August 21, 2025 • 31 mins
In Episode 484 of Relentless Health Value, host Stacey Richter talks with Dave Chase from Health Rosetta about the three most pressing questions faced by self-insured employers today.
The discussion covers how to verify if a benefits advisor truly protects employer interests, avoiding personal liability when third-party administrator contracts have hidden conflicts, and identifying if employers are being systematically overcharged on pharmacy costs despite PBM guarantees.
The episode emphasizes the importance of accessing comprehensive data to identify conflicts and transparency in reporting, and it highlights open source resources available to create high-performance health plans. The conversation also mentions noteworthy related episodes and cases to provide further context and insights.
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06:36 What questions does a plan sponsor need to ask their consultant, EBC, or broker to ensure they are protecting the interest of the plan sponsor?
07:59 EP478 with Andreas Mang and Jon Camire.
08:49 EP453 with Claire Brockbank.
09:51 EP433 with Justin Leader.
09:53 EP436 with Elizabeth Mitchell.
11:03 How can plan sponsors avoid personal liability when their TPA has hidden conflicts of interest?
11:40 Tiara Yachts v. Blue Cross Blue Shield of Michigan lawsuit.
13:48 EP483 (Part 1) with Jonathan Baran.
14:18 EP457 with Cynthia Fisher.
16:18 The Marshall-Hickenlooper bill called the Price Tags Act.
16:50 Summer Short with Elizabeth Mitchell.
17:36 How do plan sponsors figure out if they are being overcharged for pharmacy benefits?
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Stacey Richter (00:00):
Episode 484.
"What Are the Three Most BurningQuestions That Plan Sponsors Have Right
Now?" Today I speak with Dave Chase.
Tom Nash (00:18):
American Healthcare Entrepreneurs and Executives
You Want to Know, Talking.
Relentlessly Seeking Value.
Stacey Richter (00:27):
Today I am speaking with Dave Chase from Health Rosetta,
and I'm asking Dave Chase threeinferno level burning questions.
Questions that across the country,many self-insured employers are
trying to find the answers to.
Now an important underlying pointthat comes across loud and clear,
(00:48):
but remains unsaid actually in theconversation that follows — is this:
There are amazing brokers and EBCsand benefits advisors or TPAs, third
party administrators, who put theirclients first and have the receipts,
i.e., they have data and they'rewilling to share it to prove this.
And then there are those with theexact same titles, often enough, who
(01:09):
are very much the opposite of this.
But super charming, I'm sure.
I mean, it'd be a stretch to assume thatthe same roles don't apply to brokers
or EBCs that apply for titles likehospital administrators where there's
great ones and really not great ones,but everybody often gets lumped into the
same category or even the term hospitals.
(01:29):
Each of these terms is a broadstroke and contains multitudes.
And do listen to the bonus clipfrom two weeks ago with Jonathan
Baron for just more on this point.
We dig into it for like10 minutes or something.
I also talk about this same concept in anupcoming episode with Dr. Mick Conners.
So keep that underlying and unsaid themein mind because a lot of these questions
(01:49):
do boil down to how do you figure outwho's on the up and up and who's not.
And if you need an example of the lattercategory, listen to the show with Ann
Lewandowski about the whistleblowerlawsuit or the show with AJ Loiacono
about the myriad of brokers taking $7 or$14 per script written payable by the PBM
and not reported on, as far as I know.
(02:12):
This is very much still goingon today, by the way, despite
the CAA and the 5500 forms.
Chris Deacon (02:19):
Hi, I'm Chris Deacon with VerSan Consulting.
If you're listening to RelentlessHealth Value, we already have
something important in common.
You care about fixingwhat's broken in healthcare.
This isn't just a podcast I tune into.
It's one that I revisit,reflect on and highly recommend.
Stacey's conversationsdon't stop at the mic.
They spark ideas, challengeassumptions, and fuel the work so many
(02:42):
of us are doing to fix healthcare.
If you're here for real change,you're in the right place.
Subscribe to the podcast.
Sign up for the newsletter, andlet's keep the momentum going.
Thanks for listening.
Stacey Richter (02:53):
Alright, so first burning question, question one.
After seeing J&J, Johnson & Johnsonand Wells Fargo sued for fiduciary
breaches, what specific questionsdo I need to ask my benefits advisor
to prove that my benefits advisoractually protects my interests?
Okay, paraphrased this question isemployers trying to figure out what
(03:14):
they can ask or how they can figureout if their benefits advisor or
broker or employee benefit consultantis really as trustworthy as they'd
like you to believe they are.
There's been a whole bunch ofshows that circle up on this.
The thing is though, the stakes arevery, very high right now, so yeah,
I can see why this is turning into aburning question for anyone worried they
might get sued personally, unless theycan figure out how to vet for real in
(03:37):
writing who their broker, EBC, or advisorserves actually, at the end of the day.
Question two that I ask DaveChase, and I'm not giving you
the answers to these questions.
You gotta listen to the show.
But here's the second question I ask,how do I avoid personal liability
when my TPA, third party administratorcontract has hidden conflicts that
could trigger an ERISA lawsuit?
(03:59):
Kind of a continuation of question one,but yeah, you can tell that self-insured
employer teams are really digging in hereand many, many are very aware of, first of
all, the extent and depth of middle peopledoing things like, again, allegedly taking
$20 million of employer clients moneyand funding their executive bonus pool.
(04:19):
So yeah, definitely this is anotherdoozy of a burning question.
Also on these same topics, listen to theshow with Justin Leader and also the one
with Cynthia Fisher about spread pricing.
Question three that I ask Dave Chase.
My pharmacy costs keep climbing despitePBM Pharmacy Benefit Manager guarantees.
(04:40):
How do I tell if I am beingsystematically overcharged?
Well, if your consultants are taking yourrebates to fund their executive bonus
pools, as I just mentioned, there's awhole show about with Ann Lewandowski
or if they're taking $7 a script forevery script that gets written for
your members, which, yeah, that's afoot, and I've seen the contracts and
(05:01):
the cease and desist currently flyingaround our industry about that one.
Or read that Osceola County lawsuitagainst their longtime brokers.
All these links are in the show notes.
Bottom line and end of this intro,informed employer teams are for
sure wondering these questions.
But even more than just wonderingwhat these questions signify to me,
(05:21):
kind of at the macro level, they'rerealizing the danger of kind of
sitting on that knowledge or justassuming that because everybody else
is doing whatever, it's somehow safe.
Though status quo is getting kind ofmore and more dicey every single day.
As some additional foreshadowing, thisshow finishes up with Dave Chase talking
about the open source resources that areavailable so that you too can create a
(05:44):
high performance health plan where membersget higher quality healthcare and as Dave
Chase says, the cost savings for free.
There are links in the shownotes to many things that you
can get from Health Rosetta andtheir sister company, Nautilus.
Again, all the stuff is for free.
Go to nautilushealth.org.
That's their main website.
Dave Chase who has been on thispodcast I think this his third
(06:06):
time, although it has been a while.
Dave Chase is co-founderand CEO of Health Rosetta.
My name is Stacey Richter.
This podcast is sponsoredby Aventria Health Group.
Dave Chase, welcome backto Relentless Health Value.
Dave Chase (06:17):
Super happy to be back.
Thanks Stacey.
Stacey Richter (06:19):
All right, so, I asked Dave, Dave Chase here to answer
the top three most burning questionsthat employers nationwide are asking.
I said to Dave, not justlightly smoking questions.
I mean, we're talking infernos here.
You ready, Dave?
Dave Chase (06:35):
I'm ready.
Stacey Richter (06:35):
All right.
After seeing J&J, and Wells Fargo andothers sued for fiduciary breaches,
what specific questions provemy benefits advisor, my employee
benefit consultant, EBC, my brokeris actually protecting my interests.
Dave Chase (06:55):
Yeah, I mean, this is one of the things we open sourced is a RFP, but
I like to sum it up as you know, there'scanaries in the coal mine of trust.
Number one is theircomprehensive compensation
disclosure without any excuses.
Like as soon as you start hearingexcuses, Oh, we can't measure this.
We can't measure that.
Big red flag.
(07:16):
Number two, comprehensive on howthey support data and reporting.
That's the most predictive thing.
Access to data of a high performancehealth plan, and do they actually do that?
Do they have experience withthe high performance health plan
components that you have a lot ofepisodes on, which we know about,
whether it's Centers of Excellenceor advanced primary care and so on.
(07:38):
And then also, a pretty good questionis what percentage of their business,
their book of business is with anindependent plan administrator?
If it's zero or very low,that tells you a lot.
So there's a bunch of things that areunderneath that, but I think those
are really good places to start.
Stacey Richter (07:57):
The first thing that you said was no excuses.
And Andreas Mang fromBlackstone was on the pod.
He basically said the same thing,like if you're dealing with someone
and every single time you ask forsomething, they're like, well, we can't
do that because dot, dot, dot, right,like that is an immediate red flag.
Someone said the other day, and Ilove this so much, you can't make
a good deal with a bad partner.
(08:17):
And if someone or that Maya Angeloquote, you know, "When someone
tells you who they are, listen".
And sometimes these people are lovely.
Sometimes these people havebeen, it could not even be them.
It could be the companythat they work for.
But at the end of the day I thinkwhat you're saying is if any of these
three things or four things that youjust mentioned are present, there
(08:38):
is adequate insight that the companyor the person is not working in your
best interest, which puts you atlegal risk, which is scary, right.
Claire Brockbank alsowas talking about this.
She said if someone, every time yousay something, they mention the D word,
disruption, you know, it's kind oflike, oh no disruption, which is a great
(09:00):
way to get people to not do something.
So you said no excuses you saidyou gotta have thorough data and
reporting because that's transparency.
If someone just gives you discounts,they won't tell you the net.
Just all of that stuff is problematicand maybe indicative of some underlying
goings on which again, maybe not inyou or your company's best interest.
(09:23):
Experience with high performancethat's something that also has come
up a number of times on the podcast.
There could be people with thebest of intentions, they just
don't have the experience.
And then the last thing that yousaid, what percentage, this is
really interesting, what percentageof their business is with an
independent plan administrator?
That's kind of a two-prong one.
If I was just gonna recap oneof them is the experience.
(09:45):
It feeds into the experience, but theother bit of it is there are so many
TPAs and ASOs that are conflicted.
Listen to the show with Justin Leader.
Listen to the showwith Elizabeth Mitchell.
Like, just listen to a lot of them.
And, um, yeah, you'll getthe drift real, real fast.
So the answer to after seeing J&J andWells Fargo sued for fiduciary breaches,
(10:06):
what we just went through are the fouror five specific questions that, you
know, if a benefit advisor answers themflat out, here you go, I think you can
be pretty reasonably sure that therearen't underlying structural conflicts.
Dave Chase (10:19):
Absolutely.
And you know, I just trusted my consultantis definitely not a legal defense and
people were seeing that pretty rapidly.
And, and two of the items you mentionedare legal requirements under the CAA
in terms of the complete disclosureof direct and indirect compensation
and the prohibition on gag clauses.
You know, which translate, itmeans you have the duty to get
(10:42):
access to your claims data.
And so those are really black.
And white and people are finding outthe hard way that just saying, I trusted
my consultant isn't gonna cut it.
Stacey Richter (10:55):
Yeah.
What Edwards Deming say, "In Godwe trust all else bring data".
Alright, let's move on tothe second burning question.
How do I avoid personal liability when myTPA contract, third party administrator
contract has hidden conflicts thatcould trigger an ERISA lawsuit?
Dave Chase (11:16):
Boy, there again, there are so many good practices and, and
probably the thing that I would sayyou gotta start out with is this
kind of data hostage situation.
You know, you can't auditwhat you can't access.
And going back to that previousdiscussion around access to
claims data, that's prohibited.
(11:37):
And so you're in massive exposure andyou see some of the recent lawsuits
such as the um, TIARA Yachts versusthe Blue Cross Blue Shield of Michigan.
Where they're just making in network, youknow, so-called Blue Card claims outta
network so that they can jack up the priceso they can so-called save you money.
(12:02):
And they get gazillion dollarson these so-called savings.
And that's a type of thing that ifyou don't have access to your your
data, you're not gonna be able to see.
And when you do, it'sthere in black and white.
And there's just all kinds of examplesthere that we've, you hear a lot about
spread pricing in the pharmacy side ofthings, but there's absolutely spread
(12:25):
pricing on the medical claims side.
I think that was something thatJustin Leader talked about.
So you just really have to make surethat you have access to the data.
And there's all kinds of hidden feesof various forms that we know that
when a employer goes from fully insuredto self-funded, the carrier loses
(12:48):
maybe 90% of their profit opportunity.
Well, they've been exceptionallyeffective at clawing all that back, so
you're functionally fully insured whenyou're doing just everything that the
carrier wants with their boilerplateagreements, and that's really not being
self-funded and taking control in theway that your fiduciary duty requires.
Stacey Richter (13:10):
So again, the question was how do I avoid personal liability?
Because the way the ConsolidatedAppropriations Act, the CAA works, the way
ERISA works is there's personal liabilityhere because what an ERISA plan is
supposed to be doing, plan administratorsare required to ensure that plan assets
are spent, I think it's prudently.
Reasonable costs and withoutconflicts of interest.
(13:32):
When I asked this question, howdo I avoid personal liability?
The first thing that you came back withis get your data and, you know, take
that a step further, I think, uh, whatI'm inferring you mean there is get
the actual numbers, not some discount.
I'm having a conversation with JonathanBaran and one of the things that
he made really clear, I thought wassuper insightful is that it behooves
(13:57):
many, many people when employersare trained to buy discounts.
And there's this whole set up sothat employers think what they
need to purchase is discounts.
So this is what you're talking aboutwith this data hostage situation.
If people are like, here's the discounts,and then all of the rest of the data is
hostage, then everything that you justsaid could potentially be happening.
(14:18):
We, we had Cynthia Fisher on the show.
She's talked about a case in, I thinkit was Arizona, where the provider was
paid $800,000 and Cigna and MultiPlantook 2 million or something, right?
Like the spread pricingis not like, oh, 80 cent.
It's like huge money here.
You mentioned TIARA Yachtsversus Blue Cross BlueShield.
There's, there's a lot of them thatare flying around right now where the
(14:40):
plan sponsor ultimately is the one,I mean, they've been holding the bag
for years, probably from a financialstandpoint, but now they're holding
the bag from a legal standpoint.
Dave Chase (14:48):
Yeah.
And it's just plain old common sense.
I mean, I've been in business along time when an organization has a
customer and they're proud of the valuethey're delivering to that customer.
They bury them in data.
Look at all the great things we're doing.
I mean, it's just so clear that all the,going back to the earlier discussion of
excuses, excuses, excuses, you know, Iused to talk with my kids when they had
(15:12):
excuses like, Hey, the job you know of theforeman of the excuse factor is filled up.
You don't have that as a career option.
So you just see, you really seethat all throughout healthcare.
Everybody's got excuses except thepeople who are delivering value.
And you've heard about the NUCA story.
I mean, it's just incredible.
(15:32):
Like, oh, they could make excusesabout medical deserts and all those
sorts of things, but the real valuecreators just don't make excuses.
Stacey Richter (15:40):
Yeah, that's probably a good quote there.
The real value creators takeresponsibility and accountability.
They don't make excuses.
And if there isn't the data to even haveto make excuses about, that's even better.
Dave Chase (15:52):
Well, and we had, Tufts University did a study of the plan grades
we do, which is where, how we score plans.
There's about 40 questions that we ask.
And now we've got between two and3000 of these plan grade reports
the single most predictive item ofa high performance plan was they had
unfettered access to their claims data.
(16:13):
We provide the guidelines inthe open source resources.
But you can also look at the draftlanguage for the Marshall Hickenlooper
bill called the Price Tag Actthat just was announced recently.
It actually spells out very clearly whatyou need to do and they're trying to make
(16:33):
that a legal requirement at that level.
But you don't need federallegislation to do the right thing.
That just will make it easier.
Stacey Richter (16:40):
It also would be a lot easier to your exact
point, you get an independent TPA.
If you're working with the rightpartners, things become a lot easier.
Now, I did do a Summer Short withElizabeth Mitchell who talked all
about how sometimes in certain areasof the country it is very difficult
to find the right partners just dueto, you know, catch and kill where
(17:02):
there's a great partner and thenthey get bought and shut down, right?
Like, so there's a lot of things that aregoing on where if you have an industry
and you have entities that have the marketpower, the regulatory capture, that some
of these entities in our industry have,then inarguably is tough in certain areas.
But the points that you're makingare, this is how you do it.
(17:25):
There's a little foreshadowingthat is going on here.
I just wanna point out.
We talked about RFP and now we justtalked about Plan Grader, so, just saying.
Okay, so question three.
My pharmacy costs keep climbingdespite PBM, Pharmacy Benefit
Manager guarantees in air quotes.
How do I tell if I am beingsystematically overcharged?
(17:50):
So we've pivoted a little bit.
The earlier ones were more on, I'mgonna say the medical side of the house.
Now we're talking about pharmacy benefits.
Dave Chase (17:56):
Yeah.
Once again, you have to be really,basically take the position that
you do in every other area ofyour business and take control of
procurement and define the rules.
You had Scott Haas on a previous episode.
The sort of things you wanna look at ishave net cost be the focus after all fees.
(18:18):
Don't be looking at gross savingspercentages like we talked about.
You know, rebate guarantees,often hide spread pricing and
retain manufacture revenue.
And if you look at the full chainof custody of the dollars, there's
offshore GPOs and all this mumbo jumbo.
But basically when you get to net costat the end of the day and you have access
to your data, that's what you want to do.
(18:40):
But you gotta be very careful aboutspecific calculations that are hidden that
would otherwise expose hidden markups.
And once again, access to datais vital in this situation.
And when you're blocked for that,that's a really good idea that
you're gonna be overcharged.
(19:01):
Require PBMs to show actual ingredientcosts versus what they charge you.
Get line item disclosure ofall manufacturer payments.
These are the sort of things thatbest practice procurement experts do.
Fortunately there's enough trackrecord that there's a real cookbook
or recipe you can follow on that.
Stacey Richter (19:19):
Let's go down a couple of things that you said there,
and just reiterating the originalquestion was, my pharmacy costs keep
climbing despite my pharmacy benefitmanager saying that they're gonna
deliver this number of guarantees.
Or this is the amazing rebatepackage I'm gonna get, or whatever.
So there's all these promisesthat are being made, but yet my
pharmacy costs keep climbing.
(19:41):
Or you know, and I'm hearingthis one a lot, the specialty
pharmacy finger wag, right?
Like, oh, you have so muchspecialty pharmacy, which again,
I'm not necessarily doubting theveracity of some of this stuff.
I think what we're pointing outthough is there are underlying games
that are being played under thecover of darkness, which exacerbates
any existing structural situation.
(20:03):
So the big point that you'remaking again, I think is just, you
know, the pharmacy version of whatwe were talking about earlier.
Get your data and data doesn'tmean the discount number,
get the actual net unit cost.
We had Paul Holmes on thepodcast talking about this.
We had Scott Haas on thepodcast talking about this.
We had Chris Crawford on actuallyrecently explaining the problem with
(20:27):
guarantees, so you could go back andlisten to that if you're interested.
But you know, again, it prettymuch boils down to access to data,
access to those underlying costs.
Luke Slindee actually gave a very bigrundown about what all these just random,
like WAC, AWP, like what all those wordsmean and why they're sort of meaningless.
(20:47):
So the three underlines get the data.
Dave Chase (20:50):
Yeah.
And we've seen, I think it's the countsup to something like 50 different
revenue streams PBMs have created.
And unlike the TPA scenario, there area lot of a lot more independent PBMs
that can definitely serve the market.
No matter if you're in a small town inSouth Dakota or if you're in Manhattan.
(21:11):
You really have no excuse therebecause there are some good folks.
Again, seizes control of the process.
That's what's expected as afiduciary, and more and more there's
a recipe to follow to do that.
Stacey Richter (21:25):
It's interesting, Mark Cuban just stood up in front of,
I don't know if you saw this Dave.
Mark Cuban was standing in front ofa very, very large gang of folks who
advise employers and he asked, howmany of you here have a client or have
advised a client to use an independent,transparent, pharmacy benefit manager?
And like one of 'em raise their hand.
(21:47):
And you see stuff like that and thenyou see things that are flying around.
For example, right now, just abouthow some of the larger benefit brokers
are taking $7 a script getting paid bytheir large PBM for every, every script.
Like I mean just, or like the OsceolaCounty lawsuit, where the school
(22:09):
district sued their benefit brokerfor basically doing the same thing.
Like the benefit broker was making, Iforget how many hundreds of thousands on
the contract and they're making millionsof dollars because every single time a
teacher went to pick up a script, theemployee benefit consultant got paid seven
bucks or 10 bucks or something like that.
You start thinking about stuff likethis and you're like, okay, get the
data, because you never figure that outunless you have that data and they're
(22:32):
gonna try to hide it because wow,their pocketbook would be affected.
Dave Chase (22:36):
Yep.
I mean, there was the whistleblowercase that's in play with a broker
and their compliance had said,Hey, we've gotta report this stuff.
And it was a huge sum of money.
I think it was like 61% of theirrevenue of that office was coming
from rebates and various fees.
Stacey Richter (22:56):
Oh, Ann Lewandowski talked all about that whistleblower
lawsuit where the, it was the TPA.
This EBC had a TPA arm.
They took the pharmacy rebates.
They took the rebates from theirclients, $20 million and put them
in their executive bonus pool.
Here's the thing though, none oftheir customers figured this out.
It was a whistleblower lawsuitwhere their head of compliance
(23:17):
was like, I just can't with this.
Dave Chase (23:19):
I mean, the thing that I have not come up with a better analogy,
but having observed this a bunch oftimes now, when the employer finds
out what's been going on, it ends upbeing like the business equivalent of
finding out a spouse cheated on you.
Like these people thatyou had this trust in.
And you know, that probably tookyou to some great ball games and
(23:41):
any number of things to do that.
It's brutal.
And the same exact thing happened in theretirement arena like 15, 20 years ago.
And if you talk to the people whowere in that area, guess what?
A lot of the status quo folksjust disappeared, right?
They went away.
It's a completely different set ofmarket leaders and so that's the
(24:02):
real opportunity for the people doingit right, is anytime there's one
of these once in a career shifts,there's big winners and big losers.
And so we love workingwith the big winners.
They're great.
They do great work, andthey're absolutely out there.
You just gotta be careful aboutwho you choose to work with.
Stacey Richter (24:20):
Okay, Dave Chase, you said a couple of things during
the course of our conversationthat I wanna circle back on.
Starting with, you used the wordopen source and you used the
word RFP, request for proposal.
What's going on there?
Dave Chase (24:32):
Yeah.
I mean, we're lucky in a waythat healthcare is always like
15 years behind everybody else.
So it's not a new idea that ifyou want to transform an industry,
open source is the way to do it.
Yeah.
I hear this expression even in healthcare,nobody ever got fired for hiring
IBM referring to the big carriers.
(24:54):
And I'm like, well, you know,dot, dot, dot, until they did.
And so what we believed from day onewas if we could prove that we could
have much easier repeatability doingthe things like a Rosen Hotels or a
Pfeiffer Inc. are doing, if we couldprove we could do that thousands of
(25:16):
times, large companies, small companies,rural, urban, private, public, every
corner of the country, it would be prettyhard to say, You guys just got lucky.
And if we could do that, whichwe're now at, we had to open source
that, I mean, it's really amazing.
Yeah, the, the cost savings is nice,but the secret is you pursue the highest
(25:39):
quality and you know that's great, primarycare centers of excellence and whatnot.
You get the cost savings for free.
If you could put the health outcomesof these high performance health
plans in a pill bottle, it would bethe blockbuster drug of the century,
like cancer care type of thing.
And any decent person wouldn'tkeep that from others.
(26:00):
And so that's why we actuallycreated a nonprofit called
the Nautilus Health Institute.
We've had people like ChrisDeacon help us build resources.
Marilyn Bartlett andLeah Binder on the board.
I mean, it's really, to use a old baseballexpression, it's the Murder's Row of the
industry, like just the best of the bestare pouring their intellectual property
(26:22):
in and saying like, Hey, if you willorganize that, I'll pour my brain into it
as long as you make it available for free.
That's the idea with open source.
And so it's some work of course, toorganize all these, this information,
but that's what we've done with Nautilus.
So it started with the AdvisorRFP, like here's how you do it.
(26:42):
'cause people alwayssay, where do I start?
And I say, you gotta work withthe right advisor, consultant.
And then the most importantcontract is the TPA contract.
So that was the thing thatChris Deacon helped us a ton on.
And so that was one ofthe first deliverables.
We also have open sourced technologyaround data because yes, you gotta have
(27:04):
the great procurement methodology leadingto the best contracts, but you gotta
prove it in the data and actually do that.
Having a data platform is super helpful,and so we saw just repeated, redundant
investments that point solutions aremaking that they'd probably have to
invest about $3 million to do it, right?
To actually take in that data andclean it up, augment it, analyze it,
(27:28):
and that wasn't actually what wasdifferentiating them like, that's dumb.
You know, in the rest of the world,there's open source projects that
make that a shared investment.
And so we did that as well.
And so far it's about $4 millionof direct investment between the
all the contract and data useguidelines and a data platform.
(27:48):
And then the next big deliverableis the PBM Field guide, which is
gonna be available at Rosetta Fest.
And so we really have this kindof annual cycle of major updates
with these open source tools.
And you know, if you got a case ofinsomnia, you know, go dig into these.
But in all seriousness, you'lllook at 'em and go, wow.
These folks sweat the detailsand none of the details are
(28:11):
particularly rocket science.
It's just a lot.
And so that's where trying tomake that easier to operationalize
has been a big focus of ours.
But it's really a great way tokind of level the playing field and
also rise the tide for everybody.
Stacey Richter (28:28):
And you said they are available at nautilushealth.org?
Dave Chase (28:31):
Yep, exactly.
Stacey Richter (28:32):
Nautilushealth.org.
All these links by the way we will, ofcourse, as usual, put in the show notes
and if you go to nautilushealth.org,then you can find amongst other
things, this RFP template, open source.
You can find the TPAcontract that you mentioned.
PBM Field Guide is coming.
(28:53):
You'll see that launched a fewgo to Rosetta Fest, amongst
a myriad of other things.
And I think to your exact point,like some of the stuff not rocket
science, but you know, we had ClaireBrockbank from 32BJ on the pod talking
about the RFP that they put together.
And I know you work quite a bitwith the folks over at 32BJ.
You know, she was just saying there'scertain things you don't figure out
(29:16):
until you get gamed and then you'relike, oh, that's what they're up to.
I mean, we are dealing with entitiesthat whatever we wanna say about
them, they're incredibly smart andthey're incredibly good at figuring
out how to achieve their fiduciaryobjective, which is to shareholders.
Let's just not forget that.
So, we kind of need to make sure that weare amassing the same sort of intelligence
(29:39):
on the side of members and employees, atleast to make it somewhat of a fair fight.
Dave Chase (29:47):
The nice thing is once you start doing that, other people jump in.
Mark Cuban, he's an employer.
They are open source in the hospitalcontract and just kind of feeding
this, this open source trend.
And I know a past guest of yours wasDawn Cornelis, like truly one of the
world-class experts when it comes toclaims data and payment integrity.
(30:10):
And Dawn saw what we're doing waslike, you know, she's towards the end
of her career and she's like, I alwayswant to pour my brain into Nautilus
and make it available to everybody.
We've always known, even in someof the more vilified corners of the
industry, people are good people.
They're trying to do the right thing,and what we've done is just provided an
outlet for a lot of these great people toshare that, whether it Claire Brockbank
(30:35):
and basically all of the RelentlessHealth Value guests are the types of
people who love sharing how to do it.
And we're really grateful for that.
Stacey Richter (30:44):
Dave Chase, is there anything I neglected to ask you
that you wanna mention right now?
Dave Chase (30:48):
We would love to have people join us at Rosetta Fest.
It's the only event that I know of thatcuts across all the industry silos.
It's got the real payers ofhealthcare, employers and unions.
It's got the benefit pros, it'sgot the solutions and the biggest
group right up there with thebenefit pros is clinical leaders.
(31:09):
We can't do it withoutthe clinical leaders.
So it's pretty evenly splitacross those four buckets for the
thousand plus people who come.
So we'd love to have people joinus, certainly in person, but
there's also a virtual option.
Stacey Richter (31:22):
Dave Chase, thank you so much for coming on
Relentless Health Value today.
Dave Chase (31:25):
Thank you.
Cynthia Fisher (31:27):
Hi, this is Cynthia Fisher, patientrightsadvocate.org.
We subscribe to Stacey's podcast and we'velearned so much from her podcast with all
the incredible individuals she interviewson healthcare and the opportunities
to affect change for the better.
(31:47):
I suggest everyone listen to thesegreat podcasts that Stacey provides.
So well informed for all ofus engaged in healthcare.
Episode 484.
"What Are the Three Most BurningQuestions That Plan Sponsors Have Right
Now?" Today I speak with Dave Chase.
Tom Nash (00:18):
American Healthcare Entrepreneurs and Executives
You Want to Know, Talking.
Relentlessly Seeking Value.
Stacey Richter (00:27):
Today I am speaking with Dave Chase from Health Rosetta,
and I'm asking Dave Chase threeinferno level burning questions.
Questions that across the country,many self-insured employers are
trying to find the answers to.
Now an important underlying pointthat comes across loud and clear,
(00:48):
but remains unsaid actually in theconversation that follows — is this:
There are amazing brokers and EBCsand benefits advisors or TPAs, third
party administrators, who put theirclients first and have the receipts,
i.e., they have data and they'rewilling to share it to prove this.
And then there are those with theexact same titles, often enough, who
(01:09):
are very much the opposite of this.
But super charming, I'm sure.
I mean, it'd be a stretch to assume thatthe same roles don't apply to brokers
or EBCs that apply for titles likehospital administrators where there's
great ones and really not great ones,but everybody often gets lumped into the
same category or even the term hospitals.
(01:29):
Each of these terms is a broadstroke and contains multitudes.
And do listen to the bonus clipfrom two weeks ago with Jonathan
Baron for just more on this point.
We dig into it for like10 minutes or something.
I also talk about this same concept in anupcoming episode with Dr. Mick Conners.
So keep that underlying and unsaid themein mind because a lot of these questions
(01:49):
do boil down to how do you figure outwho's on the up and up and who's not.
And if you need an example of the lattercategory, listen to the show with Ann
Lewandowski about the whistleblowerlawsuit or the show with AJ Loiacono
about the myriad of brokers taking $7 or$14 per script written payable by the PBM
and not reported on, as far as I know.
(02:12):
This is very much still goingon today, by the way, despite
the CAA and the 5500 forms.
Chris Deacon (02:19):
Hi, I'm Chris Deacon with VerSan Consulting.
If you're listening to RelentlessHealth Value, we already have
something important in common.
You care about fixingwhat's broken in healthcare.
This isn't just a podcast I tune into.
It's one that I revisit,reflect on and highly recommend.
Stacey's conversationsdon't stop at the mic.
They spark ideas, challengeassumptions, and fuel the work so many
(02:42):
of us are doing to fix healthcare.
If you're here for real change,you're in the right place.
Subscribe to the podcast.
Sign up for the newsletter, andlet's keep the momentum going.
Thanks for listening.
Stacey Richter (02:53):
Alright, so first burning question, question one.
After seeing J&J, Johnson & Johnsonand Wells Fargo sued for fiduciary
breaches, what specific questionsdo I need to ask my benefits advisor
to prove that my benefits advisoractually protects my interests?
Okay, paraphrased this question isemployers trying to figure out what
(03:14):
they can ask or how they can figureout if their benefits advisor or
broker or employee benefit consultantis really as trustworthy as they'd
like you to believe they are.
There's been a whole bunch ofshows that circle up on this.
The thing is though, the stakes arevery, very high right now, so yeah,
I can see why this is turning into aburning question for anyone worried they
might get sued personally, unless theycan figure out how to vet for real in
(03:37):
writing who their broker, EBC, or advisorserves actually, at the end of the day.
Question two that I ask DaveChase, and I'm not giving you
the answers to these questions.
You gotta listen to the show.
But here's the second question I ask,how do I avoid personal liability
when my TPA, third party administratorcontract has hidden conflicts that
could trigger an ERISA lawsuit?
(03:59):
Kind of a continuation of question one,but yeah, you can tell that self-insured
employer teams are really digging in hereand many, many are very aware of, first of
all, the extent and depth of middle peopledoing things like, again, allegedly taking
$20 million of employer clients moneyand funding their executive bonus pool.
(04:19):
So yeah, definitely this is anotherdoozy of a burning question.
Also on these same topics, listen to theshow with Justin Leader and also the one
with Cynthia Fisher about spread pricing.
Question three that I ask Dave Chase.
My pharmacy costs keep climbing despitePBM Pharmacy Benefit Manager guarantees.
(04:40):
How do I tell if I am beingsystematically overcharged?
Well, if your consultants are taking yourrebates to fund their executive bonus
pools, as I just mentioned, there's awhole show about with Ann Lewandowski
or if they're taking $7 a script forevery script that gets written for
your members, which, yeah, that's afoot, and I've seen the contracts and
(05:01):
the cease and desist currently flyingaround our industry about that one.
Or read that Osceola County lawsuitagainst their longtime brokers.
All these links are in the show notes.
Bottom line and end of this intro,informed employer teams are for
sure wondering these questions.
But even more than just wonderingwhat these questions signify to me,
(05:21):
kind of at the macro level, they'rerealizing the danger of kind of
sitting on that knowledge or justassuming that because everybody else
is doing whatever, it's somehow safe.
Though status quo is getting kind ofmore and more dicey every single day.
As some additional foreshadowing, thisshow finishes up with Dave Chase talking
about the open source resources that areavailable so that you too can create a
(05:44):
high performance health plan where membersget higher quality healthcare and as Dave
Chase says, the cost savings for free.
There are links in the shownotes to many things that you
can get from Health Rosetta andtheir sister company, Nautilus.
Again, all the stuff is for free.
Go to nautilushealth.org.
That's their main website.
Dave Chase who has been on thispodcast I think this his third
(06:06):
time, although it has been a while.
Dave Chase is co-founderand CEO of Health Rosetta.
My name is Stacey Richter.
This podcast is sponsoredby Aventria Health Group.
Dave Chase, welcome backto Relentless Health Value.
Dave Chase (06:17):
Super happy to be back.
Thanks Stacey.
Stacey Richter (06:19):
All right, so, I asked Dave, Dave Chase here to answer
the top three most burning questionsthat employers nationwide are asking.
I said to Dave, not justlightly smoking questions.
I mean, we're talking infernos here.
You ready, Dave?
Dave Chase (06:35):
I'm ready.
Stacey Richter (06:35):
All right.
After seeing J&J, and Wells Fargo andothers sued for fiduciary breaches,
what specific questions provemy benefits advisor, my employee
benefit consultant, EBC, my brokeris actually protecting my interests.
Dave Chase (06:55):
Yeah, I mean, this is one of the things we open sourced is a RFP, but
I like to sum it up as you know, there'scanaries in the coal mine of trust.
Number one is theircomprehensive compensation
disclosure without any excuses.
Like as soon as you start hearingexcuses, Oh, we can't measure this.
We can't measure that.
Big red flag.
(07:16):
Number two, comprehensive on howthey support data and reporting.
That's the most predictive thing.
Access to data of a high performancehealth plan, and do they actually do that?
Do they have experience withthe high performance health plan
components that you have a lot ofepisodes on, which we know about,
whether it's Centers of Excellenceor advanced primary care and so on.
(07:38):
And then also, a pretty good questionis what percentage of their business,
their book of business is with anindependent plan administrator?
If it's zero or very low,that tells you a lot.
So there's a bunch of things that areunderneath that, but I think those
are really good places to start.
Stacey Richter (07:57):
The first thing that you said was no excuses.
And Andreas Mang fromBlackstone was on the pod.
He basically said the same thing,like if you're dealing with someone
and every single time you ask forsomething, they're like, well, we can't
do that because dot, dot, dot, right,like that is an immediate red flag.
Someone said the other day, and Ilove this so much, you can't make
a good deal with a bad partner.
(08:17):
And if someone or that Maya Angeloquote, you know, "When someone
tells you who they are, listen".
And sometimes these people are lovely.
Sometimes these people havebeen, it could not even be them.
It could be the companythat they work for.
But at the end of the day I thinkwhat you're saying is if any of these
three things or four things that youjust mentioned are present, there
(08:38):
is adequate insight that the companyor the person is not working in your
best interest, which puts you atlegal risk, which is scary, right.
Claire Brockbank alsowas talking about this.
She said if someone, every time yousay something, they mention the D word,
disruption, you know, it's kind oflike, oh no disruption, which is a great
(09:00):
way to get people to not do something.
So you said no excuses you saidyou gotta have thorough data and
reporting because that's transparency.
If someone just gives you discounts,they won't tell you the net.
Just all of that stuff is problematicand maybe indicative of some underlying
goings on which again, maybe not inyou or your company's best interest.
(09:23):
Experience with high performancethat's something that also has come
up a number of times on the podcast.
There could be people with thebest of intentions, they just
don't have the experience.
And then the last thing that yousaid, what percentage, this is
really interesting, what percentageof their business is with an
independent plan administrator?
That's kind of a two-prong one.
If I was just gonna recap oneof them is the experience.
(09:45):
It feeds into the experience, but theother bit of it is there are so many
TPAs and ASOs that are conflicted.
Listen to the show with Justin Leader.
Listen to the showwith Elizabeth Mitchell.
Like, just listen to a lot of them.
And, um, yeah, you'll getthe drift real, real fast.
So the answer to after seeing J&J andWells Fargo sued for fiduciary breaches,
(10:06):
what we just went through are the fouror five specific questions that, you
know, if a benefit advisor answers themflat out, here you go, I think you can
be pretty reasonably sure that therearen't underlying structural conflicts.
Dave Chase (10:19):
Absolutely.
And you know, I just trusted my consultantis definitely not a legal defense and
people were seeing that pretty rapidly.
And, and two of the items you mentionedare legal requirements under the CAA
in terms of the complete disclosureof direct and indirect compensation
and the prohibition on gag clauses.
You know, which translate, itmeans you have the duty to get
(10:42):
access to your claims data.
And so those are really black.
And white and people are finding outthe hard way that just saying, I trusted
my consultant isn't gonna cut it.
Stacey Richter (10:55):
Yeah.
What Edwards Deming say, "In Godwe trust all else bring data".
Alright, let's move on tothe second burning question.
How do I avoid personal liability when myTPA contract, third party administrator
contract has hidden conflicts thatcould trigger an ERISA lawsuit?
Dave Chase (11:16):
Boy, there again, there are so many good practices and, and
probably the thing that I would sayyou gotta start out with is this
kind of data hostage situation.
You know, you can't auditwhat you can't access.
And going back to that previousdiscussion around access to
claims data, that's prohibited.
(11:37):
And so you're in massive exposure andyou see some of the recent lawsuits
such as the um, TIARA Yachts versusthe Blue Cross Blue Shield of Michigan.
Where they're just making in network, youknow, so-called Blue Card claims outta
network so that they can jack up the priceso they can so-called save you money.
(12:02):
And they get gazillion dollarson these so-called savings.
And that's a type of thing that ifyou don't have access to your your
data, you're not gonna be able to see.
And when you do, it'sthere in black and white.
And there's just all kinds of examplesthere that we've, you hear a lot about
spread pricing in the pharmacy side ofthings, but there's absolutely spread
(12:25):
pricing on the medical claims side.
I think that was something thatJustin Leader talked about.
So you just really have to make surethat you have access to the data.
And there's all kinds of hidden feesof various forms that we know that
when a employer goes from fully insuredto self-funded, the carrier loses
(12:48):
maybe 90% of their profit opportunity.
Well, they've been exceptionallyeffective at clawing all that back, so
you're functionally fully insured whenyou're doing just everything that the
carrier wants with their boilerplateagreements, and that's really not being
self-funded and taking control in theway that your fiduciary duty requires.
Stacey Richter (13:10):
So again, the question was how do I avoid personal liability?
Because the way the ConsolidatedAppropriations Act, the CAA works, the way
ERISA works is there's personal liabilityhere because what an ERISA plan is
supposed to be doing, plan administratorsare required to ensure that plan assets
are spent, I think it's prudently.
Reasonable costs and withoutconflicts of interest.
(13:32):
When I asked this question, howdo I avoid personal liability?
The first thing that you came back withis get your data and, you know, take
that a step further, I think, uh, whatI'm inferring you mean there is get
the actual numbers, not some discount.
I'm having a conversation with JonathanBaran and one of the things that
he made really clear, I thought wassuper insightful is that it behooves
(13:57):
many, many people when employersare trained to buy discounts.
And there's this whole set up sothat employers think what they
need to purchase is discounts.
So this is what you're talking aboutwith this data hostage situation.
If people are like, here's the discounts,and then all of the rest of the data is
hostage, then everything that you justsaid could potentially be happening.
(14:18):
We, we had Cynthia Fisher on the show.
She's talked about a case in, I thinkit was Arizona, where the provider was
paid $800,000 and Cigna and MultiPlantook 2 million or something, right?
Like the spread pricingis not like, oh, 80 cent.
It's like huge money here.
You mentioned TIARA Yachtsversus Blue Cross BlueShield.
There's, there's a lot of them thatare flying around right now where the
(14:40):
plan sponsor ultimately is the one,I mean, they've been holding the bag
for years, probably from a financialstandpoint, but now they're holding
the bag from a legal standpoint.
Dave Chase (14:48):
Yeah.
And it's just plain old common sense.
I mean, I've been in business along time when an organization has a
customer and they're proud of the valuethey're delivering to that customer.
They bury them in data.
Look at all the great things we're doing.
I mean, it's just so clear that all the,going back to the earlier discussion of
excuses, excuses, excuses, you know, Iused to talk with my kids when they had
(15:12):
excuses like, Hey, the job you know of theforeman of the excuse factor is filled up.
You don't have that as a career option.
So you just see, you really seethat all throughout healthcare.
Everybody's got excuses except thepeople who are delivering value.
And you've heard about the NUCA story.
I mean, it's just incredible.
(15:32):
Like, oh, they could make excusesabout medical deserts and all those
sorts of things, but the real valuecreators just don't make excuses.
Stacey Richter (15:40):
Yeah, that's probably a good quote there.
The real value creators takeresponsibility and accountability.
They don't make excuses.
And if there isn't the data to even haveto make excuses about, that's even better.
Dave Chase (15:52):
Well, and we had, Tufts University did a study of the plan grades
we do, which is where, how we score plans.
There's about 40 questions that we ask.
And now we've got between two and3000 of these plan grade reports
the single most predictive item ofa high performance plan was they had
unfettered access to their claims data.
(16:13):
We provide the guidelines inthe open source resources.
But you can also look at the draftlanguage for the Marshall Hickenlooper
bill called the Price Tag Actthat just was announced recently.
It actually spells out very clearly whatyou need to do and they're trying to make
(16:33):
that a legal requirement at that level.
But you don't need federallegislation to do the right thing.
That just will make it easier.
Stacey Richter (16:40):
It also would be a lot easier to your exact
point, you get an independent TPA.
If you're working with the rightpartners, things become a lot easier.
Now, I did do a Summer Short withElizabeth Mitchell who talked all
about how sometimes in certain areasof the country it is very difficult
to find the right partners just dueto, you know, catch and kill where
(17:02):
there's a great partner and thenthey get bought and shut down, right?
Like, so there's a lot of things that aregoing on where if you have an industry
and you have entities that have the marketpower, the regulatory capture, that some
of these entities in our industry have,then inarguably is tough in certain areas.
But the points that you're makingare, this is how you do it.
(17:25):
There's a little foreshadowingthat is going on here.
I just wanna point out.
We talked about RFP and now we justtalked about Plan Grader, so, just saying.
Okay, so question three.
My pharmacy costs keep climbingdespite PBM, Pharmacy Benefit
Manager guarantees in air quotes.
How do I tell if I am beingsystematically overcharged?
(17:50):
So we've pivoted a little bit.
The earlier ones were more on, I'mgonna say the medical side of the house.
Now we're talking about pharmacy benefits.
Dave Chase (17:56):
Yeah.
Once again, you have to be really,basically take the position that
you do in every other area ofyour business and take control of
procurement and define the rules.
You had Scott Haas on a previous episode.
The sort of things you wanna look at ishave net cost be the focus after all fees.
(18:18):
Don't be looking at gross savingspercentages like we talked about.
You know, rebate guarantees,often hide spread pricing and
retain manufacture revenue.
And if you look at the full chainof custody of the dollars, there's
offshore GPOs and all this mumbo jumbo.
But basically when you get to net costat the end of the day and you have access
to your data, that's what you want to do.
(18:40):
But you gotta be very careful aboutspecific calculations that are hidden that
would otherwise expose hidden markups.
And once again, access to datais vital in this situation.
And when you're blocked for that,that's a really good idea that
you're gonna be overcharged.
(19:01):
Require PBMs to show actual ingredientcosts versus what they charge you.
Get line item disclosure ofall manufacturer payments.
These are the sort of things thatbest practice procurement experts do.
Fortunately there's enough trackrecord that there's a real cookbook
or recipe you can follow on that.
Stacey Richter (19:19):
Let's go down a couple of things that you said there,
and just reiterating the originalquestion was, my pharmacy costs keep
climbing despite my pharmacy benefitmanager saying that they're gonna
deliver this number of guarantees.
Or this is the amazing rebatepackage I'm gonna get, or whatever.
So there's all these promisesthat are being made, but yet my
pharmacy costs keep climbing.
(19:41):
Or you know, and I'm hearingthis one a lot, the specialty
pharmacy finger wag, right?
Like, oh, you have so muchspecialty pharmacy, which again,
I'm not necessarily doubting theveracity of some of this stuff.
I think what we're pointing outthough is there are underlying games
that are being played under thecover of darkness, which exacerbates
any existing structural situation.
(20:03):
So the big point that you'remaking again, I think is just, you
know, the pharmacy version of whatwe were talking about earlier.
Get your data and data doesn'tmean the discount number,
get the actual net unit cost.
We had Paul Holmes on thepodcast talking about this.
We had Scott Haas on thepodcast talking about this.
We had Chris Crawford on actuallyrecently explaining the problem with
(20:27):
guarantees, so you could go back andlisten to that if you're interested.
But you know, again, it prettymuch boils down to access to data,
access to those underlying costs.
Luke Slindee actually gave a very bigrundown about what all these just random,
like WAC, AWP, like what all those wordsmean and why they're sort of meaningless.
(20:47):
So the three underlines get the data.
Dave Chase (20:50):
Yeah.
And we've seen, I think it's the countsup to something like 50 different
revenue streams PBMs have created.
And unlike the TPA scenario, there area lot of a lot more independent PBMs
that can definitely serve the market.
No matter if you're in a small town inSouth Dakota or if you're in Manhattan.
(21:11):
You really have no excuse therebecause there are some good folks.
Again, seizes control of the process.
That's what's expected as afiduciary, and more and more there's
a recipe to follow to do that.
Stacey Richter (21:25):
It's interesting, Mark Cuban just stood up in front of,
I don't know if you saw this Dave.
Mark Cuban was standing in front ofa very, very large gang of folks who
advise employers and he asked, howmany of you here have a client or have
advised a client to use an independent,transparent, pharmacy benefit manager?
And like one of 'em raise their hand.
(21:47):
And you see stuff like that and thenyou see things that are flying around.
For example, right now, just abouthow some of the larger benefit brokers
are taking $7 a script getting paid bytheir large PBM for every, every script.
Like I mean just, or like the OsceolaCounty lawsuit, where the school
(22:09):
district sued their benefit brokerfor basically doing the same thing.
Like the benefit broker was making, Iforget how many hundreds of thousands on
the contract and they're making millionsof dollars because every single time a
teacher went to pick up a script, theemployee benefit consultant got paid seven
bucks or 10 bucks or something like that.
You start thinking about stuff likethis and you're like, okay, get the
data, because you never figure that outunless you have that data and they're
(22:32):
gonna try to hide it because wow,their pocketbook would be affected.
Dave Chase (22:36):
Yep.
I mean, there was the whistleblowercase that's in play with a broker
and their compliance had said,Hey, we've gotta report this stuff.
And it was a huge sum of money.
I think it was like 61% of theirrevenue of that office was coming
from rebates and various fees.
Stacey Richter (22:56):
Oh, Ann Lewandowski talked all about that whistleblower
lawsuit where the, it was the TPA.
This EBC had a TPA arm.
They took the pharmacy rebates.
They took the rebates from theirclients, $20 million and put them
in their executive bonus pool.
Here's the thing though, none oftheir customers figured this out.
It was a whistleblower lawsuitwhere their head of compliance
(23:17):
was like, I just can't with this.
Dave Chase (23:19):
I mean, the thing that I have not come up with a better analogy,
but having observed this a bunch oftimes now, when the employer finds
out what's been going on, it ends upbeing like the business equivalent of
finding out a spouse cheated on you.
Like these people thatyou had this trust in.
And you know, that probably tookyou to some great ball games and
(23:41):
any number of things to do that.
It's brutal.
And the same exact thing happened in theretirement arena like 15, 20 years ago.
And if you talk to the people whowere in that area, guess what?
A lot of the status quo folksjust disappeared, right?
They went away.
It's a completely different set ofmarket leaders and so that's the
(24:02):
real opportunity for the people doingit right, is anytime there's one
of these once in a career shifts,there's big winners and big losers.
And so we love workingwith the big winners.
They're great.
They do great work, andthey're absolutely out there.
You just gotta be careful aboutwho you choose to work with.
Stacey Richter (24:20):
Okay, Dave Chase, you said a couple of things during
the course of our conversationthat I wanna circle back on.
Starting with, you used the wordopen source and you used the
word RFP, request for proposal.
What's going on there?
Dave Chase (24:32):
Yeah.
I mean, we're lucky in a waythat healthcare is always like
15 years behind everybody else.
So it's not a new idea that ifyou want to transform an industry,
open source is the way to do it.
Yeah.
I hear this expression even in healthcare,nobody ever got fired for hiring
IBM referring to the big carriers.
(24:54):
And I'm like, well, you know,dot, dot, dot, until they did.
And so what we believed from day onewas if we could prove that we could
have much easier repeatability doingthe things like a Rosen Hotels or a
Pfeiffer Inc. are doing, if we couldprove we could do that thousands of
(25:16):
times, large companies, small companies,rural, urban, private, public, every
corner of the country, it would be prettyhard to say, You guys just got lucky.
And if we could do that, whichwe're now at, we had to open source
that, I mean, it's really amazing.
Yeah, the, the cost savings is nice,but the secret is you pursue the highest
(25:39):
quality and you know that's great, primarycare centers of excellence and whatnot.
You get the cost savings for free.
If you could put the health outcomesof these high performance health
plans in a pill bottle, it would bethe blockbuster drug of the century,
like cancer care type of thing.
And any decent person wouldn'tkeep that from others.
(26:00):
And so that's why we actuallycreated a nonprofit called
the Nautilus Health Institute.
We've had people like ChrisDeacon help us build resources.
Marilyn Bartlett andLeah Binder on the board.
I mean, it's really, to use a old baseballexpression, it's the Murder's Row of the
industry, like just the best of the bestare pouring their intellectual property
(26:22):
in and saying like, Hey, if you willorganize that, I'll pour my brain into it
as long as you make it available for free.
That's the idea with open source.
And so it's some work of course, toorganize all these, this information,
but that's what we've done with Nautilus.
So it started with the AdvisorRFP, like here's how you do it.
(26:42):
'cause people alwayssay, where do I start?
And I say, you gotta work withthe right advisor, consultant.
And then the most importantcontract is the TPA contract.
So that was the thing thatChris Deacon helped us a ton on.
And so that was one ofthe first deliverables.
We also have open sourced technologyaround data because yes, you gotta have
(27:04):
the great procurement methodology leadingto the best contracts, but you gotta
prove it in the data and actually do that.
Having a data platform is super helpful,and so we saw just repeated, redundant
investments that point solutions aremaking that they'd probably have to
invest about $3 million to do it, right?
To actually take in that data andclean it up, augment it, analyze it,
(27:28):
and that wasn't actually what wasdifferentiating them like, that's dumb.
You know, in the rest of the world,there's open source projects that
make that a shared investment.
And so we did that as well.
And so far it's about $4 millionof direct investment between the
all the contract and data useguidelines and a data platform.
(27:48):
And then the next big deliverableis the PBM Field guide, which is
gonna be available at Rosetta Fest.
And so we really have this kindof annual cycle of major updates
with these open source tools.
And you know, if you got a case ofinsomnia, you know, go dig into these.
But in all seriousness, you'lllook at 'em and go, wow.
These folks sweat the detailsand none of the details are
(28:11):
particularly rocket science.
It's just a lot.
And so that's where trying tomake that easier to operationalize
has been a big focus of ours.
But it's really a great way tokind of level the playing field and
also rise the tide for everybody.
Stacey Richter (28:28):
And you said they are available at nautilushealth.org?
Dave Chase (28:31):
Yep, exactly.
Stacey Richter (28:32):
Nautilushealth.org.
All these links by the way we will, ofcourse, as usual, put in the show notes
and if you go to nautilushealth.org,then you can find amongst other
things, this RFP template, open source.
You can find the TPAcontract that you mentioned.
PBM Field Guide is coming.
(28:53):
You'll see that launched a fewgo to Rosetta Fest, amongst
a myriad of other things.
And I think to your exact point,like some of the stuff not rocket
science, but you know, we had ClaireBrockbank from 32BJ on the pod talking
about the RFP that they put together.
And I know you work quite a bitwith the folks over at 32BJ.
You know, she was just saying there'scertain things you don't figure out
(29:16):
until you get gamed and then you'relike, oh, that's what they're up to.
I mean, we are dealing with entitiesthat whatever we wanna say about
them, they're incredibly smart andthey're incredibly good at figuring
out how to achieve their fiduciaryobjective, which is to shareholders.
Let's just not forget that.
So, we kind of need to make sure that weare amassing the same sort of intelligence
(29:39):
on the side of members and employees, atleast to make it somewhat of a fair fight.
Dave Chase (29:47):
The nice thing is once you start doing that, other people jump in.
Mark Cuban, he's an employer.
They are open source in the hospitalcontract and just kind of feeding
this, this open source trend.
And I know a past guest of yours wasDawn Cornelis, like truly one of the
world-class experts when it comes toclaims data and payment integrity.
(30:10):
And Dawn saw what we're doing waslike, you know, she's towards the end
of her career and she's like, I alwayswant to pour my brain into Nautilus
and make it available to everybody.
We've always known, even in someof the more vilified corners of the
industry, people are good people.
They're trying to do the right thing,and what we've done is just provided an
outlet for a lot of these great people toshare that, whether it Claire Brockbank
(30:35):
and basically all of the RelentlessHealth Value guests are the types of
people who love sharing how to do it.
And we're really grateful for that.
Stacey Richter (30:44):
Dave Chase, is there anything I neglected to ask you
that you wanna mention right now?
Dave Chase (30:48):
We would love to have people join us at Rosetta Fest.
It's the only event that I know of thatcuts across all the industry silos.
It's got the real payers ofhealthcare, employers and unions.
It's got the benefit pros, it'sgot the solutions and the biggest
group right up there with thebenefit pros is clinical leaders.
(31:09):
We can't do it withoutthe clinical leaders.
So it's pretty evenly splitacross those four buckets for the
thousand plus people who come.
So we'd love to have people joinus, certainly in person, but
there's also a virtual option.
Stacey Richter (31:22):
Dave Chase, thank you so much for coming on
Relentless Health Value today.
Dave Chase (31:25):
Thank you.
Cynthia Fisher (31:27):
Hi, this is Cynthia Fisher, patientrightsadvocate.org.
We subscribe to Stacey's podcast and we'velearned so much from her podcast with all
the incredible individuals she interviewson healthcare and the opportunities
to affect change for the better.
(31:47):
I suggest everyone listen to thesegreat podcasts that Stacey provides.
So well informed for all ofus engaged in healthcare.
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