Joining Matthew Holt (@boltyboy) on #THCBGang on Thursday December 8 will be futurist Jeff Goldsmith; privacy expert Deven McGraw (@healthprivacy), and employer & care consultant Brian Klepper (@bklepper1). Deven has a bunch of insights from her new study on health data access!

You can see the video below & if you’d rather listen than watch, the audio is preserved as a weekly podcast available on our iTunes & Spotify channels.

Joining Matthew Holt (@boltyboy) on #THCBGang on Thursday June 30 were THCB regular writer and ponderer of odd juxtapositions Kim Bellard (@kimbbellard); Principal of Worksite Health Advisors Brian Klepper (@bklepper1); futurists Ian Morrison (@seccurve); and fierce patient activist Casey Quinlan (@MightyCasey). Lots of discussion of the Dobbs ruling and also of the CAA regulations which have gotten somewhat less play in the press. Quite the impassioned discussion !

You can see the video below & if you’d rather listen than watch, the audio is preserved as a weekly podcast available on our iTunes & Spotify channels.

Joining Matthew Holt (@boltyboy) on #THCBGang on Thursday June 9 were THCB regular writer and ponderer of odd juxtapositions Kim Bellard (@kimbbellard); fierce patient activist Casey Quinlan (@MightyCasey); Principal of Worksite Health Advisors Brian Klepper (@bklepper1) & Queen of all employer benefits Jennifer Benz (@jenbenz)

You can see the video below & if you’d rather listen than watch, the audio is preserved as a weekly podcast available on our iTunes & Spotify channels.

Joining Matthew Holt (@boltyboy) on #THCBGang on April 28 for an hour of topical and sometime combative conversation on what’s happening in health care were: THCB regular writer and ponderer of odd juxtapositions Kim Bellard (@kimbbellard); medical historian Mike Magee (@drmikemagee); patient safety expert and all around wit Michael Millenson (@mlmillenson) & Principal of Worksite Health Advisors Brian Klepper (@bklepper1). Matthew had COVID so didn’t do much & Kim ran the show. Lots of discussion on telehealth, primary care, private equity and much more…

You can see the video below & if you’d rather listen than watch, the audio is preserved as a weekly podcast available on our iTunes & Spotify channels.

Joining Matthew Holt (@boltyboy) on #THCBGang at 1pm PT 4pm ET Thursday for an hour of topical and sometime combative conversation on what’s happening in health care and beyond will be: double trouble futurists Ian Morrison (@seccurve) & Jeff Goldsmith; consultant focusing on platform business models and strategy Vince Kuraitis (@VinceKuraitis), & back after a long while analyst and Principal of Worksite Health Advisors Brian Klepper (@bklepper1).

Today there will be more discussion than usual about platforms and whether health care is ready for them!

You can see the video below. If you’d rather listen than watch, the audio is preserved as a weekly podcast available on our iTunes & Spotify channels

By BRIAN KLEPPER

It seems inevitable that, in the near future, an innovative health care organization – Let’s call it The Platform – is going to seize the market opportunity of broader value. It will cobble together the pieces, and demonstrate to organizational purchasers that it consistently delivers better health outcomes at significantly lower cost than previously has been available.

To manage risk and drive performance, The Platform will embrace the best healthcare management lessons of the past decades: risk identification through data monitoring and analytics, driving the right care, quality management, care navigation and coordination, patient engagement, shared decision-making, and other mission-critical health care management approaches. It will practice care that is grounded in data and science, and is outcomes-accountable.

But The Platform will also appreciate that a few specialty vendors have developed deep expertise in dealing with clinical or financial risk in high value niches – where health care’s money is – like management of musculoskeletal care, chronic disease, maternity, surgeries, high performing providers, or specialty drugs. It will understand that it often makes sense to partner with experts who can prove and guarantee high performance rather than trying to learn to achieve high performance within each niche. The Platform also will realize that simplicity is a virtue, and that bundling specialized services under one organizational umbrella is easier for health plan sponsors to manage and for patients to negotiate than an array of individual arrangements.

The Platform and organizations like it will spark the interest of self-insured employers and unions, because they’re at risk, and likely to be persuaded by a better deal (and particularly one with guarantees). But they’ll also find reception by other organizations that carry risk or are responsible for managing care and cost: e.g., stop-loss carriers, captives, fully insured health plans, Medicare Advantage plans, Managed Medicaid plans, third party administrators, and advanced primary care organizations. If The Platform demonstrates better performance than its conventional competitors, it might scale rapidly, sweeping the market. Traditional healthcare vendors might find themselves in a more competitive marketplace than they’ve experienced in past decades.

The key here is that, in the US, patients and those who pay for health care deeply want a better way. Most health care organizations pay only modest attention to quality and are holding on to pricing that reflects what the market will bear and that is unrelated to cost, though excellent care can be delivered for far less. The difference between what is and what realistically could be is large enough that an opportunity exists for business to switch to upstarts representing stronger value. What’s needed is an integration platform that facilitates an easy-to-use comprehensive framework of high performing, best-in-class specialty services.

In the health care value-focused community, many organizations have demonstrated that they reliably produce better results, particularly in high value niches. Of course, most vendor organizations are eager to be publicly recognized as “high performance” vendors. The trick is competently identifying those that consistently deliver.

It’s reasonable to believe that a robust ecosystem of risk reduction mechanisms can result in far better health outcomes while conservatively reducing total health spending by 25 percent or more. That said, to my knowledge, no one has yet brought together all these approaches within a single health management organization. Most health plans make more if health care costs more, so they have not yet shown an interest in offering lower cost health care (without compromising quality). But value-based arrangements are finally getting traction and purchaser interest in value is accelerating. The fact that better results are occurring in the market means that high performing approaches will continue to evolve and succeed.

High value models are already being developed by advanced primary care firms like Marathon Health and CareATC, and retailers like Amazon Care and Walmart Health. These and similar efforts could hugely disrupt the current US health system by moderating the excessive services and costs that the legacy health care industry has come to depend on. Going the next step in health care management by assembling and scaling the powerful capabilities of high performers is an opportunity waiting to be exploited.

The fundamental tension within US healthcare is whether our health system will strive to optimize quality, cost and value, or strive to optimize revenues and margins. Responses to this question determine the approaches that characterize every aspect of health care, whether it’s the scientific evidence that guides a protocol, the interoperability of an electronic health record, or whether patients have access to information that can help them make better care choices.

For decades, the industry’s profiteering has dominated health care. The question now is whether purchasers will favor high value, turning the tide and remaking our health system in ways more consistent with the welfare of healthcare’s patients and purchasers.

Brian Klepper, PhD is a healthcare analyst and Principal of Worksite Health Advisors.

GoodRx’s planned initial public offering recently made the news, notable because the company, launched in 2011, has been profitable since 2016. Evidently, it’s become unfashionable for investors to demand proof of performance, so GoodRx’s results shone like a beacon. By contrast, most health care firms seeking funding convey bold aspirations and earnest promises. Investors throw in with them and hope for the best. 

But few new entrants seem to do the necessary advanced due diligence to assess exactly where and how their product, service or innovation should be positioned in the health care ecosystem to derive maximum value. Ironically, COVID has intensified and highlighted the fragility of the health care ecosystem, as well as the greater disruption opportunities available to new entrants. 

Health care has become irresistible to investors, the outgrowth of the industry’s dominant players’ spectacular financial performance. Over the past 45 quarters, for example, major health plan stock prices have grown 4-6 percent per quarter, 1.2-2.2 times the growth rates of DJI and S&P (See the table below). Investors hope to either 1) capitalize on the health care’s ongoing culture of overtreatment and egregious pricing, or 2) support and share in the savings associated with rightsizing care and cost.

The result has been a torrent of investment. Mercom Capital reports that, in the last decade, investors have poured $50 billion into some 5,000 digital health startups, each one no doubt guaranteeing wholesale health system disruption that never arrived.

There are a couple of messages here. In the main, few health care startups are constituted to thrive. And apparently, few investors critically evaluate a venture’s broader design elements to gauge its chances for success. Many startups have great ideas and some even operationally execute those ideas well, but gaining traction in the health care marketplace requires much more than that. A viable venture must also integrate with its clients’ workflows, and connect with existing players in the larger health care management ecosystem. 

There’s a huge opportunity to disrupt the status quo, but it requires a thoughtful, comprehensive design.  As Michael Porter pointed out, “If all you’re trying to do is essentially the same thing as your rivals, then it’s unlikely that you’ll be very successful.”

Purchasers of health care risk management services – e.g., employers, worksite clinic firms, captive insurance arrangements, stop loss carriers, provider risk managers – exist in a high noise-to-signal environment and are constantly besieged by vendors. If they are value-focused, the question is whether the venture can quickly differentiate by demonstrating consistently superior results, meaning better health outcomes and/or lower costs than usual approaches. Assuming they can do that, there are more hurdles to clear to have a shot. For example:

• Is the venture aimed at the right audience? If the venture achieves lower costs with equal or better outcomes, it may be wholly uninteresting to health plans that are still volume-based, that make more if health care costs more. Lower costs here likely translate to lower net revenues, earnings, stock price and market cap, results that health plans may avoid at all costs. But value-focused purchasers may be inclined to take notice.

• Potential clients want to know about other clients’ experience. Are there testimonials from people you can talk with, attesting to a program’s operational excellence and vendor-client warmth?

• Can the program scale, delivering consistent results independent of geographic location or the population’s demographics?

• Are the services sticky, remaining effective over time? Can they provide ongoing, predictable management of clinical or financial risk?

• Can clients come quickly up to speed on the services? Does the vendor provide training that facilitates ease of use with the program?

• Are all key constituencies aware of the program. If a physician-based program improves health outcomes and reduces cost, are provider risk managers aware of it and demanding its use?

• Do the processes integrate seamlessly into the clients’ existing workflows? If, for example, a new physician tool is on a different platform than the electronic health record, it may require unaffordable additional steps and will almost certainly fail.

• Does the program exchange information easily with other critical management vendors? Is it mindful that it must fit into a broader existing management structure?

• Is the vendor willing to financially guarantee the achievement of performance targets? Doing so puts its money where their mouth is, conveying confidence in its ability to deliver.

Some well-funded ventures have used marketing bluster to successfully convince the market that they’re excellent – see Al Lewis’ scathing review of Livongo – but in a health care market that increasingly considers value, purchasers are becoming more discriminating. In addition to performance data, many want to see independent, third party validation, like that provided by The Validation Institute, affirming that the approach in question works. 

Livongo and others are going directly to employers with their services, and desperate employers seem ready to listen. Other unique direct disruptors like Vera Whole Health and Integrated Musculoskeletal Care offer employers bonafide, at-risk solutions that supplant existing fee-for-service provider payment methods. They often use hybrid models that take responsibility for specific patients, and extend in-person and virtual primary care with the full functionality of advanced primary care. This agnostic model can steer to warranted episodes-of-care bundles for the biggest programmatic spend drivers. 

True innovation is exploding now, if you can spot the right firms. Companies like Dispatch Health are offering a quality at home urgent care solution that threatens brick and mortar urgent care. MediSync’s artificial intelligence-driven tool suite is revolutionizing chronic care management, which represents 75 percent of health care spend. ConferMed offers a national virtual specialty network that improves outcomes and drives out unnecessary care and cost.

Employers and at-risk organizations are increasingly abandoning traditional fee-for-service health care models in favor of value-based solutions, with payment systems that demand accountability and predictability. New ventures have a huge opportunity to succeed, but only if they have appropriately interpreted all of their opportunities in this new landscape. Most have not.

Brian Klepper is a health care analyst and Principal of Worksite Health Advisors, in Charlotte, NC.

Jeffrey Hogan is a health benefits advisor and Principal of Upside Health Advisors in Farmington, CT. 

Episode 10 of “The THCB Gang” was live-streamed on Thursday, May 21th

Joining me were regulars: writer Kim Bellard (@kimbbellard), policy expert Vince Kuraitis (@VinceKuraitis), patient advocate Grace Cordovano (@GraceCordovano), radiologist Saurabh Jha (@RogueRad), employer consultant Brian Klepper (@bklepper1), Deven McGraw (@healthprivacy) and a guest, former ONC Consumer head Lygeia Riccardi, now at Carium Health (@Lygeia)! The conversation moved onto the new normal of telehealth, how much things would change in the future, and what the story with testing and opening up would look like. You can see the video below

If you’d rather listen, the “audio only” version is preserved as a weekly podcast available on our iTunes & Spotify channels — Matthew Holt

By BRIAN KLEPPER, PhD

How will the drive to health care value affect health care’s structure? We tend to assume that the health care structure we’re become accustomed to is the one we’ll always have, but that’s probably far from the truth. If we pull levers that incentivize the right care at the right time, it’s likely that many of the problems we think we’re stuck with, like overtreatment and a lack of accountability, will disappear.

A large part of getting the right results is making sure that health care vendors have the right incentives. All forms of reimbursement carry incentives, so it’s important to align them, to choose payment structures that work for patients and purchasers as well as providers. Fee-for-service sends exactly the wrong message, because it encourages unnecessary utilization, paying for each component service independent of whether its necessary and independent of the outcomes. Compare US treatment patterns to those in other industrialized nations and you’ll find ours are generally bloated with procedures that have become part of practice not because they’re clinically necessary but simply because they’re billable.

By contrast, value-based arrangements are really about purchasers demanding that health care vendors deliver better health outcomes and/or lower cost than what they’ve experienced under fee-for-service reimbursement, and the payment structure often asks the vendor to put his money where his mouth is, at least where performance claims are concerned. In a market that’s still overwhelmingly dominated by fee-for-service arrangements, one way for a vendor to get noticed is to financially guarantee performance. Integrated Musculoskeletal Care, a musculoskeletal management firm based in Florida, guarantees a 25% reduction in musculoskeletal spend on the patients they touch. This typically translates to a 4%-5% reduction in total health plan spend, just by contracting with this vendor, a compelling offer in an environment that makes it hard for upstarts to get market traction.

But the real power of possible payment reforms become clear when one considers how it might affect utilization, cost, and workforce patterns in medical domains that have been particularly out of control. Think about spine surgery, where good data exist to argue that half or more of procedures are unnecessary or inappropriate. What would happen if, in addition to tying payment to health outcomes, reimbursement for spine surgeries suddenly was no longer fee-for-service, but a capitated rate, meaning that a limit was imposed on funds that could be devoted to it?

• Fewer surgeries would likely take place because there would be little or no financial benefit in doing unnecessary procedures,  plus any inability to show a positive impact on health outcomes in questionable cases. 
• Spine surgeons’ caseloads would drop and incomes would fall. Some spine surgeons would retire or transition to other specialties.
• The spine surgery market might quickly become very competitive. In an effort to win volume, spine clinics would quantify and then market their health outcomes and pricing, particularly to health plans and primary care practices seeking , preferred surgical providers.
• Spine surgeons would become far more interested in approaches that consistently deliver better health outcomes and/or lower costs. Evidence-based medicine would find a much more receptive audience and treatments that have data showing they work would gain a following much more quickly than they do now. Non-operative treatments would become much more mainstream.
• Spine surgery organizations with excellent performance would grow at the expense of their competitors and the variability of health outcomes would diminish. Centers of excellence would become much better established.
• In general, costs of spinal surgeries would drop, possibly precipitously, and health outcomes would blossom.

Imagine the implications if similar payment reforms were implemented across all health care, impacting other niches with excessive utilization and cost, like cancer care and cardiovascular medicine. The workloads, numbers of physicians, and revenue base within each specialty would be reshaped, each one finding a new level.

In general, health care professionals who have become comfortable over the past several decades will find the new financial normal less to their liking than before. The winners here would be patients, purchasers, and primary care physicians who will benefit from market-based pricing and a greater reliance on true evidence-based care.

If risk-based arrangements get traction in ERISA health plans as they have in Medicare Advantage and Managed Medicaid, a health care market will take shape and strengthen. The kinds of changes I’ve described above will be increasingly prevalent. The question is whether employers and unions will finally insist that we pay for results rather than for activity.

Brian Klepper is a health care analyst and the EVP of the Validation Institute.

By BRIAN KLEPPER

A class action legal ruling this month, on a case originally filed in 2014, found that UnitedHealthCare’s (UHC) mental health subsidiary, United Behavioral Health (UBH), established internal policies that discriminated against patients with behavioral health or substance abuse conditions. While an appeal is expected, patients with legitimate claims were systematically denied coverage, and employer/union purchasers who had paid for coverage for their employees and their family members received diminished or no value for their investments.

Central to the plaintiff’s argument was the fact that UBH developed its own clinical guidelines and ignored generally accepted standards of care. In the 106 page ruling, Judge Joseph C. Spero of the US District Court in Northern California wrote, “In every version of the Guidelines in the class period, and at every level of care that is at issue in this case, there is an excessive emphasis on addressing acute symptoms and stabilizing crises while ignoring the effective treatment of members’ underlying conditions.” He concluded that the emphasis was “pervasive and result[ed] in a significantly narrower scope of coverage than is consistent with generally accepted standards of care.” Judge Spero found that UBH’s cost-cutting focus “tainted the process, causing UBH to make decisions about Guidelines based as much or more on its own bottom line as on the interests of the plan members, to whom it owes a fiduciary duty.”

In a statement to FierceHealthcare, UnitedHealth said it “looks forward to demonstrating in the next phase of this case how our members received appropriate care…We remain committed to providing our members with access to the right care for the treatment of mental health conditions and substance use disorders.”

It is important to be clear about what transpired here. Based on evidence, a subsidiary of UnitedHealthCare, America’s second-largest health care firm, has been found in a court of law to have intentionally denied the coverage of thousands of patients filing claims. The organization justified the restrictions in coverage using internal guidelines tilted to favor financial performance rather than accepted standards of care. In other words, UBH’s leaders (as well as those at UHC) knowingly defrauded their customers and devised a mechanism to rationalize their scheme. In his ruling, Judge Spero described testimony by UHC representatives as “evasive — and even deceptive.”

While focused on mental health services, this case addresses an important and much broader longstanding conflict. For decades, physicians have complained about health plan gamesmanship, in which coverage decisions are made for reasons other than quality of care and often encroach on the patient-physician relationship. But the problem at hand here is deeper than a turf issue, and goes to accountability. First we need to acknowledge that, in modern health care, different professionals and organizations are responsible for different parts of the care process. In such situations, all participants in that process should be accountable. In the same way that a physician can lose a license to see patients, a health plan should be subject to penalties that make it unable to perform its core business and clinical management functions.

The truth is that US health care is awash in excess, so much so that, to maintain the financial performance they’ve become accustomed to (and that the market has come to expect), many or most health care organizations now depend on egregious unit pricing and unnecessary services. We pay about double – and sometimes as much as six times – what people in other countries pay for the same drugs. US orthopedic surgeons do double the surgeries that are performed in other industrialized countries, with no better outcomes. We have dramatically excessive utilization in cardiometabolic care and in cancer care.

Worse, US health care organizations typically turn a blind eye to these excesses. Health plans tolerate surgeons doing unnecessary or poor quality procedures and typically do not remove them from their networks. Health plans continue to pay surgeons for the inappropriate procedures they perform. The value movement – providing the right care at reasonable pricing – threatens to be devastating to this legacy structure and its financial viability.

These dynamics raise critical questions. In a health system fraught with low value and dishonest performance reporting, how do we punish violators and how do we encourage value and honesty? Does health care need a new regulatory environment? Can vendor organizations be trusted if they earn more as health care costs more?

America cannot move toward a better health system until it stops tolerating health care practices that are fundamentally dishonest, not founded in evidence, and against the interests of patients and purchasers. Finding effective oversight mechanisms – some combination of regulatory and market-based controls – will be essential but challenging, especially so long as government function is susceptible to lobbying influence.

Brian Klepper is Executive Vice President of the Validation Institute and a health care analyst.