Leverage Insights

Issue 2, June 2018


Welcome to Leverage Insights, a uniquely insightful and actionable view into the healthcare marketplace.  We are proud and grateful to share the experiences and knowledge of the industry leaders participating in Leverage Insights. Our relationships with these experts have long been a critical asset to our organization and now we are proud to bring that expertise to you.

Leverage Insights will have two sections in each issue:

“Industry Intel” – Providing relevant information from active industry executives on key operational issues which drive our industry

“Market Influencers” – Highlighting a stimulating topic spoken from business leaders that aims to educate the audience on an important subject

In this issue we’ll discuss two critical topics in healthcare:

1) The Provider Network and its Evolution.  A healthplan’s provider network is its most valuable asset and this issue of Leverage Insights provides intelligent perspectives on the network from two industry experts. 

2) Employers View on Today’s Healthcare.  These two well-known employer experts provide insightful views on the current healthcare landscape viewed not just through the lens of a national/global employer but the broader issues of healthcare in general.

The overlapping topic of Network is woven into both interviews.

We’re appreciative of the time and insights shared and believe you will find these conversations as engaging and thought provoking as we did.

You won’t want to miss a word in these two Interviews from these four experts. 

— Richard Lungen

Industry Intel

Provider Networks – Evolution and Future State

Our Industry Intel section of this second edition of Leverage Insights features Richard Lungen and Charlie Falcone, of Leverage Health, in conversation with Paul McBride, currently Head of National Provider Networks for Aetna; and Dr. John (Espi) Espinola, MD, MPH, Executive Vice President of Health Care Services at Premera Blue Cross, providing services to Alaska and Washington State.

Leverage Health: Let me begin by thanking you, Paul and Espi, for talking with us about today’s topic: the evolution of the healthcare-provider network. Knowing you both, I’m sure this will be a rich, free-flowing conversation.

Our first question is twofold: Now that the network is no longer a static construct around which the product is designed, but a dynamic relationship, how do your companies view it, and how do you think it will continue to evolve? Espi?

Dr. John Espinola: For a long time now, we’ve heard that healthcare needs to be fixed. Our traditional solutions handicapped us because we approached the network as a generic cost-of-goods access point, without discriminating between providers or the ways in which we engaged with them. Now, recognizing that our business is to provide access to healthcare—especially with many of us having large, self-funded customers—we’re changing our approach. Our customers don’t buy insurance: they purchase access to healthcare services through proprietary networks that have a variety of benefits, rights, and privileges. For example, those networks have requirements that protect patients from balance billing.

Unfortunately, the healthcare services we provide access to do not work as well as they might. Over the last decade or so, as we’ve gained better analytical tools and models, we’ve become aware of substantial variation in performance at the point of care. Most of us don’t feel good about selling something so variable and unpredictable.

To deliver value to our customers, we need to improve on this generic, one-size-fits-all network by collaborating with network providers so that we can understand their challenges, recognize our role in the variations and inefficiencies, and then use analytics to identify causes and offer solutions. If we lean in successfully, we can address many of healthcare’s shortcomings. We need to move from a generic to a more refined, data-driven, business-partner approach, so we can help customers take advantage of the variation at the point of care and work with providers to raise standards.

Paul McBride: I’d put the different iterations of network activities going on across the country into three buckets, two of which Espi nailed. The first is the transactional, fee-for-service space that’s been with us from the start and will remain with us. Isolated care is a big part of the landscape, even though it’s not ideal from either a financial or a member-experience perspective, and certainly not from a health-outcomes perspective. In fact, it’s pretty substandard, having created massive misalignment of incentives, and it’s spurred the whole value-based movement, which is the second major bucket of network activity.

Although people view Accountable Care Organizations (ACOs) as relatively new and connected with the Affordable Care Act, ACOs have been around since the 1980s, at least conceptually, and we’ve tried various iterations of these value-based relationships: gain sharing, incentives, cost management, and, more recently, quality and member-experience improvement. These approaches, like fee-for-service, will be with us for a long time, and they will grow and expand as more progressive providers consider the services, needs, and opportunities to connect care across patient populations outside their immediate office or hospital setting.

Originally, healthcare was built around the physician. More recently, it’s built around big medical-industrial complexes of hospitals with physician management through ownership or affiliations. But a third approach is emerging. The advancement of on-demand technologies has changed how consumers interact with healthcare, pushing provider networks away from the traditional exam rooms and medical-industrial complexes and into communities, into the places where people live. Most of the time people aren’t experiencing care, they’re living their lives—and there lies the opportunity to interact with them to meet their personalized health ambitions. Conventional healthcare and insurance haven’t really engaged people outside of sick care. These community-based care models will be more fluid, more dynamic, and more consumer-centric, reflecting patients’ views of their personal healthcare needs. These are the kinds of networks we’re thinking about for the future.

These community-based care models will be more fluid, more dynamic, and more consumer-centric, reflecting patients’ views of their personal healthcare needs.

Leverage Health: That’s great that you’re in agreement here. But while Espi drives success in regional markets, Paul, you run a national enterprise. So, with respect to the network, what are the differences between a geographically based footprint like the BlueCross BlueShield plans and a national plan such as Aetna’s?

Paul McBride: I have long believed that healthcare is a local phenomenon, and I see more similarities than differences between big and small health plans. We do have a few efficiencies of national scale, and we have reach—from a distribution perspective—so we’re able to service employers regardless of where they have employees. Not being limited to regional markets, especially in a shifting environment like today’s, also ensures that we’ll always be able to engage across the board the most progressive partners that exist anywhere in the country. But, in the end, it’s about members in contact with their local network and community providers.

Dr. John Espinola: I agree—and yet, as Paul points out, there’s substantial variation even within a city. There’s variation in performance within any given system, right? The key is leadership that understands that variation in performance is the main source of shortcomings in healthcare. We see four primary problems in healthcare: customers pay too much for what they get; they often don’t get the care they need; they often get care they don’t need; and too often, their experience is less than what they deserve. We look to partner with providers to solve these four problems.

When we frame it this way, we get effective engagement from providers across the table. Though we have a complex relationship with our network, we’re always trying to improve the point of care for both providers and members. We want to create a cleaner, more standardized process in which consumers have a greater awareness of benefits, and decision-making is simpler but more effective. Generally, Premera Blue Cross’s and Aetna’s strategies will be the same. They’re labor-intensive and include lots of trust building. And with bigger organizations, the challenge is to translate change from leadership to the frontlines. We’ve learned that a contract with a provider doesn’t necessarily translate into action, and at some point it must.

Though we have a complex relationship with our network, we’re always trying to improve the point of care for both providers and members.

One caveat: At the end of the day, most healthcare is dependent on how it’s purchased in the market. In California, for instance, there’s a robust, mature managed-care market, as people have been purchasing healthcare differently there since the Kaiser days of WWII—whereas in Washington State, we have an open-access PPO market driven by very large purchasers. Purchasing behaviors create market forces that may or may not be aligned with value-based care. If the greatest measure of value is broad access, then pushing hard on quality can be difficult. No matter our aspirations, factors like these come into play.

Leverage Health: What would a conversation with two network executives be without talking about the value-based tools and strategies they’re using (and are able to share) related to narrow networks and value-based contracts? Espi, that’s not easy in the Pacific Northwest with such a geographically dense plan.

Dr. John Espinola: It’s not easy, and, as I said, we’re looking at value-based efforts to address the four key problems: cost, underuse, overuse, and point-of-care experience. The deep relationships we have with our provider communities create an opportunity to share resources and business processes to improve the moment of care. These joint offerings tend to be regionally based, and are primarily suited to small and mid-size employers or to slices of larger employers. It’s possible we can bundle this kind of offering across Blues nationally, but the key will be to address those four problems in a meaningful way with the group purchaser and individual member who needs to participate in the solution through things like online registration, so that the member just shows up for their appointment and is taken care of right away, or gets preferred parking spaces, or bypasses prior authorizations—things like that. We’re moving away from a legacy of risk transferred onto the provider, and instead trying to solve the problems together. For example, Premera is deploying Vim to drive innovation to solve this dynamic.

The deep relationships we have with our provider communities create an opportunity to share resources and business processes to improve the moment of care.

Leverage Health: In your former role at Aetna, Paul, you sat on top of a set of provider-facing initiatives. What do narrow networks and value-based reimbursements mean to you?

Paul McBride: Yes, I ran Accountable Care Solutions, our R&D unit, developing various risk-based and gain-share models. I couldn’t agree more with Espi: getting a contract is the easy part. The hard part is setting up providers to succeed, maximizing not only financial gains, but also whatever opportunities there are to improve behaviors and outcomes under the contract. Both parties—plans and providers—have to invest in this. Everyone’s talking about value-based relationships, but I’m talking about aligning with organizations that are not just talking about this space, but actually betting on themselves by making internal investments, building clinically integrated networks, technology platforms, and decision-support tools to help physicians across the continuum—from primary care to specialists, from specialists to patients to labs and radiology centers.

I’m talking about aligning with organizations that are not just talking about this space, but actually betting on themselves by making internal investments, building clinically integrated networks, technology platforms, and decision-support tools to help physicians across the continuum—from primary care to specialists, from specialists to patients to labs and radiology centers.

Connecting the ecosystem and empowering it with data and various analytical and technological tools, helps everyone in that system think and work better together. That’s where we’ve invested. We’ve got almost 2,000 of these value-based provider agreements across the country. We’ve set up new, licensed health insurance companies that don’t just transfer medical-cost risk, but also share underwriting margins with providers. We have a 50/50 investment in what’s essentially a new insurance company where we make administrative as well as clinical investments that go beyond a short-term contract. It’s a long-term equity relationship. Our oldest venture has been in place for five years and has over 100,000 members around the D.C. marketplace. It’s a tremendous learning lab for us and our provider partners that’s showing some significant dividends. We’ll promote more of these innovative entrepreneurial relationships across the country.

Leverage Health: That was terrific. Now I’d like to ask what type of tools you’re giving members, so they can make good decisions and receive the right care at the right time. Paul?

Paul McBride: Since the ACA passed, we’ve invested over $1.5 billion in technology and service platforms to help make this happen. Going forward, the industry will need new ways to work with providers and to access information. We’ll need to move information from isolated locations into an ecosystem of physicians, so they can see the full medical records in their offices and throughout the community of physicians and facilities. This will allow providers to think more holistically and longitudinally about patients, wherever they are in the healthcare system or their continuum of care.

A hospital, on average, has 40% of an individual’s medical records. Most overestimate it at 80%, but we see the leakage and can collect that information to help the individual physician understand the broader context of services, so they can make better decisions. Through various support models and technologies, we want to bring members into these ecosystems where physicians have this data and can look more holistically at patient care.

Leverage Health: Espi, what’s your thinking on tools and getting members to the right provider at the right time?

Dr. John Espinola: The principles are the same. Again, we’re trying to address the variation in provider performance as we expose it. Influencing a provider who has a panel of hundreds or thousands can have a systemic effect. When you help providers understand their performance and the performance of others in their referral network or peer system, and the specialty providers who support them, you help everyone. Redirecting care to providers who perform at a higher-level benefits everyone. It’s the easiest path, because it takes advantages of existing differences and doesn’t require changing practice patterns downstream: find the orthopedist already implementing best-in-class care and direct care there.

When you help providers understand their performance and the performance of others in their referral network or peer system, and the specialty providers who support them, you help everyone.

I echo Paul about providing data to help providers be truly accountable for the patients they care for. One of our key tools is data that helps us prioritize where we should base our efforts: population health or safety, or cost impact? The first two reign supreme. On the consumer side, our big challenge has been getting effective engagement, because health plans are not viewed as trusted advisors. We’re working hard to find the right business partners to help us crack that nut.

Leverage Health: As we round the turn here, I want to ask about cost of care and what that means to both of you in your network initiatives. Paul?

Paul McBride: In many cases, brokers and national accounts have oversimplified the challenge down to who’s got the better discount. But discount is only one variable. Cost of care is the interaction of discount, utilization, and risk. Across healthcare, cost inflation is two to three times standard inflation in the economy. This has been true for decades, so there’s been compounded growth, and that’s unsustainable for the country. Value-based relationships that let providers and patients make better decisions help. In the last few years, healthcare inflation has been lower than in the last few decades, as we see more progressive provider organizations invest in how they manage populations and costs. It’s a good sign.

Leverage Health: Thanks, Paul. Espi?

Dr. John Espinola: Cost, to me, is a two-sided coin. First is the purchaser’s cost, which, with self-funded accounts, can be a major and unpredictable item in their P&L, drives uncertainty in the business environment, and is unacceptable. We also have to be honest about how brokers and consultants advise clients. We see that the current state of comparing health-plan offerings is to spreadsheet us on unit costs. We need solutions that tell a different story beyond a spreadsheet comparison, because that creates a very narrow and limited view of value, using as a paradigm the legacy of fee-for-service payments. I think we’re getting closer to having better tools than that.

Then there’s the black-box aspect of cost because it’s so unpredictable. Nowhere but in healthcare does someone else have the authority to determine what you have to spend when you’re financially responsible. Think about going to Home Depot for a rake, and the salespeople throw a leaf blower, a lawn mower, and a chainsaw in your cart. At checkout you say, “I just wanted a rake,” and they say, “Too bad, you need all of this to keep leaves in check in your yard, and you have to pay for it. If you don’t, we’ll take your house. Oh, and you can’t return any of it later if you don’t need it or it doesn’t work.” The unpredictability, the surprises, the opacity—laboratories using uncontracted subvendors, surprise billing—we think a lot about this emotional and economic cost to our customers. Shining a light on that reality is very, very important. We’re concerned with total cost of care, but when we think about member experience and all the opacity . . . it’s a fundamental flaw in the system that we must address!

Leverage Health: Seems like this is a conversation that needs to be continued. We could spend the whole day on this topic. Again, a huge thank you to you both for joining us and Leverage Insights today.


Market Influencers

Employers, Self-Funding, Strategy


We’re excited to have Shawn Leavitt, Senior Vice President of Global Benefits for Comcast and NBC Universal, and Barbara Wachsman, until very recently Director of Strategy and Engagement for Disney Enterprise Benefits (2006–2018) and Chair of the Pacific Business Group on Health. They join Richard Lungen, of Leverage Health, to discuss the changing role of the employer in healthcare delivery. Also contributing to this conversation is Larry Leisure, Managing Director of Chicago Pacific Founders and Chairman of ADVI.

Leverage Health: Thank you all for joining us today. Let’s jump right in. What do you see, Barbara and Shawn, as the main challenges faced by today’s large employers in delivering healthcare to their employees?

Barbara Wachsman: For many employers, it’s about three things: affordable care for the employee; improving the customer experience, which leads to better outcomes; and improving the quality of available care. In terms of quality, the key challenges are how you define quality, how you identify quality physicians, and how you direct your employees to those providers.

Larry Leisure: Barb, just a quick question: Implied in your statement is an intolerance for the current degree of variability in care and the inability of the employee to discern between high- and low-quality care. Am I putting words in your mouth, or is that what’s implied in your comment?

Barbara Wachsman: Yes, it is. We need to help the employee identify quality, help providers understand the standards they need to meet, and then tell the carriers, “Look, there’s a bell curve in every aspect of life, and we don’t want the 10% of providers who aren’t meeting adequate standards to be in the network.”

 

Shawn Leavitt: Absolutely. But bringing a slightly different lens to this, I’ve come to believe that the number one problem we employers face—by that I mean employers who have a self-insured health plan—is that we’re buying services from organizations incapable of delivering, because the platform that health plans and carriers use drives value for fully insured organizations, not the self-insured employer.

Barbara Wachsman: I agree, Shawn.

Shawn Leavitt: Someone needs to come out with a health plan that is designed only for self-insured employers. That would completely change the conversation about networks. We’ve been trying to build on a fully insured chassis. Things like Castlight Health and Accolade were attempts to make things better, but we’ll never see them be able to actually assist a self-funded organization effectively.

Barbara Wachsman: We need to boost the capabilities of current Third-Party Administrators (TPAs). If you’re an Administrative Services Only (ASO) group and want to do things differently, with care management or network development, your primary option today seems to be traditional TPAs. These companies were built to support traditional insurance plans as claims payers and traditional risk managers, and despite what they claim, carriers are not health plans focused primarily on delivering high-quality care.

Shawn Leavitt: I agree, Barbara: they are not.

Barbara Wachsman: Let them handle fully insured businesses, but the self-insured have different priorities and need a more flexible chassis and unique solutions.

The number one problem we employers face—by that I mean employers who have a self-insured health plan—is that we’re buying services from organizations incapable of delivering…

Larry Leisure: I’d like to interject one idea. Both of you, Barbara and Shawn, have been at the forefront of shifting the paradigm from a payer- to an employer-centric model, moving to control your own care-delivery systems with a combination of on- and near-site clinics. Where does this effort fit into the repositioning of the payer vis-à-vis the self-insured employer?

Shawn Leavitt: While this is an important strategy, I already have a large staff of people and run a $1.3 billion plan, so I could contract for primary care, for specialty, for ASOs, and for clinics for the next 20 years and still not be able to take this over. I need a separate entity building custom networks and driving change with providers based on our needs. We self-insured employers care about outcomes, about people getting the right care at the right price, and a health plan for us should focus on that. That’s why we step in where our carriers don’t. At Comcast, I’m in unique in position to afford this. But is it the right thing for us to do?

Barbara Wachsman: The question is: Are today’s employee-benefits staff capable of doing this? The whole benefits scene is changing. To Shawn’s point, he handles global benefits, including international and domestic retirement, plus healthcare, which may be the most important—he’s got so much going on. So I completely agree with his new approach. There’s an opportunity for a new kind of company to come in and work one-on-one with large employers. Because this type of service is so labor intensive, I don’t know if they can make money. Large benefit-consulting firms have had some success.

To Larry’s second point, on-site clinics are a petri dish that can illuminate how quality care can be delivered. Some on-site administrators are working hard to offer a new generation of on-site. We want superior-quality care under strong physician leadership. We want a true patient centered medical home.

I’d call on-site a plan within a plan because we’re redefining the benefit offering. An employee goes from their personal-care physician right next door to their mental-health provider. On-site demonstrates how we want care to be delivered. Employers can also improve care throughout the community by saying to community providers, “You have to compete with our on-site, because our employees have a choice.” The on-site is essentially a giant primary-care group. Employees can choose it, or choose an outside primary group, or a small practice of one or two physicians. We’ll share and compare the data on how care is delivered in these venues.

There’s an opportunity for a new kind of company to come in and work one-on-one with large employers.

Shawn Leavitt: But it’s a ton of work, and if a health plan were super-focused on self-insured employers, they’d demand network development with on-sites as part of how they’d push providers to change. There are many ways to get there; our current way is inefficient.

Leverage Health: Cutting my teeth in the 1990s building a PPO, we had many clients who were not only self-insured but also self-administered. Many companies your size paid their own claims, which worked well for companies like Walmart, Walgreens, Bridgestone, and Goodyear, but a network is difficult to build without critical mass. So, if you design and build your own infrastructure, where does the concept of network come in?

Shawn Leavitt: Do you really need to have this critical mass? If you decide you’ll give every provider a score in the market and only pursue those that score, say, above 70, and then—whoops, am I saying this?—pay them more, than even the ones that wouldn’t join your network before do. The contract is all about quality. It’s about outcomes data being available with each claim. Yes, providers get paid within two hours, but the giveaway for that is that they share outcomes data. What happens when a provider’s not effective with a patient? Stop the treatment and move the patient to another provider.

That’s what a health plan should do. The whole context of networks is backwards. We should target physicians who deliver high-quality care, pay them for doing so, and when they don’t, move on. Unit cost may be higher, but because you don’t allow someone to go for 50 mental-health visits, their total cost of care for an episode is significantly lower.

The whole context of networks is backwards. We should target physicians who deliver high-quality care, pay them for doing so, and when they don’t, move on.

Barbara Wachsman: And quality physicians pay attention to utilization. They don’t have that fee-for-service mentality of simply pushing people through sometimes unnecessary services, whether it’s unnecessary surgery or something else. They do great diagnostic work, send people to the right specialists, and the total episode of care reflects this. In one of the largest markets in the country, we asked large hospital systems to help define appropriate total episodes of care. You can see a high level of quality, as well as decreased costs, because when you have a readmission, costs increase. You need to look at the performance of physicians holistically. It’s about value-based care and saying—to Shawn’s point—to delivery systems, “You’ll get rewarded for good care.” Key providers actually told us, “Give us the goals, and let us meet them.” Many are working very hard to do what is necessary to successfully practice value-based care.

They’re making changes, but . . . Here’s another opportunity for a business that can support these many groups that we ask to do things differently. And then there’s the whole data piece.

Shawn Leavitt: The data piece is important. We’re actually on the cusp of population-based health management. We need to look at doctors’ performance on a patient-by-patient level. Instead of being general, we need to be specific and leverage data, to see whether a specific doctor is effective with a specific patient.

Barbara Wachsman: If we have the right doctors working with the right patients, we’ll see improvement in whatever population they’re responsible for—whether it’s diabetics, everybody in a given community, etc. But Shawn’s right, it’s about the individual physician. By the way, when a consumer says, “Oh, you’re narrowing the network,” I ask, “How many physicians do you need?” We end up agreeing—just one, the right one for them.

Leverage Health: Okay, so with what we know about that right physician, how do we direct employees to the new higher-performing, more appropriate provider?

Shawn Leavitt: From the perspective of a self-insured employer, part of why we do on-sites is because we don’t want someone going to a specialist on a neighbor’s recommendation. Primary care, which should include dental, vision, physical therapy, nutrition, acupuncture . . . should start with one’s primary-care physician, then move through the delivery system. A health plan doesn’t have the appropriate navigation capability. Primary care is where all of the navigation lies.

Barbara Wachsman: Agreed. Let me take a slightly different tack. Richard, you started the conversation asking about the biggest issues employers face. The issue of engagement is at the top. We’re at an inflection point now around engagement (although I will say, parenthetically, the recent discussion around privacy with Facebook is bringing additional concerns about privacy, security, and trust that your personal health data is safe), and we need to embrace some new technologies to get employees engaged. We need to push out information via text. We know virtually all people have phones that can text, and we know that people answer 99% of texts. While it’s true that soon we’re going to talk about texting like we talk about faxing today, and new technology will follow, right now we need to use the tools that get people’s attention. In the future, I’d like to be able look at data on diabetics and query, “Who hasn’t had a foot exam?,” and then push out a gentle text reminder to get a foot exam, and even offer a cash incentive to encourage engagement.

Shawn Leavitt: With on-site clinics, that text can come from their primary-care team, not from the employer or health plan.

Barbara Wachsman: Right. Which is why these groups need to have current data, not information that’s a year old. Carriers can’t inform our employees on an up-to-date basis, so let the providers, via text.

Very soon, you’re going to hear about startups that are doing this, where the PCP says to an employee, “You know me and trust me, and I know what’s important to your good health. It’s time for your mammogram. Oh, and in case you’d like to address those stress issues we’ve discussed, I’m including a therapist in our conversation who I think you’ll really connect with.” When someone gets admitted to the hospital, a hospitalist would text their primary, their specialist, and their family, letting everyone know what’s happening next, for example, when the patient is going home.

But the delivery systems have to buy into this. Every physician will need a widget on their desktop that’s easily integrated into their Electronic Medical Record (EMR). Then, when the patient goes back to their primary, the whole conversation is in the EMR. It has to happen in a way that doesn’t annoy physicians, but this engagement technology can bring about real engagement, making healthcare more effective and efficient.

Larry Leisure: Leveraging primary-care physicians to get to a better patient experience, lower costs, and a more affordable solution—I like where you’re all going.

Leverage Health: My next question has two parts. Do you see ways to control general and specialty pharmacy costs? And I have to ask about the announcement by Amazon, JPMorgan Chase, and Berkshire Hathaway, because it highlights the cost of pharmacy.

Shawn Leavitt: I long for the days when we asked for comparative effectiveness. Without ever having the basics, we seem to have said, “Well, whatever, let’s move on to specialty or on to something else.” We continue to manage pharmacy as if the Pharmacy Benefit Manager (PBM) is right when we know they’re not. Why? Again, if I ask, “What would a PBM do if it only served self-insured employers?” Since no one’s going to compare effectiveness, they’d probably start tracking outcomes for every script filled and doing a whole variety of other things. Pharmacy’s a huge issue. We employers have been chasing pennies down the hall, suggesting we create multiple tiers or provide certain drugs at no cost. But we never ask what the right drugs are, or what are the right drugs for this patient. Again, nobody is doing the work we need them to do when it comes to supporting folks running a health plan whose intent is to actually help people.

Barbara Wachsman: Let me underscore Shawn’s point about comparative effectiveness. Because with drugs—especially specialty drugs, like new, important oncology drugs—we’re very reluctant to tell an employee which one they can or cannot have based on price. If it were around quality, we could say, “These are the drugs you want to take.” But it’s physicians writing the scripts, so we need to address this with the physicians as well.

Also, the rates at which employees adhere to their drug regimens are abysmal. People start a drug, the side effects kick in, and they stop. The physician doesn’t know when they stop. Again, there are startups using AI to predict when patients will stop. These systems can notify the PCP, who in turn can call the patient and ask why they didn’t refill their prescription, discuss side effects, and get the patient back on track. If we’re going to pay for a drug, we need to make sure the patient takes it, especially if it helps with a chronic condition, or keeps the patient out of the ER or hospital.

When you’re talking about value-based purchasing, when you’re talking about risk arrangements, pharmacy has to be included. Oncology drugs are coming out like crazy. We need to make sure physicians follow quality, evidence-based guidelines and have oncologists on staff. We need more behind-the-scenes quality evaluation of specialty drugs—again, not putting the employee in the middle or telling the physician what they can prescribe, but being sure they have access to the best data and that they are fully informed regarding various options and clinical trials. Carriers have a responsibility around specialty.

When you’re talking about value-based purchasing, when you’re talking about risk arrangements, pharmacy has to be included.

With opioids, it can be difficult to come up with a top-ten list of physicians who overprescribed. It was very hard to do. These are clinical decisions based on the relationship between patient and physician, who determines what’s appropriate for the pain the patient is experiencing. But one thing rose to the top of the data: dentists. Physicians go through behind-the-scenes training regarding opioids with their various societies and academies, and we can give PBMs kudos for restricting the number of opioids that can be prescribed—but it’s unclear who’s talking to the dentists who prescribe 30 days’ worth of a painkiller for a minor procedure.

Shawn Leavitt: To Barbara’s point, a health plan for a self-insured employer needs to integrate dental and medical data. If you are a PBM and a health plan combined for a self-insured employer, you want to change how you contract, so that you put the onus of ensuring that patients continue with medications on the provider. That’ll never happen today. But if you take only the top doctors and lay out the rules and their responsibilities, this will be one of them. We can’t continue to put a health plan between doctor and patient and think we can win.

Barbara Wachsman: Very true. Many physicians agree that if a provider does a good job of treating diabetes, they’re likely doing a very good job overall. It can be useful to build in accountability for diabetes care.

Larry Leisure: I’d like to return to Richard’s statement about Amazon. I think we’re trying to avoid it.

Shawn Leavitt: I’ll be succinct: They announced that they’re going to do something. What that something is is the interesting piece. It could be amazing. It could be a retread. I’m excited somebody has made an announcement and is willing to shake up the world a little bit. Now we’ll sit back and see if it’s something truly different.

Barbara Wachsman: Yes, it was really an important thing to put out into the marketplace, and we all noticed that many of the carriers’ stock dropped when that announcement was made.

Larry Leisure: And the PBMs.

Barbara Wachsman: These three large employers have combined 1.5 million members that they can offer their own custom PBM— they can accomplish what many employers would like to do together. When you have the visibility of Amazon, you have the leverage and the attention of the market. I’ve heard Amazon may call it Prime Health and offer it to their employees.

Larry Leisure: There was a conversation at the last employer roundtable about the one area people thought they could impact, and that was the PBMs. The specific issues were: the complete lack of transparency, the lack of pushback on the outrageous price increases, and the lack of alignment. It would be nice if self-insured businesses would take on Big Pharma and the PBMs, but that’s not for the faint of heart.

Where do you think large, self-insured employers can and should have impact? This sort of pivots a little bit off the Amazon thing.

Shawn Leavitt: Part of our issue is that we don’t have the right partners. I think that it takes recognizing that, and then demanding that our partners focus on our needs and start thinking about how they could actually provide a health plan for an employer, like Comcast or Disney, that addresses what we’ve just talked about. The fact that they focus on their business and what makes their business successful is diametrically opposed to the things self-insured employers need for our unique health plans . . . it’s time they admit the problem and start talking about how to solve it.

Barbara Wachsman: This is extremely important, and an opportunity. I think if one of the carriers said they were going to start a completely separate business that does just what Shawn suggests, there would be great interest. Let me be more specific: It’s the delivery system, the supply side, that matters. Building great networks—that’s what’s going to address affordability, the customer experience, and quality. Large employers need to take the lead, and the benefit world of smaller and midsize employers will follow. We need to start today, because with, typically, one annual enrollment, the important work needed to get people into these systems takes so long.

It’s the delivery system, the supply side, that matters.

The conversations can be at the coalitions level—I think if we had Shawn doing creative things with others in Florida and extending that, others working with Shawn in New York . . . something could happen wherever employers have leverage and support, whether it’s consulting firms or entrepreneurs that want to come into this business to help redefine what a network is and what kind of performance can be rewarded. And I think there’s an urgency. There’s a bit of a pause out there right now, because it’s still unclear what Washington is or is not going to focus on, but if you just take what we need today, if we want to see any change in the delivery of healthcare, we have to do it. I will leave it at that.

Leverage Health: And so will we. We’re absolutely grateful to all of you for your time, wisdom, and—I can’t underscore this enough—intelligence.

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