Encore! EP413: The Intersection of Healthcare Waste, Value-Based Care, and the Potential Rising Power of PCPs, With Will Shrank, MD

In Episode 451 of Relentless Health Value, host Stacey Richter converses with Dr. Spencer Dorn about the implications of AI in healthcare, referencing lessons learned from EHR implementations. They discuss Kranzberg's first law of technology, which advises against labeling a technology as inherently good, bad, or neutral, emphasizing instead the importance of its application, configuration, and the human decisions surrounding its use. Dorn and Richter explore both the potential benefits and drawbacks of AI, drawing parallels with past experiences in healthcare digitization. To read the full article with links mentioned or to sign up to the newsletter, visit our episode page. The first takeaway from this short show focused on artificial intelligence is gonna be the same, really, as it was in episode 446 about EHRs. Do not ascribe any given technology a label of, as good, bad, or even neutral. That is Kranzberg’s First Law of Technology; and it applies here, too. Second major takeaway—and again, this is the same as in that earlier show about EHRs, but today we’re talking about AI—if you’re thinking about the ultimate impact of the people and the processes that have some technology in their midst (technology, again, such as AI, artificial intelligence), the ultimate impact will not be a black-and-white binary. We talk about some of these nuanced not binaries in the 10 minutes that follow, but for more, I’ve put some links in the show notes on our epsiode page for some newsletters et cetera to check out. 05:23 What could happen with AI in healthcare if we aren’t thinking about how we’re deploying it? 05:58 How could the lessons from digitizing healthcare help us with employing AI? 08:25 How could artificial intelligence make things better and simultaneously worse? 10:55 Why is it important to look beyond the hype and pessimism and make a clear-eyed assessment?

In Episode 450 I speak with Marilyn Bartlett, a renowned CPA in the healthcare field, about her remarkable achievement of transforming the state of Montana’s employee health plan from $9 million in debt to a surplus of $112 million within three years. You can read the full show notes with mentioned links on the epsiode page. If you enjoy this podcast, be sure to subscribe to the free weekly newsletter to be a member of the Relentless Tribe. Marilyn discusses the steps she took, including identifying financial inefficiencies, targeting high-cost areas, and implementing data-driven strategies to produce quick wins and sustainable results. The conversation delves into the importance of having the right team, communicating effectively with stakeholders, and staying focused amidst challenges. Listeners will gain valuable insights into strategic change management and actionable advice for improving healthcare plans. Yeah, I made a meme for the show with Marilyn Bartlett. My very first meme ever. In this meme, I picture that Olympic silver medalist shooter from Turkey who showed up in a T-shirt and his hand in his pocket versus the others with all their fancy equipment that, turns out, may or may not be necessary, regardless of who might swear up and down that complexity requires even more complexity and plenty of expensive gear to shoot straight. Point being, it’s amazing what a dedicated CPA with a spreadsheet and their eye on the target can accomplish in the real world when they just do their thing and follow the dollar. And with that, Marilyn Bartlett has entered the chat. Marilyn Bartlett isn’t called the “Queen of Healthcare” for no good reason, and nobody is joking when they say this. She was probably the first person (or one of the first, at a minimum) to truly identify the amount of money getting sucked out of the wallets of taxpayers and employers and plan members and into the pockets of the healthcare and insurance and consulting industries. She is a through and through numbers person but also deeply cares. She is truly a senior stateswoman in our field. To read the full article with mentioned links or the transcript, visit our epsiode page. 06:45 What gave Marilyn the confidence to fix Montana’s state health plan? 08:11 Why Marilyn knew she would have enough power to make the changes needed in Montana’s state health plan. 09:11 What Marilyn achieved in her time as the administrator of the Montana State Employee Health Plan. 10:38 What were the “quick wins” Marilyn was able to achieve when she first took over as administrator? 17:33 Stay tuned for an upcoming episode that covers RFP in detail. 17:50 How Marilyn structured her plan for the Montana State Employee Health Plan. 21:21 What’s the key to setting yourself up for success when doing what Marilyn was able to achieve? 25:02 Why putting together your own team is so important. 29:07 What happened when Marilyn left the Montana State Employee Health Plan? 31:08 Have the costs of the plan gone up since Marilyn’s time working on it?

So, I had a chance to read Dr. Marty Makary’s new book, which is called Blind Spots; and here’s why I wanted to get him to come back on Relentless Health Value and talk to you, people of the healthcare industry. It’s because of something that he said on page 127 and which I’ve been mulling over for probably years, actually. To Read The Full Article Including Links Mentioned, click here. If you enjoy this podcast, be sure to subscribe to the free weekly newsletter to be a member of the Relentless Tribe. It’s this idea of what is appropriate care and how good are we at ensuring that patients/members get said appropriate care. Lots of people are of the same minds because appropriate care has come up in the show with Ben Schwartz, MD, MBA (EP434); John Lee, MD (EP438); Spencer Dorn, MD, MPH, MHA (EP446); Tom Lee, MD (EP445).  I mean, an estimated 21% of all medical care is potentially unnecessary. And unnecessary is, of course, one category of things that are not appropriate. This is according to a national survey of physicians: 25% of diagnostic tests, 22% of all medications, and 11% of all procedures are unnecessary/inappropriate. This is billions of wasted dollars doing stuff that shouldn’t be done, and it’s not appropriate care. But think about this: How many visions for how to fix healthcare and how to reduce waste depend upon a broad-stroke assumption that we will materially ensure that patients are getting best-practice (ie, appropriate) care? That we cut down on over-medicalization and surgeries on the back end and add appropriate preventative stuff and optimal medical therapy to the front end? Dr. Makary and I delve into the challenges of ensuring patients receive appropriate care, touching on medical dogma, financial, business, and legal incentives, and the importance of measuring practice patterns. Dr. Makary provides practical advice for clinical leaders, payers, and plan sponsors on promoting transparency, improving health literacy, and steering members towards higher performing providers. To Read The Full Article Including Links Mentioned, click here. 07:32 What is appropriate care? 10:19 Why what we think might be appropriate care might not be appropriate care. 10:34 Why is medical dogma damaging to appropriate care? 12:45 Why we need less absolutism in medical practice. 13:37 How is groupthink prevalent in medicine? 14:02 Why do we resist new ideas? 17:43 How do providers figure out what to believe and what not to believe? 20:59 “If you leave it to the medical profession to fix itself … so far, it’s not going well.” 22:33 How does supporting health literacy affect appropriate care? 30:23 “People need to find their care based on quality and price.” 34:28 What proportion of medical care is deemed unnecessary right now?  

Maybe you’ve already caught Part 1 of my conversation with Shawn Gremminger, and if so, you're ahead of the game. But if not, no worries—here's the deal: I decided to split this deep dive into the 340B program with Shawn into two parts. So, feel free to jump into one or both—it’s totally up to you. To Read The Full Article Including Links Mentioned, click here. If you enjoy this podcast, be sure to subscribe to the free weekly newsletter to be a member of the Relentless Tribe. These episodes don’t have to be listened to in order, so you’re good to start here with Part 2. Let’s get into it!" Right now, we are going to talk about how 340B impacts employers and commercial plans and other plan sponsors. So, if all you want to hear about is the why—as in, Why do employers care about what amounts to a program that is or was supposed to be for low-income Americans and Medicaid?—you are in the right place. As just one example of the why should employers care if you are teetering on the edge of proceeding, did you know that if an employee or a member of a commercial plan gets a drug at a contract pharmacy participating in 340B, the employer does not get the rebate? The employer is gonna pay the list price for that med. Wait, what? Yeah, details follow because Shawn Gremminger is gonna get into this and many other reasons why employers or anyone in the commercial market (or taxpayers, really) should care about this, as some may call it, Medicaid program. The fact is, 340B is currently so gargantuan that it creates market distortions that bleed into the prices and possibly the quality of healthcare for everybody, all Americans. And that could really matter to employer or Taft-Hartley plan sponsors. After you listen to this show, if you want to drill in a little deeper on the “what the what” and the history of 340B, head back and take in Part 1 of this episode 448. Shawn Gremminger gives the skinny on how the program morphed over the years into a $53 billion juggernaut and is credited (or blamed) for all kinds of healthcare market consolidation and many other weird and unusual consequences that make me admire some of the folks who are truly gold medal winners in the sport of financial engineering. If you want a summary of the points Shawn makes for why employers should care, it is your lucky day, because here you go. Here’s the four distortions in the market that Shawn talks about which impact employers: To continue reading, please view our show notes/full article. 09:11 Why do employers care about 340B, which is a Medicaid program? 11:30 Why do I care as an employer, even if I’m not Pharma? 12:44 Why is 340B causing employers to pay significantly more for healthcare? 14:36 Study by Zack Cooper, PhD. 15:06 Why are there distorted pricing models at 340B hospitals? 21:22 Why do employers need to stop playing the blame game?

So, after some pondering, I decided to release this conversation with Shawn Gremminger about 340B in two parts. So, listen to one, listen to both, pick your poison. Shawn Gremminger came up with three really important takeaways relative to 340B, which is a feat unto itself, considering how sprawling this conversation can be. So, if you came here for some concise and actionable takeaways, you have come to the right place. To Read The Full Article Including Links Mentioned, click here. If you enjoy this podcast, be sure to subscribe to the free weekly newsletter to be a member of the Relentless Tribe. This first part you are listening to right now zeros in on Shawn’s first takeaway: whether or not the original intent, or the presumed original intent, of the 340B program has actually been met. Many do not realize that 340B began life as a caterpillar. It originally, actually, was conceived as a lowly bureaucratic fix. But over the past 15 years, it has gone into a chrysalis and emerged into a 500-pound gorilla that sits in the corner of a lot of rooms, actually—probably more than many people realize. All of that being said, when you’re done listening to this first part of the convo, you should be able to competently assess whether or not 340B does, in fact, adequately help underserved communities get better healthcare—because 340B is supposed to help safety-net healthcare providers stretch scarce resources. The second part of the show, which is a separate episode called Part 2, is how all of this impacts employers and commercial plans. And there’s two more takeaways there. So, if you already have the gist of how we got from the beginnings of 340B to where we are in 2024 already and all you want to hear about is why do employers care about what amounts to a low-income program or was purported to be a low-income program, feel free to zip over to the second show and cut to that chase. If you’re still with me for this Part 1—and I hope you are, because … wow, it’s a wild and tangled journey—here’s an outline of where this first part of the discussion is headed. So, for the sake of posterity and having this introduction transcribed in your inbox (be sure to sign up for the free newsletter), here you go. Here’s the outline. Visit the full article to read more. 05:25 Shawn’s three takeaways from the 340B program. 06:04 What is the intent of the 340B program? 08:22 Read the full 32-page report of the Energy and Commerce Committee.  09:17 Why does Medicaid have to get the best price? 13:26 Why was there a shift in how the 340B program looked starting in the mid-2000s? 15:11 Why do more than half of acute care hospitals now qualify for 340B? 18:18 How has hospital consolidation affected 340B? 20:37 What is the misalignment between how a hospital qualifies for 340B and how it benefits said hospitals? 24:11 How is a 340B designed for hospitals to make a profit? 28:45 Why isn’t there a real patient definition in 340B? 31:46 Why is 340B still popular among policymakers? 33:05 Are 340B dollars being used in underserved communities? 33:57 EP394 with Vikas Saini, MD, and Judith Garber, MPP.

In this Summer Short Episode of Relentlessly Seeking Value, host Stacey Richter discusses the hidden costs and inefficiencies of value-based care with Elizabeth Mitchell, President and CEO of the Purchaser Business Group on Health (PBGH). To read the full article and show notes which include mentioned links, visit the episode page.  If you enjoy this podcast, be sure to subscribe to the free weekly newsletter to be a member of the Relentless Tribe. They uncover how value-based care, often touted as the ideal system, can be manipulated by middlemen to extract more money from plan sponsors without delivering real value to patients. Through a critical conversation involving examples and insights from various experts, they explore the disconnect between financial incentives and actual care quality in American healthcare. Elizabeth argues for for-real alternative payment models that are transparent to the employer plan sponsors. She wants prospective payments or bundled payments, and she wants them with warranties that are measurable. She wants members to get integrated whole-person care in a measurable way, which most health plans (ie, middlemen) either cannot or will not administer. Elizabeth says to achieve actual care that is of value, cooperation between employers, employees, and primary care providers is crucial (ie, direct contracts). She also says that this whole effort is really, really urgently needed given the affordability crisis affecting many Americans. There’s been just one article after another lately about how many billions and billions of dollars are getting siphoned off the top into the pockets of the middlemen and their shareholders. These are dollars partially paid for by employees and plan members. We have 48% of Americans with commercial insurance delaying or forgoing care due to cost. If you’re a self-insured employer and you’re hearing this, don’t be thinking it doesn’t impact you because your employees are highly compensated. As Deborah Williams wrote the other day, she wrote, “Co-pays have gotten high enough that even higher-income patients can’t afford them.” And she was referencing a study to that end. To read the full article and show notes which include mentioned links, visit the episode page.  If you enjoy this podcast, be sure to subscribe to the free weekly newsletter to be a member of the Relentless Tribe. So, yeah … with that, here is your Summer Short with Elizabeth Mitchell. 10:36 What are members and providers actually asking for in terms of value-based care? 10:56 Why won’t most health plans administer alternative payment models? 12:17 “We do not have value in the US healthcare system.” 12:57 Why you can’t do effective primary care on a fee-for-service model. 13:30 Why have we fragmented care out? 14:39 “No one makes money in a fee-for-service system if people are healthy.” 17:27 “If we think it is not at a crisis point, we are kidding ourselves.”

My conversation today is with Will Shrank, MD. Dr. Shrank led the evaluation group at CMMI (Center for Medicare and Medicaid Innovation). He has spent time in the private sector, first at CVS Health and UPMC (University of Pittsburgh Medical Center) as chief medical officer of the health plan in Pittsburgh, and then as the chief medical officer for Humana. Now he is a venture partner at Andreessen Horowitz and doing some consulting for CMMI. To read the full article and show notes which include mentioned links, visit the episode page.  If you enjoy this podcast, be sure to subscribe to the free weekly newsletter to be a member of the Relentless Tribe. We start out this conversation talking about waste in healthcare. In fact, Dr. Shrank was on a team who did a study about waste in the US healthcare system. (The article is, unfortunately, paywalled.) In that study, it says estimates suggest we have upwards of a trillion dollars of waste a year. This waste can be categorized into administrative and clinical failures. Dr. Shrank emphasizes the need for aligning incentives with higher quality care, paying for patient outcomes, and highlights the potential rising power of PCPs. The discussion covers the progress made towards value-based care, the challenges faced by the current fee-for-service model, and the future landscape of primary care and healthcare delivery. In sum, we have a waste problem in this country. Aligning incentives might be one way to curb that waste. 06:54 Can we cut healthcare waste while improving patient care? 07:33 What does “healthcare waste” consist of? 07:46 What are the six categories of “healthcare waste”? 10:23 EP363 with David Scheinker, PhD. 10:37 How much money does Dr. Shrank estimate is wasted each year in healthcare? 13:09 Where is that healthcare waste going, and why does it happen? 20:07 Uncaring by Robert Pearl, MD. 21:18 “We’ve built a backbone of extraordinary waste on a fee-for-service chassis.” 22:16 EP409 with Larry Bauer, MSW, MEd. 24:24 EP359 with Dan O’Neill. 26:02 Dr. Shrank’s warning to providers out there. 30:03 Summer Shorts 2 with Scott Conard, MD. 31:41 Why there might be a generational shift among younger providers looking to work with different models.

This encore episode is with Amy Scanlan, MD. It was, in fact, one of our most popular episodes of the past year. It is still just as relevant today in a slightly different way. It’s interesting how things which were said maybe a year ago have shades of meaning which become evident as time goes on. So, I liked this show a lot in the second listen with the advantage of time passing. To read the show notes with mentioned links and a transcript, head over to our site. If you enjoy this podcast, be sure to subscribe to the free weekly newsletter to be a member of the Relentless Tribe. Complicating fact of current life, it’s becoming increasingly obvious that in order to stand up a practice that can take advantage of value-based care payments—payments where primary care docs mainly at this time can get paid more and likely more fairly to care for patients well—you need a lot of infrastructure. You need data, you need tech, you need a team. Translation: You need money, maybe a lot of money, to invest in all of this. These are the external realities that hit anyone trying to do right by patients from every direction. But on the other hand (or maybe different fingers on the same hand), as Dr. Amy Scanlan says in this healthcare podcast, physicians are the backbone of this system. Dr. Scanlan talks in the interview today about the opportunity, and maybe the responsibility, that physicians have here for patients; but also the Eric Reinhart article comes up again about rampant physician moral injury (unpaywalled link with my compliments). Right now might be a great time to read something from Denver Sallee, MD. He wrote to me, and he wrote, “Like many physicians, I did not have much understanding of the business side of medicine, as I mistakenly thought as long as I helped take great care of patients that I was doing my job. More recently, it became apparent to me that by ceding the management of medicine to nonclinical administrators and to companies interested primarily in value extraction for the benefit of shareholders that I needed more education in order to truly help patients.” Today as aforementioned, I’m talking with Amy Scanlan, MD, who is chief medical officer of the clinically integrated network (CIN) that is the joint venture between Intermountain Health and UCHealth in Colorado. We talk about what it’s like to be in the kind of messy middle of transformation to integrate care in a clinically integrated network, trying to figure out how to help physician practices and the CIN itself navigate the external environment in a way that empowers different kinds of practices at different points in their transformation journey that empowers physicians to be in charge, and considering clinical and financial outcomes (ie, the business of healthcare). Dr. Scanlan brings up four main factors to consider when plotting strategy from here to there. Listen to the episode or read the show notes to learn about the four factors. 06:35 How is Dr. Scanlan thinking about the transformation process and the shift to value? 09:16 “It is really trying to think about, how do we help practices get there?” 11:48 “The hard part is the in-between spaces.” 13:21 EP407 with Vivek Garg, MD, MBA. 14:12 “Team-based care done badly is really just a series of handoffs.” 15:52 “We have to get to that point where the culture of collaboration is more pervasive.” 19:58 “How do we as healthcare providers step in and solve this problem?” 20:06 Why do providers have a responsibility to step in and try to fix the healthcare system? 20:22 Article (unpaywalled) by Eric Reinhart, MD, PhD. 21:51 Why do physicians need to be accountable for the cost of care as well as outcomes? 23:38 Why does physician burnout give Dr. Scanlan hope? 24:26 What is the solution to changing fee-for-service incentives? 25:43 What are some of the challenges facing changing incentives? 27:16 Why is data so important? 28:54 EP393 with David Muhlestein, PhD, JD. 30:13 “It’s important to understand that we are in the middle of this change.” 31:18 Dr. Scanlan’s advice for those trying to stand up a CIN.  

In Episode 447, Stacey Richter interviews Ashleigh Gunter, president of Translucent Healthcare Consulting, to discuss the indispensable role of change management in healthcare transformation. They emphasize that creating an effective change strategy involves great leadership, a clear case for change, influential change champions, over-communication, and continuous measurement and celebration of successes. The conversation highlights the importance of understanding and aligning with the 'why' that drives healthcare professionals and the necessity of a multi-faceted approach beyond just implementing technological solutions like EHR systems. Visit the Episode Page to read the show notes with mentioned links. If you enjoy this podcast, be sure to subscribe to the free weekly newsletter to be a member of the Relentless Tribe. I saw a bar chart by Phil Ballentine the other day in Nikhil Krishnan’s Out-Of-Pocket newsletter that showed, in the USA, in 2024, there are 18,982 live instances of Epic. Each one of those 18,982 live instances are all different: different workflows, separate data, different ways to do the same thing. So, even if having an “Epic strategy” actually was a complete master plan to change behavior in clinic, healthcare has no “nationwide, everywhere it’s all the same, so figure out your thing once and you’re good to go” thing going on. There are 18,982 differences of opinion out there, but here’s the actual and big kahuna real reason why I’m leery. An Epic strategy is not equivalent to a change management strategy. That’s the real point that I want to make. It’s necessary, very necessary even, but not sufficient. You want to make the way as easy as possible once the “why” goes down and the case for change is made, but even if it’s one click and not your usual 14 to 60 clicks, there’s no “why” there. There’s no automatic case for change that slithers out of anybody’s API like a spontaneous miracle. I said this last week, too. Lots of things are really pretty easy. Lots of things are in Epic. Yet no one uses them. I mean, let’s talk about actually reading most of the best-practice alerts that pop up. How about consistent use of SmartSets in the majority of those 18,982 instances? Anyway, I couldn’t be more pleased to have learned a thing or two from Ashleigh Gunter about change management and how to do this whole thing right. This conversation happened actually a while ago. It’s re-edited for 2024—call it a supercut—specifically considering change management at hospitals or physician organizations. Ashleigh Gunther is president of Translucent Healthcare Consulting. She is also an expert in change management and how to align employees and staff so that an organization can move forward together. One quick spoiler before we proceed: According to Ashleigh, there’s five steps to effective change management that will ensure success: 1. Having great leadership 2. Creating a case for change. This includes the whole “why” thing. 3. Finding champions—engaging people who have to change so that they can contribute and be supportive 4. Overcommunicating 5. Measuring how things are going and also celebrating small triumphs If you continue to be interested in this topic, do go back and listen to the show with Karen Root (EP381) on shepherding innovation through a large company. Before we kick in to the show today, let me remind you, if you haven’t done so and you appreciate the show, could I ask you to please leave a rating and review on Apple Podcasts or Spotify? We haven’t had any of them this month, and it is important for the show to get found and for me and the team to stay motivated over here. While you're there, be sure to Follow the show. 09:22 How does change management go wrong in healthcare? 09:56 “Communication [of change] in and of itself isn’t change management.” 10:53 How does change management work on the provider organization side? 15:33 “You want to ensure you are educating the operational folks.” 16:35 What is change management? 17:36 What does great leadership look like in change management? 18:55 “Leadership sets the tone.” 19:04 What makes change management so hard? 19:31 “What’s the company reason to make this change happen?” 20:51 What are change champions, and why do you need to create them when changing your benefit plan? 21:57 Crossing the Chasm by Geoffrey A. Moore. 23:21 Why is it important to overcommunicate change? 26:47 Why is it important to measure your successes and communicate those after a change?

In Episode 446, "Hey, Let's Not Talk About EHRs," host Stacey Richter engages Dr. Spencer Dorn, vice chair and professor of medicine at the University of North Carolina, in a comprehensive discussion about the implications of healthcare technology, specifically electronic health records (EHRs).  Visit the Episode Page to read the show notes with mentioned links. If you enjoy this podcast, be sure to subscribe to the free weekly newsletter to be a member of the Relentless Tribe. The conversation emphasizes the necessity of understanding technology as a tool that neither possesses inherent goodness nor badness but delivers results based on its implementation and usage. They discuss the paradoxical nature of technology in healthcare, highlighting how EHR systems can simultaneously empower and overwhelm healthcare practitioners. Dr. Dorn and Stacey delve into the effects of digital technology on patient-doctor and clinician-clinician relationships, stressing the importance of proper deployment, operational excellence, and continuous improvement to optimize healthcare outcomes. In essence, the episode sheds light on the necessity of viewing technology as a means to an end rather than an end in itself. 06:15 Breaking down Kranzberg’s Laws of Technology. 08:16 How do EHRs go right? 12:49 “EHRs empower us with information, yet they also overwhelm us with information.” 16:00 How do EHRs bring healthcare workers closer together? 19:35 The Digital Doctor by Robert Wachter. 21:33 “The whole point of healthcare is to help people live healthier, happier lives.” 22:41 How the same EHR deployed in different places can be more or less efficient. 25:51 Why the problem is not necessarily the EHR but actually operational. 28:51 How technology has also changed our expectations on timing and value.