for the last couple of years.
• 3:23
  Speaker 4: But I think, you know, this is a, this is a year of utilization where we're really going to start seeing people drive that more.
• 3:29
  Speaker 4: And then consumerism, you know, I think everybody's on board now about what that means.
• 3:34
  Speaker 4: It's not just a cvs thing or a walmart thing or, or etc.
• 3:38
  Speaker 4: I think all the existing sort of established players are starting to think through how do they disrupt themselves in that area too.
• 3:44
  Speaker 4: So those are, those are the three core themes that I continually heard again and again and again, and it's stuff that, you know, as investors at early stage investors we've been thinking about for a long period of time, but it just, it was nice to get reinforced across the entire ecosystem.
• 3:56
  Speaker 4: Terrific.
• 3:57
  Speaker 4: Now let's get into the business at hand, which is the healthcare is hard podcast.
• 4:00
  Speaker 4: Tell us a little bit about your talk with your guests, susan.
• 4:03
  Speaker 4: For sure.
• 4:04
  Speaker 4: So I had the pleasure of interviewing a red for the holidays, susan devor who is the president and ceo of premier and it's always fun I find to interview and talk with your former boss.
• 4:18
  Speaker 4: So that was a lot of fun.
• 4:20
  Speaker 4: And, and susan's also somebody that um, you know, is by far one of the most respected individuals in the industry has had an incredible career as I had an incredible impact on my career frankly.
• 4:33
  Speaker 4: Um, and we just had a really, really good discussion all about trying to peel back the onion that is premier a little bit frankly.
• 4:41
  Speaker 4: Um, I find, uh, because I'm out of there now, I get asked a lot of questions about what it really is and so I tried to get into that a little bit and then we talked about what's at the core of premier is really sort of convening folks in convening their, their health systems.
• 4:56
  Speaker 4: Um, you know, as people dive into premier, they just realized how big it is, you know, 70 percent of the healthcare environment has some attachment in the u s to premier and that these incredible people who part of their supply chain efforts, part of their collaboratives, part of their informatics, the businesses that I used to run it is an amazing organization with an amazing set of leaders.
• 5:19
  Speaker 4: Uh, and you know, finally we dug into sort of them as a convener and them is working with cms and other parts of government to really think about what's next.
• 5:29
  Speaker 4: Uh, they were very early in, you know, ran the first demonstration program with evidenced based care.
• 5:34
  Speaker 4: They were very early with the aco is most people even know what an aco was and premier was building a 70 market aco collaborative.
• 5:42
  Speaker 4: Um, and so I think we shed a lot of light on sort of value based care and where that's going in the pace and how administration gets involved in that.
• 5:49
  Speaker 4: So I think people are going to really like this interview.
• 5:51
  Speaker 4: I love the interview.
• 5:51
  Speaker 4: I thought it was just a really dynamic, a discussion and I really look forward to people, uh, you know, digging
• 5:58
  Speaker 2: in and taking a listen after they liked it.
• 6:00
  Speaker 2: If they want more, I don't need to stare at a traffic to the way of him, but I understand susan's going to be holding a pretty, pretty central spot in that meeting.
• 6:09
  Speaker 2: She is, I believe she's the main keynote this year, so it's pretty exciting.
• 6:12
  Speaker 2: We've got a little bit of a, a little bit of foreshadowing site before maybe on some of her comments, so hopefully people can listen to that before they potentially see her at hims.
• 6:19
  Speaker 2: Fantastic.
• 6:20
  Speaker 2: Well thanks for this interview and that's going into this conversation with susan devor right.
• 6:24
  Speaker 2: Hey, so hey everyone, tom again, before we get into this interview, just want to let you know, share a little production note, the audio had a few rough patches in this.
• 6:31
  Speaker 2: We've done a good job cleaning it up, but I want to give you a heads up but we have since corrected the issue that created this so we'll have a better audio next time around, but I know you'll enjoy this interview with susan.
• 6:53
  Speaker 4: Well welcome to our third instance of healthcare is hard podcast.
• 6:58
  Speaker 4: I could not be more excited to be sitting across from susan devor, a former boss of mine, so that's always fun.
• 7:05
  Speaker 4: So I get to know the ins and outs of that and we get to ask her a bunch of different questions.
• 7:08
  Speaker 4: So susan, welcome.
• 7:09
  Speaker 4: Thank you.
• 7:10
  Speaker 4: part of the fun of these is just trying to get people to get to know you a bit more and you know, you're on.
• 7:14
  Speaker 4: I see every other day on some high profile media outlet.
• 7:19
  Speaker 4: So it'd be great to just start with an overview on yourself and maybe even talk a little bit about how you got into healthcare.
• 7:25
  Speaker 5: So I grew up a military brat, one of seven kids and moved around the world and then my dad retired from the military, started a second career in charlotte and moved to charlotte, North Carolina.
• 7:38
  Speaker 5: My dad waS a biomedical engineer, uh, in the military, so I sort of grew up in healthcare, um, and I went to business school and then right out of business school and to work for ernst and young and their healthcare practice.
• 7:52
  Speaker 5: And I knew I wanted to be in healthcare from the time I was about 14 years old.
• 7:56
  Speaker 5: I didn't know exactly what part of healthcare.
• 7:59
  Speaker 5: And so I worked at ernst and young for elapsed 25 years and then ended up at premiere back in 2003.
• 8:07
  Speaker 4: But it tease a few thIngs out just because I know some things.
• 8:10
  Speaker 4: So your, your history with premier goes way back and it'd be.
• 8:14
  Speaker 4: I think it'd be interesting for people to know a little bit about that because not many people know that.
• 8:18
  Speaker 5: Yeah, that's true.
• 8:19
  Speaker 5: Not a lot of people know that.
• 8:20
  Speaker 5: My dad actually was one of the initial employees of a company called sun health, which was a predecessor company to premiere.
• 8:30
  Speaker 5: So when I, when I left consulting and uh, I got a call from premier on the west coast, uh, to interview a.
• 8:39
  Speaker 5: Nobody knew that my dad had actually helped start one of the predecessor companies because I had a different last name.
• 8:44
  Speaker 5: And so I interviewed, um, and it felt sort of like serendipity to me that all those years later, um, I would follow in the footsteps if you will, of a company, but that my dad started.
• 8:57
  Speaker 5: So I always thought that was like one of the
• 8:59
  Speaker 4: coolest stories ever in the fact that, you know, people used to tell me that they will remember you as a child and kind of running
• 9:05
  Speaker 5: right.
• 9:05
  Speaker 5: Like how cool.
• 9:06
  Speaker 5: Well, sun health used to have company picnics.
• 9:09
  Speaker 5: And so when I first came to work at premier, there were some 20, 30 year employees who actually worked with my dad and did remember me as a 13 year old, 14 year old running around at the company picnic.
• 9:21
  Speaker 5: So.
• 9:22
  Speaker 5: So it's, you know, it's really kind of fun to have a legacy relationship and in the last 10 years of my dad's life we got to talk about work, we got to talk shop every weekend and, and the, the good and bad of that is um, a lot of the conversation was still the same, you know, about the challenges in healthcare, the solutions being provided and, and it really gives you a view into actually how long it takes to drive change or transformation in an industry as complex as this one.
• 9:55
  Speaker 4: right.
• 9:55
  Speaker 4: And so you're like, I'm the ideal guest for what we're trying to do because you've seen this all the way from childhood and you've seen what's going on and you know, a lot of people kinda kinda come in and out of health care, but you've been this through your entire career and you know, when you step back and you think about premier's position in that, you know, probably the number one question that I get since I left premier is what is premiere.
• 10:21
  Speaker 4: And so we used to always joke about that as well.
• 10:23
  Speaker 4: And so I think it'd be really good to give just maybe a quick overview on how you describe premier, um, you know, the cement is parts and then we'll dive into this idea of, you know, so your view of healthcare right now.
• 10:34
  Speaker 5: So what I would say is as we look at the healthcare industry, all of us, we see 5,000 hospitals, hundreds of thousands of physicians, all kinds of alternate sites of care, all kinds of technologies, all kinds of insurance companies and offerings.
• 10:51
  Speaker 5: And the truth is on the provider side of the business, they're all doing the same things, building the same things, solving the same problems.
• 11:00
  Speaker 5: And so the, the idea behind premier is how do you aggregate hospitals, health systems, doctors who are all trying to solve a cost problem in a quality problem and get to a different model of care delivery in the country.
• 11:15
  Speaker 5: and how do you do it at scale?
• 11:17
  Speaker 5: How do you bring innovation to it?
• 11:18
  Speaker 5: How do you bring data to it?
• 11:19
  Speaker 5: So, so, you know, sort of in one sentence we would say we are a national performance improvement company.
• 11:27
  Speaker 5: We work from the center of healthcare systems out, not the outside in and so we want to be the intel inside these healthcare systems with data technology services, a group purchasing organization to really have them do this more efficiently together than they could all do it themselves.
• 11:45
  Speaker 5: So that's the, that's the theory.
• 11:47
  Speaker 5: Interesting.
• 11:48
  Speaker 5: And so when you,
• 11:49
  Speaker 4: you know, one of the things that I was very naive going into premier was
• 11:54
  Speaker 5: all things supply chain and what I learned over those almost eight years was incredible.
• 11:59
  Speaker 5: All the stuff that we did, but when you think of sort of panning that out and you think of total cost, I think one, one thing that people I don't think truly understand about premier, how much you impact total cost with your members.
• 12:14
  Speaker 5: And so when you think about what's happening in the cost, and we just saw some data that came out were costs coming down a little bit, but we're still on the path to 20 percent gdp from all intensive cases.
• 12:24
  Speaker 5: So how do you think about where the industry is in sort of our runaway costs right now?
• 12:30
  Speaker 5: In more importantly, what does each partner needs wearing each player in this space need to do about it?
• 12:35
  Speaker 5: It's a great question.
• 12:36
  Speaker 5: It's a complicated question.
• 12:38
  Speaker 5: So for as long as I've been in healthcare, labor costs has been 50 percent of their operating expenses.
• 12:43
  Speaker 5: Supply chain costs has been 20 percent of their operating expenses.
• 12:46
  Speaker 5: Supply chain is a clinical process.
• 12:49
  Speaker 5: And so the question of how do you get to appropriate staffing levels, clinically appropriate use of supply chain, um, how do you actually aggregate the buying power of all these health systems to get the best possible price point?
• 13:02
  Speaker 5: So I think the solution to this and the reason I was so excited to actually come to premier, because I'd been in consulting for a long time, I'd seen pure jpo as I had seen technology companies and what they do.
• 13:16
  Speaker 5: The thing that premier brought was this national footprint, all kinds of data sets.
• 13:22
  Speaker 5: Now iT's 45 percent of the patients in the country, all kinds of applications in the big cost buckets and a really warm channel, a channel that actually owned the company and a channel that actually wanted to work together at scale to solve the same problems and so for me there's still 30 percent waste in the system.
• 13:43
  Speaker 5: There's still three times variatioN in care delivery.
• 13:45
  Speaker 5: It can't be fixed by insurance companies or government.
• 13:48
  Speaker 5: It actually has to be fixed from the inside out and you have to have data and you have to have technology and you have to have wraparound capability to help these healthcare systems drive the transformation
• 14:01
  Speaker 3: that's changing in.
• 14:03
  Speaker 3: We used to talk a lot about, I mean at the core, I think what you're saying is sort of social systems and you think that given where margins are given, more consolidations going, we said the health system level, you think that social system and that change and we'll get it a little bit into the bbc value based care next.
• 14:19
  Speaker 3: is that starting to change at the administrative level for a lot of these systems?
• 14:23
  Speaker 3: a lot of people,
• 14:25
  Speaker 5: I think it is changing, but I think it is changing right now in an experimental way.
• 14:31
  Speaker 5: I think the only way that it changes at scale is if you get health systems off the fee for service drip.
• 14:39
  Speaker 5: So unless you have global payment models, double sided risk payment models, models in which people are bonused or penalize based on their ability to drive efficiency and outcomes and, and safety and patient experience.
• 14:54
  Speaker 5: Um, it's too easy to just stay in the fee for service world.
• 14:58
  Speaker 5: So I would say today 10 or 15 percent, it's sort of a normal distribution curve.
• 15:03
  Speaker 5: You've got the, the innovators, you've got the early adopters, you've got the people who proactively know that we cannot end up at 20 percent of gdp.
• 15:11
  Speaker 5: We can't be twice the rate of growth of the economy and that, that risk is going to be shifted to providers.
• 15:20
  Speaker 5: So the people that see that coming are building the infrastructure for that driving the experimental implementation of it right now so that they're ready when it's broader.
• 15:32
  Speaker 5: I think the trump administration and Alex Hayes are, um, specifically have a much more aggressive urgency around driving to those models.
• 15:42
  Speaker 5: RighT.
• 15:42
  Speaker 3: I don't know if you saw the switchover limited value.
• 15:45
  Speaker 3: I'll come back to cost tubing.
• 15:46
  Speaker 3: I think this morning the new mssp rules came out and the it
• 15:52
  Speaker 5: for the holidays.
• 15:53
  Speaker 5: So we all know that we all get to spend all of our volunteers evaluating the new acn
• 15:59
  Speaker 3: ages by the fire, but it sounded like the was for 25 to 40 percent or something of that tune.
• 16:06
  Speaker 3: So it started in a downside person and he starts in 20 slash 20.
• 16:11
  Speaker 3: Right?
• 16:12
  Speaker 5: And so they really shortened the transition and said it's the training wheels have come off.
• 16:16
  Speaker 5: We've been experimenting with this now for several years.
• 16:20
  Speaker 5: We want to move to double sided risk.
• 16:22
  Speaker 5: We want to move to higher degrees of, of, of savings, and we want to do it quickly and maybe even make it mandatory down the road.
• 16:32
  Speaker 5: I mean, those are the kinds of words that the secretary of hhs uses now.
• 16:37
  Speaker 3: And so when you think about, um, as we move into value based care discussion points, when you think about that pace, your point about trump and asr and price was very different, right?
• 16:50
  Speaker 3: Obama was very different, you know, do you feel, because you've been in this for a long time, you know the administration, yes.
• 16:56
  Speaker 3: They can't change it, but they can also make an influence paste.
• 17:00
  Speaker 3: It feels like.
• 17:00
  Speaker 3: So are you, it sounds like you're feeling like the pace is picking back up again where we kind of fell down a little bit in the beginning part of the chocolate industry.
• 17:07
  Speaker 5: Yeah, I think there was a lot of noise and uncertainty around repeal and replace.
• 17:11
  Speaker 5: It's a little noise right now around the Texas case, but you got 17 million people who have gotten access to healthcare.
• 17:18
  Speaker 5: Hard to put that back in the barn.
• 17:20
  Speaker 5: And I actually think the power in the innovation center that the current administration has to drive their drug pricing agenda.
• 17:28
  Speaker 5: They're value based care agenda, their opioid agenda and their interoperability agenda, which would they would say are their top Four priorities.
• 17:36
  Speaker 5: They have the regulatory power under the current law to move that forward as fast as they want and that's what I think.
• 17:45
  Speaker 5: Um, and in a way they can politically talk about the aca and you know, it'S not the best thIng since sliced bread, but operationally they have the vehicle to drive the changes they want.
• 17:58
  Speaker 3: We keep saying it's kinda like the same place, but you know, value based care is that inevitable.
• 18:04
  Speaker 3: But it's gradual.
• 18:05
  Speaker 3: Right.
• 18:06
  Speaker 5: And obamacare had a much more gradual view of getting to the end point.
• 18:11
  Speaker 5: I think the current hhs secretary and the administration has a much accelerated in view of that.
• 18:16
  Speaker 5: They basically came out and said I want 50 percent of all payments by 20, 20 and a hundred percent
• 18:22
  Speaker 3: by 20, 25 in alternative payment models.
• 18:26
  Speaker 3: So you'll.
• 18:26
  Speaker 3: So it feels like, because we get this question a lot, not only from our health system and payer partners, but obviously entrepreneurs that the pace of bbc is probably going to start with.
• 18:37
  Speaker 5: I think it's the pace is going to pick up.
• 18:40
  Speaker 5: It's been fits and starts up to now because of repeal and replace because they didn't have all the positions filled because they changed hhs secretaries, but there there are more regulatory rules, proposed rules, final rules coming out at a much faster pace right now and I think the risk for health systems is that if they wait too long to build the infrastructure to actually deal with this, they're going to be accepting the riSk before they're completely ready to go
• 19:08
  Speaker 3: except the risk.
• 19:09
  Speaker 3: To that point.
• 19:10
  Speaker 3: I read something last week which I thought was really interesting and I hadn't heard someone describe it this way and I probably needed the percentages wrong.
• 19:18
  Speaker 3: I'm curious, back to your core members, if this is relevant.
• 19:21
  Speaker 3: This is someone who's steeped in healthcare.
• 19:24
  Speaker 3: Consulting for providers is up to 20 percent of risk contracts.
• 19:29
  Speaker 3: You're experimenting, right?
• 19:31
  Speaker 3: Twenty to 50 percent.
• 19:34
  Speaker 3: You need to start making subtle structural changes after 50 percent.
• 19:38
  Speaker 3: You truly are risk bearing entity.
• 19:40
  Speaker 3: You need to make major structural changes.
• 19:42
  Speaker 3: Are you seeing that across of your membership in terms of then what are the factors on that as a market?
• 19:47
  Speaker 3: Is it competition?
• 19:48
  Speaker 5: Yeah, it varies by geographic market as you know, in terms of how intense the pressure is to make that movement, but for the innovators and for the early adopters, I would say that they view that 20 perCEnt and that experiment as the time tO build the real infrastructure.
• 20:04
  Speaker 5: So I'm not sure I would say they're structurally or waiting until they get to above 50 Percent because I think there's a lot of reading between the 20 percent and the 50 percent if they are, if they don't have the infrastructure, um, I think the, the only thing getting in the way of it right now is the uncertainty.
• 20:23
  Speaker 5: So if you're in fee for service and if you're experimenting with alternative payment models, but you think there's a chance that fee for service might last longer and you have to give up some of that revenue or profitability in the short term to get to the longterm or make investments.
• 20:40
  Speaker 5: It's just harder.
• 20:41
  Speaker 5: It's just harder to pull the trigger
• 20:44
  Speaker 3: and it views on downside risks across membership at your view.
• 20:48
  Speaker 3: Um, you know, I know I would say it's frowned upon, but you know, people haven't been jumpIng up and down and go, hey, I'll get into a downside risk contract, right?
• 20:55
  Speaker 5: Yeah.
• 20:56
  Speaker 5: I think that again, it's tied to am I ready to do it or not.
• 21:00
  Speaker 5: And I think obama care gave a longer transition window then the current administration wants to give because they have to get to the savings faster.
• 21:10
  Speaker 5: And so, you know, what we talked to all of our health systems about is look, whether it's an aco or bundled payment or republican or democrat to call total cost of care, coordination of care, interoperability, quality problems, safety problems, this satisfied patients.
• 21:31
  Speaker 5: It's all the same core problems.
• 21:33
  Speaker 5: So build the infrastructure to solve those problems.
• 21:36
  Speaker 3: And then if you, if you start thinking about premier's position over the years, would you get.
• 21:42
  Speaker 3: I just highlight this because I don't think a lot of people know it is, you know, you were a convener and a demonstration program with evidence based care early on cms, right?
• 21:50
  Speaker 3: You are convenient with bundles you have on the largest, not the largest mssp sort of collaboratives convening.
• 21:58
  Speaker 3: Right.
• 21:59
  Speaker 3: Do you think you'll end up seeing premier convene a couple of new programs coming in to see him?
• 22:03
  Speaker 3: I so like just give an example, a social determinants.
• 22:07
  Speaker 3: We're hearing a lot about hr.
• 22:10
  Speaker 3: Talk about as they're a new supplemental benefit program that comes out may start with may or may not, you know, would you guys jump into something like that?
• 22:18
  Speaker 5: Yeah, I think, you know, our history has been to try to stay two or three years ahead of where we think it's going to try to work proactively in dc with our data, with our members, with our collaboratives to design and test what works and what doesn't work so we can inform these things.
• 22:34
  Speaker 5: So we're participating in the oncology care model.
• 22:36
  Speaker 5: And to your point, the bundles, the aco knows the value based purchasing.
• 22:40
  Speaker 5: I think one of our core competencies is actually the ability to truly understand all the algorithms behind all the measurement and the technology that's needed.
• 22:49
  Speaker 5: The second competency is to actually organize health systems at scale.
• 22:54
  Speaker 5: To be able to then hone in on the root causes and the things that really work the challenge in the industry right now I think is that there's a ton of big data, a ton of it and, and we have to as you know, because she used to do this inside premiere figure out how to get it to small data in the workflow with the physician and the patient to change the decisions as the care's being delivered.
• 23:15
  Speaker 5: And so I think that's the next big horizon in healthcare.
• 23:21
  Speaker 3: Yeah.
• 23:22
  Speaker 3: I mean it's not even widely known but premiere's uncanny ability to convene many different players.
• 23:30
  Speaker 3: Right?
• 23:30
  Speaker 3: A new shock to the system comes out I think is second to none and I'm not saying yes or whatever, but it's real.
• 23:37
  Speaker 3: And I think you guyS have such a unique position to do that also because to your point on the dc side, I'd love to see you guys lead in more into what I
• 23:46
  Speaker 5: think are going to be some really interesting programs coming to see you soon around social determinants and a few other areas.
• 23:51
  Speaker 5: So we will continue to do that.
• 23:54
  Speaker 5: Um, I think we can do it at the federal level, I think we can do it at the state level, but what's interesting and new probably since you've been there is employers who are increasingly frustrated with an insurance company's ability to um, change the cost curve or deliver the clinical outcomes and reduce the variation.
• 24:17
  Speaker 5: And so I think that I don't think they want to upend their insurance relationships, their risk relationships, their tpa relationships.
• 24:24
  Speaker 5: I think what they want to do is be able to convene to your point, one of our core competencies providers with data and technology that can be standardized and normalized and then have those providers go to work on improving the care delivery.
• 24:40
  Speaker 5: And then I think they want to incent their employees to use the individual providers within a narrow network that actually are high quality, low cost providers.
• 24:51
  Speaker 5: And I think that dynamic is really different.
• 24:53
  Speaker 5: And I think, you know, historically maybe three percent of employers were going direct.
• 24:58
  Speaker 5: I think the frustration level is much, much higher than that now.
• 25:02
  Speaker 5: And I think that so.
• 25:03
  Speaker 5: So for us, not only is it for federal government and state government but also directly for employers and I think that national convening network ability with data is really important and you see yourself in that environment being able to convene your health system members with employers and kind of think through certain the right strategy.
• 25:23
  Speaker 5: So you know from having worked with us that we do these accelerated a solution design events we have done those were we'll bring 40 or 50 health system member customers and we'll bring together a national employer and we'll say let's design kind of the ideal employer to provider performance improvement collaborative if you will.
• 25:45
  Speaker 5: and so, you know, once you build that prototype you can then sort of do that with a lot of national employers that are customized to the needs of their employees a national bit.
• 26:00
  Speaker 5: Right?
• 26:00
  Speaker 5: The mumble programs, you know, ideally what all health systems want is to treat patients consistently.
• 26:07
  Speaker 5: So they don't want to treat an aco patient differently than a bundled payment patient differently than an employer.
• 26:13
  Speaker 5: You know, self funded employers, a employee.
• 26:16
  Speaker 5: And so the, the beauty of what we have is the ability to take all of that clinical information and financial information and from the inside of the delivery system, figure out how the care really should be delivered at the end of this.
• 26:40
  Speaker 5: but I do want to of a and
• 26:45
  Speaker 3: dbc and which can be sort of value based contracting, set everything, you know, how much are you seeing right now on one side of the contract and went on about what needs to be.
• 27:17
  Speaker 5: It's a great question.
• 27:19
  Speaker 5: The first thing I'd say is a whole bunch of suppliers give a lot of lip service to it, right?
• 27:25
  Speaker 5: We all, we all want value based contracts and we're all going to go out publicly saying want value based contracts.
• 27:32
  Speaker 5: We have seven.
• 27:33
  Speaker 5: We have a pipeline of 20 or 25.
• 27:35
  Speaker 5: So I have more today than I had three years ago or five years ago.
• 27:39
  Speaker 5: Um, and I do think that the pressure pharma companies are under the pressure.
• 27:44
  Speaker 5: Health systems are under a will lead people.
• 27:47
  Speaker 5: And, and especially if you move to these global payment models, I think actually global payment models, uh, will drive a lot of the right incentive for value based contracts.
• 27:57
  Speaker 5: The difficulty with them is isolating the variables and how much differentiation is there really in products and the clinical effectiveness.
• 28:08
  Speaker 5: So the need to have clinical data, real world, real time clinical data twice.
• 28:14
  Speaker 5: Dancing is really important because that puts it in the workflow and you can actually see how many physicians accept or ignore, you know, the idea and you can also see what the clinical data when we marry it with the clinical content, how much affect something is having or not having our acquisition of ce city, which you know well, gives us access to registry data.
• 28:36
  Speaker 5: So when we were trying to do valUe based contracts before all we had was acute outpatient data.
• 28:43
  Speaker 5: If you've got registry data together with the healthcare system data and the ehr data, you actually have a way of managing the variables you're trying to isolate.
• 28:55
  Speaker 5: But it's complicated, right?
• 28:56
  Speaker 5: It's really complicated.
• 28:58
  Speaker 3: was a minute and mechanisms, mechanisms do.
• 29:07
  Speaker 3: Right, right.
• 29:08
  Speaker 5: So I think it will be a slow moving machine, not a fast moving machine.
• 29:15
  Speaker 5: I also think that when you have clinical decision support that's automated inside and connect it to the ehr will be able to more rapidly identify clinical trials in an automated way.
• 29:29
  Speaker 5: Um, if you could take that same technology and have it automated prior authorization tied to clinical protocols that an insurance company would have, you can get efficiency and speed that clinical adoption.
• 29:44
  Speaker 5: So I think there are a lot of ways to get to it.
• 29:48
  Speaker 5: I think value based contracting, we're, we're completely focused on it, but it is a hard long slog.
• 29:56
  Speaker 5: So when you think about what side of the market that will penetrate
• 30:00
  Speaker 3: when we have biologics now sometimes giving up to a million dollars a year for
• 30:03
  Speaker 5: of course treatment, do you think it's going to be the high end of the biologics?
• 30:07
  Speaker 5: I think it's, biosimilars is a perfect place for it.
• 30:10
  Speaker 5: Biosimilars is a perfect place for it.
• 30:13
  Speaker 5: Um, devices is a good place for it.
• 30:16
  Speaker 5: Um, those are the hardest ones to do though.
• 30:19
  Speaker 5: So.
• 30:20
  Speaker 5: So I think, I think it actually has a applicability across the whole portfolio.
• 30:26
  Speaker 5: Pharma certainly device, uh, I just think the real contracts are very hard to do and hard to do because it's hard to isolate the variables that really make a difference.
• 30:38
  Speaker 3: Ran across a company a couple months ago that is doing work over in europe with a lot of governance, but we've basically taken in bond trading platform and try to create a marketplace for what the market will tolerate for a price point in doing it.
• 30:56
  Speaker 3: We know it's a lot of use for probably over there than here.
• 30:59
  Speaker 3: They're really fascinating idea to this, this problem.
• 31:02
  Speaker 3: Um, and, and so maybe an adjunct I missed is when you think about pharma prices and you figured out what's going on with the government because we have touched on that much.
• 31:11
  Speaker 3: I know you think about this a lot.
• 31:14
  Speaker 3: What's your view on what's really gonna happen there?
• 31:16
  Speaker 3: It feels like a lot of lip service to me and some programs, but do you think something's really going to come down the pipe that starts changing?
• 31:21
  Speaker 3: So
• 31:22
  Speaker 5: I do think it is the number one priority for the trump administration for healthcare.
• 31:28
  Speaker 5: So I would say that first, which makes it important to, I think that, um, they have a lot of power in the innovation center.
• 31:36
  Speaker 5: They have the power to make things mandatory, et cetera, and you have a leader of the hhs that is a former pharma manufacturer.
• 31:44
  Speaker 5: So I think the setup is more conducive to, to things changing.
• 31:50
  Speaker 5: I think that what they believe, what we believe is that unless you can create competitive friction, it's really hard to control those prices.
• 31:58
  Speaker 5: Scott gottlieb, the new fda commissioner, he's driven a 47 percent increase in the new generics to market a speeding up that process, trying to take away the loopholes that actually allow pharma companies to extend patent lives, to not let generics get to margaret, to not through rebates, let biosimilars get to market.
• 32:18
  Speaker 5: I actually think they are going to be very focused on closing as many of those loopholes as they can.
• 32:25
  Speaker 5: I also think they're going to push this transparency of pricing.
• 32:30
  Speaker 5: Um, and this international index demonstration project is a really interesting, clever.
• 32:39
  Speaker 5: I don't know, uh, I don't know how easily it will be implemented or how much teeth it has in it, but the idea that you would take all the pricing around the world for the same drugs, create an index and then as the government say that's what we're paying.
• 32:55
  Speaker 5: Um, it's a, it's an interesting way to try to solve the problem.
• 32:58
  Speaker 5: So I would say I view their activities as creative hard.
• 33:05
  Speaker 5: Um, but, but there's a lot of prioritization behind it.
• 33:11
  Speaker 3: I just remember when you used to look at me and say, chief, we've got to forget this rebate thing.
• 33:15
  Speaker 3: Transparency and is a, is a product guy, the tactician and a data guy.
• 33:21
  Speaker 3: I'd be like, I don't even know what to do with it because my hand hurt because there was so much lack of transparency in the whole process of trying to dig into that.
• 33:28
  Speaker 3: We had so mUch data and you're like, wow, how are we going to unpack this?
• 33:31
  Speaker 3: So it's gonna be interesting to watch.
• 33:33
  Speaker 3: maybe maybe they close out the last couple of minutes to talk a little bit about the, you know, the new entrance.
• 33:38
  Speaker 3: I think we get a lot because we're in the venture space, in the innovation space, you know, we hear a lot of noise and we talked a lot of folks and we've talked a lot of them, you know, when you think about the amazon, you think about, um, you know, even, you know, walmart, walgreens, cvs, aetna, all the players that are coming in, you know, microsoft is beIng a little silent, but they do a lot of stuff.
• 34:00
  Speaker 3: I'm just curious how you're thinking about that and more importantly, what the discussion is with the health systems.
• 34:05
  Speaker 3: And then it also put in there kind of the new entrance on the primary and the other side, like one medical and a few of the other players are coming out.
• 34:12
  Speaker 5: So, you know, It feels like a christmas every week there's a new deal, a new offering, a new partnership, a new idea.
• 34:19
  Speaker 5: so there's no shortage of point solutions to solve a particular problem.
• 34:25
  Speaker 5: And the challenge all the health systems have is how do I organize all this stuff in such a way that I take all this stuff and figure out how I'm actually going to coordinate the care for an individual more effectively.
• 34:38
  Speaker 5: Um, and so I think that there are a lot of players that have some really cool products and I think that what premier is trying to do is say you need an integration infrastructure and if you're a provider, um, and you have communities or patients that are going to be with you for life or for a long time, let's figure out how to take those devices.
• 35:01
  Speaker 5: Let's figure out how to take those data sets.
• 35:04
  Speaker 5: Let's figure out how to take those multiple technologies and let's figure out how we filter, help you filter through all that to figure out what are the 10 most important things you need to be working on to improve the outcomes of your healthcare system.
• 35:20
  Speaker 5: Um, and so, you know, when I look at the big players who have longterm potential to make it more seamless and into end and bring a lot of disparate technologies together.
• 35:34
  Speaker 5: Um, I think that ultimately where we're gonna end up, but I think there's going to be a lot of messiness with people trialing and erroring on lots of individual point solutions along the way.
• 35:47
  Speaker 3: Yeah, it's funny just because we're at such a base level, when I call it population health, one dentist, which everybody thought they were going to build these enterprise class care coordination data.
• 35:59
  Speaker 3: Whereas all this stuff, it feels like our point of view is population health to datto is more like you're taking slices of the population, right?
• 36:10
  Speaker 5: But then how to manage them
• 36:11
  Speaker 3: and your credit companies.
• 36:13
  Speaker 3: Right?
• 36:13
  Speaker 3: And so what's happening to the health systems, the mayor's is if they've got their diabetics, they've got their heart failure, chf patients, they've got their college educations, they're having to manage a portfolio of suppliers to do that.
• 36:27
  Speaker 3: And then, you know, the question obviously is a super bundle and a chronic complex, like how does that work?
• 36:32
  Speaker 3: And you see some of the companies now bridging over that when we started with diabetes and other kind of move on.
• 36:37
  Speaker 3: So just going to be interesting to see how this all plays out in my mind because it feels like we're going right back to where we were with a lot of siloed data silo approaches based on population.
• 36:47
  Speaker 3: Maybe that's the right way.
• 36:47
  Speaker 3: I don't know yet.
• 36:49
  Speaker 3: Right?
• 36:52
  Speaker 5: It's this dichotomy of needIng to have the individual who has diabetes, have the best of everything that individual can get and then as a health system to actually understand how to systematically take care of a population, right where diabetes is connected to obesity is connected to other chronic conditions and so it's the big data over here that needs to be able to be turned into micro data for.
• 37:19
  Speaker 5: For an individual in the care of an individual.
• 37:21
  Speaker 5: And I just think this is a long journey, but when I think back to your point, I've been around a long time.
• 37:27
  Speaker 5: When I think back to the days that we didn't have electronic health records to even capture it and we probably wouldn't have ever gotten to electronic health records unless mandated by the government and unless paid for in some ways are subsidized by the government.
• 37:42
  Speaker 5: And when I think about not having cloud based technology capability, the level of ai we have today, you know, I just think there are a lot of different capabilities.
• 37:53
  Speaker 5: we're just figuring, we're just trying to figure out how to take all of that capability and make it usable.
• 37:58
  Speaker 3: So, so that is a great sort of at the end of this is where does this end up in 10 years?
• 38:04
  Speaker 3: I mean, again, like you're pointing, been here for a long time to see a lot of waves.
• 38:06
  Speaker 3: It's gone on the permutations of all this.
• 38:10
  Speaker 3: What does this look like in 10 years?
• 38:13
  Speaker 5: You know?
• 38:15
  Speaker 5: Uh, there are some things I think about how I would like it to look in there.
• 38:19
  Speaker 5: Somethings I worry about.
• 38:20
  Speaker 5: So what I, what keeps me awake at night is thinking that with the growth of medicare, medicaid with people who have, um, um, defined contribution pension, not, not defined benefit, we're going to have more old fat, unhealthy and poor people.
• 38:42
  Speaker 5: And so our ability to actually finance this a longer term is even more challenging than it is today.
• 38:49
  Speaker 5: So to me, if we can get to a healthcare system, whether it's medicare, medicaid, commercial insurers, employers, hss, where we understand the clinical protocols by condition and we invest in prevention and we do it in the home and we do it in ambulatory settings.
• 39:08
  Speaker 5: I mean we have to get to a healthcare system across payers.
• 39:14
  Speaker 5: I think that the world of us having to do things a different way for every patient population or payment model we have is just not manageable.
• 39:25
  Speaker 5: That's great.
• 39:26
  Speaker 5: So I do think there will be more consumer activation in it.
• 39:30
  Speaker 5: There will be more technology, there'll be more data.
• 39:33
  Speaker 5: Um, there will be more integrated delivery systems and integrated capabilities.
• 39:37
  Speaker 5: There will be fewer and bigger, you know, national players.
• 39:42
  Speaker 5: Um, but I think it's going to take a long time and I think it's going to be messy along the way.
• 39:49
  Speaker 3: Well susan, this has been great.
• 39:50
  Speaker 3: We probably talk for hours, but I appreciate it.
• 39:55
  Speaker 3: I think listeners appreciate it and, um, we're wishing you had family.
• 39:58
  Speaker 3: Happy holidays to you too, and I'm sure we'll see jp morgan.
• 40:02
  Speaker 3: Yep.
• 40:02
  Speaker 3: Thank you.
• 40:03
  Speaker 3: Alright, take care.
• 40:03
  Speaker 3: Bye.
• 40:03
  Speaker 3: Bye.
• 40:08
  Speaker 6: That's a wrap.
• 40:08
  Speaker 6: I hope you enjoyed this episode of the podcast for insiders.
• 40:12
  Speaker 6: Please go to itunes, give us a ranking that helps people find it or whatever platform you're listening to this podcast on.
• 40:18
  Speaker 6: You can find it on spotify as well as others.
• 40:21
  Speaker 6: Also, uh, if you could tell your colleagues about the healthcare is hard to podcast or inside his podcast, that's always a great help.
• 40:27
  Speaker 6: It's a great way to have more people listening.
• 40:30
  Speaker 6: Finally, feel free to reach out to me if you have any suggestions about the podcast.
• 40:34
  Speaker 6: I am on twitter at medtech.
• 40:36
  Speaker 6: Tom or you can email me, tom@healthegy.com.
• 40:39
  Speaker 6: That is the word health followed by letters, eg y.com.
• 40:43
  Speaker 6: Healthegy is the prodUcer of the healthcare is hard podcast produced the digital healthcare innovation summit and the breaking health podcast.
• 40:53
  Speaker 6: Thanks for joining us.
• 40:54
  Speaker 6: Tune in next month.
• 40:54
  Speaker 6: We'll have another terrific interview for you.
• 40:57
  Speaker 6: We've already conducted that and uh, I actually got to sit in on it.
• 41:00
  Speaker 6: It's going to be a doozy, so please join us next month on healthcare is hard.
• 41:04
  Speaker 6: A podcast for insiders.