Exploring TPA and Health Plan Inertia with Elizabeth Mitchell: What Plan Sponsors Need to Know.
In this Take 2 of episode 436 of Relentless Health Value, host Stacey Richter speaks with Elizabeth Mitchell, President and CEO of the Purchaser Business Group on Health, about the challenges third-party administrators (TPAs) face, the issues around hidden fees, and the problems with health plan inertia.
They discuss how self-insured employers can find reliable TPA partners, the impact of anti-competitive contracts, and the importance of transparency in healthcare procurement. Mitchell emphasizes the need for direct contracting between employers and providers to reduce costs and improve quality.
The episode covers the implications of the Consolidated Appropriations Act, the role of brokers, and how employers can achieve better value for their healthcare spend.
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08:06 What is the overarching context for health plans in healthcare purchasing?
11:31 Why is it important to reestablish a connection between the people paying for care and people providing care?
13:47 What are the needs of a self-insured employer when managing employee benefits?
19:00 Is it doable for employers to set their own contracts?
21:24 Is transparency presumed?
22:39 Will the new transparency upon us actually expose wasted expense?
24:23 EP408 with Chris Deacon.
25:58 “This is not about individual bad actors. … The systems … that is not aligned.”
27:39 Are there providers who want to work directly with employers?
30:53 Why is it important that incentives need to be aligned?
32:42 EP427 with Rik Renard.
33:51 What’s missing from the conversation on changing health plans?
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Stacey Richter (00:00):
A Take Two
Instead of Jumbo Employer Inertia".
Today I speak with Elizabeth Mitchell.
Tom Nash (00:18):
American Healthcare Entrepreneurs and Executives
You Want to Know, Talking.
Relentlessly Seeking Value.
Stacey Richter (00:26):
Right up front here, let me just state loudly that there
are some amazing independent TPAs,third party administrators out there
who have the expertise, the scrappywillfulness, and the deep desire
to do right by their clients, theirself-insured employer, clients.
And look, they may be facing someof the same headwinds that plan
sponsors themselves face, likeanti-competitive contracts, brokers
(00:48):
who are up to no good, et cetera.
So just keep that in mind as you listen.
And the main point of all of this, if youare a plan sponsor is, find a good TPA
partner, which as Bryce Platt has saidabout consultants, but same rules apply
about TPAs here, the difficulty is beinginformed enough to tell the difference.
So the goal of this show is tohelp with that, the be informed
(01:11):
enough to tell the difference.
All of this being said, this istechnically a Take Two, but we trimmed
it down and welcome to a whole new intro.
So call this a refresher and an updateabout a really, really important topic
from last year that is becoming extremely,maybe even more relevant this year.
Really relevant.
Consider, for example, the show withClaire Brockbank about carrier slash
(01:33):
TPA, RFPs and all of the landminesthat are really expensive, that are
buried in some of these contracts.
Then there was this Cynthia Fishershow from last year about the
millions, maybe billions of dollarsin aggregate going missing in medical
i.e. TPA or ASO spread pricing.
We had "The Mystery of the Weekly ClaimsWire" show with Justin Leader, again,
(01:55):
revealing money that's being disappearedwhen the TPA is withdrawing dollars
from plan sponsor checking accounts.
And then there's the payment integrityepisode with Kimberly Carleson from a
few weeks ago with just another wrinkleon this, namely TPAs or ASOs who insist
on auditing themselves and how thatturns out for members and plan sponsors.
Oh, and last, but certainly not least,is the whistleblower show with Ann
(02:19):
Lewandowski on how a TPA arm of anEBC allegedly pocketed $20 million.
$20 million of their client's pharmarebates, and used that $20 million
to fund their executive bonus pool.
What a time to be alive.
All of this just highlights the hugestakes for plan sponsors to really
(02:39):
understand what their TPA is all about.
And when I say high stakes, I meanfrom both a legal standpoint and
also just vast dollars in play here.
But this episode with Elizabeth Mitchellis also, I'm gonna say extremely
relevant given just a few ripped from theheadlines and news articles such as these.
(02:59):
I'm gonna start actually with a postfrom Kimberly Carleson, and I like
the comment by Jeff Evans who wrote,"How does $8,710 equal $104,266"?
Spoiler alert, it doesn't.
Lots of missing dollars there.
Someone's hands are in the cookie jar.
Oh look, the TPA has entered the chat.
(03:21):
In a nutshell, and I'm quotingsomething Peter Hayes wrote,
he wrote, TPAs have receivedrelatively little public attention.
There's an article in Health Affairsthat describes how TPAs impose hidden
fees, benefit from their own formof spread pricing, and otherwise
prioritize their own financial interestsover those of their plan clients.
Links in the show notes toboth this post, as well as that
(03:43):
original Health Affairs article.
Also, here's a totally other issue.
Let me quote Luke Prettol highlightingsomething Jason Shafrin had written
about a paper by Jeff Marr, DanielPolsky, and Mark Meiselbach.
Let me slightly rephrase what Luke said.
He wrote, Employers pay on averagea 4.7%, so almost a 5% price markup
(04:05):
when hospitals are in their TPAsMedicare Advantage Network, right?
Dr. Eric Bricker talked about this inthat episode, just how TPAs with MA,
Medicare Advantage business negotiatetheir commercial clients to pay
higher rates so that then they can paylower rates for their own MA members.
As Luke wrote on its face, thisoverpayment does not appear to be
(04:27):
solely in the interest of participants.
No kidding.
Tom Nash (04:31):
Hi, this is Tom Nash, editor and producer of the
Relentless Health Value Podcast.
I bet you're wondering, how canI help Relentless Health Value?
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Thanks so much for listening.
Stacey Richter (05:12):
Now, let's spin the wheel here.
There are barriers for TPAs, thirdparty administrators themselves,
even the ones who have a deepdesire to do the right thing.
As Patrick Moore wrote, "MostTPAs still can't do many of the
things that employers might wantbecause there are PPO contracts".
So is it a rock in a hard place situation?
(05:34):
I mean, if the TPA has no other optionsthan using a carrier's PPO network with
all its attendant contractual issues,then yeah, that is one definite challenge.
Along these lines, let me reada post by Rina Tikia, because I
think she sums up this really well.
"When independent TPAs push fortransparency, they're blocked under the
(05:55):
banner of in air quotes, fiduciary risk.
Meanwhile, the largest carriers in PBMswith Cayman, shell subsidiaries, DOJ
Kickback probes, huge hedge fund ties10 million plus lobbying budgets and
antitrust violations continue unchecked.
"They are not only allowed to operate,but celebrated as mainstream options.
Why the double standard question mark?Political donations, foundation, smoke
(06:17):
screens, nonprofit status as a PRshield." These are excellent questions.
And here's another challenge, brokers.
Ramesh Kumar Budhani wrote about this one,just how hard it is sometimes to find for
TPA, an independent TPA, trying to do theright thing to find brokers who prioritize
doing the right thing for employersand helping their clients save money.
The summary of all of this.
(06:39):
There are TPAs and there areASOs who aren't even trying.
They are going to ride the flywheel,the gravy train, and catch all of
the dollars flying off of it for aslong as they can manage to clinging
to it with all 10 of their fingers.
Then there are TPAs, mostly indies,trying super hard to do the right thing.
(07:00):
But how successful they are is going todepend on how boxed in they are by the PPO
networks or the carriers that the brokersor even plan sponsors may insist on.
Just how courageous they areand just how smart they are and
experience they are about themarket and how it actually operates.
So the show that follows is about allof this, including how we can inspire
(07:20):
TPAs, which in the show that followssubsumes ASOs kind of into it, but
in the show that follows, I hope it'sinspiring to create an environment
so that the market demands TPAs thatdo all of the things, and we make
inertia not a viable business strategy.
Elizabeth Mitchell, my guest todaycurrently serves as the president and CEO
(07:42):
of the Purchaser Business Group on Health.
My name is Stacey Richter.
This podcast is sponsoredby Aventria Health Group.
Elizabeth Mitchell welcometo Relentless Health Value.
Elizabeth Mitchell (07:51):
Thanks, Stacey.
I'm really glad to be here.
Stacey Richter (07:53):
Well, it is a pleasure to have you here today.
What I would love to drill into is afocus on TPAs and ASOs and what they
are and what they're supposed to bedoing or not supposed to be doing.
But before we go there, isthere any overarching context?
Elizabeth Mitchell (08:09):
There is because the entire environment for healthcare
purchasing has changed and is changing,which is why we need to revisit the role
of health plans in healthcare purchasing.
Jumbo self-insured employers arespending their own money and their
employees money on healthcare services,our members spend over $350 billion
(08:33):
a year on healthcare services andpeople's health is not improving.
All of those dollars seem to begetting lost in the system, and it is
particularly ironic because that moneyis also not going to providers in the
way that our members would like to see.
(08:54):
They are very much aligned withproviders, particularly primary care
providers and mental health providers.
And yet there is some disconnectbetween the amount they are paying and
the amount the providers are getting.
Stacey Richter (09:06):
Members of PBGH that you serve are spending
$350 billion a year at least.
To get members, employees better health.
Elizabeth Mitchell (09:17):
Absolutely.
And they want it to be easily accessed.
One of our members C-Suite representativesconcluded they lose as much on lost
productivity of people bouncingaround an un-navigable healthcare
system and needing to take days offand try to find appointments for
(09:37):
them and their family members as theyactually spend on healthcare services.
And people do that because theyhave to during the workday.
There is so much room for improvement.
Again, this money is coming fromUS businesses and US families.
Health plans are a pass through.
It is not their money.
The money belongs to the employers andthe employees and they should be expecting
(10:03):
much better value for their spend.
Stacey Richter (10:05):
It's interesting that you use the term pass through, on
one side you have employer commercialentities paying $350 billion.
And then on the other side you have thosethat are actually providing the care.
That's kind of where the valueat a minimum is realized.
And then you have this whole spacein the middle where the dollars
(10:27):
are ostensibly passing through.
And that's what I wanna talk abouttoday because it kind of feels
like there's some dollars thatgo missing in the middle there.
Elizabeth Mitchell (10:36):
30%.
Stacey Richter (10:37):
30% go missing in the middle.
Elizabeth Mitchell (10:39):
Well.
If it were just a pass through, ifhealth plans did what Jumbo self-insured
employers needed, they would simplypay the claims at a fair cost for
agreed upon quality standards.
Right?
It is so simple.
I've heard Mark Cubansay that about drugs.
They want high quality, accessiblecare, and they wanna pay a fair price.
(11:01):
But then you get these middlemen, it'slike the middle earth of healthcare.
Money goes in and it doesn't come out.
It doesn't reach the providers.
We know because we measurethis at PBGH annually.
The amount of money going intoprimary care as a percentage
of total spend is going down.
This is despite our members andmany, many others saying they want to
(11:25):
increase investment in primary care.
But then something gets lostin translation in the middle.
We have got to reconnect andreestablish the direct connection
between the people paying for careand the people providing the care
without all of the waste in the middle.
Stacey Richter (11:43):
So I'm gonna circle back on the exactly what
you just said at the end there.
The reestablish the direct connectionbetween the ultimate purchasers,
i.e., self-insured employersor other plan sponsors and the
provider organizations themselves.
But what I wanna do right now istalk a little bit about that middle
aspect or that middle entity.
Elizabeth Mitchell (12:02):
Self-insured employers retain all the financial risk.
It's their money is their risk.
They hire health plans to administer thebenefits and to develop the contracts
with the providers because they donot have the capacity to go and create
a contract with every primary carepractice or every hospital or specialist.
(12:24):
So they need an administrative partnerto establish those contracts and to pay
claims, and frankly, that's kind of it.
But what happens is even when you havea really flexible, effective TPA, they
tend to want to be a health plan whenthey grow up, they add lots of services
(12:47):
and care management or care coordination.
Optimal care management is actually donein a primary care practice, but health
plans like to take on larger and largerroles in the management of healthcare.
So they retain more and more of themoney when they do that, and many
health plans will not unbundle iteven when the employer asks them to.
(13:10):
Even when they say, I wouldprefer my primary care partner
to do this, they say, Nope.
All or nothing.
Package of services.
If they just paid the claimseffectively in a timely way,
provided transparent informationon cost and quality, and managed
the contracts, that would be great.
But that is not happening typically.
(13:33):
And what also happens is when youget an effective TPA, they tend to
be bought by a very large insurer.
It's like catch and kill.
They are acquired and then theygo in a different direction.
Stacey Richter (13:47):
Summing up what you just said, the need of a self-insured employer
have somebody who can do three things.
Number one, pay the claims.
Number two, transparently providedata back relative to said claims.
And then thirdly, docontract negotiations.
Like it should be the day job of thismiddle person to do those three things
(14:10):
because as you said, a self-insuredemployer, they're doing benefits, is
your quote from you, which I love.
You know, a lot of times.
Human resources groups are doing healthbenefits off the sides of their desks.
Like they simply do not have timeto be doing primary care contracts
across the country or negotiatingbundles with every single orthopedic
practice across the country, right?
So like you need an entity sittingin the middle wherein it is their day
(14:32):
job to be doing those three things.
What I'm understanding you sayingis that should be the definition
of a third party administrator.
However, because a lot of times thisthird party administration is being
offered as a service from a largercarrier, what they try to do is throw
some of the other services that they mayhave available into these contracts, and
(14:55):
that's when things start getting muddy.
Because there isn't a lot of optionsin the marketplace right now, they
wind up getting saddled, payingfor stuff that they may not need.
Elizabeth Mitchell (15:05):
That's right.
You would be amazed at how resistantmany of the plans are to doing
what employers ask them to do.
Even sharing data effectively oradding a doula benefit or things
that employers know are the rightthing for their employees and to
(15:25):
effectively manage their plan.
It is remarkably challenging.
That said, they are increasinglystepping into that space.
We have employers who are literallytaking the time to design bundles
for maternity care for an example.
Negotiate those contracts directly withhealth systems because that is their
(15:47):
best way of getting what they actuallywant and need for their employees.
We have multiple members who are directlycontracting for advanced primary care.
They are saying, thisis what we want to buy.
This is what we're prepared to pay for it.
These are the metrics to whichwe will hold you accountable.
Then they're having directrelationships with those providers.
(16:10):
They're understanding their barriers,like they can't integrate behavioral
health because it's all carved outby the health plan as an example.
So they are understanding the barriersthat their provider partners face,
and they're working to address them.
What is happening is in everycase, they are seeing a 10 to 30%
reduction in total cost of care, muchbetter access, much better patient
(16:34):
experience and better outcomes.
So we know this is possibleand it should be scalable.
Yet many of the administrators havenot achieved those same results.
So what I predict, particularly underthe Consolidated Appropriations Act,
where self-insured employers are beingheld accountable for high value care.
(16:58):
They are going to be moving more and moreinto these direct relationships where
they understand exactly what's going on.
It's all visible and transparent,and they have more control.
Because one of the key changesunder the CAA is they are now
being held to an expert standard.
They can't say, well, my consultanttold me to do it, or my health
(17:20):
plan said it was a good idea.
They are being held to an expert standard.
They have to take this in-house.
They have to really dive into what ishappening, where the money's going,
what are the outcomes that they'regetting, and they've gotta own it.
This is going to be a verydifferent dynamic going forward.
They are accountable and thataccountability will be passed
(17:41):
on to all of their partners.
Stacey Richter (17:43):
So, lemme paraphrase.
In summary, you have some employers,they have asked their current third
party administrator, ASA, ASO, whateveracronym we wanna use here to help
them improve maternal health benefits,including a doula or do something, right?
And just banged their head against thewall for so long, just not being helped.
(18:07):
So these employers said, you know,it might just be easier if I go
to my local providers myself.
So they go directly to the providers inthe area or where their employees are,
and they negotiate these direct contracts.
And when they do, you start to seeexactly what we started talking
about at the very beginning, that10 to 30% of spend, which is getting
(18:30):
sucked up by a vacuum in the middleand is not actually passing through.
Plus you start doing these directcontracts, the data becomes
transparent because the providersand the employers themselves have a
lot of incentive to be aligned there.
Elizabeth Mitchell (18:45):
My friend Harold Miller says, having a health plan
in the middle between an employerand a provider is like being at
the UN with a bad translator.
We lose the plot of trying tosimply pay for high value care.
It is doable and it's,it's remarkably simple.
We are in the process right nowof supporting a couple of our
(19:07):
members negotiate direct contracts.
I kept thinking there was goingto be more complexity to it.
We set the quality metrics, we set thepayment level, and then they pay it.
It is so amazing to me how much we havecomplexified this, if that's a word.
Once you just determine what you wannabuy, you set the standards like they
(19:30):
do procurement for anything else.
You find a partner who iswilling to meet those standards.
You write a check and then, andthen you monitor performance.
This is doable.
It is happening right now.
I think part of the challenge isthat self-insured employers don't
talk about this very much, right?
They're not like the breathlessVCs on LinkedIn all day.
(19:52):
Ooh, we got a new customer.
Ooh, we have a new investor.
They're just keeping their headsdown and they are doing this work.
Stacey Richter (19:58):
First of all, you said you had a group of self-insured employers.
They directly contracted.
They were just like, thisis really not that hard.
Did they have the TPA in the middle?
The third party administeractually paying?
Because the employer still needed tofigure out how to pay the provider, or
was the employer actually cutting a check?
Elizabeth Mitchell (20:16):
It depends on the arrangement and it depends on the scale.
If it is multi-region or multi-practice,you tend to still need the TPA.
They have got to just dothe basic administration.
But if it is a direct contractwith one practice or one hospital
or one system, sometimes it canbe as easy as writing a check.
Now, I'm not downplaying theregulatory burdens of some of
(20:41):
this because there are states likeCalifornia that make it very hard for
providers to assume financial risk.
But it is doable.
And our members have done directcontracts that have been very successful
with all types of organizations.
Stacey Richter (20:56):
Alright, if I'm thinking this through the timeline
here, it was kind of like employerswent to provider organizations
and they cooked up their own deal.
They're just like, you know, handshake,we're gonna pay you some amount.
At that point, if the TPA a wantsto administer it, like their pricing
kind of has to be transparentbecause everybody knows what the
(21:16):
dollar amount they should be payingand what they should be receiving.
So if there's dollars that go missingin that equation, it is obvious.
So if the TPA chooses to accept thechallenge, they have to be transparent.
Do TPAs agree to terms like that?
Elizabeth Mitchell (21:31):
There is a reason that it took federal action to get transparency
from health plans and hospitals.
It's not like people weren'tasking for it for decades.
The resistance to thetransparency was high.
And as we start to get visibilityinto what was going on in all
(21:51):
of those arrangements, it'sstarting to become clear why.
So yes, transparency is presumed.
I really want to point out though thatthere are very few, if any, TPAs out
there who are as flexible and responsiveand transparent as employers want.
There are some newcomers.
(22:11):
I'm wishing them all the luckin the world, but I really think
it's important to understand howchallenging it is for a jumbo employer
to negotiate contracts all over thecountry without a partner like that.
Stacey Richter (22:24):
Yeah, because I actually have heard stories of employers
working with provider organizationsand they spend a lot of time and
they come up with a great contractand then they go to their ASO, TPA,
ASA, and that entity is like, no.
Elizabeth Mitchell (22:39):
Remember, all the health plans have their own quality
metrics or their own payment arrangements.
Their own networks that theyhave already established.
I believe the new transparency thatis upon us is going to expose all
of the money that has been wasted intraditional healthcare procurement.
(23:02):
It is going to be very awkward forthose who have signed those contracts.
We are seeing our membersusing newly available data like
transparent hospital pricing.
They are literally going to thewebsites of their regional hospitals
and seeing what is the average charge.
And they're looking at their ownclaims and say, wait a minute,
I paid like five times that.
And actually gettingrefunds from the hospitals.
(23:25):
In that same example, however, wherethat employer said, hold the phone.
I am paying way too much.
I want my money back.
The health plan in that scenarioactually tried to block that because
they were going to get a lowerrate than their network charge.
Just think about this, the health plan,who was supposed to be representing
(23:46):
the employer as the negotiator ofthe best rates was trying to stop,
said employer from getting a betterrate directly from the provider.
And that was not the only example.
We had another employer try todo this in another state and the
health plan told them to stop.
So we have thought about the healthplans acting on behalf of the
(24:08):
self-insured employer, but I thinkthat relationship is really going to
be called into question as informationbecomes more and more transparent.
Stacey Richter (24:17):
Yeah and just another example of what you're talking about there
is the Bricklayers case in Massachusetts.
There's a show with ChrisDeacon, "Who's Suing Who", but
that's also the premise there.
The Bricklayers looked at transparentlyavailable hospital pricing information
and just realized how much their planwas charging them in the middle there.
(24:38):
So yeah, it's a thing.
Elizabeth Mitchell (24:41):
I feel so bad for some of these employer purchasers
who have trusted so many people intheir supply chain of healthcare.
Brokers, consultants, health plans, PBMs.
Now with this newly transparentinformation, they are realizing they
were not always working on their behalf.
They have said, well, myconsultant advised this.
(25:03):
I really trust them.
I like them.
I've known them for years.
I'm paying them 20 to $30 PM-PM,so they should be giving me the
best ideas and the best deals.
And as this starts to come to light, itis really unnerving for the purchasers who
thought they were doing the right thing.
They trusted people who weren'taligned with their needs.
Stacey Richter (25:24):
It is so fraught on a number of levels and it's almost
like a crisis of trust that some ofthese employers are having because
they've been working with theirbroker, EBC or practice lead for years.
And sometimes it's like maybe thatthat person is actually trustworthy.
It's that that individual doesn'tunderstand what their company is doing.
It is even possible that the individualis telling the truth when they
(25:48):
say that there's no fees here orthere or whatever, because they're
not even cognizant of what theirorganization is doing on the backend.
Elizabeth Mitchell (25:54):
Stacey, I wanna pause right there because that is so important.
This is not about individual bad actors.
I am not suggesting everyone was shadyand trying to do the wrong thing.
The systems, the incentives, the companiesand who they're actually accountable
to that is not aligned with the needsof the people paying for healthcare.
Stacey Richter (26:16):
Are there any concrete examples of provider
organizations and employers beingaligned and accountable to each other.
Elizabeth Mitchell (26:23):
We just released an RFP in a market for high quality whole
person primary care on behalf of threeof our jumbo self-insured employers.
They want to take this on themselves.
This is so new and different.
A lot of the providers like didn'teven understand the dynamic.
What do you mean we're responding to you?
(26:43):
What do you mean?
There's no health plan, andyet it was wildly successful.
It is around quality and equity and accessand all the things that these employers
want on behalf of their employees.
This is starting to happen because thereare employer purchasers out there, and I
really wanna include public purchasers.
They are ready to take this on and helptheir employees help make sure that they
(27:07):
are getting the care that they deserve.
Stacey Richter (27:09):
I am seeing more and more provider organizations and doctors
themselves really aligned with whatyou're saying because you know the
enemy of your enemy is your friend.
Just that whole international relationsstatement that if you have a doctor
really looking to do the right thing bypatients, the employer, just based on,
again, going back to the very beginning ofthis conversation, is another entity which
(27:32):
is concerned about whole person health.
So working together canhave a lot of alignment.
Elizabeth Mitchell (27:38):
You're exactly right.
I can't describe the number of timeswe are approached by providers who
want to work directly with employers.
Maybe not all of them, but thereare a lot of them out there who are
ready for that type of relationship.
Stacey Richter (27:52):
Moby Parsons, Ben Schwartz.
Those are two orthopedic surgeons whotalk about this kind of thing a lot.
Elizabeth Mitchell (27:58):
Right now, there is no forum for that.
There is no platform to talkdirectly to an employer other
than literally calling them up onthe phone, and that is happening.
This is a really exciting opportunity,particularly in regions where
you have high concentrations ofheadcount across multiple employers.
We're going into our fourth market now.
(28:18):
Providers who raise their handand say, well, great, because
that's what we wanna provide.
That is how we want to practice.
It's clear that they want the same things.
Stacey Richter (28:27):
I guess there's like Mishi in, um, New York.
What you are saying is resonating,maybe philosophically, because if
you think about this from an employerstandpoint, the, and you know, another
word for an employer is a customer.
We all realize that as customersof almost every other thing.
It's up to us to set the standard.
(28:48):
It's hard sometimes, you know, can youblame a vendor for being self-interested
and giving you a bid that is wildly high?
Like I guess that's how capitalismworks, that they Sure feel free
to give me a super high bid.
But then it's kind of likemy job to say no, I'm not.
Basically applying purchasing discipline.
Right?
That they probably applyelsewhere in the business.
(29:11):
It's difficult, but it's almost theresponsibility as a customer, as a
fiduciary to the employees on the planto apply the same purchasing discipline
and others have said this on the showthat we do elsewhere to healthcare
and to understand what we want andto figure out how to get it because
otherwise the wolfs are in the hen house.
Elizabeth Mitchell (29:31):
I completely agree with that.
In a market, someone gives you a bad bid.
You don't take it.
You don't buy it.
Here's the challenge is one, there'sbeen no transparency and they have
not been able to get their data toactually even evaluate the performance.
One of the changes within the CAA, itabsolutely clarifies that employers
(29:51):
are entitled to the data theyneed to evaluate cost and quality.
But then the other problem,there are not any alternatives.
If all of the plans are doing the samething, where are they supposed to go?
I think that there aresome new market entrants.
I also think there's a big opportunityif you could just have a platform that
(30:12):
does flexible payments, innovativepayment models, without all the other
stuff that no one wants to buy, Ithink that would be pretty compelling.
I do think those are starting to emerge,but right now, if you are looking
for a big health plan administrator,there's not, not a lot of options
for something really different.
Stacey Richter (30:34):
If you're an entrepreneur and you're looking for a need in the
marketplace, set up a third partyadministrator where you, and I'm going
back to what you said earlier, where youpay the claims, you do that well, you're
transparent with the data and that youdo a contract negotiation really well.
Like just do those threethings really well.
And there's a big market out there.
Elizabeth Mitchell (30:52):
This is really important.
A lot of the new market entrants,they come with VC backing or whatever.
Their investors want them to make money.
Totally makes sense.
No problem.
However, their incentives mustbe aligned with the self-insured
employer for this to work.
(31:13):
They need to make money bydoing the right thing, not just
maximizing healthcare spending.
That just has to be clear from the outset.
Stacey Richter (31:23):
And the fees have to be transparent.
Elizabeth Mitchell (31:25):
One other thing that is extremely important, we've talked
a lot about setting a fair price andit should absolutely be transparent.
What my members care even more aboutthough, is the quality of care.
They need to know their employeesare going to high quality, safe
providers, and to date, mosthealth plans have not been terribly
(31:50):
innovative around quality measurement.
It's not that we don'thave the quality measures.
I was on the board of the NationalQuality Forum a decade ago.
We've got meaningful quality measuresthat have been vetted and are valid.
They are not being used in contractsand that is very important to employers.
Because frankly, all the evidence showsthat you save on the total cost of care.
(32:14):
That is such a win because patients arehealthier, they don't have unnecessary
procedures, and they save money.
Better care costs less, but you have to bereally clear about the quality standards
you are using to measure better care.
That is entirely doable.
Stacey Richter (32:33):
I mean, that's the actual literal definition of value,
quality at a fair price, and it'sa real call to action, frankly, to
provider organizations themselves.
We had Rik Renard on the show, and one ofthe things that he made very clear is that
a small single digits, really percentageof provider organizations themselves
are measuring absolutely anything.
(32:53):
Patient reported outcomes, clinicaloutcomes, the efficiency of the
services that they're providing.
So I am also hearing a realcall to action for providers.
If you want a commercial contract,it's gonna become more and more
important to figure out how you'remeasuring what you're doing.
And that is not something that youcan like figure out next Tuesday.
Elizabeth Mitchell (33:11):
I wanna be really clear there is going to
be change required on all sides.
Employers have not been terriblyclear about what quality metrics
matter to them or access standards.
And so we took it upon ourselvesover the last couple of years
to really articulate that we'retrying to do our part being clear.
Any provider group that wants topartner directly, though, there
(33:33):
is an expectation that partnersreally step up and do that quality
measurement and transparent reporting.
They can continue to not be transparent,but if they want to work directly
with employers, they're gonna haveto share their quality performance.
Stacey Richter (33:50):
Elizabeth Mitchell, is there anything I neglected to
ask you that you wanna mention here?
Elizabeth Mitchell (33:55):
We seem to have this strange Stockholm Syndrome
identifying the folks who havemade the system as bad as it is.
We blame employers for not havingpurchased more effectively.
Sure, there is blame to go around, butwhy aren't we holding health system
and health plan executives accountable?
(34:16):
Why aren't there boards asking them toensure affordability, equity, quality?
I really believe we need to put thataccountability where it belongs.
Yes, it should be shared.
On all sides, but it's not enough tohave the purchasers buying effectively.
We have got to have accountablepartners to work with.
Stacey Richter (34:39):
Do you feel like that's happening because everybody seems to
inherently agree that those entitiesare accountable to their shareholders,
whereas somehow or another theemployers are the only ones that are
accountable to members and patients.
Elizabeth Mitchell (34:54):
Well, I guess they get a pass because everyone says, Oh,
well, we can't expect any more, theyhave to do that for their shareholders.
But they are not providing whatwe need as a healthcare system.
We are seeing more and more evidence ofthis massive growth in these health plans
and their profits, not translating toaffordable, equitable, accessible care.
(35:19):
Maybe we find alternativepartners who don't just have to
answer to their stockholders.
Stacey Richter (35:24):
Elizabeth Mitchell, thank you so much for being on
Relentless Health Value today.
Elizabeth Mitchell (35:28):
It's such a pleasure.
Thank you.
Cora Opsahl (35:30):
Hi, this is Cora Opsahl with the 32BJ Health Fund.
If you love Relentless Health Value justlike I do, then I will encourage you,
please sign up for the newsletter, followon your podcast app, and leave a review
. Tell everyone else about how greatthis is, and I'll let you're learning.
A Take Two
Instead of Jumbo Employer Inertia".
Today I speak with Elizabeth Mitchell.
Tom Nash (00:18):
American Healthcare Entrepreneurs and Executives
You Want to Know, Talking.
Relentlessly Seeking Value.
Stacey Richter (00:26):
Right up front here, let me just state loudly that there
are some amazing independent TPAs,third party administrators out there
who have the expertise, the scrappywillfulness, and the deep desire
to do right by their clients, theirself-insured employer, clients.
And look, they may be facing someof the same headwinds that plan
sponsors themselves face, likeanti-competitive contracts, brokers
(00:48):
who are up to no good, et cetera.
So just keep that in mind as you listen.
And the main point of all of this, if youare a plan sponsor is, find a good TPA
partner, which as Bryce Platt has saidabout consultants, but same rules apply
about TPAs here, the difficulty is beinginformed enough to tell the difference.
So the goal of this show is tohelp with that, the be informed
(01:11):
enough to tell the difference.
All of this being said, this istechnically a Take Two, but we trimmed
it down and welcome to a whole new intro.
So call this a refresher and an updateabout a really, really important topic
from last year that is becoming extremely,maybe even more relevant this year.
Really relevant.
Consider, for example, the show withClaire Brockbank about carrier slash
(01:33):
TPA, RFPs and all of the landminesthat are really expensive, that are
buried in some of these contracts.
Then there was this Cynthia Fishershow from last year about the
millions, maybe billions of dollarsin aggregate going missing in medical
i.e. TPA or ASO spread pricing.
We had "The Mystery of the Weekly ClaimsWire" show with Justin Leader, again,
(01:55):
revealing money that's being disappearedwhen the TPA is withdrawing dollars
from plan sponsor checking accounts.
And then there's the payment integrityepisode with Kimberly Carleson from a
few weeks ago with just another wrinkleon this, namely TPAs or ASOs who insist
on auditing themselves and how thatturns out for members and plan sponsors.
Oh, and last, but certainly not least,is the whistleblower show with Ann
(02:19):
Lewandowski on how a TPA arm of anEBC allegedly pocketed $20 million.
$20 million of their client's pharmarebates, and used that $20 million
to fund their executive bonus pool.
What a time to be alive.
All of this just highlights the hugestakes for plan sponsors to really
(02:39):
understand what their TPA is all about.
And when I say high stakes, I meanfrom both a legal standpoint and
also just vast dollars in play here.
But this episode with Elizabeth Mitchellis also, I'm gonna say extremely
relevant given just a few ripped from theheadlines and news articles such as these.
(02:59):
I'm gonna start actually with a postfrom Kimberly Carleson, and I like
the comment by Jeff Evans who wrote,"How does $8,710 equal $104,266"?
Spoiler alert, it doesn't.
Lots of missing dollars there.
Someone's hands are in the cookie jar.
Oh look, the TPA has entered the chat.
(03:21):
In a nutshell, and I'm quotingsomething Peter Hayes wrote,
he wrote, TPAs have receivedrelatively little public attention.
There's an article in Health Affairsthat describes how TPAs impose hidden
fees, benefit from their own formof spread pricing, and otherwise
prioritize their own financial interestsover those of their plan clients.
Links in the show notes toboth this post, as well as that
(03:43):
original Health Affairs article.
Also, here's a totally other issue.
Let me quote Luke Prettol highlightingsomething Jason Shafrin had written
about a paper by Jeff Marr, DanielPolsky, and Mark Meiselbach.
Let me slightly rephrase what Luke said.
He wrote, Employers pay on averagea 4.7%, so almost a 5% price markup
(04:05):
when hospitals are in their TPAsMedicare Advantage Network, right?
Dr. Eric Bricker talked about this inthat episode, just how TPAs with MA,
Medicare Advantage business negotiatetheir commercial clients to pay
higher rates so that then they can paylower rates for their own MA members.
As Luke wrote on its face, thisoverpayment does not appear to be
(04:27):
solely in the interest of participants.
No kidding.
Tom Nash (04:31):
Hi, this is Tom Nash, editor and producer of the
Relentless Health Value Podcast.
I bet you're wondering, how canI help Relentless Health Value?
Well, that's pretty easy.
Have you signed up for the newsletter?
The newsletter is great.
It tells you when eachepisode's coming out.
It gives you an introduction tothe episode with all the mention
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(04:51):
Have you ever left a review forus on Apple Podcast or Spotify?
That would help greatly.
Another thing you could do, you could headover to our website and donate to the tip
jar, maybe become a sustaining member.
In many ways, RelentlessHealth runs like an unofficial
nonprofit, a very, very nonprofit.
So anything that you givewould help us pay the bills.
Thanks so much for listening.
Stacey Richter (05:12):
Now, let's spin the wheel here.
There are barriers for TPAs, thirdparty administrators themselves,
even the ones who have a deepdesire to do the right thing.
As Patrick Moore wrote, "MostTPAs still can't do many of the
things that employers might wantbecause there are PPO contracts".
So is it a rock in a hard place situation?
(05:34):
I mean, if the TPA has no other optionsthan using a carrier's PPO network with
all its attendant contractual issues,then yeah, that is one definite challenge.
Along these lines, let me reada post by Rina Tikia, because I
think she sums up this really well.
"When independent TPAs push fortransparency, they're blocked under the
(05:55):
banner of in air quotes, fiduciary risk.
Meanwhile, the largest carriers in PBMswith Cayman, shell subsidiaries, DOJ
Kickback probes, huge hedge fund ties10 million plus lobbying budgets and
antitrust violations continue unchecked.
"They are not only allowed to operate,but celebrated as mainstream options.
Why the double standard question mark?Political donations, foundation, smoke
(06:17):
screens, nonprofit status as a PRshield." These are excellent questions.
And here's another challenge, brokers.
Ramesh Kumar Budhani wrote about this one,just how hard it is sometimes to find for
TPA, an independent TPA, trying to do theright thing to find brokers who prioritize
doing the right thing for employersand helping their clients save money.
The summary of all of this.
(06:39):
There are TPAs and there areASOs who aren't even trying.
They are going to ride the flywheel,the gravy train, and catch all of
the dollars flying off of it for aslong as they can manage to clinging
to it with all 10 of their fingers.
Then there are TPAs, mostly indies,trying super hard to do the right thing.
(07:00):
But how successful they are is going todepend on how boxed in they are by the PPO
networks or the carriers that the brokersor even plan sponsors may insist on.
Just how courageous they areand just how smart they are and
experience they are about themarket and how it actually operates.
So the show that follows is about allof this, including how we can inspire
(07:20):
TPAs, which in the show that followssubsumes ASOs kind of into it, but
in the show that follows, I hope it'sinspiring to create an environment
so that the market demands TPAs thatdo all of the things, and we make
inertia not a viable business strategy.
Elizabeth Mitchell, my guest todaycurrently serves as the president and CEO
(07:42):
of the Purchaser Business Group on Health.
My name is Stacey Richter.
This podcast is sponsoredby Aventria Health Group.
Elizabeth Mitchell welcometo Relentless Health Value.
Elizabeth Mitchell (07:51):
Thanks, Stacey.
I'm really glad to be here.
Stacey Richter (07:53):
Well, it is a pleasure to have you here today.
What I would love to drill into is afocus on TPAs and ASOs and what they
are and what they're supposed to bedoing or not supposed to be doing.
But before we go there, isthere any overarching context?
Elizabeth Mitchell (08:09):
There is because the entire environment for healthcare
purchasing has changed and is changing,which is why we need to revisit the role
of health plans in healthcare purchasing.
Jumbo self-insured employers arespending their own money and their
employees money on healthcare services,our members spend over $350 billion
(08:33):
a year on healthcare services andpeople's health is not improving.
All of those dollars seem to begetting lost in the system, and it is
particularly ironic because that moneyis also not going to providers in the
way that our members would like to see.
(08:54):
They are very much aligned withproviders, particularly primary care
providers and mental health providers.
And yet there is some disconnectbetween the amount they are paying and
the amount the providers are getting.
Stacey Richter (09:06):
Members of PBGH that you serve are spending
$350 billion a year at least.
To get members, employees better health.
Elizabeth Mitchell (09:17):
Absolutely.
And they want it to be easily accessed.
One of our members C-Suite representativesconcluded they lose as much on lost
productivity of people bouncingaround an un-navigable healthcare
system and needing to take days offand try to find appointments for
(09:37):
them and their family members as theyactually spend on healthcare services.
And people do that because theyhave to during the workday.
There is so much room for improvement.
Again, this money is coming fromUS businesses and US families.
Health plans are a pass through.
It is not their money.
The money belongs to the employers andthe employees and they should be expecting
(10:03):
much better value for their spend.
Stacey Richter (10:05):
It's interesting that you use the term pass through, on
one side you have employer commercialentities paying $350 billion.
And then on the other side you have thosethat are actually providing the care.
That's kind of where the valueat a minimum is realized.
And then you have this whole spacein the middle where the dollars
(10:27):
are ostensibly passing through.
And that's what I wanna talk abouttoday because it kind of feels
like there's some dollars thatgo missing in the middle there.
Elizabeth Mitchell (10:36):
30%.
Stacey Richter (10:37):
30% go missing in the middle.
Elizabeth Mitchell (10:39):
Well.
If it were just a pass through, ifhealth plans did what Jumbo self-insured
employers needed, they would simplypay the claims at a fair cost for
agreed upon quality standards.
Right?
It is so simple.
I've heard Mark Cubansay that about drugs.
They want high quality, accessiblecare, and they wanna pay a fair price.
(11:01):
But then you get these middlemen, it'slike the middle earth of healthcare.
Money goes in and it doesn't come out.
It doesn't reach the providers.
We know because we measurethis at PBGH annually.
The amount of money going intoprimary care as a percentage
of total spend is going down.
This is despite our members andmany, many others saying they want to
(11:25):
increase investment in primary care.
But then something gets lostin translation in the middle.
We have got to reconnect andreestablish the direct connection
between the people paying for careand the people providing the care
without all of the waste in the middle.
Stacey Richter (11:43):
So I'm gonna circle back on the exactly what
you just said at the end there.
The reestablish the direct connectionbetween the ultimate purchasers,
i.e., self-insured employersor other plan sponsors and the
provider organizations themselves.
But what I wanna do right now istalk a little bit about that middle
aspect or that middle entity.
Elizabeth Mitchell (12:02):
Self-insured employers retain all the financial risk.
It's their money is their risk.
They hire health plans to administer thebenefits and to develop the contracts
with the providers because they donot have the capacity to go and create
a contract with every primary carepractice or every hospital or specialist.
(12:24):
So they need an administrative partnerto establish those contracts and to pay
claims, and frankly, that's kind of it.
But what happens is even when you havea really flexible, effective TPA, they
tend to want to be a health plan whenthey grow up, they add lots of services
(12:47):
and care management or care coordination.
Optimal care management is actually donein a primary care practice, but health
plans like to take on larger and largerroles in the management of healthcare.
So they retain more and more of themoney when they do that, and many
health plans will not unbundle iteven when the employer asks them to.
(13:10):
Even when they say, I wouldprefer my primary care partner
to do this, they say, Nope.
All or nothing.
Package of services.
If they just paid the claimseffectively in a timely way,
provided transparent informationon cost and quality, and managed
the contracts, that would be great.
But that is not happening typically.
(13:33):
And what also happens is when youget an effective TPA, they tend to
be bought by a very large insurer.
It's like catch and kill.
They are acquired and then theygo in a different direction.
Stacey Richter (13:47):
Summing up what you just said, the need of a self-insured employer
have somebody who can do three things.
Number one, pay the claims.
Number two, transparently providedata back relative to said claims.
And then thirdly, docontract negotiations.
Like it should be the day job of thismiddle person to do those three things
(14:10):
because as you said, a self-insuredemployer, they're doing benefits, is
your quote from you, which I love.
You know, a lot of times.
Human resources groups are doing healthbenefits off the sides of their desks.
Like they simply do not have timeto be doing primary care contracts
across the country or negotiatingbundles with every single orthopedic
practice across the country, right?
So like you need an entity sittingin the middle wherein it is their day
(14:32):
job to be doing those three things.
What I'm understanding you sayingis that should be the definition
of a third party administrator.
However, because a lot of times thisthird party administration is being
offered as a service from a largercarrier, what they try to do is throw
some of the other services that they mayhave available into these contracts, and
(14:55):
that's when things start getting muddy.
Because there isn't a lot of optionsin the marketplace right now, they
wind up getting saddled, payingfor stuff that they may not need.
Elizabeth Mitchell (15:05):
That's right.
You would be amazed at how resistantmany of the plans are to doing
what employers ask them to do.
Even sharing data effectively oradding a doula benefit or things
that employers know are the rightthing for their employees and to
(15:25):
effectively manage their plan.
It is remarkably challenging.
That said, they are increasinglystepping into that space.
We have employers who are literallytaking the time to design bundles
for maternity care for an example.
Negotiate those contracts directly withhealth systems because that is their
(15:47):
best way of getting what they actuallywant and need for their employees.
We have multiple members who are directlycontracting for advanced primary care.
They are saying, thisis what we want to buy.
This is what we're prepared to pay for it.
These are the metrics to whichwe will hold you accountable.
Then they're having directrelationships with those providers.
(16:10):
They're understanding their barriers,like they can't integrate behavioral
health because it's all carved outby the health plan as an example.
So they are understanding the barriersthat their provider partners face,
and they're working to address them.
What is happening is in everycase, they are seeing a 10 to 30%
reduction in total cost of care, muchbetter access, much better patient
(16:34):
experience and better outcomes.
So we know this is possibleand it should be scalable.
Yet many of the administrators havenot achieved those same results.
So what I predict, particularly underthe Consolidated Appropriations Act,
where self-insured employers are beingheld accountable for high value care.
(16:58):
They are going to be moving more and moreinto these direct relationships where
they understand exactly what's going on.
It's all visible and transparent,and they have more control.
Because one of the key changesunder the CAA is they are now
being held to an expert standard.
They can't say, well, my consultanttold me to do it, or my health
(17:20):
plan said it was a good idea.
They are being held to an expert standard.
They have to take this in-house.
They have to really dive into what ishappening, where the money's going,
what are the outcomes that they'regetting, and they've gotta own it.
This is going to be a verydifferent dynamic going forward.
They are accountable and thataccountability will be passed
(17:41):
on to all of their partners.
Stacey Richter (17:43):
So, lemme paraphrase.
In summary, you have some employers,they have asked their current third
party administrator, ASA, ASO, whateveracronym we wanna use here to help
them improve maternal health benefits,including a doula or do something, right?
And just banged their head against thewall for so long, just not being helped.
(18:07):
So these employers said, you know,it might just be easier if I go
to my local providers myself.
So they go directly to the providers inthe area or where their employees are,
and they negotiate these direct contracts.
And when they do, you start to seeexactly what we started talking
about at the very beginning, that10 to 30% of spend, which is getting
(18:30):
sucked up by a vacuum in the middleand is not actually passing through.
Plus you start doing these directcontracts, the data becomes
transparent because the providersand the employers themselves have a
lot of incentive to be aligned there.
Elizabeth Mitchell (18:45):
My friend Harold Miller says, having a health plan
in the middle between an employerand a provider is like being at
the UN with a bad translator.
We lose the plot of trying tosimply pay for high value care.
It is doable and it's,it's remarkably simple.
We are in the process right nowof supporting a couple of our
(19:07):
members negotiate direct contracts.
I kept thinking there was goingto be more complexity to it.
We set the quality metrics, we set thepayment level, and then they pay it.
It is so amazing to me how much we havecomplexified this, if that's a word.
Once you just determine what you wannabuy, you set the standards like they
(19:30):
do procurement for anything else.
You find a partner who iswilling to meet those standards.
You write a check and then, andthen you monitor performance.
This is doable.
It is happening right now.
I think part of the challenge isthat self-insured employers don't
talk about this very much, right?
They're not like the breathlessVCs on LinkedIn all day.
(19:52):
Ooh, we got a new customer.
Ooh, we have a new investor.
They're just keeping their headsdown and they are doing this work.
Stacey Richter (19:58):
First of all, you said you had a group of self-insured employers.
They directly contracted.
They were just like, thisis really not that hard.
Did they have the TPA in the middle?
The third party administeractually paying?
Because the employer still needed tofigure out how to pay the provider, or
was the employer actually cutting a check?
Elizabeth Mitchell (20:16):
It depends on the arrangement and it depends on the scale.
If it is multi-region or multi-practice,you tend to still need the TPA.
They have got to just dothe basic administration.
But if it is a direct contractwith one practice or one hospital
or one system, sometimes it canbe as easy as writing a check.
Now, I'm not downplaying theregulatory burdens of some of
(20:41):
this because there are states likeCalifornia that make it very hard for
providers to assume financial risk.
But it is doable.
And our members have done directcontracts that have been very successful
with all types of organizations.
Stacey Richter (20:56):
Alright, if I'm thinking this through the timeline
here, it was kind of like employerswent to provider organizations
and they cooked up their own deal.
They're just like, you know, handshake,we're gonna pay you some amount.
At that point, if the TPA a wantsto administer it, like their pricing
kind of has to be transparentbecause everybody knows what the
(21:16):
dollar amount they should be payingand what they should be receiving.
So if there's dollars that go missingin that equation, it is obvious.
So if the TPA chooses to accept thechallenge, they have to be transparent.
Do TPAs agree to terms like that?
Elizabeth Mitchell (21:31):
There is a reason that it took federal action to get transparency
from health plans and hospitals.
It's not like people weren'tasking for it for decades.
The resistance to thetransparency was high.
And as we start to get visibilityinto what was going on in all
(21:51):
of those arrangements, it'sstarting to become clear why.
So yes, transparency is presumed.
I really want to point out though thatthere are very few, if any, TPAs out
there who are as flexible and responsiveand transparent as employers want.
There are some newcomers.
(22:11):
I'm wishing them all the luckin the world, but I really think
it's important to understand howchallenging it is for a jumbo employer
to negotiate contracts all over thecountry without a partner like that.
Stacey Richter (22:24):
Yeah, because I actually have heard stories of employers
working with provider organizationsand they spend a lot of time and
they come up with a great contractand then they go to their ASO, TPA,
ASA, and that entity is like, no.
Elizabeth Mitchell (22:39):
Remember, all the health plans have their own quality
metrics or their own payment arrangements.
Their own networks that theyhave already established.
I believe the new transparency thatis upon us is going to expose all
of the money that has been wasted intraditional healthcare procurement.
(23:02):
It is going to be very awkward forthose who have signed those contracts.
We are seeing our membersusing newly available data like
transparent hospital pricing.
They are literally going to thewebsites of their regional hospitals
and seeing what is the average charge.
And they're looking at their ownclaims and say, wait a minute,
I paid like five times that.
And actually gettingrefunds from the hospitals.
(23:25):
In that same example, however, wherethat employer said, hold the phone.
I am paying way too much.
I want my money back.
The health plan in that scenarioactually tried to block that because
they were going to get a lowerrate than their network charge.
Just think about this, the health plan,who was supposed to be representing
(23:46):
the employer as the negotiator ofthe best rates was trying to stop,
said employer from getting a betterrate directly from the provider.
And that was not the only example.
We had another employer try todo this in another state and the
health plan told them to stop.
So we have thought about the healthplans acting on behalf of the
(24:08):
self-insured employer, but I thinkthat relationship is really going to
be called into question as informationbecomes more and more transparent.
Stacey Richter (24:17):
Yeah and just another example of what you're talking about there
is the Bricklayers case in Massachusetts.
There's a show with ChrisDeacon, "Who's Suing Who", but
that's also the premise there.
The Bricklayers looked at transparentlyavailable hospital pricing information
and just realized how much their planwas charging them in the middle there.
(24:38):
So yeah, it's a thing.
Elizabeth Mitchell (24:41):
I feel so bad for some of these employer purchasers
who have trusted so many people intheir supply chain of healthcare.
Brokers, consultants, health plans, PBMs.
Now with this newly transparentinformation, they are realizing they
were not always working on their behalf.
They have said, well, myconsultant advised this.
(25:03):
I really trust them.
I like them.
I've known them for years.
I'm paying them 20 to $30 PM-PM,so they should be giving me the
best ideas and the best deals.
And as this starts to come to light, itis really unnerving for the purchasers who
thought they were doing the right thing.
They trusted people who weren'taligned with their needs.
Stacey Richter (25:24):
It is so fraught on a number of levels and it's almost
like a crisis of trust that some ofthese employers are having because
they've been working with theirbroker, EBC or practice lead for years.
And sometimes it's like maybe thatthat person is actually trustworthy.
It's that that individual doesn'tunderstand what their company is doing.
It is even possible that the individualis telling the truth when they
(25:48):
say that there's no fees here orthere or whatever, because they're
not even cognizant of what theirorganization is doing on the backend.
Elizabeth Mitchell (25:54):
Stacey, I wanna pause right there because that is so important.
This is not about individual bad actors.
I am not suggesting everyone was shadyand trying to do the wrong thing.
The systems, the incentives, the companiesand who they're actually accountable
to that is not aligned with the needsof the people paying for healthcare.
Stacey Richter (26:16):
Are there any concrete examples of provider
organizations and employers beingaligned and accountable to each other.
Elizabeth Mitchell (26:23):
We just released an RFP in a market for high quality whole
person primary care on behalf of threeof our jumbo self-insured employers.
They want to take this on themselves.
This is so new and different.
A lot of the providers like didn'teven understand the dynamic.
What do you mean we're responding to you?
(26:43):
What do you mean?
There's no health plan, andyet it was wildly successful.
It is around quality and equity and accessand all the things that these employers
want on behalf of their employees.
This is starting to happen because thereare employer purchasers out there, and I
really wanna include public purchasers.
They are ready to take this on and helptheir employees help make sure that they
(27:07):
are getting the care that they deserve.
Stacey Richter (27:09):
I am seeing more and more provider organizations and doctors
themselves really aligned with whatyou're saying because you know the
enemy of your enemy is your friend.
Just that whole international relationsstatement that if you have a doctor
really looking to do the right thing bypatients, the employer, just based on,
again, going back to the very beginning ofthis conversation, is another entity which
(27:32):
is concerned about whole person health.
So working together canhave a lot of alignment.
Elizabeth Mitchell (27:38):
You're exactly right.
I can't describe the number of timeswe are approached by providers who
want to work directly with employers.
Maybe not all of them, but thereare a lot of them out there who are
ready for that type of relationship.
Stacey Richter (27:52):
Moby Parsons, Ben Schwartz.
Those are two orthopedic surgeons whotalk about this kind of thing a lot.
Elizabeth Mitchell (27:58):
Right now, there is no forum for that.
There is no platform to talkdirectly to an employer other
than literally calling them up onthe phone, and that is happening.
This is a really exciting opportunity,particularly in regions where
you have high concentrations ofheadcount across multiple employers.
We're going into our fourth market now.
(28:18):
Providers who raise their handand say, well, great, because
that's what we wanna provide.
That is how we want to practice.
It's clear that they want the same things.
Stacey Richter (28:27):
I guess there's like Mishi in, um, New York.
What you are saying is resonating,maybe philosophically, because if
you think about this from an employerstandpoint, the, and you know, another
word for an employer is a customer.
We all realize that as customersof almost every other thing.
It's up to us to set the standard.
(28:48):
It's hard sometimes, you know, can youblame a vendor for being self-interested
and giving you a bid that is wildly high?
Like I guess that's how capitalismworks, that they Sure feel free
to give me a super high bid.
But then it's kind of likemy job to say no, I'm not.
Basically applying purchasing discipline.
Right?
That they probably applyelsewhere in the business.
(29:11):
It's difficult, but it's almost theresponsibility as a customer, as a
fiduciary to the employees on the planto apply the same purchasing discipline
and others have said this on the showthat we do elsewhere to healthcare
and to understand what we want andto figure out how to get it because
otherwise the wolfs are in the hen house.
Elizabeth Mitchell (29:31):
I completely agree with that.
In a market, someone gives you a bad bid.
You don't take it.
You don't buy it.
Here's the challenge is one, there'sbeen no transparency and they have
not been able to get their data toactually even evaluate the performance.
One of the changes within the CAA, itabsolutely clarifies that employers
(29:51):
are entitled to the data theyneed to evaluate cost and quality.
But then the other problem,there are not any alternatives.
If all of the plans are doing the samething, where are they supposed to go?
I think that there aresome new market entrants.
I also think there's a big opportunityif you could just have a platform that
(30:12):
does flexible payments, innovativepayment models, without all the other
stuff that no one wants to buy, Ithink that would be pretty compelling.
I do think those are starting to emerge,but right now, if you are looking
for a big health plan administrator,there's not, not a lot of options
for something really different.
Stacey Richter (30:34):
If you're an entrepreneur and you're looking for a need in the
marketplace, set up a third partyadministrator where you, and I'm going
back to what you said earlier, where youpay the claims, you do that well, you're
transparent with the data and that youdo a contract negotiation really well.
Like just do those threethings really well.
And there's a big market out there.
Elizabeth Mitchell (30:52):
This is really important.
A lot of the new market entrants,they come with VC backing or whatever.
Their investors want them to make money.
Totally makes sense.
No problem.
However, their incentives mustbe aligned with the self-insured
employer for this to work.
(31:13):
They need to make money bydoing the right thing, not just
maximizing healthcare spending.
That just has to be clear from the outset.
Stacey Richter (31:23):
And the fees have to be transparent.
Elizabeth Mitchell (31:25):
One other thing that is extremely important, we've talked
a lot about setting a fair price andit should absolutely be transparent.
What my members care even more aboutthough, is the quality of care.
They need to know their employeesare going to high quality, safe
providers, and to date, mosthealth plans have not been terribly
(31:50):
innovative around quality measurement.
It's not that we don'thave the quality measures.
I was on the board of the NationalQuality Forum a decade ago.
We've got meaningful quality measuresthat have been vetted and are valid.
They are not being used in contractsand that is very important to employers.
Because frankly, all the evidence showsthat you save on the total cost of care.
(32:14):
That is such a win because patients arehealthier, they don't have unnecessary
procedures, and they save money.
Better care costs less, but you have to bereally clear about the quality standards
you are using to measure better care.
That is entirely doable.
Stacey Richter (32:33):
I mean, that's the actual literal definition of value,
quality at a fair price, and it'sa real call to action, frankly, to
provider organizations themselves.
We had Rik Renard on the show, and one ofthe things that he made very clear is that
a small single digits, really percentageof provider organizations themselves
are measuring absolutely anything.
(32:53):
Patient reported outcomes, clinicaloutcomes, the efficiency of the
services that they're providing.
So I am also hearing a realcall to action for providers.
If you want a commercial contract,it's gonna become more and more
important to figure out how you'remeasuring what you're doing.
And that is not something that youcan like figure out next Tuesday.
Elizabeth Mitchell (33:11):
I wanna be really clear there is going to
be change required on all sides.
Employers have not been terriblyclear about what quality metrics
matter to them or access standards.
And so we took it upon ourselvesover the last couple of years
to really articulate that we'retrying to do our part being clear.
Any provider group that wants topartner directly, though, there
(33:33):
is an expectation that partnersreally step up and do that quality
measurement and transparent reporting.
They can continue to not be transparent,but if they want to work directly
with employers, they're gonna haveto share their quality performance.
Stacey Richter (33:50):
Elizabeth Mitchell, is there anything I neglected to
ask you that you wanna mention here?
Elizabeth Mitchell (33:55):
We seem to have this strange Stockholm Syndrome
identifying the folks who havemade the system as bad as it is.
We blame employers for not havingpurchased more effectively.
Sure, there is blame to go around, butwhy aren't we holding health system
and health plan executives accountable?
(34:16):
Why aren't there boards asking them toensure affordability, equity, quality?
I really believe we need to put thataccountability where it belongs.
Yes, it should be shared.
On all sides, but it's not enough tohave the purchasers buying effectively.
We have got to have accountablepartners to work with.
Stacey Richter (34:39):
Do you feel like that's happening because everybody seems to
inherently agree that those entitiesare accountable to their shareholders,
whereas somehow or another theemployers are the only ones that are
accountable to members and patients.
Elizabeth Mitchell (34:54):
Well, I guess they get a pass because everyone says, Oh,
well, we can't expect any more, theyhave to do that for their shareholders.
But they are not providing whatwe need as a healthcare system.
We are seeing more and more evidence ofthis massive growth in these health plans
and their profits, not translating toaffordable, equitable, accessible care.
(35:19):
Maybe we find alternativepartners who don't just have to
answer to their stockholders.
Stacey Richter (35:24):
Elizabeth Mitchell, thank you so much for being on
Relentless Health Value today.
Elizabeth Mitchell (35:28):
It's such a pleasure.
Thank you.
Cora Opsahl (35:30):
Hi, this is Cora Opsahl with the 32BJ Health Fund.
If you love Relentless Health Value justlike I do, then I will encourage you,
please sign up for the newsletter, followon your podcast app, and leave a review
. Tell everyone else about how greatthis is, and I'll let you're learning.
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