AHLA's Speaking of Health Law

The Future of American Medicine: The New Business of Health Care in a Post-COVID Era

August 19, 2020 AHLA Podcasts
AHLA's Speaking of Health Law
The Future of American Medicine: The New Business of Health Care in a Post-COVID Era
Show Notes Transcript

Charles Overstreet, Global Segment Leader, Health Solutions, FTI Consulting, follows up with Marty Makary, MD, surgeon, New York Times bestselling author, and Johns Hopkins health policy expert, after his keynote address at AHLA’s 2020 virtual Annual Meeting. In the podcast, Dr. Makary talks about the importance of public health to medicine, including incentivizing lifestyle changes and addressing social determinants of health. The podcast also discusses price transparency, including the role of pharmacy benefit managers and antitrust concerns. In addition, Dr. Makary addresses access to care issues and appropriateness of care. Sponsored by FTI Consulting

To learn more about AHLA and the educational resources available to the health law community, visit americanhealthlaw.org.

Speaker 1:

Support for A H L A comes from f t i consulting. The F T I Consulting Regulatory Solutions team uses an integrated approach to best address the unique needs of each of their clients. They emphasize cross-collaboration amongst their multidisciplinary group of industry, experience compliance, and investigative professionals to bring the right mix of experience and skills to bear on each assignment. F t I Consulting also works with virtually every segment of the healthcare and life sciences industry to discern innovative solutions that optimize performance in the short term and prepare for future strategic, operational, financial and legal challenges. For more information, go to www.fticonsulting.com.

Speaker 2:

Hi, this is Charles Overstreet with FTI Consulting. I'm lucky today to have Dr. Marty McCreary on the phone. Many of you heard Dr. McCreary during our annual meeting. He was the keynote speaker, very interesting and provocative discussions. And from that came a few questions. Uh, Dr. McCreary, if you don't mind, uh, can I dive in and talk with you on a few questions that came up from the audience?

Speaker 3:

Of course. Great to be with you, Charles. Thanks for having me.

Speaker 2:

Oh, no problem. Pleasure's all mine. Uh, one of the questions came up was regarding the importance of public health. Given where we are now in the pandemic, I think this is pretty, uh, important and very appropriate for where we are today. And Dr. McCury Marty, what portion of preventive medicine could fall into the realm of public health and be supported by public health budgets,

Speaker 3:

<laugh>? Well, you know, it's interesting because more and more students now going into medicine are saying, I want to get a master's in public health for an additional year. And many of us said, why is this not a standard part of the medical degree? Why is it that learning about the health of the public and prevention and some of the major issues we face like pandemics? Why are these things that are seen as peripheral topics that are really central? And if you think about everything we do in medicine, there is a better public health strategy, whether it's my own field of cancer care or heart disease or inflammatory conditions like arthritis or injury. Um, there are areas of medicine that have been un unexplored, underfunded, underappreciated, and under-recognized. And those are the issues of food as medicine and the environmental exposures that cause skin rashes and lung disease and a whole host of other problems. Can we talk about physical therapy and using ice more liberally for back pain than just surgery and opioids? This is what a new generation of healthcare providers are talking about. And this is what the futuristic healthcare systems now are actively engaged in. Now they gotta fight the billing system, right? Because the billing system says, look, you're, you know, your hamster's on a wheel and we're just measuring the, the velocity of how much energy you're producing. And pretty much, you know, when when there's an underperformance, the the providers are told, you gotta work harder, right? And now the doctors are saying, we wanna work smarter, not just harder. So all of the stuff that you're referring to, um, you know, why are we learning what contact tracing is for the first time with the pandemic, right? These are sort of the nuts and bolts of health. And I think when we talk about, um, healthcare, we think of a reactionary system. But when we think about the health of the public or the underlying root causes of, of issues that create problems with health, now we're actually getting to the exciting thing. And I think that's what's rejuvenating a lot of medical centers right now. They're saying, we wanna assume responsibility for a population. Cause we don't wanna have to, you know, be in this coding billing throughput cycle that the patients don't like. And we, doctors don't really like, a lot of times we want to have freedom and we want to have the liberty to custom tailor treatments to individuals. Let us do that. And that's some of the, the new stuff that, uh, we had talked about, the new Medicare advantage plans, relationship-based medicine.

Speaker 2:

Well, how do we, you know, link to this, you know, incentivize lifestyle changes? You know, the question really was around social determinants of health. But now, you know, it'd be a good lifestyle change. I think if some folks all wore masks as we, uh, go through this. But, uh, how do we incentivize lifestyle changes through public health

Speaker 3:

<laugh>? Yeah. If we, if we thought economically about some of these behaviors, it's amazing to think what the possibilities are. Um, but at the same time, you know, we're a country that values personal liberty and sometimes individual rights over community rights, even though that encroaches on the health of the public sometimes. And we've seen that with personal behavior during the Covid pandemic, right? The sense of I can do whatever I want in public around other people and other people saying, no, we have laws that govern seat belts and, and, and we, we need things that are reasonable with broad consensus with the pandemic. So I think right now we're at, we're at a difficult position where we're actually saying, how can we approach this problem in a way that makes sense and is not too onerous, but serves a broader purpose? Because if we look at all of healthcare, all of the healthcare we deliver in the United States, that entire half of federal spending that goes to healthcare, the eighth of the economy on medical services in the fee for service cogwheel, most of it stems from behavioral problems. Most of it, the most common cause of death in the United States is heart disease. The most common known cause of heart disease is smoking and inflammation and obesity in the metabolic syndrome. And cholesterol number two, cause of death in the United States cancer number one known cause of cancer, smoking. Number two other environmental exposures. Um, so when we look at the universe of healthcare we're delivering, it gets exciting when we can take a step back from the direct interface with the patient and say, let's look at the, the drivers of health. And as we know, the biggest driver of health status in the United States is economic status, sad to say, but it is economic status, right? So when people are struggling financially, they're struggling with their health and it's just the way that the systems are aligned. It's just the way that cheaper foods are worse foods and, and so on down the line,

Speaker 2:

I agree with you and you know, some of this is linked to the new things. There are, I know on the line of number of our clients, the price transparency, uh, that's being mandated. Can you expand on your thoughts about the value of PBMs and how they might, uh, or might not contribute to increasing healthcare costs?

Speaker 3:

Yeah, there are assumptions that we are now challenging. For example, we've assumed that employers are shopping for healthcare on an open market that, um, is, is transparent enough for them to make sound decisions or that that market is competitive. The reality is it's not competitive. And the reason it's not competitive is because the way a, a PBM or pharmacy benefit manager bills an employer for their services is to send them a report at the end of the year saying, here are all the medications your employees took. Here's all the prices. Here's some artificial crazy discounts that we're applying cuz we're your friend. And they look at some big number at the end. How do you compare that? Is there another business with the same population of employees with the same comorbidity case mix? No. Uh, and it's very difficult for employers to compare lists of a thousand or 5,000 medications with different frequencies, biosimilars names, dosages. You, you don't even know what people are getting swapped out for by the pbm. So what we have is this fog that prevents employers from shopping responsibly. So what they do is they rely on their benefits advisor or consultant, or aka broker. And what we learned from our research is that the brokers are getting paid a major lump sum of money on the back end from the companies that they sell. So you're a big PBM company and a broker sells your product. You're paying them on the back end, 80,000, a hundred thousand,$150,000. And then when that contract comes up for renewal, it's, you know, the, the PBM can say, keep this employer, keep this car dealership with us, and we're gonna pay you a retention bonus. Well, it's just, it does not feed a competitive marketplace. And there's a generational brokers that are, that now are saying, look, we're sick of playing in this, uh, system. We didn't go into this for this reason. Um, we didn't design this system. We inherited it. We're gonna disclose a hundred percent of those payments on the backend for a company of 2000 employees. Those total payments on the backend can total a million dollars. I mean, some brokers can actually pay employers to be their broker and still make a big hefty profit just from the backend stuff. So we are seeing a generation, again, led by young people who, as you know, if you have kids have very little tolerance for BS and they wanna be a part of something larger than themselves as a generational value, right? They want, they, they want to be a part of some gr greater purpose in their work. And so we're, we're seeing some reforms now and some good efforts, and I've, um, worked with some employers now to say, Hey, let's start talking about direct contracting with your local hospital and the pharmacy that the hospital runs. And we are seeing some exciting new things in the price transparency space. I'm involved in one company called Sesame Care, again, trying to create an online marketplace for medical services. Some hospitals are getting really good business from this, uh, web-based service, uh, sending patients their way because it's an open and honest marketplace.

Speaker 2:

Thank you. Do you see any issues with the transparency or with the pricing where it could have the opposite effect of the even fostering collusion? Or do you think this is something that's really going to, you know, increase competition or decrease it

Speaker 3:

In terms of the PBM and the health insurance space?

Speaker 2:

Yes.

Speaker 3:

Yeah, it's, um, I think the more transparency, the better. There have been arguments that have been made that if you make everything transparent, you'll confuse people and therefore it'll be counterproductive. Those arguments have actually been made. And I think right now there's enough frustration with the middle industry of healthcare that employers are taking the lead and they're saying, can we just put all this stuff aside, all the, the, the middle insurance, um, claims processing, PBM wellness, anti-fraud programs, all that stuff that we pay for as an employer, and can we just go to the community hospital that we know, trust and love, and do a direct contract? And with those direct contracts, you really are bypassing a giant industry and creating, in my opinion, more local accountability. And it reminds me of growing up in central Pennsylvania at Danville, where Geisinger was a small, uh, community hospital at the time. It's now large. But if there was an issue, we all saw the CEO of the hospital in the grocery store, and the docs would've no problem talking to the CEO when there was an issue. And the CEO was, was very responsive. And it was exactly what people love about, um, many workplaces is this sort of, um, dialogue, the relationship between leadership and those on the front lines. And that is something that's beautiful. It exists all across the country. We see it all the time. And that really all is, is promoted when we have fewer of these middle layers for an employer say, to get healthcare from their hospital. So it's exciting. I love direct contracting with hospitals. I think the hospitals love it. I think the employers are very happy with it. And we save ourself a lot of the sort of, uh, black hole in the middle where the money goes. Nobody can explain where it goes.

Speaker 2:

So do you see, I know from our client base, a lot of hospitals or health systems are kind of maybe worried or hesitant to publish prices and things. Do you think that, uh, that that worry is misplaced or it could actually help them?

Speaker 3:

I think the worry is legitimate only because the insurance companies are basically threatening hospitals. They're saying, we don't want you to do this. Because if you start doing that mm-hmm.<affirmative>, it's gonna undermine the secret discount that we have. So I, I have yet to meet somebody at a hospital who actually says on the provider's side, it's not a good idea for us to show prices. And what, what, what I hear is the opposite. I hear we'd like to show prices, but our insurers are gonna be very upset, or I hear that we'd like to show prices, but we've, the market's never required it. And it takes work. It takes, you actually have to itemize services in a way that we've never done. And we can do that work, but remember we're being asked to do 50 other things, including all these due regulatory requirements and reporting into collaboratives. So we just, you know, we need time, energy, and resources to do that work to itemize. Now some of that's being driven by a poll. The market is saying, Hey, we're inviting you to post prices for a select group of services, bundled orthopedic procedures, for example. And if you put those on the open market, um, there are folks out there who will bring employers to you or send patient patients your way. So that is, that is actually sort of the carrot that's driving some of this. But I know, like, I think hospitals are run by terrific people who intend and mean good. Nobody goes to work for a hospital because they think this is gonna be a great way for me to make a lot of money. People go to work for a hospital because they believe in the mission of a hospital. All of us in healthcare are united around a sense of working for a larger purpose of having compassion on those in need. That's why there's tremendous pride among people at work in a hospital. They, they intend and want to do good, but we've all inherited this system that doesn't always make sense where we're expected to do certain things. And one of those things is having a gun to our head by a payer that says, Hey, we're gonna give you, send you patients, but we want this discount and you can't tell anybody what this discount is. So from a regulatory standpoint, we've said, can we reset that playing field? Mm-hmm.<affirmative>. And when, when I was involved in that, um, uh, regulatory change, I had hospitals all over the country reaching out, telling me, Hey, I know the hospital association is um, not supporting this because it's gonna be more work, but don't, don't quote me. And I'm not going on record here, but this is exactly what we need. And so I think you're gonna see this new normal, just like we had with nutrition labels. All the food industry companies had said when nutrition labels were being discussed that this was gonna be work, an unfunded mandate, there was gonna be mass layoffs of, of workers in the food industry. Food prices were gonna spike. They unified in a, in opposing it. But it turns out it wasn't the individuals or the individual food companies, it was the trade association. And they simply, you know, put out the, you know, the, the loud bark. Well, guess what? We got nutrition labels. And we have a whole new marketplace where the playing field has been reset around things that matter. And now we have informed patients and we have people making better decisions and we're educating folks on sodium and sugar and other things. And so there are certain ways to reset a playing field that may not be comfortable initially, but I think have tremendous implications for the broader public.

Speaker 2:

That makes perfect sense. Uh, thank you. Last thing is on, uh, kind of appropriateness of care. Is it affected by where the care may be if you're in a small town with a private practitioner versus, you know, a larger town or a more comprehensive HMO that you may belong to, or you might be in a high tech practice in an urban area? Is there, uh, a propensity provide more diagnostic tests and procedures when the, the practitioner and the patient are have more access to that or easier access?

Speaker 3:

<laugh>? You know, our research shows that some of the patterns of excessive care have no rhyme or reason as they have no geographic association. There's no, uh, profile of individual physician or provider institution that you can, um, create that is more likely to engage in this. That we were some minor associations when a physician owns their own surgery center or pathology lab. We saw more utilization of things like that. That's been well documented. But by and large, most doctors do the right thing or always try to. And what we've seen is that when we survey doctors around the country and ask them, and this was sort of the basis for writing the book unaccountable, when we ask them, do you know of a local physician who is in practice who should not be in practice and, um, represent a risk to the community, it turns out that almost everybody<laugh> knows of somebody. Um, and the question is, what do we do about those individuals? And there's a lot of things we as a profession can do to improve quality across the board, really increasing the reliability of quality care. But there's not a lot of good vehicles to do it. So what we've decided to do is let's talk about these doctors who are outliers, not as bad doctors, but as doctors who need help and let's reach out to them. And what we've seen is that when peop a peer reaches out to another peer who is independent from the local politics of a regional practice and referral pattern base, that is somebody from, uh, the na a national organization in that specialty, a like-minded like specialist and says, Hey, I saw on the data you showed up as, uh, a high utilizer in this certain practice pattern. I'm happy to chat with you about it, that people do their best to try to improve. And there may be patterns where people are gaming the system or doing things for billing purposes, but by and large, when there's some transparency created with that peer-to-peer collegiality, when there's civility in reaching out, we do see some tremendous improvement. So, uh, my thought is let's try to be positive, right? There's enough depressing stuff going on in healthcare, right? There's, there's enough, you know, cracks in the system. And, and part of it is just Charles science has exploded faster than we have been able to coordinate all the different new subcategories of care, right? When I was in medical school, we had roughly 82 specialties in medicine. Now there are well over 2000, okay? Our gastrointestinal, uh, our, our GI department, gastroenterology department at Johns Hopkins has 12 different specialties in that department. About 80 faculty in 12 different areas, hepatology and esophagus, uh, disease and ultrasound of the pancreas. And so GI is not GI anymore. And when you have that many different skillsets, when you have that many incredible amazing doctors who are so focused on one problem that they get really good at it, of course you need to increase your coordination of care proportional to the growth of the number of subfields medicine. There's never been funding for that, right? There's never been a Medicare adjustment to say you're providing 500 services, we're gonna give you a bonus just to coordinate care. And what you have is you have people showing up at the hospital who are just saying, who, how do I get my doctors to talk to each other? Or does this doctor know that the other doctor wants to do this? And you have these very real experiences from people who sometimes work at the hospital and you, we try to do our best to really deliver care that we would want for our own mother or father. But sometimes we get frustrated saying, the system is not set up for this much scientific knowledge and this much hyper specialization in the hospital. So we've gotta go the extra distance ourselves. I mean, I met some guy in the, in the cafeteria, Charles, uh, I just saw ophthalmology on his white coat and we were chatting and I asked him, so is there an area of ophthalmology that you specialize in? Assuming that pretty much everyone at John Hopkins has a subspecialty. And he said, yeah, he exclusively specializes in the choroid. Okay, I don't even know what that is,<laugh>. I have no idea what that organ or part of the eye is. And that's his entire life. Okay? I don't know if I was sleeping in medical school or what, but that is the level of scientific. So when people like to blame individuals or blame hospitals because they had a bad experience, I remind them that we live in an unprecedented area where we have seen scientific expertise, mature, downed, um, paths that provide spectacular care, but we've not been able to keep up with the coordination of care as efficiently as we have cuz we haven't been funded for it. So all that to say, um, it is an exciting time right now in medicine, but many of, many of us have been, um, sort of, um, very, very much, uh, comforted in seeing a whole new movement of people in in healthcare say, we want to take this on and this piece of the problem coordination, care management, diabetes care, uh, patients with renal insufficiency before they need dialysis, we want to just focus on this one problem. And that's where we're seeing these innovators and this incredible disease management that I referred to, uh, globally as relationship-based management. And it's really exciting and it's just, I didn't think, we think we'd see that in our lifetime, but we are, we're seeing incredible innovation right now.

Speaker 2:

No, I agree with you a hundred percent. You've bring back some memories. When I was a student in the mid eighties looking at the graduate medical, uh, education, national Advisory committee, the number of specialties or subspecialties with a few dozen, and I did a project on, well, what would be the need moving forward if I did it today? That might be a dissertational analysis and not an undergraduate project.

Speaker 3:

<laugh><laugh>. Well, you've seen it all, Charles, between your time in the military and working at Grady and, um, doing your fellowship at, at Emory and now of course all your work with fti. It's, it's really an incredible, it's an honor to speak with you. You've seen it all, I'm sure. So it, I'm not sure you know exactly what I'm talking about.

Speaker 2:

Raising five girls I think taught me more than anything Marty

Speaker 3:

<laugh>.

Speaker 2:

But, uh, I will thank you for your time and your candor. Uh, it was great to hear you speak, uh, during our virtual meeting. Uh, lot of kudos I heard back, uh, from our end and just, uh, wish you all the best moving forward and you know, we'll see if we can all get through the pandemic and get back to what was, uh, semblance of normal. But maybe we'll learn something from this that helps everyone.

Speaker 3:

Great. Well we are hearing some good news right now on the numbers in the pandemic, so hopefully there's an end insight. Charles, pleasure talking with you as always and thanks for having me and for the, uh, A H L A I love you guys. So thanks again for having me at the conference this year.

Speaker 2:

No, we're, uh, like I said, we're very proud to have been, uh, sponsor the keynote speaker now for quite some time and we look forward to next year.

Speaker 3:

Thanks. So Charles,

Speaker 2:

Thank you.