May 8, 2025 • 34 mins
In this episode of Relentless Health Value, host Stacey Richter sits down with Peter Hayes to discuss the major forces driving change in the healthcare industry. Hayes outlines three critical factors: changing public opinion, heightened transparency, and new regulations such as the Consolidated Appropriations Act.
He emphasizes the unprecedented convergence of these elements, creating a pivotal moment for healthcare transformation. The discussion delves into the erosion of trust within the healthcare system and the growing public unrest over high costs and inefficiencies.
Hayes also highlights the role of state-level initiatives as experimental laboratories for potential national solutions. The episode concludes with a call to focus on root causes and collaborative approaches to restore trust and improve healthcare affordability and quality.
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05:28 What things are adding to the urgency in this moment of healthcare?
05:55 The three things that have brought us to a tipping point in healthcare.
07:05 Why is now the real moment for this tipping point?
10:35 EP458 with Komal Bajaj, MD.
13:01 Article by (and tribute to) Uwe Reinhardt.
13:27 Hospital ratings by The Leapfrog Group.
14:08 EP358 with Wayne Jenkins, MD.
15:07 EP474 with Yashaswini Singh, PhD.
16:29 How is regulation changing in healthcare?
21:48 How the “trifecta” of change is working together to create this movement of change in healthcare.
23:54 What do we need to look at to address the problems pushing this change in healthcare?
25:44
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Episode 475.
"Is This a Moment or a Movement? Todaywe hear the viewpoint of Peter Hayes."
American Healthcare Entrepreneurs andExecutives You Want To Know, Talking.
(00:22):
Relentlessly Seeking Value.
I was talking to Peter Hayes, my guestthis week, and I said, Peter, you
post a lot about many, many differenttopics on LinkedIn and elsewhere.
If you had to roll up all of yourposts into a few main, I don't know,
change-making vectors or forces of change,roads to Damascus, what would they be?
(00:45):
And you know, do you wanna comeon the pod and tell the tribe
here what you're thinking?
And Peter said.
I would love to.
So this show is going to be a top downkind of let's try to get a handle on
said major forces of change and howthose forces have swirled together
to create the place that we are now.
So most of this episode, I'm gonnastrongly suggest Relentless Health
(01:08):
Value tribe members who tune infrequently there's not any, Oh wow,
what a revelation, probably that'sgonna happen in the show today.
And to be frank, that's kind of the point.
It wouldn't be a major force if youall weren't aware of it now, would it?
The goal here is to figure out howto organize so many posts about so
(01:29):
many different things on LinkedIn.
There's so many of these micromoments, maybe I'd call them.
How do we organize them into a manageablenumber of strategic fundamental goings on
that we all can wrap our brains around?
That was my ask of Peter, and thatis not easy because it's a valid
question a lot of times when talkingabout healthcare transformation,
(01:51):
is it a moment or is it a movement?
This show is again what PeterHayes thinks the movements are.
The thing is though, it issurprisingly hard to discern what
the forces of change actually are.
What we often experience as a bigdramatic inflection point has almost
always been gestating for a while.
(02:13):
This creates an opportunity for usall here in the tribe because if we
see the changes early, or even better,spark the changes and inflection
point can really be a strategic boon.
And let me tell you, I want everyonelistening to have a strategic advantage
over those who, I don't know, maybeare a little bit less concerned with
putting patients before profits.
(02:34):
But yeah, usually inflection points havebeen a long time coming because forces
of change have been battering away for awhile until they finally break through.
I say this to acknowledge, we'vebeen talking about tipping points
and the total cost of healthcaresimply cannot get any higher.
We've been talking about this for probablydecades, but Peter says right now he
(02:56):
firmly believes we have a force majeureof bridges too far, of obvious over
the line activities that offend normalpeople's sense of justice and fair play.
Peter believes we're at a reallyunprecedented place right now.
So even if there's some starts andstops, some two bigs to fail, like
for example, some of the lawsuits aregetting thrown out because it's legally
(03:18):
unclear who the in aggrieved party is.
Yet too much of this country isfeeling like an aggrieved party,
so it's only a matter of time.
This is the major takeawayfrom the show today.
Peter's view of how three main forcesin the ecosystem all braid together
and reinforce each other and havecreated a kind of inexorableness
(03:39):
that something's gotta give.
And part of the equation here is just,and I'm mentioning this because we
keep talking about it, is a brutallack of trust that's really pervasive
across so many parts of the industry.
Patient to healthcare system, clinicianto healthcare system, et cetera.
As you listen to the show, definitelyconsider the shows from earlier with
(04:01):
Dr. Kenny Cole and Dr. ChristineHale about high-cost claimants.
These shows are another viewinto this exact basic topic.
They also show what trustcan bring us if we earn it.
I'm kind of thinking it couldbe cool to do shows like this
periodically where we get differentpeople to answer the question, what
are the major forces of change?
(04:22):
How are you rolling them up, and whatis your assessment of where we are
now in the journey of transformation?
If I get enough of you who are like,yeah, that's a great idea, I probably
will be less likely to forget about it.
Peter Hayes.
My guest today istechnically at least retired.
He was director of Benefits at HannafordSupermarkets for about 25 years.
He's been on the advisoryboards of Express Scripts and
(04:44):
Definitive Health among others.
He served on two healthcare reformcommissions in Maine, appointed
by two different governors.
He headed up the PurchaserAlliance in Maine.
My name is Stacey Richter,and this podcast is sponsored
by Aventria Health Group.
Peter Hayes, welcome backto Relentless Health Value.
I am glad to be here.
Thanks for having me back.
One of the things that I reallyappreciate that you're doing in your
(05:07):
productive retirement, here it is,is being very active on LinkedIn and
highlighting just so many issues.
So I have to admit that one of thereasons why I invited you to come back
is just to try to get your assessmentof all of these things that you talk
about so frequently on LinkedIn.
(05:28):
What are the ones that you feel likeare adding up to this unique moment
in time or this new tone and urgencythat, that you have mentioned.
So I think for me, I, as I've spent,30 years in the healthcare space, I've
been somewhat frustrated just about howhard it is to change some of the things
that are out there that are drivingall the things we're frustrated with.
(05:50):
I do think we're at thisunique tipping point.
It's sort of the perfect storm of events.
I think there's three things that havereally reached us to that tipping point.
The three major things arechanging public opinion.
Two, transparency.
The fact that we're really starting toget some information about our healthcare
delivery system, both from quality,cost, equity, has really ignited,
(06:14):
sort of, lots of voices in the spaceto really call for, for some changes.
And then regulation increasinglyis gonna play a role how states are
leading the way to find some answersto how we can make healthcare better
quality, more affordable, better access.
So I think those are three thingsthat are all colliding pretty
quickly that is really gonna drivethis change or transformation that
(06:37):
we've been talking about for years.
I'm going to be cynical for a moment.
We've been hearing aboutthe tipping point, right?
Like we've been hearing now it'sthe moment healthcare cannot
become any more expensive.
Oh my goodness.
It has reached 15% of the GDP, right?
Like we have heard this for literally,I'm gonna say at a minimum, a
(07:00):
decade or more, probably more.
So these are fighting words.
I think we should definitely dig in onwhy these three factors of which you
speak are just so unique and so compellingor have reached such a critical mass
that after all this talk now is, is themoment and, and the first thing that
(07:24):
you said was, changing public opinion.
And just to weigh in here for asec, this one is actually we have
never really had that before.
I don't think, to your point, I've reallyever seen the public this fired up.
Yeah, I agree and I absolutelyagree that we've all been having
(07:44):
these conversations for decades now.
But not talking about the right things.
When I said it's a perfect storm,sometime it takes just an event
to really ignite the issue.
Unfortunate, but I was really surprisedby the reaction to the assassination
of Brian Thompson at UnitedHealthcare.
LinkedIn just exploded with people talkingabout and realizing we have gotten to
(08:09):
a point where something has to change.
And what really shocked me is I have ayoung son who just recently graduated
from college and I kind of asked himwhat, what his peer group reaction was.
It was shocking that many felt.
Yes, it was unfortunate, but it wasdeserved and I think that really has
sent, it's just been the symbolic messagethat people can really grab a hold of
(08:31):
and say something is just really wrong.
And I'll take that on thepublic engagement piece, kind
of couple things tied to it.
One, what's as a follow up tothat, it's the first time that
I've seen the board of directors atUnitedHealthcare started to demand that
UnitedHealthcare be accountable forwhat they're doing with denials and
some of their audits and other things.
(08:52):
Two, it's the first time I'veseen physicians really starting
to speak up and say they're justnot comfortable where things are.
There's an interesting stat where in 2020.
Both the public and physicians had abouta 71% trust level in hospitals and care.
In 2021, fast forward only 40% did.
That is a huge drop in sort ofpublic and physician confidence
(09:16):
in our healthcare delivery system.
Hi, I'm Chris Crawford, CEO,and founder of RxSaveCard.
If you love the Relentless HealthValue podcast like I do, be sure to
follow their LinkedIn page and join theconversation about the topics every week.
Thanks so much for listening.
There are a number ofthings you just said.
As you mentioned the BrianThompson assassination and it
(09:39):
is horrifying to think vigilantejustice at any level is okay.
At the same time, it's like the lidgot blown off the pressure cooker.
It's almost like citizens of this countrylooked around and started sharing stories,
and then it just almost seems like it'sbecome now, it's socially acceptable
(10:01):
to start talking about your stories.
Everybody realizes everybody elsehas a story like, Hey, that time I
went to the ER and got charged andyada yada, blew out my credit cards.
You know, like these stories arebecoming so commonplace and I think
that everybody just all of a suddenrealizes how common they are,
which just accelerates the trend.
60% of Americans have medical debt, soit's becoming a real affordability issue.
(10:24):
And it's actually gotten to the pointwhere a lot of consumers are foregoing
preventative medications and services andother things 'cause they can't afford 'em.
Physicians and other healthcareprofessionals, we had Komal Bajaj, Dr.
Komal Bajaj on the pod, talking justabout the number of doctors and people
who work in a hospital who do not trustthat their leadership has their back.
(10:45):
You put all of these thingstogether and in the court of public
opinion, now we have a trial thatmatters more to legislatures.
We also have the transparencygoing on, which I also could
see being an accelerant.
And that's the secondthing that you mentioned.
Yeah, and I, I think the transparencypiece is, is really powerful and, and
(11:05):
I think there's some real staggeringthings that have come out of it.
60% of the time the cash price isless than what your insurers are
actually negotiating on your behalf.
So for instance, in Maine, there's ahospital where the cash price for a knee
replacement is $15,000, but the carriersare paying $45,000 on that same procedure.
(11:29):
So I think those things are all startingto kind of come together into a, you
know, as part of that perfect storm.
An average person knows this now, likean average person, like my parents'
buddies in their senior community.
One of 'em was giving me a lessonin how he goes to the Google.
He goes to the Google and he typesin cash price for insert drug name
(11:51):
here, and he can, he can find it.
That is what is meaningful in thisexact moment in time that just, it is
now public consciousness that sometimesit is cheaper to pay cash on its face.
That is both a revelation and also akind of paradigm shift in people's
(12:12):
brains like that is happening right now.
Couple other things on, on transparency.
I'd just like to mention too.
Brown Universe came out with a model.
It's a hospital payment cap simulator.
But for any state in the country you canlook at what hospitals are being paid for
medical services that you and I are payingas individuals in the commercial market.
You can look at what they're chargingas a percent of Medicare courts are
(12:35):
starting to say that a fair and reasonableprice is no more than 200% of Medicare.
This model will look at the statehealth plans in every state and tell
you what the savings would be if youmoved from what they're paying the
state health plans to 200% of Medicare.
In Maine, the savings to the statehealth plan is $47 million a year.
(12:57):
It's a 25% reduction.
It's the price.
It goes back to UweReinhardt, the seventies.
It's the prices, stupid.
Two, on transparency there's a lotmore evidence about life expectancies.
People have always heard us has the besthealthcare system, but if you look at
some of the other countries, we're deadlast when you look at life expectancies.
(13:17):
So in the US our lifeexpectancies are going down.
Average age is 78.
The other Europeancountries are at 84 years.
Patient safety still remains an issue.
Leapfrog, it rates hospitalson an A to F scale.
If your hospital is rated C or lower.
You have an 88% higher chance ofnot walking out of that hospital.
(13:38):
That's unconscionable to me.
30% of hospitals get afailing grade of C or lower.
You know, that's, sothat's an opportunity.
And again, we've talked a lot about thephysician trust, so those things are
all conspiring to ignite the consumersand really start to ask questions.
With the transparency, you can startto see how much they're charging
for medical services and drugs.
(14:00):
So even consumers who are just, youknow, like, I don't have time in my life.
I'm way too busy toworry about other people.
Those individuals, they have medical debt.
We had Dr. Wayne Jenkins on thepod, 41% of commercially insured.
Patients or members were delayingor foregoing care due to cost.
As we like, 50% of people aren't takingdrugs 'cause of some the cost issues.
(14:22):
At the same time, we have plan sponsorsand other large purchasers getting some
transparency through more forthrightcontracting terms and the power that
comes from those who choose to acton this revealed information, which
is bigger than price transparency.
There's a lot now possible forplan sponsors to know about how
their money is being spent orsquandered by their vendors.
(14:46):
It starts to be clear how muchmoney Medicare Advantage carriers
make from our tax dollars.
What is it like 70 or 75% of atleast UHCs revenue comes from
taxpayer funded government programs.
Also, there's a growing interest intransparency and like who actually owns
the physician practices because, youknow, PE buys them and tries to conceal
itself a lot of times as the owner.
(15:07):
As we talked about last week withYashaswini Singh, it's becoming just
much more clear to average folks, howmuch money some of these entities,
including hospitals, carriers, PBMs, etcetera, are making off the backs of sick
people or old people or disabled people.
And as Afer mentioned, taxpayersand many find it really unpalatable.
(15:28):
So, all of this I definitely can see,can easily turn into a flywheel because
all these various transparencies thatwind up with the public kind of getting
a bead on what's going on can in a way,impel purchasers maybe to do things
they previously thought were optionalon behalf of members and patients.
So yeah, for sure.
(15:50):
I think we have a flywheel of factorsthat can coalesce their impact here.
Yes, and it actually, to your point,30 to 40% of what we're spending
is for non-direct care that'sgoing to all the intermediaries,
administration, cost margins, and others.
That's a huge number.
So despite the complexity, the problem isvery simple and, and when it's, when you
(16:12):
have the transparency to see that problem,it becomes all the more crystallized.
The third thing that you said here isregulation as a component in all of this.
What did you mean?
So we talked about changing publicopinion, we talked about transparency,
and now we're talking about regulation.
Many employers, 50% of them aren't evenaware of it, but 2021 the Consolidate
(16:35):
Appropriations Act to me is just anearthquake to the healthcare space
and what it really says for the firsttime ever that the chief executives,
the board of directors, anybody thattouches the health plan, has personal
and corporate fiduciary responsibility.
If they are not using the benefit dollarsof their employees and family members
(16:57):
to the highest and best use for thefirst time, you're actually getting some
executives at different organizationsreally starting to ask questions.
And so if you take it to its full extentin Maine, we have a hospital that's doing,
as I said earlier, knee replacements highquality by CMS star ratings for about.
10 to 15,000.
There's another hospital in Maine notvery far away that's doing that same
(17:20):
procedure with lower quality for 75,000.
So presumably what this law starts to sayif your employees are going to that higher
cost hospital and you can get it doneat that lower cost hospital with higher
quality, you are personally responsiblefor making that benefit decision.
And all of a sudden now you'regetting the boards of directors
(17:40):
and CEOs and CFOs actively engagedand making sure that they're buying
healthcare services efficiently.
And I think most states have sometype of litigation in process.
They've been a bunch that havealready circulated through the courts.
They haven't, the courts at this pointhaven't really ruled in favor of the
employees, but many are speculatingsooner or later it's gonna come.
(18:03):
The legislation was really modeled afterwhat happened in the 401k industry, and
so I, I think that's another componenthere where finally executives are
starting to say, Gee, why is theresuch this unwarranted price variation,
and quality variation that exists?
That's always been there.
And now all of a suddenI've got personal risk.
We're not using good due diligenceand prudence in how we acquire
(18:26):
benefits, and I think that'sgonna absolutely change the world.
It also applies to consultants.
There are a lot of times consultantshave gotten as much as 30 or 40%
of their revenue on backend revenueflows that come from the health
plans or other intermediaries.
And all of a sudden, if that'sthere, the consultants have to
disclose how much revenue theyget, both indirect and direct.
(18:48):
And then the plan sponsors andexecutives are gonna have to justify
why they may be paying a muchhigher price for those services.
And I think really all of a suddenyou've got the physicians engaged,
you've got the public engaged,and now you have C-suites engaged.
The third component here of thiscrescendo of underlying factors is
the Consolidated Appropriations Act.
(19:10):
Passed in the very, very end of 2021.
It's now, clarified that the CAAalso requires PBM disclosures.
And I think TPAs thirdparty administrators.
And I kind of liken it, I, I'm gonnasay Peter, to me it's been a little
bit less like a earthquake and alittle bit more like peeling an onion.
I agree.
(19:30):
Because you know, like it first came outand people were like, my plan's fine.
And then you had these, thesedisclosure forms first they
sort of gave it the side eye.
Yeah, it's so true.
Right?
Like, and, and now they're kindof creeping in and starting to
realize just how much money, youknow, for example, there was just
a whistleblower lawsuit that wasfiled the other day where there was a
(19:51):
broker who was taking pharma rebates.
What?
Wow.
Stay tuned actually, there's gonna be ashow coming up with Anne Lewandowski where
we dig into that whistleblower lawsuit.
This is news.
And then you get other plan sponsorswho are looking around thinking what?
And the reason why these lawsuitsare failing right now, and I had a
(20:12):
long conversation with Al Lewis aboutthis is because there's a question
mark who is the aggrieved party.
So like if the plan sponsor ispaying, as you just said, the knee
replacement example that you just gave.
One hospital, good hospital, goodquality, $15,000 for the knee
replacement, other hospital $75,000.
The question here is because the planitself is picking up the difference,
(20:33):
so it's the plan itself that's payingthe extra 60,000 and no one has yet
connected the dots between, hey, ifyour underlying costs go up as a plan,
then members are actually aggrievednext year when their premiums go up.
Like that connectivity hasnot been connected yet.
The second that that happens.
Yikes.
(20:54):
Is all I can say.
Yeah, no, I agree.
And I think when the Department ofLabor put this in place, they kind of
informally said they're gonna treadlightly in the first couple of years.
But again, I, I said earlier thatthis was kind of modeled after the
401k industry on all the hiddenfees that a lot of administrators
had and they treaded lightly.
(21:14):
And then there was just a case whichconnected the dots as you suggested.
And there was a huge sort of financialconsequence of that to the organization,
and that was the wake up call.
So I think you're right, it's kindof flying under the radar now.
You have consultants telling a lot ofplan sponsors, oh, there's nothing to see.
But the speculation is at some point, oneof these cases is gonna hit, and then as
(21:39):
you suggest, then it's gonna be chaos fora bit, but I think that's on the horizon.
I just don't know when.
So we have three factors, as youtalked about, that underpin a lot
of, for example, the posts youhighlight on LinkedIn, and they
definitely create a bit of a trifectathat may add up to a perfect storm.
(21:59):
That is the changing publicopinion that there is unrest.
Members of plans may be more awareof the fact that they can go, you
know, vis-a-vis any num any of thesecash places and get a drug cheaper.
Like members are figuring out that theplan sponsors plan is enabling stuff like
(22:19):
this to happen, and then they connectthe dots because of transparency to
like, Oh, somebody's taking money here.
Like, somebody's making money.
Like, why is it three times moreexpensive on my plan than if I just
go to and get it off of Amazon or MarkCuban or any of these other places?
You start having public opinionchanging, and then you've got regs
like the Consolidated AppropriationsAct that sort of validate some of the
(22:42):
transparency and also create this flywheelwhat's in the middle of the flywheel.
Like we were gonna sum up these threefactors into just like one force majeure.
What would it be?
I think we've talked about it andtouched on all of these things.
As we said it, it's kindof the perfect storm.
It's a bridge too faror a bridge is too far.
When you have a system where theactual people that are providing the
(23:05):
services, clinicians, providers areunhappy, patients are unhappy, and
it's unaffordable, it's all comingtogether and, and I think the big
issue is just this erosion of trust.
We as a country are really starting tolook at all of that, how to reestablish
trust in some of these organizations.
You've just got enough people,you've, you've got this critical
(23:26):
mass of people who are like,wait, we've got an issue here.
And it's all culminating witha lack of trust, which in and
of itself is a huge problem.
It's like that Winston Churchillquote, which I'm remembering
off the top of my head.
"Americans will eventuallyfigure out the right answer after
they've tried everything else".
So if we think about, all right, nowwe've got this eroded trust, which
has wound up transpiring becausewe've let it go to this point.
(23:50):
If we start thinking about thepossible solutions and next steps,
like we're, we're in a trench hereright now, how do we get out of it?
How do we restore this trust?
What happens now?
It's a trillion dollar question.
Or the 3 trillion.
4 trillion, right?
Yeah, true.
I think that trust piece is really, reallyimportant and I think that quote you have
of Churchill, I love and it, it's spot on.
I think a lot of us have believedfor years there's, there's always
(24:14):
been the flavor of the month.
Oh, an HMO is gonnadrive all these savings.
The, you know, Accountable CareAct is gonna drive all these
savings and make things better.
Point solutions, the disease managementand wellness and other things.
I think you know where we areon Main Street is none of those
things have really worked.
And so what we need to go back and itgoes back to the top of the conversation,
(24:34):
what we need to start thinking about iswhat's the root cause of the problems
and how do we start to solve those?
And again, I come backto look at fair pricing.
We should have standardizedaffordable prices.
Is healthcare a utility.
Utilities are describedas the basic necessity.
Maryland has had a price regulationon hospital services for decades
(24:56):
or more that has been effective andnow you see eight states that are
really starting to move ahead on stateregulation that's gonna do things to
improve price controls and other things.
And there are Connecticut,Maryland, mass, Nevada, New Jersey,
Oregon, Rhode Island, Washington.
On the prescription drugs, there are11 states that have formed public
(25:17):
accountability boards, you know,Colorado, Maine, Mass, Minnesota, New
Hampshire, New Jersey, and others.
So I, I think a pathway, becausethey are virtual monopolies,
they're too big to fail.
They're too big for any individualmarket force to change 'em.
We really need to start thinking abouteffective regulation at the national level
that's gonna level the playing field.
(25:38):
As I'm parsing what you just said,one of the things, and Chris Crawford
said it most recently on the pod,if we wanna think about how prices
wind up becoming fair, it's not justtransparency, it's also competition.
If everyone's like, whoa,the price is too high.
Okay, now what?
You have to have a layerof competition otherwise.
(25:59):
It's just the price ishigh and wow, that sucks.
Then you start thinking about, well,how do you bring competition into a
market that is too big to fail, whereyou have these entities where every
time you know, a competitor moves in,it gets bought, or the whole catch and
kill or that is happening right now.
Which basically means that amarket has become unbalanced.
(26:20):
It is no longer a market,it is dysfunctional.
The FTC was, was created toensure that the market is fair.
And there's many places in thecountry that it's currently not.
So generally speaking, there hasto be some level of, of regulation.
It seems like states arepicking up the torch here and
maybe a little bit more nimble.
They're trying to figure out theseaffordability boards and, and doing a
(26:42):
whole bunch of different things, some ofwhich I understand are going quite well.
There's issues elsewhere.
We're in that moment wherepolicymakers need to have the
bandwidth and the agility to learn.
There's a really interestingpodcast EconTalk, you know,
'cause economists talking issomething I can't stay away from.
(27:03):
It's like a magnet.
But anyway, it, it is something that Ithink is fairly unappreciated, that you
can't just make a policy, the end, right?
That those policies need toevolve just like a business
is gonna evolve its product.
So when you have these entities that aretoo big to fail, that are regulated by
policy, it's going to necessarily needto be some sort of evolving effort there.
(27:26):
But there's just so much opportunity,you know, like Dr. John Rodis is our
independent director at QC Health,and he is a former hospital, CEO.
He took his hospital from, I thinkit was like a C Leapfrog grade up
to an A. And the one thing that hesays, if you go to a C hospital,
you're twice as likely to die I think.
Yeah, 80%, 88% higher chance of havinga fatality for anything you go in for.
(27:50):
Which is like, think about that.
88% more likely to have a fatalityand there was no incentive.
Like no money in trying to levelup the safety at his hospital.
Yeah.
Actually we had a, I saidearlier at the top that I was
the CEO of a purchaser alliance.
So we had a talk with a hospital inthe state, the CFO, who actually said
(28:12):
aloud to a room, there is no incentivefor increased hospital safety because
they actually earned 30% more revenueif a patient has a complication.
Said it out loud.
What I'm taking away from this, statesare on it and it might go well, it might
create kind of its own issues, but youhave eyes on it, very astutely right now.
(28:32):
There's a great need.
There's enough unrest at the state levelthat that states are really digging in.
Oh, I'd agree with that.
I mean, a good example, goingback to Leapfrog and, and there's
discussion around a utility.
Can you imagine if we had an airlinethat had a 92% or an 88% higher
chance of having a, you know,fatalities due to preventable errors,
(28:53):
we wouldn't allow them to fly.
It's, it's really interestingthat we allow hospitals to operate
with that type of defect ratewhen it's preventable and fixable.
We need to fix those types ofthings to really get at some of
the issues we're talking about.
Right.
So a number of things going on atthe state level from regulation
to maybe this should be a utility.
Not to bury the lead on this one,but we just had Arkansas with a
(29:16):
bunch of states right on its heels,forbidding PBMs from owning pharmacies.
These are big, big changes insome cases that are happening.
We mentioned earlier like Maryland.
I think we're at a point wherewhat we need are some good
demonstration projects, if you will.
States are great laboratoriesto try different things.
I mean, I can go back towhen I was a benefit manager
(29:39):
and Leapfrog first came out.
We had some of the most unsafehospitals in Maine, in the country,
and we collectively came togetheras purchasers and the state to say,
we're gonna emphasize hospital safety.
And we changed copays and deductibles andother things to reward those hospitals
that were doing the right thing.
About two years ago, the governoraccepted award for Maine having the
(29:59):
safest hospitals in the country.
So I, I think we need to look todifferent models in different places,
states or a perfect laboratory, andthen that might build a momentum that
we can find the best fit solution thatwe can start to implement nationally.
It's gotten to the point whereit's gonna take, I at least I feel
some national sort of level of theplaying field around expectations and
(30:22):
conflicts of interest and other things.
So I think it's gonna be a combinationof federal and state collaboration
that starts to drive to some ofthese root causes that we're finally
getting back to what's reallycausing some of this to happen.
We're paying four times more forhealthcare in this country than
any other industrialized country.
It's the prices we needto figure that out.
Got it.
So my takeaway from all of this,this last part of our conversation,
(30:46):
is that at the state level, statescan act as sort of laboratories.
And this is kind of what I wassaying before, that policies need to
evolve little trial and error here.
This is just such a multivariate.
Hey newsflash, healthcareis very complicated.
Lots of people have their okayfingers in the cookie jar here,
so it's not necessarily a straightline between we're gonna do this
(31:07):
and this is gonna be the outcome.
Lots of really smart people are gonnatry to figure out how to game the system,
so it's hard to be smarter than someof these incredibly deft individuals.
The takeaways that I'm gathering hereare if you do things at the state level,
maybe and, and maybe it's just the stateresponding to voters, or maybe it's
the business community in that state.
You know, the other thing that begs tobe said here is that healthcare is local.
(31:30):
So some things you just can't scale.
So there are actually probably thingswhere the ultimate goal isn't to
roll them out across the country.
The ultimate goal might be to figureout how to enable maybe even counties.
At a time, like there was some reallysuccessful stuff that was done in North
Carolina where basically the whole thing,or I, we had, um, Dr. Beau Raymond on from
Ochsner in Louisiana, where even withintheir service area in Louisiana, there
(31:57):
was different needs and, and differentthings that worked or didn't work.
So, you know, part of this couldbe just like, how do you empower a
local market, whatever geography thatcomprises, to do what they need to to do.
So make a lab, figure out whatgood looks like, then others can
learn from those experiments.
And then you also had brought up Europeso there's probably also lessons there.
(32:18):
A really important point you justmade that, that healthcare is local.
And again, I, I shared that as involvedin a purchaser alliance here that
included the state health systems,physicians, businesses, and we could
do things collaboratively that reallysolve some of these root causes.
This has to be done as a village.
How do we get in our communities,all the parties in the room, there'll
(32:40):
be tons of stuff we can't agree on,but let's find those things we do
agree on and try to come up withsomething that starts to address that
everybody has to be at the table.
And hopefully we'll find themiddle ground seems to be a lost
art in this country at this point.
In the middle ground.
Yeah, the middle ground,the elusive middle ground.
But to your exact point, like there'splenty of things where incentives are
(33:01):
wildly misaligned, but just becausethose misalignments exist doesn't
mean there aren't some things thateverybody can throw their backs into.
And that's generally speaking,those are the quick wins.
Just because we can't do somethings doesn't mean that we can't
come together in in other places.
Peter Hayes, is there anything I neglectedto ask you that you want to mention here?
(33:22):
No, I just appreciate you soeloquently restating or, or actually
interpreting what I was trying to say.
So I think at least there's somemiddle ground I think we have found
on ways that we can move forward.
Hopefully others will take the leadand and move their communities forward.
Peter Hayes, if someone is interestedin learning about the work that you
are doing, where would you direct them?
(33:44):
Probably the best place might be justmy LinkedIn profile at this point.
I'm retired and stilldoing consulting work.
Welcome any and all commentsand glad to assist in any way.
Peter Hayes, thank you so much forbeing on Relentless Health Value today.
Thank you.
Hi, this is Scott Conard.
One of the highlights of my week iswhen Relentless Health Value comes out.
I love to listen and then to think,who can I send this to, that it
(34:07):
would bless them and tremendouslyhelp them think through and solve
a problem they're dealing with.
It's, again, one of the highlightsof my week, and I hope that
you'll join me in appreciating andsharing Relentless Health Value.
Episode 475.
"Is This a Moment or a Movement? Todaywe hear the viewpoint of Peter Hayes."
American Healthcare Entrepreneurs andExecutives You Want To Know, Talking.
(00:22):
Relentlessly Seeking Value.
I was talking to Peter Hayes, my guestthis week, and I said, Peter, you
post a lot about many, many differenttopics on LinkedIn and elsewhere.
If you had to roll up all of yourposts into a few main, I don't know,
change-making vectors or forces of change,roads to Damascus, what would they be?
(00:45):
And you know, do you wanna comeon the pod and tell the tribe
here what you're thinking?
And Peter said.
I would love to.
So this show is going to be a top downkind of let's try to get a handle on
said major forces of change and howthose forces have swirled together
to create the place that we are now.
So most of this episode, I'm gonnastrongly suggest Relentless Health
(01:08):
Value tribe members who tune infrequently there's not any, Oh wow,
what a revelation, probably that'sgonna happen in the show today.
And to be frank, that's kind of the point.
It wouldn't be a major force if youall weren't aware of it now, would it?
The goal here is to figure out howto organize so many posts about so
(01:29):
many different things on LinkedIn.
There's so many of these micromoments, maybe I'd call them.
How do we organize them into a manageablenumber of strategic fundamental goings on
that we all can wrap our brains around?
That was my ask of Peter, and thatis not easy because it's a valid
question a lot of times when talkingabout healthcare transformation,
(01:51):
is it a moment or is it a movement?
This show is again what PeterHayes thinks the movements are.
The thing is though, it issurprisingly hard to discern what
the forces of change actually are.
What we often experience as a bigdramatic inflection point has almost
always been gestating for a while.
(02:13):
This creates an opportunity for usall here in the tribe because if we
see the changes early, or even better,spark the changes and inflection
point can really be a strategic boon.
And let me tell you, I want everyonelistening to have a strategic advantage
over those who, I don't know, maybeare a little bit less concerned with
putting patients before profits.
(02:34):
But yeah, usually inflection points havebeen a long time coming because forces
of change have been battering away for awhile until they finally break through.
I say this to acknowledge, we'vebeen talking about tipping points
and the total cost of healthcaresimply cannot get any higher.
We've been talking about this for probablydecades, but Peter says right now he
(02:56):
firmly believes we have a force majeureof bridges too far, of obvious over
the line activities that offend normalpeople's sense of justice and fair play.
Peter believes we're at a reallyunprecedented place right now.
So even if there's some starts andstops, some two bigs to fail, like
for example, some of the lawsuits aregetting thrown out because it's legally
(03:18):
unclear who the in aggrieved party is.
Yet too much of this country isfeeling like an aggrieved party,
so it's only a matter of time.
This is the major takeawayfrom the show today.
Peter's view of how three main forcesin the ecosystem all braid together
and reinforce each other and havecreated a kind of inexorableness
(03:39):
that something's gotta give.
And part of the equation here is just,and I'm mentioning this because we
keep talking about it, is a brutallack of trust that's really pervasive
across so many parts of the industry.
Patient to healthcare system, clinicianto healthcare system, et cetera.
As you listen to the show, definitelyconsider the shows from earlier with
(04:01):
Dr. Kenny Cole and Dr. ChristineHale about high-cost claimants.
These shows are another viewinto this exact basic topic.
They also show what trustcan bring us if we earn it.
I'm kind of thinking it couldbe cool to do shows like this
periodically where we get differentpeople to answer the question, what
are the major forces of change?
(04:22):
How are you rolling them up, and whatis your assessment of where we are
now in the journey of transformation?
If I get enough of you who are like,yeah, that's a great idea, I probably
will be less likely to forget about it.
Peter Hayes.
My guest today istechnically at least retired.
He was director of Benefits at HannafordSupermarkets for about 25 years.
He's been on the advisoryboards of Express Scripts and
(04:44):
Definitive Health among others.
He served on two healthcare reformcommissions in Maine, appointed
by two different governors.
He headed up the PurchaserAlliance in Maine.
My name is Stacey Richter,and this podcast is sponsored
by Aventria Health Group.
Peter Hayes, welcome backto Relentless Health Value.
I am glad to be here.
Thanks for having me back.
One of the things that I reallyappreciate that you're doing in your
(05:07):
productive retirement, here it is,is being very active on LinkedIn and
highlighting just so many issues.
So I have to admit that one of thereasons why I invited you to come back
is just to try to get your assessmentof all of these things that you talk
about so frequently on LinkedIn.
(05:28):
What are the ones that you feel likeare adding up to this unique moment
in time or this new tone and urgencythat, that you have mentioned.
So I think for me, I, as I've spent,30 years in the healthcare space, I've
been somewhat frustrated just about howhard it is to change some of the things
that are out there that are drivingall the things we're frustrated with.
(05:50):
I do think we're at thisunique tipping point.
It's sort of the perfect storm of events.
I think there's three things that havereally reached us to that tipping point.
The three major things arechanging public opinion.
Two, transparency.
The fact that we're really starting toget some information about our healthcare
delivery system, both from quality,cost, equity, has really ignited,
(06:14):
sort of, lots of voices in the spaceto really call for, for some changes.
And then regulation increasinglyis gonna play a role how states are
leading the way to find some answersto how we can make healthcare better
quality, more affordable, better access.
So I think those are three thingsthat are all colliding pretty
quickly that is really gonna drivethis change or transformation that
(06:37):
we've been talking about for years.
I'm going to be cynical for a moment.
We've been hearing aboutthe tipping point, right?
Like we've been hearing now it'sthe moment healthcare cannot
become any more expensive.
Oh my goodness.
It has reached 15% of the GDP, right?
Like we have heard this for literally,I'm gonna say at a minimum, a
(07:00):
decade or more, probably more.
So these are fighting words.
I think we should definitely dig in onwhy these three factors of which you
speak are just so unique and so compellingor have reached such a critical mass
that after all this talk now is, is themoment and, and the first thing that
(07:24):
you said was, changing public opinion.
And just to weigh in here for asec, this one is actually we have
never really had that before.
I don't think, to your point, I've reallyever seen the public this fired up.
Yeah, I agree and I absolutelyagree that we've all been having
(07:44):
these conversations for decades now.
But not talking about the right things.
When I said it's a perfect storm,sometime it takes just an event
to really ignite the issue.
Unfortunate, but I was really surprisedby the reaction to the assassination
of Brian Thompson at UnitedHealthcare.
LinkedIn just exploded with people talkingabout and realizing we have gotten to
(08:09):
a point where something has to change.
And what really shocked me is I have ayoung son who just recently graduated
from college and I kind of asked himwhat, what his peer group reaction was.
It was shocking that many felt.
Yes, it was unfortunate, but it wasdeserved and I think that really has
sent, it's just been the symbolic messagethat people can really grab a hold of
(08:31):
and say something is just really wrong.
And I'll take that on thepublic engagement piece, kind
of couple things tied to it.
One, what's as a follow up tothat, it's the first time that
I've seen the board of directors atUnitedHealthcare started to demand that
UnitedHealthcare be accountable forwhat they're doing with denials and
some of their audits and other things.
(08:52):
Two, it's the first time I'veseen physicians really starting
to speak up and say they're justnot comfortable where things are.
There's an interesting stat where in 2020.
Both the public and physicians had abouta 71% trust level in hospitals and care.
In 2021, fast forward only 40% did.
That is a huge drop in sort ofpublic and physician confidence
(09:16):
in our healthcare delivery system.
Hi, I'm Chris Crawford, CEO,and founder of RxSaveCard.
If you love the Relentless HealthValue podcast like I do, be sure to
follow their LinkedIn page and join theconversation about the topics every week.
Thanks so much for listening.
There are a number ofthings you just said.
As you mentioned the BrianThompson assassination and it
(09:39):
is horrifying to think vigilantejustice at any level is okay.
At the same time, it's like the lidgot blown off the pressure cooker.
It's almost like citizens of this countrylooked around and started sharing stories,
and then it just almost seems like it'sbecome now, it's socially acceptable
(10:01):
to start talking about your stories.
Everybody realizes everybody elsehas a story like, Hey, that time I
went to the ER and got charged andyada yada, blew out my credit cards.
You know, like these stories arebecoming so commonplace and I think
that everybody just all of a suddenrealizes how common they are,
which just accelerates the trend.
60% of Americans have medical debt, soit's becoming a real affordability issue.
(10:24):
And it's actually gotten to the pointwhere a lot of consumers are foregoing
preventative medications and services andother things 'cause they can't afford 'em.
Physicians and other healthcareprofessionals, we had Komal Bajaj, Dr.
Komal Bajaj on the pod, talking justabout the number of doctors and people
who work in a hospital who do not trustthat their leadership has their back.
(10:45):
You put all of these thingstogether and in the court of public
opinion, now we have a trial thatmatters more to legislatures.
We also have the transparencygoing on, which I also could
see being an accelerant.
And that's the secondthing that you mentioned.
Yeah, and I, I think the transparencypiece is, is really powerful and, and
(11:05):
I think there's some real staggeringthings that have come out of it.
60% of the time the cash price isless than what your insurers are
actually negotiating on your behalf.
So for instance, in Maine, there's ahospital where the cash price for a knee
replacement is $15,000, but the carriersare paying $45,000 on that same procedure.
(11:29):
So I think those things are all startingto kind of come together into a, you
know, as part of that perfect storm.
An average person knows this now, likean average person, like my parents'
buddies in their senior community.
One of 'em was giving me a lessonin how he goes to the Google.
He goes to the Google and he typesin cash price for insert drug name
(11:51):
here, and he can, he can find it.
That is what is meaningful in thisexact moment in time that just, it is
now public consciousness that sometimesit is cheaper to pay cash on its face.
That is both a revelation and also akind of paradigm shift in people's
(12:12):
brains like that is happening right now.
Couple other things on, on transparency.
I'd just like to mention too.
Brown Universe came out with a model.
It's a hospital payment cap simulator.
But for any state in the country you canlook at what hospitals are being paid for
medical services that you and I are payingas individuals in the commercial market.
You can look at what they're chargingas a percent of Medicare courts are
(12:35):
starting to say that a fair and reasonableprice is no more than 200% of Medicare.
This model will look at the statehealth plans in every state and tell
you what the savings would be if youmoved from what they're paying the
state health plans to 200% of Medicare.
In Maine, the savings to the statehealth plan is $47 million a year.
(12:57):
It's a 25% reduction.
It's the price.
It goes back to UweReinhardt, the seventies.
It's the prices, stupid.
Two, on transparency there's a lotmore evidence about life expectancies.
People have always heard us has the besthealthcare system, but if you look at
some of the other countries, we're deadlast when you look at life expectancies.
(13:17):
So in the US our lifeexpectancies are going down.
Average age is 78.
The other Europeancountries are at 84 years.
Patient safety still remains an issue.
Leapfrog, it rates hospitalson an A to F scale.
If your hospital is rated C or lower.
You have an 88% higher chance ofnot walking out of that hospital.
(13:38):
That's unconscionable to me.
30% of hospitals get afailing grade of C or lower.
You know, that's, sothat's an opportunity.
And again, we've talked a lot about thephysician trust, so those things are
all conspiring to ignite the consumersand really start to ask questions.
With the transparency, you can startto see how much they're charging
for medical services and drugs.
(14:00):
So even consumers who are just, youknow, like, I don't have time in my life.
I'm way too busy toworry about other people.
Those individuals, they have medical debt.
We had Dr. Wayne Jenkins on thepod, 41% of commercially insured.
Patients or members were delayingor foregoing care due to cost.
As we like, 50% of people aren't takingdrugs 'cause of some the cost issues.
(14:22):
At the same time, we have plan sponsorsand other large purchasers getting some
transparency through more forthrightcontracting terms and the power that
comes from those who choose to acton this revealed information, which
is bigger than price transparency.
There's a lot now possible forplan sponsors to know about how
their money is being spent orsquandered by their vendors.
(14:46):
It starts to be clear how muchmoney Medicare Advantage carriers
make from our tax dollars.
What is it like 70 or 75% of atleast UHCs revenue comes from
taxpayer funded government programs.
Also, there's a growing interest intransparency and like who actually owns
the physician practices because, youknow, PE buys them and tries to conceal
itself a lot of times as the owner.
(15:07):
As we talked about last week withYashaswini Singh, it's becoming just
much more clear to average folks, howmuch money some of these entities,
including hospitals, carriers, PBMs, etcetera, are making off the backs of sick
people or old people or disabled people.
And as Afer mentioned, taxpayersand many find it really unpalatable.
(15:28):
So, all of this I definitely can see,can easily turn into a flywheel because
all these various transparencies thatwind up with the public kind of getting
a bead on what's going on can in a way,impel purchasers maybe to do things
they previously thought were optionalon behalf of members and patients.
So yeah, for sure.
(15:50):
I think we have a flywheel of factorsthat can coalesce their impact here.
Yes, and it actually, to your point,30 to 40% of what we're spending
is for non-direct care that'sgoing to all the intermediaries,
administration, cost margins, and others.
That's a huge number.
So despite the complexity, the problem isvery simple and, and when it's, when you
(16:12):
have the transparency to see that problem,it becomes all the more crystallized.
The third thing that you said here isregulation as a component in all of this.
What did you mean?
So we talked about changing publicopinion, we talked about transparency,
and now we're talking about regulation.
Many employers, 50% of them aren't evenaware of it, but 2021 the Consolidate
(16:35):
Appropriations Act to me is just anearthquake to the healthcare space
and what it really says for the firsttime ever that the chief executives,
the board of directors, anybody thattouches the health plan, has personal
and corporate fiduciary responsibility.
If they are not using the benefit dollarsof their employees and family members
(16:57):
to the highest and best use for thefirst time, you're actually getting some
executives at different organizationsreally starting to ask questions.
And so if you take it to its full extentin Maine, we have a hospital that's doing,
as I said earlier, knee replacements highquality by CMS star ratings for about.
10 to 15,000.
There's another hospital in Maine notvery far away that's doing that same
(17:20):
procedure with lower quality for 75,000.
So presumably what this law starts to sayif your employees are going to that higher
cost hospital and you can get it doneat that lower cost hospital with higher
quality, you are personally responsiblefor making that benefit decision.
And all of a sudden now you'regetting the boards of directors
(17:40):
and CEOs and CFOs actively engagedand making sure that they're buying
healthcare services efficiently.
And I think most states have sometype of litigation in process.
They've been a bunch that havealready circulated through the courts.
They haven't, the courts at this pointhaven't really ruled in favor of the
employees, but many are speculatingsooner or later it's gonna come.
(18:03):
The legislation was really modeled afterwhat happened in the 401k industry, and
so I, I think that's another componenthere where finally executives are
starting to say, Gee, why is theresuch this unwarranted price variation,
and quality variation that exists?
That's always been there.
And now all of a suddenI've got personal risk.
We're not using good due diligenceand prudence in how we acquire
(18:26):
benefits, and I think that'sgonna absolutely change the world.
It also applies to consultants.
There are a lot of times consultantshave gotten as much as 30 or 40%
of their revenue on backend revenueflows that come from the health
plans or other intermediaries.
And all of a sudden, if that'sthere, the consultants have to
disclose how much revenue theyget, both indirect and direct.
(18:48):
And then the plan sponsors andexecutives are gonna have to justify
why they may be paying a muchhigher price for those services.
And I think really all of a suddenyou've got the physicians engaged,
you've got the public engaged,and now you have C-suites engaged.
The third component here of thiscrescendo of underlying factors is
the Consolidated Appropriations Act.
(19:10):
Passed in the very, very end of 2021.
It's now, clarified that the CAAalso requires PBM disclosures.
And I think TPAs thirdparty administrators.
And I kind of liken it, I, I'm gonnasay Peter, to me it's been a little
bit less like a earthquake and alittle bit more like peeling an onion.
I agree.
(19:30):
Because you know, like it first came outand people were like, my plan's fine.
And then you had these, thesedisclosure forms first they
sort of gave it the side eye.
Yeah, it's so true.
Right?
Like, and, and now they're kindof creeping in and starting to
realize just how much money, youknow, for example, there was just
a whistleblower lawsuit that wasfiled the other day where there was a
(19:51):
broker who was taking pharma rebates.
What?
Wow.
Stay tuned actually, there's gonna be ashow coming up with Anne Lewandowski where
we dig into that whistleblower lawsuit.
This is news.
And then you get other plan sponsorswho are looking around thinking what?
And the reason why these lawsuitsare failing right now, and I had a
(20:12):
long conversation with Al Lewis aboutthis is because there's a question
mark who is the aggrieved party.
So like if the plan sponsor ispaying, as you just said, the knee
replacement example that you just gave.
One hospital, good hospital, goodquality, $15,000 for the knee
replacement, other hospital $75,000.
The question here is because the planitself is picking up the difference,
(20:33):
so it's the plan itself that's payingthe extra 60,000 and no one has yet
connected the dots between, hey, ifyour underlying costs go up as a plan,
then members are actually aggrievednext year when their premiums go up.
Like that connectivity hasnot been connected yet.
The second that that happens.
Yikes.
(20:54):
Is all I can say.
Yeah, no, I agree.
And I think when the Department ofLabor put this in place, they kind of
informally said they're gonna treadlightly in the first couple of years.
But again, I, I said earlier thatthis was kind of modeled after the
401k industry on all the hiddenfees that a lot of administrators
had and they treaded lightly.
(21:14):
And then there was just a case whichconnected the dots as you suggested.
And there was a huge sort of financialconsequence of that to the organization,
and that was the wake up call.
So I think you're right, it's kindof flying under the radar now.
You have consultants telling a lot ofplan sponsors, oh, there's nothing to see.
But the speculation is at some point, oneof these cases is gonna hit, and then as
(21:39):
you suggest, then it's gonna be chaos fora bit, but I think that's on the horizon.
I just don't know when.
So we have three factors, as youtalked about, that underpin a lot
of, for example, the posts youhighlight on LinkedIn, and they
definitely create a bit of a trifectathat may add up to a perfect storm.
(21:59):
That is the changing publicopinion that there is unrest.
Members of plans may be more awareof the fact that they can go, you
know, vis-a-vis any num any of thesecash places and get a drug cheaper.
Like members are figuring out that theplan sponsors plan is enabling stuff like
(22:19):
this to happen, and then they connectthe dots because of transparency to
like, Oh, somebody's taking money here.
Like, somebody's making money.
Like, why is it three times moreexpensive on my plan than if I just
go to and get it off of Amazon or MarkCuban or any of these other places?
You start having public opinionchanging, and then you've got regs
like the Consolidated AppropriationsAct that sort of validate some of the
(22:42):
transparency and also create this flywheelwhat's in the middle of the flywheel.
Like we were gonna sum up these threefactors into just like one force majeure.
What would it be?
I think we've talked about it andtouched on all of these things.
As we said it, it's kindof the perfect storm.
It's a bridge too faror a bridge is too far.
When you have a system where theactual people that are providing the
(23:05):
services, clinicians, providers areunhappy, patients are unhappy, and
it's unaffordable, it's all comingtogether and, and I think the big
issue is just this erosion of trust.
We as a country are really starting tolook at all of that, how to reestablish
trust in some of these organizations.
You've just got enough people,you've, you've got this critical
(23:26):
mass of people who are like,wait, we've got an issue here.
And it's all culminating witha lack of trust, which in and
of itself is a huge problem.
It's like that Winston Churchillquote, which I'm remembering
off the top of my head.
"Americans will eventuallyfigure out the right answer after
they've tried everything else".
So if we think about, all right, nowwe've got this eroded trust, which
has wound up transpiring becausewe've let it go to this point.
(23:50):
If we start thinking about thepossible solutions and next steps,
like we're, we're in a trench hereright now, how do we get out of it?
How do we restore this trust?
What happens now?
It's a trillion dollar question.
Or the 3 trillion.
4 trillion, right?
Yeah, true.
I think that trust piece is really, reallyimportant and I think that quote you have
of Churchill, I love and it, it's spot on.
I think a lot of us have believedfor years there's, there's always
(24:14):
been the flavor of the month.
Oh, an HMO is gonnadrive all these savings.
The, you know, Accountable CareAct is gonna drive all these
savings and make things better.
Point solutions, the disease managementand wellness and other things.
I think you know where we areon Main Street is none of those
things have really worked.
And so what we need to go back and itgoes back to the top of the conversation,
(24:34):
what we need to start thinking about iswhat's the root cause of the problems
and how do we start to solve those?
And again, I come backto look at fair pricing.
We should have standardizedaffordable prices.
Is healthcare a utility.
Utilities are describedas the basic necessity.
Maryland has had a price regulationon hospital services for decades
(24:56):
or more that has been effective andnow you see eight states that are
really starting to move ahead on stateregulation that's gonna do things to
improve price controls and other things.
And there are Connecticut,Maryland, mass, Nevada, New Jersey,
Oregon, Rhode Island, Washington.
On the prescription drugs, there are11 states that have formed public
(25:17):
accountability boards, you know,Colorado, Maine, Mass, Minnesota, New
Hampshire, New Jersey, and others.
So I, I think a pathway, becausethey are virtual monopolies,
they're too big to fail.
They're too big for any individualmarket force to change 'em.
We really need to start thinking abouteffective regulation at the national level
that's gonna level the playing field.
(25:38):
As I'm parsing what you just said,one of the things, and Chris Crawford
said it most recently on the pod,if we wanna think about how prices
wind up becoming fair, it's not justtransparency, it's also competition.
If everyone's like, whoa,the price is too high.
Okay, now what?
You have to have a layerof competition otherwise.
(25:59):
It's just the price ishigh and wow, that sucks.
Then you start thinking about, well,how do you bring competition into a
market that is too big to fail, whereyou have these entities where every
time you know, a competitor moves in,it gets bought, or the whole catch and
kill or that is happening right now.
Which basically means that amarket has become unbalanced.
(26:20):
It is no longer a market,it is dysfunctional.
The FTC was, was created toensure that the market is fair.
And there's many places in thecountry that it's currently not.
So generally speaking, there hasto be some level of, of regulation.
It seems like states arepicking up the torch here and
maybe a little bit more nimble.
They're trying to figure out theseaffordability boards and, and doing a
(26:42):
whole bunch of different things, some ofwhich I understand are going quite well.
There's issues elsewhere.
We're in that moment wherepolicymakers need to have the
bandwidth and the agility to learn.
There's a really interestingpodcast EconTalk, you know,
'cause economists talking issomething I can't stay away from.
(27:03):
It's like a magnet.
But anyway, it, it is something that Ithink is fairly unappreciated, that you
can't just make a policy, the end, right?
That those policies need toevolve just like a business
is gonna evolve its product.
So when you have these entities that aretoo big to fail, that are regulated by
policy, it's going to necessarily needto be some sort of evolving effort there.
(27:26):
But there's just so much opportunity,you know, like Dr. John Rodis is our
independent director at QC Health,and he is a former hospital, CEO.
He took his hospital from, I thinkit was like a C Leapfrog grade up
to an A. And the one thing that hesays, if you go to a C hospital,
you're twice as likely to die I think.
Yeah, 80%, 88% higher chance of havinga fatality for anything you go in for.
(27:50):
Which is like, think about that.
88% more likely to have a fatalityand there was no incentive.
Like no money in trying to levelup the safety at his hospital.
Yeah.
Actually we had a, I saidearlier at the top that I was
the CEO of a purchaser alliance.
So we had a talk with a hospital inthe state, the CFO, who actually said
(28:12):
aloud to a room, there is no incentivefor increased hospital safety because
they actually earned 30% more revenueif a patient has a complication.
Said it out loud.
What I'm taking away from this, statesare on it and it might go well, it might
create kind of its own issues, but youhave eyes on it, very astutely right now.
(28:32):
There's a great need.
There's enough unrest at the state levelthat that states are really digging in.
Oh, I'd agree with that.
I mean, a good example, goingback to Leapfrog and, and there's
discussion around a utility.
Can you imagine if we had an airlinethat had a 92% or an 88% higher
chance of having a, you know,fatalities due to preventable errors,
(28:53):
we wouldn't allow them to fly.
It's, it's really interestingthat we allow hospitals to operate
with that type of defect ratewhen it's preventable and fixable.
We need to fix those types ofthings to really get at some of
the issues we're talking about.
Right.
So a number of things going on atthe state level from regulation
to maybe this should be a utility.
Not to bury the lead on this one,but we just had Arkansas with a
(29:16):
bunch of states right on its heels,forbidding PBMs from owning pharmacies.
These are big, big changes insome cases that are happening.
We mentioned earlier like Maryland.
I think we're at a point wherewhat we need are some good
demonstration projects, if you will.
States are great laboratoriesto try different things.
I mean, I can go back towhen I was a benefit manager
(29:39):
and Leapfrog first came out.
We had some of the most unsafehospitals in Maine, in the country,
and we collectively came togetheras purchasers and the state to say,
we're gonna emphasize hospital safety.
And we changed copays and deductibles andother things to reward those hospitals
that were doing the right thing.
About two years ago, the governoraccepted award for Maine having the
(29:59):
safest hospitals in the country.
So I, I think we need to look todifferent models in different places,
states or a perfect laboratory, andthen that might build a momentum that
we can find the best fit solution thatwe can start to implement nationally.
It's gotten to the point whereit's gonna take, I at least I feel
some national sort of level of theplaying field around expectations and
(30:22):
conflicts of interest and other things.
So I think it's gonna be a combinationof federal and state collaboration
that starts to drive to some ofthese root causes that we're finally
getting back to what's reallycausing some of this to happen.
We're paying four times more forhealthcare in this country than
any other industrialized country.
It's the prices we needto figure that out.
Got it.
So my takeaway from all of this,this last part of our conversation,
(30:46):
is that at the state level, statescan act as sort of laboratories.
And this is kind of what I wassaying before, that policies need to
evolve little trial and error here.
This is just such a multivariate.
Hey newsflash, healthcareis very complicated.
Lots of people have their okayfingers in the cookie jar here,
so it's not necessarily a straightline between we're gonna do this
(31:07):
and this is gonna be the outcome.
Lots of really smart people are gonnatry to figure out how to game the system,
so it's hard to be smarter than someof these incredibly deft individuals.
The takeaways that I'm gathering hereare if you do things at the state level,
maybe and, and maybe it's just the stateresponding to voters, or maybe it's
the business community in that state.
You know, the other thing that begs tobe said here is that healthcare is local.
(31:30):
So some things you just can't scale.
So there are actually probably thingswhere the ultimate goal isn't to
roll them out across the country.
The ultimate goal might be to figureout how to enable maybe even counties.
At a time, like there was some reallysuccessful stuff that was done in North
Carolina where basically the whole thing,or I, we had, um, Dr. Beau Raymond on from
Ochsner in Louisiana, where even withintheir service area in Louisiana, there
(31:57):
was different needs and, and differentthings that worked or didn't work.
So, you know, part of this couldbe just like, how do you empower a
local market, whatever geography thatcomprises, to do what they need to to do.
So make a lab, figure out whatgood looks like, then others can
learn from those experiments.
And then you also had brought up Europeso there's probably also lessons there.
(32:18):
A really important point you justmade that, that healthcare is local.
And again, I, I shared that as involvedin a purchaser alliance here that
included the state health systems,physicians, businesses, and we could
do things collaboratively that reallysolve some of these root causes.
This has to be done as a village.
How do we get in our communities,all the parties in the room, there'll
(32:40):
be tons of stuff we can't agree on,but let's find those things we do
agree on and try to come up withsomething that starts to address that
everybody has to be at the table.
And hopefully we'll find themiddle ground seems to be a lost
art in this country at this point.
In the middle ground.
Yeah, the middle ground,the elusive middle ground.
But to your exact point, like there'splenty of things where incentives are
(33:01):
wildly misaligned, but just becausethose misalignments exist doesn't
mean there aren't some things thateverybody can throw their backs into.
And that's generally speaking,those are the quick wins.
Just because we can't do somethings doesn't mean that we can't
come together in in other places.
Peter Hayes, is there anything I neglectedto ask you that you want to mention here?
(33:22):
No, I just appreciate you soeloquently restating or, or actually
interpreting what I was trying to say.
So I think at least there's somemiddle ground I think we have found
on ways that we can move forward.
Hopefully others will take the leadand and move their communities forward.
Peter Hayes, if someone is interestedin learning about the work that you
are doing, where would you direct them?
(33:44):
Probably the best place might be justmy LinkedIn profile at this point.
I'm retired and stilldoing consulting work.
Welcome any and all commentsand glad to assist in any way.
Peter Hayes, thank you so much forbeing on Relentless Health Value today.
Thank you.
Hi, this is Scott Conard.
One of the highlights of my week iswhen Relentless Health Value comes out.
I love to listen and then to think,who can I send this to, that it
(34:07):
would bless them and tremendouslyhelp them think through and solve
a problem they're dealing with.
It's, again, one of the highlightsof my week, and I hope that
you'll join me in appreciating andsharing Relentless Health Value.
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