December 31, 2024 • 27 mins
Marty Makary, MD, was recently announced as President-Elect Trump’s pick to be the next commissioner of the Food and Drug Administration. In this episode from August 19, 2020, Dr. Makary, in conversation with Charles Overstreet, FTI Consulting, talks about the future of American medicine, including public health, price transparency, and issues related to access to care and appropriateness of care.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:14):
Dr. Marty McCarey was recently announced as
President-elect Trump's pick tobe the next commissioner of the
Food and Drug Administrationand this re-air, speaking of
health law episode from August19th, 2020, Dr. McCreary talks
about the future of Americanmedicine.
Speaker 2 (00:31):
Hi, this is Charles Overstreet with FTI consulting.
I'm lucky today to have Dr.
Marty McCreary on the phone.
Many of you heard Dr . McCrearyduring our annual meeting. He
was the keynote speaker, veryinteresting and provocative
discussions. And from that camea few questions. Uh, Dr.
McCreary, if you don't mind ,uh, can I dive in and talk with
(00:51):
you on a few questions thatcame up from the audience?
Speaker 3 (00:54):
Of course. Great to be with you, Charles. Thanks
for having me.
Speaker 2 (00:58):
Oh, no problem.
Pleasure's all mine. Uh , oneof the questions came up was
regarding the importance ofpublic health. Given where we
are now in the pandemic, Ithink this is pretty , uh,
important and very appropriatefor where we are today. And Dr
. McCury Marty, what portion ofpreventative medicine could
(01:18):
fall into the realm of publichealth and be supported by
public health budgets,
Speaker 3 (01:25):
? Well, you
know, it's interesting because
more and more students nowgoing into medicine are saying,
I want to get a master's inpublic health for an additional
year. And many of us said, whyis this not a standard part of
the medical degree? Why is itthat learning about the health
of the public and preventionand some of the major issues we
(01:49):
face like pandemics? Why arethese things that are seen as
peripheral topics that reallycentral ? And if you think
about everything we do inmedicine, there is a better
public health strategy, whetherit's my own field of cancer
care or heart disease orinflammatory conditions like
(02:11):
arthritis or injury . Um ,there are areas of medicine
that have been un unexplored,underfunded, underappreciated,
and under-recognized. And thoseare the issues of food as
medicine and the environmentalexposures that cause skin
(02:33):
rashes and lung disease, and awhole host of other problems.
Can we talk about physicaltherapy and using ice more
liberally for back pain thanjust surgery and opioids? This
is what a new generation ofhealthcare providers are
talking about. And this is whatthe futuristic healthcare
(02:55):
systems now are activelyengaged in. Now they gotta
fight the billing system,right? Because the billing
system says, look, you're , youknow, your hamster's on a wheel
and we're just measuring the,the velocity of how much energy
you're producing. And prettymuch, you know, when when
there's an underperformance,the the providers are told, you
(03:16):
gotta work harder , right ? Andnow the doctors are saying, we
wanna work smarter, not justharder. So all of the stuff
that you're referring to , um,you know, why are we learning
what contact tracing is for thefirst time with the pandemic,
right? These are sort of thenuts and bolts of health. And I
think when we talk about , um,healthcare, we think of a
(03:40):
reactionary system. But when wethink about the health of the
public or the underlying rootcauses of , of issues that
create problems with health,now we're actually getting to
the exciting thing. And I thinkthat's what's rejuvenating a
lot of medical centers rightnow. They're saying, we wanna
assume responsibility for apopulation because we don't
(04:03):
wanna have to, you know, be inthis coding billing throughput
cycle that the patients don'tlike. And we, doctors don't
really like, a lot of times wewant to have freedom and we
want to have the liberty tocustom tailor treatments to
individuals. Let us do that.
And that's some of the, the newstuff that , uh, we had talked
about, the new Medicareadvantage plans,
(04:24):
relationship-based medicine.
Speaker 2 (04:27):
Well , how do we, you know, link to this, you
know, incentivize lifestylechanges? You know, the question
really was around socialdeterminants of health. But
now, you know, it'd be a goodlifestyle change. I think if
some folks all wore masks as we, uh, go through this. But ,
uh, how do we incentivizelifestyle changes through
public health
Speaker 3 (04:47):
? Yeah. If
we, if we thought economically
about some of these behaviors ,it's amazing to think what the
possibilities are. Um, but atthe same time, you know, we're
a country that values personalliberty and sometimes
individual rights overcommunity rights, even though
that encroaches on the healthof the public sometimes. And
we've seen that with personalbehavior during the Covid
(05:10):
pandemic, right? The sense of Ican do whatever I want in
public around other people andother people saying, no, we
have laws that govern seatbelts and, and , and we , we
need things that are reasonablewith broad consensus with the
pandemic. So I think right nowwe're at , we're at a difficult
position where we're actuallysaying, how can we approach
(05:31):
this problem in a way thatmakes sense and is not too
onerous, but serves a broaderpurpose? Because if we look at
all of healthcare, all of thehealthcare we deliver in the
United States, that entire halfof federal spending that goes
to healthcare , the eighth ofthe economy on medical services
(05:53):
and the fee for service cowheel , most of it stems from
behavioral problems. Most ofit, the most common cause of
death in the United States isheart disease. The most common
known cause of heart disease issmoking and inflammation and
(06:13):
obesity in the metabolicsyndrome. And cholesterol
number two, cause of death inthe United States cancer number
one known cause of cancersmoking. Number two other
environmental exposures. Um, sowhen we look at the universe of
healthcare we're delivering, itgets exciting when we can take
(06:35):
a step back from the directinterface with a patient and
say, let's look at the , thedrivers of health. And as we
know, the biggest driver ofhealth status in the United
States is economic status, sadto say, but it is economic
status, right? So when peopleare struggling financially,
they're struggling with theirhealth, and it's just the way
that the systems are aligned.
(06:56):
It's just the way that cheaperfoods are worse foods and, and
so on down the line,
Speaker 2 (07:05):
I agree with you and you know, some of this is
linked to the new things. Thereare , I know on the mind of
number of our clients, theprice transparency , uh, that's
being mandated. Can you expandon your thoughts about the
value of PBMs and how theymight , uh, or might not
contribute to increasinghealthcare costs?
Speaker 3 (07:25):
Yeah, there are assumptions that we are now
challenging. For example, we'veassumed that employers are
shopping for healthcare on anopen market that , um, is, is
transparent enough for them tomake sound decisions or that
that market is competitive. Thereality is it's not
(07:47):
competitive. And the reasonit's not competitive is because
the way A-A-P-B-M or pharmacybenefit manager bills an
employer for their services isto send them a report at the
end of the year saying, hereare all the medications your
employees took. Here's all theprices. Here's some artificial
(08:07):
crazy discounts that we'reapplying 'cause we're your
friend. And they look at somebig number at the end. How do
you compare that? Is thereanother business with the same
population of employees withthe same comorbidity case mix?
No. Uh, and it's very difficultfor employers to compare lists
(08:29):
of a thousand or 5,000medications with different
frequencies, biosimilars names,dosages. You, you don't even
know what people are gettingswapped out for by the pbm. So
what we have is this fog thatprevents employers from
shopping responsibly. So whatthey do is they rely on their
(08:49):
benefits advisor or consultant,or AKA broker. What we learned
from our research is that thebrokers are getting paid a
major lump sum of money on theback end from the companies
that they sell. So you're a bigPBM company and a broker sells
(09:10):
your product. You're payingthem on the back end , 80,000,
a hundred thousand , $150,000 .
And then when that contractcomes up for renewal, it's, you
know, the , the PBM can say,keep this employer, keep this
car dealership with us, andwe're gonna pay you a retention
bonus. Well, it's just, it doesnot feed a competitive
(09:31):
marketplace. And there's agenerational brokers that are ,
that now are saying, look ,we're sick of playing in this ,
uh, system. We didn't go intothis for this reason. Um, we
didn't design this system. Weinherited it. We're gonna
disclose a hundred percent ofthose payments on the backend
for a company of 2000employees. Those total payments
on the back end can total amillion dollars. I mean , some
(09:55):
brokers could actually payemployers to be their broker
and still make a big heftyprofit just from the backend
stuff . So we are seeing ageneration, again, led by young
people who, as you know, if youhave, kids have very little
tolerance for BS and they wannabe a part of something larger
than themselves as agenerational value, right? They
(10:15):
want, they , they want to be apart of some gr greater purpose
in their work. And so we're ,we are seeing some reforms now
and some good efforts, and I've, um, worked with some
employers now to say, Hey,let's start talking about
direct contracting with yourlocal hospital and the pharmacy
that the hospital runs. And weare seeing some exciting new
(10:38):
things in the pricetransparency space. I'm
involved in one company calledSesame Care, again, trying to
create an online marketplacefor medical services. Some
hospitals are getting reallygood business from this , uh,
web-based service , uh, sendingpatients their way because it's
an open and honest marketplace.
Speaker 2 (10:59):
Thank you. Do you see any issues with the
transparency or with thepricing where it could have the
opposite effect of evenfostering collusion? Or do you
think something that's reallygonna , you know, increase
competition or decrease it
Speaker 3 (11:15):
In terms of the PBM and the health insurance space?
Speaker 2 (11:19):
Yes .
Speaker 3 (11:21):
Yeah, it's , um, I think the more transparency,
the better. There have beenarguments that have been made
that if you make everythingtransparent, you'll confuse
people and therefore it'll becounterproductive. Those
arguments have actually beenmade. And I think right now
(11:42):
there's enough frustration withthe middle industry of
healthcare that employers aretaking the lead and they're
saying , can we just put allthis stuff aside, all the, the
, the middle insurance , um,claims processing, PBM,
(12:05):
wellness, anti-fraud programs,all that stuff that we pay for
as an employer, and can we justgo to the community hospital
that we know, trust and love,and do a direct contract? And
with those direct contracts,you really are bypassing a
giant industry and creating, inmy opinion, more local
accountability. And it remindsme of growing up in central
(12:29):
Pennsylvania at Danville, whereGeisinger was a small , uh,
community hospital at the time.
It's now large, but if therewas an issue, we all saw the
CEO of the hospital in thegrocery store, and the docs
would have no problem talkingto the CEO when there was an
issue. And the CEO was veryresponsive. And it was exactly
(12:51):
what people love about , um,many workplaces is this sort of
, um, dialogue, therelationship between leadership
and those on the front lines.
And that is something that'sbeautiful. It exists all across
the country. We see it all thetime. And that really all is,
(13:12):
is promoted when we have fewerof these middle layers for an
employer say, to get healthcarefrom their hospitals. So it's
exciting. I love directcontracting with hospitals. I
think the hospitals love it. Ithink the employers are very
happy with it. And we saveourself a lot of the, sort of
the black hole in the middlewhere the money goes. Nobody
(13:35):
can explain where it goes.
Speaker 2 (13:38):
So do you see, I know from our client base, a
lot of hospitals or healthsystems are kind of maybe
worried or hesitant to publishprices and things. Do you think
that , uh, that that worry ismisplaced or you , you could
actually help them ?
Speaker 3 (13:54):
I think the worry is legitimate only because the
insurance companies arebasically threatening
hospitals. They're saying, wedon't want you to do this,
because if you start doingthat, it's gonna undermine the
secret discount that we have.
So I , I have yet to meetsomebody at a hospital who
actually says on the providerside, it's not a good idea for
(14:17):
us to show prices. And what ,what I hear is the opposite. I
hear we'd like to show prices,but our insurers are gonna be
very upset, or I hear that we'dlike to show prices, but we've,
the market's never required it.
And it takes work. It takes,you actually have to itemize
services in a way that we'venever done, and we can do that
(14:39):
work, but remember we're beingasked to do 50 other things,
including all these dueregulatory requirements and
reporting into collaboratives.
So we just, you know, we needtime, energy, and resources to
do that work to itemize. Now,some of that's being driven by
a poll. The market is saying,Hey, we're inviting you to post
prices for a select group ofservices, bundled orthopedic
(15:02):
procedures, for example. And ifyou put those on the open
market , um, there are folksout there who will bring
employers to you or sendpatient patients your way. So
that is, that is actually sortof the carrot that's driving
some of this. But I'm not like,I think hospitals are run by
(15:22):
terrific people who intend andmean good. Nobody goes to work
for a hospital because theythink this is gonna be a great
way for me to make a lot ofmoney. People go to work for a
hospital because they believein the mission of a hospital.
All of us in healthcare areunited around a sense of
working for a larger purpose ofhaving compassion on those in
(15:43):
need. That's why there'stremendous pride among people
that work in a hospital. They,they intend and wanna do good,
but we've all inherited thissystem that doesn't always make
sense where we're expected todo certain things. And one of
those things is having a gun toour head by a payer that says ,
(16:06):
Hey, we're gonna give you ,send you patients, but we want
this discount and you can'ttell anybody what this discount
is. So from a regulatorystandpoint, we've said, can we
reset that playing field?
Mm-hmm . Andwhen, when I was involved in
that , um, regulatory change, Ihad hospitals all over the
(16:26):
country reaching out, tellingme, Hey, I know the hospital
association is , um, notsupporting this because it's
gonna be more work, but don't,don't quote me. And I'm not
going on record here, but thisis exactly what we need. And so
I think you're gonna see thisnew normal, just like we had
with nutrition labels. All thefood industry companies had
(16:51):
said when nutrition labels werebeing discussed that this was
gonna be work, an unfundedmandate, there was gonna be
mass layoffs of, of workers inthe food industry. Food prices
were gonna spike. They unifiedin , in opposing it. But it
turns out it wasn't theindividuals or the individual
(17:12):
food companies, it was thetrade association. And they
simply, you know , put out the, you know, the , the loud
bark. Well, guess what? We gotnutrition labels. And we have a
whole new marketplace where theplaying field has been reset
around things that matter. Andnow we have informed patients
and we have people makingbetter decisions and we're
(17:34):
educating folks on sodium andsugar and other things. And so
there are certain ways to reseta playing field that may not be
comfortable initially, but Ithink have tremendous
implications for the broaderpublic.
Speaker 2 (17:49):
That makes perfect sense. Uh , thank you. Last
thing is on , uh, kind ofappropriateness of care. Is it
affected by where the care maybe if you're in a small town
with a private practitionerversus, you know, a larger town
or a more comprehensive HMO youmay belong to, or you might be
in a high tech practice in anurban area? Is there , uh, a
(18:13):
propensity to provide morediagnostic tests and procedures
when the , the practitioner andthe patient are have more
access to that or easieraccess? Arnie
Speaker 3 (18:24):
, you know,
our research shows that some of
the patterns of excessive carehave no rhyme or reason as they
have no geographic association.
There's no , uh, profile ofindividual physician or
provider institution that youcan , um, create that is more
(18:45):
likely to engage in this .
There were some minorassociations when a , uh,
physician owns their ownsurgery center or pathology
lab. We saw more utilization ofthings like that. That's been
well documented. But by andlarge, most doctors do the
right thing or always try to.
(19:05):
And what we've seen is thatwhen we survey doctors around
the country and ask them, andthis was sort of the basis for
writing the book unaccountable,when we ask them, do you know
of a local physician who is inpractice who should not be in
practice and , um, represent arisk to the community, it turns
(19:29):
out that almost everybody knowsof somebody. Um, and the
question is, what do we doabout those individuals? And
there's a lot of things we as aprofession can do to improve
quality across the board,really increasing the
reliability of quality care.
But there's not a lot of goodvehicles to do it. So what
(19:49):
we've decided to do is let'stalk about these doctors who
are outliers, not as baddoctors, but as doctors who
need help and let's reach outto them. And what we've seen is
that when people , a peerreaches out to another peer who
is independent from the localpolitics of a regional practice
(20:10):
and referral pattern base, thatis somebody from , uh, the na a
national organization in thatspecialty, a like-minded like
specialist and says, Hey, I sawon the data you showed up as a
high utilizer in this certainpractice pattern. I'm happy to
chat with you about it, thatpeople do their best to try to
(20:34):
improve. And there may bepatterns where people are
gaming the system or doingthings for billing purposes,
but by and large, when there'ssome transparency created with
that peer-to-peer collegiality,when there's civility in
reaching out, we do see sometremendous improvement. So ,
um, my thought is, let's try tobe positive, right? There's
(20:57):
enough depressing stuff goingon in healthcare, right?
There's , there's enough, youknow, cracks in the system .
And , and part of it is justCharles science has exploded
faster than we have been ableto coordinate all the different
new subcategories of care,right? When I was in medical
(21:18):
school, we had roughly 82specialties in medicine. Now
there are well over 2000, okay? Our gastrointestinal , uh,
our , our GI department,gastroenterology department at
Johns Hopkins has 12 differentspecialties in that department.
About 80 faculty in 12different areas, hepatology and
(21:43):
esophagus , uh, disease, anultrasound of the pancreas. And
so GI is not GI anymore. Andwhen you have that many
different skill sets , when youhave that many incredible
amazing doctors who are sofocused on one problem that
they get really good at it, ofcourse you need to increase
(22:07):
your coordination of careproportional to the growth of
the number of subfieldsmedicine. There's never been
funding for that, right?
There's never been a Medicareadjustment to say You're
providing 500 services. We'regonna give you a bonus just to
coordinate care. And what youhave is you have people showing
up at the hospital who are justsaying, who, how do I get my
(22:31):
doctors to talk to each other?
Or does this doctor know thatthe other doctor wants to do
this? And you have these veryreal experiences from people
who sometimes work at thehospital. And you, we try to do
our best to really deliver carethat we would want for our own
mother or father. But sometimeswe get frustrated saying, the
(22:54):
system is not set up for thismuch scientific knowledge and
this much hyper specializationin the hospital. So we've gotta
go the extra distanceourselves. I mean, I met some
guy in the, in the cafeteria,Charles , uh, I just saw
ophthalmology on his whitecoat. And we were chatting and
I asked him, so is there anarea of ophthalmology that you
(23:18):
specialize in ? Assuming thatpretty much everyone at John
Hopkins has a subspecialty. Andhe said, yeah, he exclusively
specializes in the choroid.
Okay, I don't even know whatthat is. I have no idea what
that organ or part of the eyeis. And that's his entire life.
(23:39):
Okay? I don't know if I wassleeping in medical school or
what, but that is the level ofscientific. So when people like
to blame individuals or blamehospitals because they had a
bad experience, I remind themthat we live in an
unprecedented area where wehave seen scientific expertise,
mature down , um, paths thatprovide spectacular care, but
(24:07):
we've not been able to keep upwith the coordination of care
as efficiently as we have.
'cause we haven't been fundedfor it. So all that to say ,
um, it is an exciting timeright now in medicine, but many
of, many of us have been , um,uh, sort of , um, very, very
(24:27):
much , uh, comforted in seeinga whole new movement of people
in in healthcare say, we wantto take this on and this piece
of the problem coordination,care management, diabetes care
, uh, patients with renalinsufficiency before they need
dialysis, we want to just focuson this one problem. And that's
(24:51):
where we're seeing theseinnovators and this incredible
disease management that I referto , uh, globally as
relationship based management.
And it's really exciting andit's just , I didn't think, we
think we'd see that in ourlifetime, but we're, we're
seeing incredible innovationright now.
Speaker 2 (25:06):
No , I agree with you a hundred percent . You
bring back some memories. WhenI was a student in the mid
eighties looking at thegraduate medical , uh,
education, national AdvisoryCommittee, the number of
specialties or subspecialtieswith a few dozen, and they did
a project on, well , what wouldbe the need moving forward if I
did it today? That might be adissertational analysis and not
(25:26):
an undergraduate project.
Speaker 3 (25:29):
. Well,
you've seen it all, Charles,
between your time in themilitary and working at Grady
and , um, doing your fellowshipat , at Emory, and now of
course all your work with Ft I, it's , it's really an
incredible, it's an honor tospeak with . You've seen it all
, I'm sure . So what I'm about
Speaker 2 (25:48):
Raising five girls I think taught me more than
anything Marty . But , uh, Iwill thank you for your time
and your candor. Uh , it wasgreat to hear you speak , uh,
during our virtual meeting. Uh, a lot of kudos I heard back ,
uh, from our end and just , uh,wish you all the best moving
forward and , you know , we'llsee if we can all get through
(26:10):
the pandemic and get back towhat was some semblance of
normal. But maybe we'll learnsomething from this that helps
everyone.
Speaker 3 (26:19):
Great . Well we are hearing some good news right
now on the numbers in thepandemic, so hopefully there's
an end in sight . Charles,pleasure talking with you as
always, and thanks for havingme and for the , uh, A-H-L-A-I
love you guys. So thanks againfor having me at the conference
this year .
Speaker 2 (26:36):
No , we're , uh, like I said , we're very proud
to have been , uh, keynotespeaker now for quite some time
and we look forward to nextyear .
Speaker 3 (26:44):
Thanks so much, Charles.
Speaker 2 (26:45):
Thank you Marty.
Speaker 1 (26:54):
Thank you for listening. If you enjoy this
episode, be sure to subscribeto a HLA speaking of health law
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To learn more about a HLA andthe educational resources
available to the health lawcommunity, visit American
health law.org .
Dr. Marty McCarey was recently announced as
President-elect Trump's pick tobe the next commissioner of the
Food and Drug Administrationand this re-air, speaking of
health law episode from August19th, 2020, Dr. McCreary talks
about the future of Americanmedicine.
Speaker 2 (00:31):
Hi, this is Charles Overstreet with FTI consulting.
I'm lucky today to have Dr.
Marty McCreary on the phone.
Many of you heard Dr . McCrearyduring our annual meeting. He
was the keynote speaker, veryinteresting and provocative
discussions. And from that camea few questions. Uh, Dr.
McCreary, if you don't mind ,uh, can I dive in and talk with
(00:51):
you on a few questions thatcame up from the audience?
Speaker 3 (00:54):
Of course. Great to be with you, Charles. Thanks
for having me.
Speaker 2 (00:58):
Oh, no problem.
Pleasure's all mine. Uh , oneof the questions came up was
regarding the importance ofpublic health. Given where we
are now in the pandemic, Ithink this is pretty , uh,
important and very appropriatefor where we are today. And Dr
. McCury Marty, what portion ofpreventative medicine could
(01:18):
fall into the realm of publichealth and be supported by
public health budgets,
Speaker 3 (01:25):
more and more students nowgoing into medicine are saying,
I want to get a master's inpublic health for an additional
year. And many of us said, whyis this not a standard part of
the medical degree? Why is itthat learning about the health
of the public and preventionand some of the major issues we
(01:49):
face like pandemics? Why arethese things that are seen as
peripheral topics that reallycentral ? And if you think
about everything we do inmedicine, there is a better
public health strategy, whetherit's my own field of cancer
care or heart disease orinflammatory conditions like
(02:11):
arthritis or injury . Um ,there are areas of medicine
that have been un unexplored,underfunded, underappreciated,
and under-recognized. And thoseare the issues of food as
medicine and the environmentalexposures that cause skin
(02:33):
rashes and lung disease, and awhole host of other problems.
Can we talk about physicaltherapy and using ice more
liberally for back pain thanjust surgery and opioids? This
is what a new generation ofhealthcare providers are
talking about. And this is whatthe futuristic healthcare
(02:55):
systems now are activelyengaged in. Now they gotta
fight the billing system,right? Because the billing
system says, look, you're , youknow, your hamster's on a wheel
and we're just measuring the,the velocity of how much energy
you're producing. And prettymuch, you know, when when
there's an underperformance,the the providers are told, you
(03:16):
gotta work harder , right ? Andnow the doctors are saying, we
wanna work smarter, not justharder. So all of the stuff
that you're referring to , um,you know, why are we learning
what contact tracing is for thefirst time with the pandemic,
right? These are sort of thenuts and bolts of health. And I
think when we talk about , um,healthcare, we think of a
(03:40):
reactionary system. But when wethink about the health of the
public or the underlying rootcauses of , of issues that
create problems with health,now we're actually getting to
the exciting thing. And I thinkthat's what's rejuvenating a
lot of medical centers rightnow. They're saying, we wanna
assume responsibility for apopulation because we don't
(04:03):
wanna have to, you know, be inthis coding billing throughput
cycle that the patients don'tlike. And we, doctors don't
really like, a lot of times wewant to have freedom and we
want to have the liberty tocustom tailor treatments to
individuals. Let us do that.
And that's some of the, the newstuff that , uh, we had talked
about, the new Medicareadvantage plans,
(04:24):
relationship-based medicine.
Speaker 2 (04:27):
Well , how do we, you know, link to this, you
know, incentivize lifestylechanges? You know, the question
really was around socialdeterminants of health. But
now, you know, it'd be a goodlifestyle change. I think if
some folks all wore masks as we, uh, go through this. But ,
uh, how do we incentivizelifestyle changes through
public health
Speaker 3 (04:47):
about some of these behaviors ,it's amazing to think what the
possibilities are. Um, but atthe same time, you know, we're
a country that values personalliberty and sometimes
individual rights overcommunity rights, even though
that encroaches on the healthof the public sometimes. And
we've seen that with personalbehavior during the Covid
(05:10):
pandemic, right? The sense of Ican do whatever I want in
public around other people andother people saying, no, we
have laws that govern seatbelts and, and , and we , we
need things that are reasonablewith broad consensus with the
pandemic. So I think right nowwe're at , we're at a difficult
position where we're actuallysaying, how can we approach
(05:31):
this problem in a way thatmakes sense and is not too
onerous, but serves a broaderpurpose? Because if we look at
all of healthcare, all of thehealthcare we deliver in the
United States, that entire halfof federal spending that goes
to healthcare , the eighth ofthe economy on medical services
(05:53):
and the fee for service cowheel , most of it stems from
behavioral problems. Most ofit, the most common cause of
death in the United States isheart disease. The most common
known cause of heart disease issmoking and inflammation and
(06:13):
obesity in the metabolicsyndrome. And cholesterol
number two, cause of death inthe United States cancer number
one known cause of cancersmoking. Number two other
environmental exposures. Um, sowhen we look at the universe of
healthcare we're delivering, itgets exciting when we can take
(06:35):
a step back from the directinterface with a patient and
say, let's look at the , thedrivers of health. And as we
know, the biggest driver ofhealth status in the United
States is economic status, sadto say, but it is economic
status, right? So when peopleare struggling financially,
they're struggling with theirhealth, and it's just the way
that the systems are aligned.
(06:56):
It's just the way that cheaperfoods are worse foods and, and
so on down the line,
Speaker 2 (07:05):
I agree with you and you know, some of this is
linked to the new things. Thereare , I know on the mind of
number of our clients, theprice transparency , uh, that's
being mandated. Can you expandon your thoughts about the
value of PBMs and how theymight , uh, or might not
contribute to increasinghealthcare costs?
Speaker 3 (07:25):
Yeah, there are assumptions that we are now
challenging. For example, we'veassumed that employers are
shopping for healthcare on anopen market that , um, is, is
transparent enough for them tomake sound decisions or that
that market is competitive. Thereality is it's not
(07:47):
competitive. And the reasonit's not competitive is because
the way A-A-P-B-M or pharmacybenefit manager bills an
employer for their services isto send them a report at the
end of the year saying, hereare all the medications your
employees took. Here's all theprices. Here's some artificial
(08:07):
crazy discounts that we'reapplying 'cause we're your
friend. And they look at somebig number at the end. How do
you compare that? Is thereanother business with the same
population of employees withthe same comorbidity case mix?
No. Uh, and it's very difficultfor employers to compare lists
(08:29):
of a thousand or 5,000medications with different
frequencies, biosimilars names,dosages. You, you don't even
know what people are gettingswapped out for by the pbm. So
what we have is this fog thatprevents employers from
shopping responsibly. So whatthey do is they rely on their
(08:49):
benefits advisor or consultant,or AKA broker. What we learned
from our research is that thebrokers are getting paid a
major lump sum of money on theback end from the companies
that they sell. So you're a bigPBM company and a broker sells
(09:10):
your product. You're payingthem on the back end , 80,000,
a hundred thousand , $150,000 .
And then when that contractcomes up for renewal, it's, you
know, the , the PBM can say,keep this employer, keep this
car dealership with us, andwe're gonna pay you a retention
bonus. Well, it's just, it doesnot feed a competitive
(09:31):
marketplace. And there's agenerational brokers that are ,
that now are saying, look ,we're sick of playing in this ,
uh, system. We didn't go intothis for this reason. Um, we
didn't design this system. Weinherited it. We're gonna
disclose a hundred percent ofthose payments on the backend
for a company of 2000employees. Those total payments
on the back end can total amillion dollars. I mean , some
(09:55):
brokers could actually payemployers to be their broker
and still make a big heftyprofit just from the backend
stuff . So we are seeing ageneration, again, led by young
people who, as you know, if youhave, kids have very little
tolerance for BS and they wannabe a part of something larger
than themselves as agenerational value, right? They
(10:15):
want, they , they want to be apart of some gr greater purpose
in their work. And so we're ,we are seeing some reforms now
and some good efforts, and I've, um, worked with some
employers now to say, Hey,let's start talking about
direct contracting with yourlocal hospital and the pharmacy
that the hospital runs. And weare seeing some exciting new
(10:38):
things in the pricetransparency space. I'm
involved in one company calledSesame Care, again, trying to
create an online marketplacefor medical services. Some
hospitals are getting reallygood business from this , uh,
web-based service , uh, sendingpatients their way because it's
an open and honest marketplace.
Speaker 2 (10:59):
Thank you. Do you see any issues with the
transparency or with thepricing where it could have the
opposite effect of evenfostering collusion? Or do you
think something that's reallygonna , you know, increase
competition or decrease it
Speaker 3 (11:15):
In terms of the PBM and the health insurance space?
Speaker 2 (11:19):
Yes .
Speaker 3 (11:21):
Yeah, it's , um, I think the more transparency,
the better. There have beenarguments that have been made
that if you make everythingtransparent, you'll confuse
people and therefore it'll becounterproductive. Those
arguments have actually beenmade. And I think right now
(11:42):
there's enough frustration withthe middle industry of
healthcare that employers aretaking the lead and they're
saying , can we just put allthis stuff aside, all the, the
, the middle insurance , um,claims processing, PBM,
(12:05):
wellness, anti-fraud programs,all that stuff that we pay for
as an employer, and can we justgo to the community hospital
that we know, trust and love,and do a direct contract? And
with those direct contracts,you really are bypassing a
giant industry and creating, inmy opinion, more local
accountability. And it remindsme of growing up in central
(12:29):
Pennsylvania at Danville, whereGeisinger was a small , uh,
community hospital at the time.
It's now large, but if therewas an issue, we all saw the
CEO of the hospital in thegrocery store, and the docs
would have no problem talkingto the CEO when there was an
issue. And the CEO was veryresponsive. And it was exactly
(12:51):
what people love about , um,many workplaces is this sort of
, um, dialogue, therelationship between leadership
and those on the front lines.
And that is something that'sbeautiful. It exists all across
the country. We see it all thetime. And that really all is,
(13:12):
is promoted when we have fewerof these middle layers for an
employer say, to get healthcarefrom their hospitals. So it's
exciting. I love directcontracting with hospitals. I
think the hospitals love it. Ithink the employers are very
happy with it. And we saveourself a lot of the, sort of
the black hole in the middlewhere the money goes. Nobody
(13:35):
can explain where it goes.
Speaker 2 (13:38):
So do you see, I know from our client base, a
lot of hospitals or healthsystems are kind of maybe
worried or hesitant to publishprices and things. Do you think
that , uh, that that worry ismisplaced or you , you could
actually help them ?
Speaker 3 (13:54):
I think the worry is legitimate only because the
insurance companies arebasically threatening
hospitals. They're saying, wedon't want you to do this,
because if you start doingthat, it's gonna undermine the
secret discount that we have.
So I , I have yet to meetsomebody at a hospital who
actually says on the providerside, it's not a good idea for
(14:17):
us to show prices. And what ,what I hear is the opposite. I
hear we'd like to show prices,but our insurers are gonna be
very upset, or I hear that we'dlike to show prices, but we've,
the market's never required it.
And it takes work. It takes,you actually have to itemize
services in a way that we'venever done, and we can do that
(14:39):
work, but remember we're beingasked to do 50 other things,
including all these dueregulatory requirements and
reporting into collaboratives.
So we just, you know, we needtime, energy, and resources to
do that work to itemize. Now,some of that's being driven by
a poll. The market is saying,Hey, we're inviting you to post
prices for a select group ofservices, bundled orthopedic
(15:02):
procedures, for example. And ifyou put those on the open
market , um, there are folksout there who will bring
employers to you or sendpatient patients your way. So
that is, that is actually sortof the carrot that's driving
some of this. But I'm not like,I think hospitals are run by
(15:22):
terrific people who intend andmean good. Nobody goes to work
for a hospital because theythink this is gonna be a great
way for me to make a lot ofmoney. People go to work for a
hospital because they believein the mission of a hospital.
All of us in healthcare areunited around a sense of
working for a larger purpose ofhaving compassion on those in
(15:43):
need. That's why there'stremendous pride among people
that work in a hospital. They,they intend and wanna do good,
but we've all inherited thissystem that doesn't always make
sense where we're expected todo certain things. And one of
those things is having a gun toour head by a payer that says ,
(16:06):
Hey, we're gonna give you ,send you patients, but we want
this discount and you can'ttell anybody what this discount
is. So from a regulatorystandpoint, we've said, can we
reset that playing field?
Mm-hmm
that , um, regulatory change, Ihad hospitals all over the
(16:26):
country reaching out, tellingme, Hey, I know the hospital
association is , um, notsupporting this because it's
gonna be more work, but don't,don't quote me. And I'm not
going on record here, but thisis exactly what we need. And so
I think you're gonna see thisnew normal, just like we had
with nutrition labels. All thefood industry companies had
(16:51):
said when nutrition labels werebeing discussed that this was
gonna be work, an unfundedmandate, there was gonna be
mass layoffs of, of workers inthe food industry. Food prices
were gonna spike. They unifiedin , in opposing it. But it
turns out it wasn't theindividuals or the individual
(17:12):
food companies, it was thetrade association. And they
simply, you know , put out the, you know, the , the loud
bark. Well, guess what? We gotnutrition labels. And we have a
whole new marketplace where theplaying field has been reset
around things that matter. Andnow we have informed patients
and we have people makingbetter decisions and we're
(17:34):
educating folks on sodium andsugar and other things. And so
there are certain ways to reseta playing field that may not be
comfortable initially, but Ithink have tremendous
implications for the broaderpublic.
Speaker 2 (17:49):
That makes perfect sense. Uh , thank you. Last
thing is on , uh, kind ofappropriateness of care. Is it
affected by where the care maybe if you're in a small town
with a private practitionerversus, you know, a larger town
or a more comprehensive HMO youmay belong to, or you might be
in a high tech practice in anurban area? Is there , uh, a
(18:13):
propensity to provide morediagnostic tests and procedures
when the , the practitioner andthe patient are have more
access to that or easieraccess? Arnie
Speaker 3 (18:24):
the patterns of excessive carehave no rhyme or reason as they
have no geographic association.
There's no , uh, profile ofindividual physician or
provider institution that youcan , um, create that is more
(18:45):
likely to engage in this .
There were some minorassociations when a , uh,
physician owns their ownsurgery center or pathology
lab. We saw more utilization ofthings like that. That's been
well documented. But by andlarge, most doctors do the
right thing or always try to.
(19:05):
And what we've seen is thatwhen we survey doctors around
the country and ask them, andthis was sort of the basis for
writing the book unaccountable,when we ask them, do you know
of a local physician who is inpractice who should not be in
practice and , um, represent arisk to the community, it turns
(19:29):
out that almost everybody knowsof somebody. Um, and the
question is, what do we doabout those individuals? And
there's a lot of things we as aprofession can do to improve
quality across the board,really increasing the
reliability of quality care.
But there's not a lot of goodvehicles to do it. So what
(19:49):
we've decided to do is let'stalk about these doctors who
are outliers, not as baddoctors, but as doctors who
need help and let's reach outto them. And what we've seen is
that when people , a peerreaches out to another peer who
is independent from the localpolitics of a regional practice
(20:10):
and referral pattern base, thatis somebody from , uh, the na a
national organization in thatspecialty, a like-minded like
specialist and says, Hey, I sawon the data you showed up as a
high utilizer in this certainpractice pattern. I'm happy to
chat with you about it, thatpeople do their best to try to
(20:34):
improve. And there may bepatterns where people are
gaming the system or doingthings for billing purposes,
but by and large, when there'ssome transparency created with
that peer-to-peer collegiality,when there's civility in
reaching out, we do see sometremendous improvement. So ,
um, my thought is, let's try tobe positive, right? There's
(20:57):
enough depressing stuff goingon in healthcare, right?
There's , there's enough, youknow, cracks in the system .
And , and part of it is justCharles science has exploded
faster than we have been ableto coordinate all the different
new subcategories of care,right? When I was in medical
(21:18):
school, we had roughly 82specialties in medicine. Now
there are well over 2000, okay? Our gastrointestinal , uh,
our , our GI department,gastroenterology department at
Johns Hopkins has 12 differentspecialties in that department.
About 80 faculty in 12different areas, hepatology and
(21:43):
esophagus , uh, disease, anultrasound of the pancreas. And
so GI is not GI anymore. Andwhen you have that many
different skill sets , when youhave that many incredible
amazing doctors who are sofocused on one problem that
they get really good at it, ofcourse you need to increase
(22:07):
your coordination of careproportional to the growth of
the number of subfieldsmedicine. There's never been
funding for that, right?
There's never been a Medicareadjustment to say You're
providing 500 services. We'regonna give you a bonus just to
coordinate care. And what youhave is you have people showing
up at the hospital who are justsaying, who, how do I get my
(22:31):
doctors to talk to each other?
Or does this doctor know thatthe other doctor wants to do
this? And you have these veryreal experiences from people
who sometimes work at thehospital. And you, we try to do
our best to really deliver carethat we would want for our own
mother or father. But sometimeswe get frustrated saying, the
(22:54):
system is not set up for thismuch scientific knowledge and
this much hyper specializationin the hospital. So we've gotta
go the extra distanceourselves. I mean, I met some
guy in the, in the cafeteria,Charles , uh, I just saw
ophthalmology on his whitecoat. And we were chatting and
I asked him, so is there anarea of ophthalmology that you
(23:18):
specialize in ? Assuming thatpretty much everyone at John
Hopkins has a subspecialty. Andhe said, yeah, he exclusively
specializes in the choroid.
Okay, I don't even know whatthat is. I have no idea what
that organ or part of the eyeis. And that's his entire life.
(23:39):
Okay? I don't know if I wassleeping in medical school or
what, but that is the level ofscientific. So when people like
to blame individuals or blamehospitals because they had a
bad experience, I remind themthat we live in an
unprecedented area where wehave seen scientific expertise,
mature down , um, paths thatprovide spectacular care, but
(24:07):
we've not been able to keep upwith the coordination of care
as efficiently as we have.
'cause we haven't been fundedfor it. So all that to say ,
um, it is an exciting timeright now in medicine, but many
of, many of us have been , um,uh, sort of , um, very, very
(24:27):
much , uh, comforted in seeinga whole new movement of people
in in healthcare say, we wantto take this on and this piece
of the problem coordination,care management, diabetes care
, uh, patients with renalinsufficiency before they need
dialysis, we want to just focuson this one problem. And that's
(24:51):
where we're seeing theseinnovators and this incredible
disease management that I referto , uh, globally as
relationship based management.
And it's really exciting andit's just , I didn't think, we
think we'd see that in ourlifetime, but we're, we're
seeing incredible innovationright now.
Speaker 2 (25:06):
No , I agree with you a hundred percent . You
bring back some memories. WhenI was a student in the mid
eighties looking at thegraduate medical , uh,
education, national AdvisoryCommittee, the number of
specialties or subspecialtieswith a few dozen, and they did
a project on, well , what wouldbe the need moving forward if I
did it today? That might be adissertational analysis and not
(25:26):
an undergraduate project.
Speaker 3 (25:29):
between your time in themilitary and working at Grady
and , um, doing your fellowshipat , at Emory, and now of
course all your work with Ft I, it's , it's really an
incredible, it's an honor tospeak with . You've seen it all
, I'm sure . So what I'm about
Speaker 2 (25:48):
Raising five girls I think taught me more than
anything Marty . But , uh, Iwill thank you for your time
and your candor. Uh , it wasgreat to hear you speak , uh,
during our virtual meeting. Uh, a lot of kudos I heard back ,
uh, from our end and just , uh,wish you all the best moving
forward and , you know , we'llsee if we can all get through
(26:10):
the pandemic and get back towhat was some semblance of
normal. But maybe we'll learnsomething from this that helps
everyone.
Speaker 3 (26:19):
Great . Well we are hearing some good news right
now on the numbers in thepandemic, so hopefully there's
an end in sight . Charles,pleasure talking with you as
always, and thanks for havingme and for the , uh, A-H-L-A-I
love you guys. So thanks againfor having me at the conference
this year .
Speaker 2 (26:36):
No , we're , uh, like I said , we're very proud
to have been , uh, keynotespeaker now for quite some time
and we look forward to nextyear .
Speaker 3 (26:44):
Thanks so much, Charles.
Speaker 2 (26:45):
Thank you Marty.
Speaker 1 (26:54):
Thank you for listening. If you enjoy this
episode, be sure to subscribeto a HLA speaking of health law
wherever you get your podcasts.
To learn more about a HLA andthe educational resources
available to the health lawcommunity, visit American
health law.org .
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