In this episode, Stacey Richter talks with Dr. Stan Schwartz, co-founder of ZERO.health about the tension between mission-driven healthcare and financial incentives within the healthcare system. Highlighting examples like the Comprehensive Primary Care Initiative and other advanced primary care efforts, Schwartz shares insights on how health system economics, particularly the reliance on emergency room admissions, often undermine initiatives aimed at reducing costs and improving patient outcomes.
The discussion delves into the role of employer-sponsored health plans as potential change agents in the healthcare system, given their significant influence over commercially insured patients, who are highly attractive to providers. Dr. Schwartz underscores the importance of aligned financial incentives and collective action among employers to drive meaningful change in healthcare.
If you would like to get a copy of the mentinoed personal integrity and “are you in healthcare for the right reasons” policy called the Guiding Principles Policy that Doug Geinzer and Amy Mecham from High Performance Providers put together.please either check your inbox for the newsletter this week that you just got when this show went live and find the link to download or sign up for the newsletter and I will include it again next week on Thursday.
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08:11 What was Dr. Schwartz’s “Pelican Brief” moment?
09:09 How Dr. Schwartz’s advanced primary care structure and health information exchange beat out competing states for CMMI funding.
12:53 What did “good” look like with this advanced primary care program?
15:06 EP391 with Scott Conard, MD.
15:42 EP438 with John Lee, MD.
16:57 What got Dr. Schwartz interested in employer-sponsored healthcare?
18:46 EP419 with Andreas Mang.
18:48 EP453 with Claire Brockbank.
18:50 EP452 with Cora Opsahl.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Stacey Richter (00:00):
Summer Short.
Another case study for anyonetrying to level up primary care
that I am going to call, "How MarginShoves Mission Off of the Bus".
Today I am speakingwith Stan Schwartz, MD.
(00:22):
American Healthcare Entrepreneurs andExecutives You Want to Know, Talking.
Relentlessly Seeking Value.
Starting off here with a heads up.
Hey, heads up.
A bunch of you in the tribe who Ifind inspiring as all get out, and
just the good kind of people who,yeah, you would be the type who
(00:43):
would want something like this.
But in the newsletter that RelentlessHealth Value sends out on a weekly basis,
the weekly email that you can for freesubscribe to if you go to the website
and click on the box that will pop upsooner or later, I am going to link to
the so-called Guiding Principles Policythat Doug Geinzer and Amy Mecham from
(01:03):
High Performance Providers put together.
I had referenced said policy inthe show with Dr. Ben Schwartz
about mission and margin.
In that show, I called thisdocument the more professional
version of a no A-Holes policy.
But anyway, I said it's something thatDoug, Amy and team ask anyone they have
to do with to sign like literally sign.
(01:26):
So yeah.
If you would like to get a copy ofthis personal integrity and are you
and healthcare for the right reasons,policy, please either check your inbox
for the newsletter this week that youjust got when this show went live.
And find the link to download orsign up for the newsletter and I will
include it again next week on Thursday.
(01:46):
After that, I am not gonna postthis on the website or anything, so
yeah, call it a limited time offer.
Chris Deacon (01:54):
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.
If you're here for real change,you're in the right place.
Subscribe to the podcast.
(02:15):
and let's keep the momentum going.
Thanks for listening.
Stacey Richter (02:19):
Let's do this Summer Short.
Did you listen to the shows withAl Lewis about ER, emergency room
spending, being now around 6% ofmany plan sponsors total plan costs.
If not, it's episode 464.
Go back and take a listenwhen you have a moment.
So 6% of total plan sponsorcosts can go to the ER these
(02:42):
days, which is insane, mind you.
But it got this breathtakingly high, onereason at least, because so many patients
slash members are getting what amountsto the most expensive primary care money
can buy in the emergency department.
That right there was the big takeawayfrom the primary care slash ER
(03:02):
follow the dollar show I did thispast spring, which is episode 467.
Look at me, saving you time.
You wait long enough and you'll get aone sentence summary of every single
Relentless Health Value episode.
So let me continue.
Turns out advanced primary care,comprehensive primary care.
Can and often will reduceemergency room admissions.
(03:24):
Advanced primary care will also thereforereduce resulting hospital admissions since
as many as a third of hospital admissionscome through the emergency room.
And this matters considering thataround 50% of a lot of plan sponsors
total costs go to health systems 50%.
(03:46):
Yeah right, one half.
Let's just say from a quadruple aimperspective, advanced primary care
makes all the sense in the world.
Now I mean advanced primarycare, we are not talking about
transactional primary care.
I'm talking good, comprehensive,longitudinal data-driven team-based
with behavioral health and navigationwhere managing health not just symptoms.
(04:07):
We've just established it'sgood for patients, it's good
for members, affordability,just all the things, clinicians.
So you think that everyone in thehealthcare industry, the medical
industrial complex, if I wanna besnarky, should really have, if they're
interested in the quadruple aim, theyshould really have a vested interest in
promoting good advanced primary care.
(04:28):
Well, let's open the door andinvite the real world in, shall we?
I want to mention episode 391.
This is the episode where Dr. ScottConard for the first time ever talked
about his, he calls it his Pelican Briefmoment when the local health system
bought his advanced primary care practice.
(04:48):
It is a really compelling show.
It is a tale of how healthcarein this country actually works.
And let me tell you, I have people withvery big jobs who have come up to me.
They've sent me emails, they've come upto me at conferences, they pull me aside
and they say that this show, the one withDr. Scott Conard, it really got to them.
It really affected them and howthey think, link in the show
(05:10):
notes to all of the shows, etcetera, that I am mentioning.
So right this Summer Short today isanother such tale of perverse incentives
and health system administratorsdoing stuff that is clearly endorsed
and encouraged by their boards andleadership, but smells very, very bad
when it hits the open air I would say.
(05:31):
I mean, I think anyway, but youknow, nihilism is just not my brand.
So let me introduce you toa real OG in the healthcare
industry, Dr. Stan Schwartz.
I know you are used to spoilersin these introductions, but I'm
gonna throw you for a loop today.
No spoilers for you, except to say thatthis story isn't rainbows and unicorns,
but you probably guessed that already.
(05:51):
It's another exampleof, and now, okay, fine.
I'll give you one little, I'llcall it a trailer, and I'm
quoting Dr. Schwartz here.
But he says his experience wasan example of a major variation
on fee for service that occurredwithin a fee for service universe.
And the problem was one leg wasgoing one direction and the body
wants it to go another direction.
And Dr. Schwartz said, Thatis not a sustainable endeavor.
(06:15):
Yep.
Not the first time thatwe have heard this.
These days, Dr. Stan Schwartz isa co-founder over at Zero Health.
Zero gets members access to high qualityproviders for $0 out of pocket, leveraging
bundled payments and direct contracting.
Apropos nothing except I wasintrigued and just thought of
something that Dr. Schwartz told me.
He says, Members rarely have anincentive to opt out of surgery.
(06:38):
Because surgery is so oftencheaper than conservative care.
That struck me.
So yeah, points of ponder zero, bythe way, generously offered financial
support to Relentless Health Value.
And for that, I and the entire teamover here is extremely grateful.
It was such an honor to have Dr.Schwartz on the show, and especially
talking about an experience that isso instructive, I think, for everybody
(07:03):
listening from plan sponsors tohospital executives, to clinicians.
Just everybody.
This is another case studywith a lot of learnings.
This Summer Short, as I just said, issponsored by Zero Health with a small
assist from Aventria Health Group.
My name is Stacey Richter.
Dr. Stan Schwartz, welcometo Relentless Health Value.
Dr. Stan Schwartz (07:22):
Great to be here.
Stacey Richter (07:22):
I wanna ask you to tell me a little bit about yourself Dr. Schwartz.
And I do actually have some motivationa scheme here because I was talking to
Dr. Scott Conard, who many may rememberwas on the podcast a couple of times.
But Dr. Conard was telling me that youactually have a similar story to his,
(07:43):
the one he related that he calls his,in air quotes, Pelican Brief moment.
What happened there?
Dr. Stan Schwartz (07:49):
Let me give you a real quick background just to
understand how we got to that point.
Wound up coming to Oklahoma topractice because it was a wonderful
opportunity with very, very few doctors.
There was only one doctor withina 100 mile radius that was
in the same specialty I was.
Fast forward to the year 2004, I was askedby one of the largest health systems in
(08:11):
Oklahoma to become medical director fortheir multi-specialty clinic, which was
about 300 or so providers at that time.
We were also in the process in the lateaughts at about 2009 in the city of
Tulsa, setting up a health informationexchange, which was really a landmark
technology that was, I think, faradvanced from what any other states had.
(08:36):
Medicare came along with their centersfor Medicare, Medicaid Innovation.
And they had proposed a project calledthe Comprehensive Primary Care Initiative,
and this was a landmark project to reallyhelp Medicare demonstrate that if you did
something, you could get something back.
Pay a little more here.
Save a little more there.
The project gave physicians, primarycare physicians additional resources,
(09:00):
mainly in the, in terms of money,but some also knowledge resources
to make advanced primary care.
Primary care where you had careguidance nurses, you had risk
stratification of your patients.
All the things you know that Scottknows very well and has talked about.
So our little area in northeastOklahoma applied and we were
(09:22):
competing against states.
We were one of the, of only two of theorganizations that applied that weren't
complete states, and we were competingagainst Colorado, Oregon, New York, you
know, big tickets, just a little us.
But we won because we had a healthinformation exchange and we had brought
together a consortium of hospitals anddoctors who are like-minded and tied
(09:46):
them together with the health informationexchange and brought, I think, was
it well more organized structure toit that really promised them success.
Stacey Richter (09:56):
Let me just give kind of a recap of what I'm understanding
the situation was thus far.
So this is, as you said,this is in the early aughts.
You were a medical director in Oklahoma.
300 docs.
You were thinking to yourself, maybewe should do advanced primary care.
This would be amazing to do because ashas been said, we just have done a through
(10:22):
line show on how if you do primary care,well you can reduce ER visits or at at
a minimum, there's a correlation betweengood primary care and reduced ER visits.
So not news.
Apparently 25 years agopeople had that same thought.
So CMMI throws out an opportunitywhere if you can do advanced primary
(10:43):
care, they gave the potential tobe able to demonstrate that there
are in fact downstream savings.
There was a big competition and becauseyour little nook of northeastern
Oklahoma had an HIE and had maybe somesynergies and some practices going on
there that were for the time potentiallyadvanced, you actually beat big states.
(11:06):
So that's where we're at in this story.
Okay.
So you get the CMMI award, then what?
Dr. Stan Schwartz (11:12):
Well, we put it into place and over the course of
the program, it actually worked.
I mean, the primary care docs loved it.
They would have a registerednurse in the office to work with
patients, teach patients afterwards.
Call people up.
You know, if somebody left the hospital,they were immediately contacted.
Follow up was all arranged.
There was never that dead zone betweenwhen they left the hospital and
(11:35):
what they got to see their doctor.
Everything was facilitated.
We had behavioral health in the offices,which is really important for primary care
because so many problems are either basedon behavioral health issues, depression,
anxiety, or chronic diseases that areaggravated by depression, for example.
And this project tootedalong, the patients loved it.
(11:56):
The doctors loved it becauseall of a sudden they had
things they didn't have before.
Stacey Richter (12:00):
It sounds like clinicians were very happy.
They're like, whoa, this feels like why Iwent to medical school or nursing school.
Like I am fulfilling my purpose here.
This feels very good.
I can see patients responding to thestructure of what we are doing here
were patient outcomes, Dr. Conard saidsometimes it takes a while up to two
(12:22):
years actually for there to be financialrewards and health improvement awards.
But at that time were you alsoseeing whatever they were measuring?
Like what?
What did good look like?
Dr. Stan Schwartz (12:33):
We saved money.
We reduced emergency room visits andhospitalizations to a certain degree.
But overall,, the, the program wassuccessful as a beginning demonstration
program and some of the doctors gotreally nice rewards, you know, tens
of thousands of dollars based on thequality of the service they provided.
So the program was successful and thenit was reborn in a second version of it,
(12:58):
we wound up, Oklahoma really was at thehead of the class when the program ended.
The program wasn't continuedin the health system.
And the one thing I remember, and Ithink that's what Scott was alluding
to when he spoke to you is I was at ameeting, an executive meeting at the
hospital and we presented what theprogram was all about and how we were
(13:19):
going to reduce visits to the emergencyroom, keep people out of the hospital.
And as I was sitting down, there wasa conversation behind me between the
health system, CEO and his consultant whowas his consigliere and his consigliere
whispered in his ear, why would we wantto keep people out of the emergency room?
Because that's wherepeople got to the hospital.
(13:41):
Third of the hospital admissionscame through the emergency room.
It was a money maker for the hospital.
So just from a financiallycompetitive standpoint, it didn't
make very much sense for the healthsystem to continue the program.
I'm not demonizing thehealth system for this.
You know, it's a very competitive markethere in Tulsa and keeping people in
(14:01):
the hospital, being sure the peoplethat the clinic doctors were taking
care of wound up in our hospital wasvery important to the bottom line.
But it was an example of the conflict,the tension between things that
save money and things that generatemoney in the health system economy.
Stacey Richter (14:18):
Just to underline a couple of points that you made there,
which I think is just a stunning, uh,just another example of something that
we've heard repeatedly on this showand if anyone is fascinated by the
story that Dr. Schwartz just related,definitely do go back and listen to
(14:39):
the episode with Dr. Scott Conard.
It's episode 391.
We'll link to it in theshow notes as usual.
But in that earlier show, Dr.Scott Conard tells a similar story.
The hospital administrator said of theadvanced primary care, he said to Dr.
Conard, look, we looked at the numbersand we realized just how many hospital
(14:59):
admissions your group prevented.
We gotta fill up the beds in our hospital.
So we had to shut you down so that ourbeds in our hospital could be filled.
We also had Dr. John Lee on, if I'mjust thinking about this, the story
that Dr. Lee told was of a hospital thatchose to shut down a very successful
program that prevented heart failurepatients from getting readmitted.
(15:23):
And you know, again, the story was someof these heart failure readmissions
are actually very profitable.
And so, you know, we want the readmission.
There's just so many examples here.
Dr. Stan Schwartz (15:34):
Like I said, I don't demonize any health system for
doing what they need to do to survive.
It's the way our system is put together.
It doesn't take a genius tolook at a system like that and
realize that isn't gonna work.
It's a fox and henhouse problem.
Stacey Richter (15:49):
It is very, very important, I think, to break things
down to the fundamental levels thatwe're talking about right here,
and not get confused by marketing.
Dr. Stan Schwartz (15:57):
And just going back to the comprehensive primary care initiative,
it was a great program, but it was a majorvariation on fee for service that occurred
within a fee for service universe.
And the problem was it wound up beinga situation where one leg was going
in one direction and the body wantedto go in another direction, and
that's not a sustainable endeavor.
Stacey Richter (16:19):
I love how you put that.
And the body's a lot heavierthan legs, I'm guessing.
Dr. Stan Schwartz, is there anythingthat you want to sum up with or mention
in the context of that experience.
Dr. Stan Schwartz (16:32):
In the context of that experience, what I'd learned
is that you've got to make changesin how healthcare is financed and
you've got to make the change agentpeople who pay for things, not
for people who receive payment.
That's why after I supposedly retired,I got really interested in employer
sponsored healthcare because althoughemployer sponsored healthcare doesn't
(16:55):
spend the most amount of money in theUnited States, employers cover the most
number of people in the United States.
And if there's one place, change canhappen and it can happen quickly.
It's in employer sponsored health plans.
They are nimble.
They cover people who are notnecessarily vulnerable people.
They cover commercially insuredpatients are generally the most
(17:18):
quote unquote desirable patientsbecause the payment is the greatest.
So they're very attractive to providers.
And providers really wanna followcommercially insured populations.
So we realized that here's the placeyou can really make a difference.
And don't look at Blue Cross.
Don't look at United.
Don't look at health plans.
Don't look at health systems.
(17:40):
Look at employer sponsored plansbecause if you get enough employers
together, they really make a difference.
Health systems, hospitals haveto have commercial populations.
Stacey Richter (17:49):
So recapping what you just said there, and I don't think
any plan sponsor listening shouldforget this, that the profitable
readmissions are the commercial patients.
And if you think back to what I was justtalking about, about how, why do we wanna
eliminate the profitable heart failurereadmissions, like that's who we're
talking about right now, your members.
It's a buyer beware scenario, and aswe've had Andreas Mang talk about as
(18:15):
we've had Claire Brockbank Cora Opsahl,there's been any number of guests on
the podcast who have also echoed exactlywhat you just said, collective action.
60% I think, of Americansare commercially insured.
These are the attractive, these are thedesirable patients, just from a financial
standpoint, for better, for worse.
So there is power there ifanyone chooses to embrace it.
(18:36):
Dr. Stan Schwartz if someone isinterested in learning more about
Zero, where would you direct them?
Dr. Stan Schwartz (18:41):
I'm on LinkedIn, Stanley Schwartz, MD. My co-founder Jim
Millaway is on LinkedIn, James G. Millway.
Or you can go to our website,zero.health, or you can send us an email
at info@zero.health and I assure you areal human will answer your questions.
Stacey Richter (18:59):
Dr. Stan Schwartz, thank you so much for being on
Relentless Health Value today.
Dr. Stan Schwartz (19:05):
Thank you Stacey.
Dr. Scott Conard (19:06):
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
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.
Summer Short.
Another case study for anyonetrying to level up primary care
that I am going to call, "How MarginShoves Mission Off of the Bus".
Today I am speakingwith Stan Schwartz, MD.
(00:22):
American Healthcare Entrepreneurs andExecutives You Want to Know, Talking.
Relentlessly Seeking Value.
Starting off here with a heads up.
Hey, heads up.
A bunch of you in the tribe who Ifind inspiring as all get out, and
just the good kind of people who,yeah, you would be the type who
(00:43):
would want something like this.
But in the newsletter that RelentlessHealth Value sends out on a weekly basis,
the weekly email that you can for freesubscribe to if you go to the website
and click on the box that will pop upsooner or later, I am going to link to
the so-called Guiding Principles Policythat Doug Geinzer and Amy Mecham from
(01:03):
High Performance Providers put together.
I had referenced said policy inthe show with Dr. Ben Schwartz
about mission and margin.
In that show, I called thisdocument the more professional
version of a no A-Holes policy.
But anyway, I said it's something thatDoug, Amy and team ask anyone they have
to do with to sign like literally sign.
(01:26):
So yeah.
If you would like to get a copy ofthis personal integrity and are you
and healthcare for the right reasons,policy, please either check your inbox
for the newsletter this week that youjust got when this show went live.
And find the link to download orsign up for the newsletter and I will
include it again next week on Thursday.
(01:46):
After that, I am not gonna postthis on the website or anything, so
yeah, call it a limited time offer.
Chris Deacon (01:54):
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.
If you're here for real change,you're in the right place.
Subscribe to the podcast.
(02:15):
and let's keep the momentum going.
Thanks for listening.
Stacey Richter (02:19):
Let's do this Summer Short.
Did you listen to the shows withAl Lewis about ER, emergency room
spending, being now around 6% ofmany plan sponsors total plan costs.
If not, it's episode 464.
Go back and take a listenwhen you have a moment.
So 6% of total plan sponsorcosts can go to the ER these
(02:42):
days, which is insane, mind you.
But it got this breathtakingly high, onereason at least, because so many patients
slash members are getting what amountsto the most expensive primary care money
can buy in the emergency department.
That right there was the big takeawayfrom the primary care slash ER
(03:02):
follow the dollar show I did thispast spring, which is episode 467.
Look at me, saving you time.
You wait long enough and you'll get aone sentence summary of every single
Relentless Health Value episode.
So let me continue.
Turns out advanced primary care,comprehensive primary care.
Can and often will reduceemergency room admissions.
(03:24):
Advanced primary care will also thereforereduce resulting hospital admissions since
as many as a third of hospital admissionscome through the emergency room.
And this matters considering thataround 50% of a lot of plan sponsors
total costs go to health systems 50%.
(03:46):
Yeah right, one half.
Let's just say from a quadruple aimperspective, advanced primary care
makes all the sense in the world.
Now I mean advanced primarycare, we are not talking about
transactional primary care.
I'm talking good, comprehensive,longitudinal data-driven team-based
with behavioral health and navigationwhere managing health not just symptoms.
(04:07):
We've just established it'sgood for patients, it's good
for members, affordability,just all the things, clinicians.
So you think that everyone in thehealthcare industry, the medical
industrial complex, if I wanna besnarky, should really have, if they're
interested in the quadruple aim, theyshould really have a vested interest in
promoting good advanced primary care.
(04:28):
Well, let's open the door andinvite the real world in, shall we?
I want to mention episode 391.
This is the episode where Dr. ScottConard for the first time ever talked
about his, he calls it his Pelican Briefmoment when the local health system
bought his advanced primary care practice.
(04:48):
It is a really compelling show.
It is a tale of how healthcarein this country actually works.
And let me tell you, I have people withvery big jobs who have come up to me.
They've sent me emails, they've come upto me at conferences, they pull me aside
and they say that this show, the one withDr. Scott Conard, it really got to them.
It really affected them and howthey think, link in the show
(05:10):
notes to all of the shows, etcetera, that I am mentioning.
So right this Summer Short today isanother such tale of perverse incentives
and health system administratorsdoing stuff that is clearly endorsed
and encouraged by their boards andleadership, but smells very, very bad
when it hits the open air I would say.
(05:31):
I mean, I think anyway, but youknow, nihilism is just not my brand.
So let me introduce you toa real OG in the healthcare
industry, Dr. Stan Schwartz.
I know you are used to spoilersin these introductions, but I'm
gonna throw you for a loop today.
No spoilers for you, except to say thatthis story isn't rainbows and unicorns,
but you probably guessed that already.
(05:51):
It's another exampleof, and now, okay, fine.
I'll give you one little, I'llcall it a trailer, and I'm
quoting Dr. Schwartz here.
But he says his experience wasan example of a major variation
on fee for service that occurredwithin a fee for service universe.
And the problem was one leg wasgoing one direction and the body
wants it to go another direction.
And Dr. Schwartz said, Thatis not a sustainable endeavor.
(06:15):
Yep.
Not the first time thatwe have heard this.
These days, Dr. Stan Schwartz isa co-founder over at Zero Health.
Zero gets members access to high qualityproviders for $0 out of pocket, leveraging
bundled payments and direct contracting.
Apropos nothing except I wasintrigued and just thought of
something that Dr. Schwartz told me.
He says, Members rarely have anincentive to opt out of surgery.
(06:38):
Because surgery is so oftencheaper than conservative care.
That struck me.
So yeah, points of ponder zero, bythe way, generously offered financial
support to Relentless Health Value.
And for that, I and the entire teamover here is extremely grateful.
It was such an honor to have Dr.Schwartz on the show, and especially
talking about an experience that isso instructive, I think, for everybody
(07:03):
listening from plan sponsors tohospital executives, to clinicians.
Just everybody.
This is another case studywith a lot of learnings.
This Summer Short, as I just said, issponsored by Zero Health with a small
assist from Aventria Health Group.
My name is Stacey Richter.
Dr. Stan Schwartz, welcometo Relentless Health Value.
Dr. Stan Schwartz (07:22):
Great to be here.
Stacey Richter (07:22):
I wanna ask you to tell me a little bit about yourself Dr. Schwartz.
And I do actually have some motivationa scheme here because I was talking to
Dr. Scott Conard, who many may rememberwas on the podcast a couple of times.
But Dr. Conard was telling me that youactually have a similar story to his,
(07:43):
the one he related that he calls his,in air quotes, Pelican Brief moment.
What happened there?
Dr. Stan Schwartz (07:49):
Let me give you a real quick background just to
understand how we got to that point.
Wound up coming to Oklahoma topractice because it was a wonderful
opportunity with very, very few doctors.
There was only one doctor withina 100 mile radius that was
in the same specialty I was.
Fast forward to the year 2004, I was askedby one of the largest health systems in
(08:11):
Oklahoma to become medical director fortheir multi-specialty clinic, which was
about 300 or so providers at that time.
We were also in the process in the lateaughts at about 2009 in the city of
Tulsa, setting up a health informationexchange, which was really a landmark
technology that was, I think, faradvanced from what any other states had.
(08:36):
Medicare came along with their centersfor Medicare, Medicaid Innovation.
And they had proposed a project calledthe Comprehensive Primary Care Initiative,
and this was a landmark project to reallyhelp Medicare demonstrate that if you did
something, you could get something back.
Pay a little more here.
Save a little more there.
The project gave physicians, primarycare physicians additional resources,
(09:00):
mainly in the, in terms of money,but some also knowledge resources
to make advanced primary care.
Primary care where you had careguidance nurses, you had risk
stratification of your patients.
All the things you know that Scottknows very well and has talked about.
So our little area in northeastOklahoma applied and we were
(09:22):
competing against states.
We were one of the, of only two of theorganizations that applied that weren't
complete states, and we were competingagainst Colorado, Oregon, New York, you
know, big tickets, just a little us.
But we won because we had a healthinformation exchange and we had brought
together a consortium of hospitals anddoctors who are like-minded and tied
(09:46):
them together with the health informationexchange and brought, I think, was
it well more organized structure toit that really promised them success.
Stacey Richter (09:56):
Let me just give kind of a recap of what I'm understanding
the situation was thus far.
So this is, as you said,this is in the early aughts.
You were a medical director in Oklahoma.
300 docs.
You were thinking to yourself, maybewe should do advanced primary care.
This would be amazing to do because ashas been said, we just have done a through
(10:22):
line show on how if you do primary care,well you can reduce ER visits or at at
a minimum, there's a correlation betweengood primary care and reduced ER visits.
So not news.
Apparently 25 years agopeople had that same thought.
So CMMI throws out an opportunitywhere if you can do advanced primary
(10:43):
care, they gave the potential tobe able to demonstrate that there
are in fact downstream savings.
There was a big competition and becauseyour little nook of northeastern
Oklahoma had an HIE and had maybe somesynergies and some practices going on
there that were for the time potentiallyadvanced, you actually beat big states.
(11:06):
So that's where we're at in this story.
Okay.
So you get the CMMI award, then what?
Dr. Stan Schwartz (11:12):
Well, we put it into place and over the course of
the program, it actually worked.
I mean, the primary care docs loved it.
They would have a registerednurse in the office to work with
patients, teach patients afterwards.
Call people up.
You know, if somebody left the hospital,they were immediately contacted.
Follow up was all arranged.
There was never that dead zone betweenwhen they left the hospital and
(11:35):
what they got to see their doctor.
Everything was facilitated.
We had behavioral health in the offices,which is really important for primary care
because so many problems are either basedon behavioral health issues, depression,
anxiety, or chronic diseases that areaggravated by depression, for example.
And this project tootedalong, the patients loved it.
(11:56):
The doctors loved it becauseall of a sudden they had
things they didn't have before.
Stacey Richter (12:00):
It sounds like clinicians were very happy.
They're like, whoa, this feels like why Iwent to medical school or nursing school.
Like I am fulfilling my purpose here.
This feels very good.
I can see patients responding to thestructure of what we are doing here
were patient outcomes, Dr. Conard saidsometimes it takes a while up to two
(12:22):
years actually for there to be financialrewards and health improvement awards.
But at that time were you alsoseeing whatever they were measuring?
Like what?
What did good look like?
Dr. Stan Schwartz (12:33):
We saved money.
We reduced emergency room visits andhospitalizations to a certain degree.
But overall,, the, the program wassuccessful as a beginning demonstration
program and some of the doctors gotreally nice rewards, you know, tens
of thousands of dollars based on thequality of the service they provided.
So the program was successful and thenit was reborn in a second version of it,
(12:58):
we wound up, Oklahoma really was at thehead of the class when the program ended.
The program wasn't continuedin the health system.
And the one thing I remember, and Ithink that's what Scott was alluding
to when he spoke to you is I was at ameeting, an executive meeting at the
hospital and we presented what theprogram was all about and how we were
(13:19):
going to reduce visits to the emergencyroom, keep people out of the hospital.
And as I was sitting down, there wasa conversation behind me between the
health system, CEO and his consultant whowas his consigliere and his consigliere
whispered in his ear, why would we wantto keep people out of the emergency room?
Because that's wherepeople got to the hospital.
(13:41):
Third of the hospital admissionscame through the emergency room.
It was a money maker for the hospital.
So just from a financiallycompetitive standpoint, it didn't
make very much sense for the healthsystem to continue the program.
I'm not demonizing thehealth system for this.
You know, it's a very competitive markethere in Tulsa and keeping people in
(14:01):
the hospital, being sure the peoplethat the clinic doctors were taking
care of wound up in our hospital wasvery important to the bottom line.
But it was an example of the conflict,the tension between things that
save money and things that generatemoney in the health system economy.
Stacey Richter (14:18):
Just to underline a couple of points that you made there,
which I think is just a stunning, uh,just another example of something that
we've heard repeatedly on this showand if anyone is fascinated by the
story that Dr. Schwartz just related,definitely do go back and listen to
(14:39):
the episode with Dr. Scott Conard.
It's episode 391.
We'll link to it in theshow notes as usual.
But in that earlier show, Dr.Scott Conard tells a similar story.
The hospital administrator said of theadvanced primary care, he said to Dr.
Conard, look, we looked at the numbersand we realized just how many hospital
(14:59):
admissions your group prevented.
We gotta fill up the beds in our hospital.
So we had to shut you down so that ourbeds in our hospital could be filled.
We also had Dr. John Lee on, if I'mjust thinking about this, the story
that Dr. Lee told was of a hospital thatchose to shut down a very successful
program that prevented heart failurepatients from getting readmitted.
(15:23):
And you know, again, the story was someof these heart failure readmissions
are actually very profitable.
And so, you know, we want the readmission.
There's just so many examples here.
Dr. Stan Schwartz (15:34):
Like I said, I don't demonize any health system for
doing what they need to do to survive.
It's the way our system is put together.
It doesn't take a genius tolook at a system like that and
realize that isn't gonna work.
It's a fox and henhouse problem.
Stacey Richter (15:49):
It is very, very important, I think, to break things
down to the fundamental levels thatwe're talking about right here,
and not get confused by marketing.
Dr. Stan Schwartz (15:57):
And just going back to the comprehensive primary care initiative,
it was a great program, but it was a majorvariation on fee for service that occurred
within a fee for service universe.
And the problem was it wound up beinga situation where one leg was going
in one direction and the body wantedto go in another direction, and
that's not a sustainable endeavor.
Stacey Richter (16:19):
I love how you put that.
And the body's a lot heavierthan legs, I'm guessing.
Dr. Stan Schwartz, is there anythingthat you want to sum up with or mention
in the context of that experience.
Dr. Stan Schwartz (16:32):
In the context of that experience, what I'd learned
is that you've got to make changesin how healthcare is financed and
you've got to make the change agentpeople who pay for things, not
for people who receive payment.
That's why after I supposedly retired,I got really interested in employer
sponsored healthcare because althoughemployer sponsored healthcare doesn't
(16:55):
spend the most amount of money in theUnited States, employers cover the most
number of people in the United States.
And if there's one place, change canhappen and it can happen quickly.
It's in employer sponsored health plans.
They are nimble.
They cover people who are notnecessarily vulnerable people.
They cover commercially insuredpatients are generally the most
(17:18):
quote unquote desirable patientsbecause the payment is the greatest.
So they're very attractive to providers.
And providers really wanna followcommercially insured populations.
So we realized that here's the placeyou can really make a difference.
And don't look at Blue Cross.
Don't look at United.
Don't look at health plans.
Don't look at health systems.
(17:40):
Look at employer sponsored plansbecause if you get enough employers
together, they really make a difference.
Health systems, hospitals haveto have commercial populations.
Stacey Richter (17:49):
So recapping what you just said there, and I don't think
any plan sponsor listening shouldforget this, that the profitable
readmissions are the commercial patients.
And if you think back to what I was justtalking about, about how, why do we wanna
eliminate the profitable heart failurereadmissions, like that's who we're
talking about right now, your members.
It's a buyer beware scenario, and aswe've had Andreas Mang talk about as
(18:15):
we've had Claire Brockbank Cora Opsahl,there's been any number of guests on
the podcast who have also echoed exactlywhat you just said, collective action.
60% I think, of Americansare commercially insured.
These are the attractive, these are thedesirable patients, just from a financial
standpoint, for better, for worse.
So there is power there ifanyone chooses to embrace it.
(18:36):
Dr. Stan Schwartz if someone isinterested in learning more about
Zero, where would you direct them?
Dr. Stan Schwartz (18:41):
I'm on LinkedIn, Stanley Schwartz, MD. My co-founder Jim
Millaway is on LinkedIn, James G. Millway.
Or you can go to our website,zero.health, or you can send us an email
at info@zero.health and I assure you areal human will answer your questions.
Stacey Richter (18:59):
Dr. Stan Schwartz, thank you so much for being on
Relentless Health Value today.
Dr. Stan Schwartz (19:05):
Thank you Stacey.
Dr. Scott Conard (19:06):
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
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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