[S2E6] Dr. Khuram Arif - Healthcare Quality Over Growth

A CEO's Case for Foundational Excellence in Healthcare

Vincent Catalano sits down with Dr. Khuram Arif, CEO of Western Health Advantage (WHA), for an in-depth conversation about the future of regional healthcare delivery. With nearly 20 years as a practicing pediatrician, a decade in physician leadership at organizations like Woodland Clinic and Mercy Medical Group, and experience as WHA’s President and Chief Medical Officer, Dr. Arif brings a unique physician-leader perspective to healthcare management.

In this wide-ranging conversation, Dr. Arif discusses:

• How WHA maintains stable premiums while drug costs have skyrocketed from 15% to over one-third of total premium costs
• The role of care navigation in helping members access the right care at the right time
• WHA’s innovative approach to coverage decisions, including being the first health plan in California to offer covered nutrition services
• The “Plan for Foundational Excellence”—a three-year strategic initiative developed with 300 staff members
• Using AI to reduce administrative burden and physician burnout
• Why WHA chooses strategic restraint over rapid expansion
• Building strong partnerships with physicians and healthcare systems
• The challenges of rising hospital costs (including $30 million per bed construction costs)

Dr. Arif shares candid insights about working at a Federally Qualified Health Center in rural New Mexico, his decade guiding medical groups through the transition from volume to value-based care, and now leading WHA with a clear mission: deliver quality healthcare at sustainable costs while maintaining the regional, relationship-focused approach that has made WHA successful for 30 years.

This episode is essential listening for: 

• Insurance brokers and benefits consultants 
• HR professionals and benefits managers 
• Healthcare executives and administrators 
• Physicians and clinical leaders 
• Anyone interested in practical solutions to America’s healthcare challenges

Key Takeaway: Sustainable healthcare requires a holistic approach—addressing costs throughout the supply chain, leveraging technology thoughtfully, building strong provider partnerships, and always putting member needs first.

Learn more at www.clearhcs.com and www.westernhealth.com

Disclaimer: The content provided in this podcast is for informational purposes only and does not constitute legal, financial, or professional advice. Listeners should consult with qualified professionals regarding their specific situations.

Transcript

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Welcome to the Clearly Beneficial podcast,

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the show where we rip off the Band-Aid and explore the future of healthcare,

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benefits,

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and the people driving innovation in the industry.

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This episode is brought to you by Health Next,

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the company leading the way in helping employers build enduring cultures of health

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and well-being,

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reducing medical cost trends,

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and increasing organizational performance.

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To learn more how they can help you, visit healthnext.com.

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Well, welcome to the Clody Beneficial Podcast.

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This is your host, Vincent Catalano.

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And I am so thrilled today to have one of my homies, really.

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I mean,

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but also one of my good friends in the industry,

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Dr.

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Kuram Arath,

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who is incoming,

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soon to be in a few weeks,

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in a week,

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CEO of Western Health Advantage,

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a local HMO here in the Sacramento region in California.

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And we're here to talk about health care in all its forms.

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We're here to talk about WHA and how it fits into the Sacramento area,

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as well as Coram's new role.

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So welcome.

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Thank you, Vinny.

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I'm so happy to be here and to be at your wonderful studio.

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Well, thank you.

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I appreciate you being here.

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You've been working,

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we just chatted about a few things,

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but you've been with WHA for five years.

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Is that right?

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That's right.

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Yeah.

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And you came in as chief medical officer.

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I did.

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I joined as chief medical officer a month before the pandemic hit.

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So it was a very interesting ramp up period.

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Wow.

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Oh, wow.

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So, so let's talk about, let's talk about your backstory a little bit.

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So, so you did your medical training where, I mean.

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Yeah.

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So I grew up in Pakistan.

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That's where I got my, my undergraduate medical degree.

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And then I came here in the nineties to the United States to do my pediatric residency.

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Okay.

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And you know, it's been a very interesting journey.

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So my, my dad's a pediatrician and I sort of grew up with,

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with that sort of running in my DNA, and so that's the field that I entered.

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And I practiced pediatrics right here in Sacramento from 2004 onwards.

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And in the middle,

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after completing my residency at Downstate New York,

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I spent about three years in New Mexico at a federally qualified health center.

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Okay.

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An underserved area, so I was the only pediatrician in a small town in Portales, New Mexico.

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Wow.

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And, you know, I really got to see healthcare close and personal.

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And build a lot of empathy, I would imagine.

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I mean, that's working for an FQHC has got to be a little challenging.

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Well, you know, you learn to sort of use every resource at your disposal.

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So working for an FQHC,

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I mean,

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that had to be an eye-opening experience working in a community like that for how

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big was the community?

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So it was a small town, Portales, and I covered the adjacent town Clovis.

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So, you know, probably altogether in that whole area was about, you know, 50,000, 70,000 people.

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I'm sure by now it's grown a lot more.

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And,

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you know,

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it was just interesting because you're in the heartland and you quickly realize

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that there's a huge shortage of physicians and healthcare workers.

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And we're talking back in the 2000s, and that was like 25 years ago.

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And then if you extrapolate that to where we're at today,

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that national shortage of physicians and healthcare workers,

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nurses,

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etc.

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and that I think goes into one of the questions you've had is you know what is the

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state of healthcare and where are we going and you really have to think about the

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inputs you know when you're talking about labor shortages costs on the inputs are

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going to rise and so if you want to

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really make systemic improvements.

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We have to think about healthcare holistically,

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not just at the consumer end,

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but everything that goes up and down the supply chain to really sort of understand

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how can you make the system more efficient.

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No, I completely agree with you.

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I feel like when you look at,

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you know,

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I'm on LinkedIn quite a bit and there's quite this community of pundits who all

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have a thing or an ax to grind or

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something to say about something.

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And everybody wants to cast blame somewhere, right?

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I mean, whether it's the evil insurance company or brokers or hospitals or wherever.

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But I'm of the mind that,

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to your exact point,

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there has to be some more of a holistic look to this.

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And how do we look at cost?

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I mean, I look at hospital systems, for example, and you were on the

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sort of, I would say, the negotiating side across the table from all your partners, right?

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And so every year they come to you and say, Kuro, we need this.

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And you go, well, I think we need that.

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And then the horse trading starts, right?

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And I'm just struck where I remember last year,

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and I think you're on the upcoming panel for the Sacramento Business Journal,

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right?

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I saw your picture there.

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And I remember last year,

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the guy who was the interim CEO of UC Davis Medical Center,

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and every morning I walk my dog through the cemetery over here in East Lawn,

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and then I watch them build the new towers over there.

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And I remember him saying, net net, that was going to cost $30 million a bed.

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You know,

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a couple of billion dollars divided by 250 beds,

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whatever it worked out to be worked out to,

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you know,

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30,

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30 million dollars a bed.

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And I just sit there in in just dumbfounded.

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I mean, if if if that is the calculus.

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Of how health systems think.

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How do we get everybody on the same level to be holistic?

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Yeah.

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Well, you know, I think this goes to all the different inputs that go into it.

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If you think about that,

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with that cost,

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you know,

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those kinds of staggering costs around fixed facilities,

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hospitals,

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you have to think,

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well,

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what's the breakeven point?

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How many years does this birth have to function at what cost to pay that off?

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It's basically the math is not doable.

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It's not realistic, it's not practical.

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And I think that we have to sort of, you know, from the hospital system, for instance,

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There are input costs,

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things such as regulations,

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seismic retrofitting,

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and all of that that goes into it,

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just to sort of name one.

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So that goes back to the earlier point,

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which is how do you manage the system to be effective from the ground up?

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We are living in a system that has organically been built up over time.

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And does it still serve the purpose that it was initially intended for?

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A long,

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long time ago,

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people needed to go to hospitals to get better and to get that level of care.

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But a lot of care now with the help of technology can happen at home.

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A lot of care can happen in the clinic.

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A lot of care can happen at, you know, freestanding ambulatory surgical centers.

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And so that's so you can sort of find ways to if you can get care at the most efficient level.

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You can hopefully try and start to decrease some of those costs.

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Yes.

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And I think that the other point here is how does one decide where's the most

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efficient place to get care?

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And that's where it goes to the negotiations with the health systems.

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You know,

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for instance,

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if a colonoscopy can happen at an outpatient surgical center,

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why should it happen at a hospital at a significantly higher cost margin or a

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significantly higher cost level?

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And those are the things that we have to be intelligent about.

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We have to align leadership,

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since on the health system side or the hospital side,

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about the hospitals as the place of last resort.

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You go to the hospital when the care that you need is not available anywhere else.

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Right.

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Well, and that's the push-pull, right?

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In that if the goal of a hospital is to be empty,

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how could the goal of a hospital be to be full?

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I mean,

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to pay for those 30 million dollar beds,

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you have to have butts in the seats all the time and capacity has to be full.

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And what's interesting,

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you know,

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to your point,

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I noticed here in Sacramento,

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it's kind of been an interesting laboratory because,

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you know,

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here you've got four solid,

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five solid hospital systems in the region,

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maybe more,

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actually.

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And you've got, you know,

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Over the years,

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I have found insurance companies use Sacramento as a laboratory to try different

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things.

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But at the same time, the systems have done some very interesting things.

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I don't think it's possible in Sacramento

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to go and get an x-ray or an MRI at an independent facility anywhere that's not

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connected to a system.

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Once one of the large health systems bought one of the last independents about

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five,

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six years ago,

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maybe more,

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you couldn't get an x-ray or MRI independently.

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I remember back in the day when I was an insurance broker,

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I must have had 10 different,

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12,

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actually 12 at one point,

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different ambulatory surgery centers around California as my clients.

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But slowly,

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they may have had a life cycle of about five to eight years,

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and then the hospital system started buying them up.

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So they're no longer independents anymore.

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So, I mean, where do you see that...

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You need that competition in the market to keep people competitive.

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But do you see that being a trend that you'll see more of these independent

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facilities or you'll see more independent imaging centers?

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I mean, what are you seeing?

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I think from the perspective of economies,

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it's become difficult for freestanding independent organizations to do this kind of

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work.

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And so that's why over time,

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They've sort of consolidated into the health systems.

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Right.

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And so so you have to work with what you have.

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And if in the current state,

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most health systems have some sort of relationship with imaging centers,

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whether they own them or they're in,

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you know,

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joint venture type of relationships.

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But just to sort of really push for, you know, MRIs and CD scans and those kinds of things.

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outpatient diagnostic services should be provided at freestanding facilities.

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You don't have to go into the hospital for that anymore.

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And those charges have to be reasonable, right?

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You know,

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if you're at an independent facility,

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then the cost of that should be the cost of maintaining that independent facility,

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not the cost of the entire hospital system,

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right?

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And that's where it goes to,

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you know,

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I think it goes to working with leaders who understand the importance of

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value-based care.

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Right.

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So as hospital systems are beginning to realize that the costs are getting higher and higher,

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One of the organic things that's happening is the realization that for hospitals to

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control their costs,

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they have to provide them at a lower cost to begin with.

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And so that's where diversifying outside the facilities and into freestanding

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clinics,

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et cetera,

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makes a lot of sense.

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Right, right.

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And hopefully that's a trend.

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I mean, value-based care is, and there's been so many different monikers about

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that tossed around.

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I mean, the HMO, right, started in Sacramento back in the mid-'80s.

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I mean,

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Foundation Health was the first HMO here in the country,

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you know,

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started here in Sacramento.

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And then over the years, you know, it evolved.

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And,

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you know,

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WHA came along now,

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again,

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in probably 2000-ish,

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just before I became an insurance broker.

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I became an insurance broker in 2003.

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And

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One of the things,

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and I want to kind of pivot the conversation a little bit to WHA,

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because I always found people would say,

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why would you offer WHA to the employees?

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Well, very simple.

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They're predictable.

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And what I mean by predictable is you were not out there.

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giving rate increase swings, 22% one year, 4% the next year, and 12% the next.

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It wasn't all over the place.

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WHA was a consistent 5% to 8% company.

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You could bank on that every year, sometimes even less.

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I mean, there were years where it was in the 3% increase level.

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So number one, predictable.

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Number two, always easy to do business with, right?

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If there was a problem, a challenge, a whomever, you know, WHA...

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The team at WHA has always been good to work with brokers, staffs, also the brokers.

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When I had a problem,

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if I had a problem,

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I knew I can access the leadership within WHA and they would work to help me solve

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the problem.

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What is it about WHA, would you say, that fostered that type of ethos?

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So,

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you know,

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I think so,

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so,

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um,

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so that's not the vantage we were founded in 96 and we were founded by health

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systems right here in Sacramento,

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as well as,

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as over in,

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in Solana County.

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Um,

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and so we've got,

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you know,

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not the health in Solana County,

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we've got the dignity health system here,

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which is not part of the common spirit system nationally.

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And at that time, we also had UC Davis was a founding partner as well.

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I think what really happened is that the health system saw a need to have a help

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plan that they could be closer to,

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in the sense that if you're a health system and you understand the business of

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health care,

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if you can have a health plan that also understands that,

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you can be closer aligned to where the care needs to be delivered and at what level

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and what costs.

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And so that's always been in our DNA.

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And of course, you know, when you...

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found a company that grows organically over time it's it's always a relatively

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small operation um and that's been by design it allows us as a help plan to stay

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focused on the region so we're a regional health plan and to stay very nimble so as

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needs arise in the in the industry for instance um we're talking about weight loss

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and glp ones and everything like that nowadays right but

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You know,

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three,

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four years ago,

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we were the first health plan in California to go out and work with the Department

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of Managed Healthcare and get approval to offer a nutrition services covered

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benefit.

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What that meant is patients did not have to wait to get gastric bypass surgery to

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be at that point.

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before which they could get a nutrition council visit covered.

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And so that that demand arose from our physicians talking to us and saying,

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well,

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let me understand something.

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So,

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you know,

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when somebody first starts to have issues with their weight and we want them to see

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a nutritionist to help design a diet plan and get counseling about healthy eating.

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Why don't health plans cover that?

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It seems kind of really crazy to not offer that coverage.

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And then once the patient's at the point where they need gastric bypass surgery,

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then you're covering the nutritional records.

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It's way too late.

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You're talking about well care versus sick care.

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Absolutely.

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And so the reason I'm painting this example is because this was an example of

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The providers,

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you know,

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the clinicians delivering the care,

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seeing that there's a demand for a certain kind of service that health plans are

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not covering.

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Right.

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And talking to Western Health Advantage and saying, can you do something about it?

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Right.

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And as a regional plan, we were nimble enough to say, this idea makes a lot of sense.

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There's no bureaucracy for us to work with internally here.

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Let's just take it and run with it.

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Go to the department directly and say, we have an idea.

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What do you think?

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Yep.

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And then fast forward a few years later, we got approval.

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And this was,

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you know,

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two,

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three years ago,

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long before there was GLP-1s,

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what was on the market and weight loss was a hot topic the way it is nowadays.

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Right, right.

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And but, you know, I think, you know, culturally, people just want to press the easy button.

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Right.

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Right.

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Unfortunately.

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Right.

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You know, you look at.

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You know, doing a nutritional consult and teaching someone to eat right and exercise.

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I mean,

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at the end of the day,

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you know,

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I feel like at this point in my life and I've proven it out.

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I mean, four years sweating my butt off on the Peloton.

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I didn't lose a single pound.

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OK, but changing my diet fundamentally this year, I lost 25.

(00:17:05):
Were you surprised by how much that made a difference?

(00:17:08):
Like really understanding how to eat intelligently?

(00:17:13):
completely i i mean but that was the light bulb that goes off i mean it's kind of a

(00:17:17):
funny story but it's like you know i i literally you know was in the bathroom back

(00:17:22):
in january and i looked at myself naked in the mirror yeah and i said to my and i

(00:17:26):
just let it all hang out and i go i walked into the i walked it i walked it i

(00:17:31):
walked into the bedroom and i said to my wife fix me and she's like okay you ready

(00:17:38):
And we began a journey of,

(00:17:42):
you know,

(00:17:43):
intermittent fasting,

(00:17:45):
eating more protein,

(00:17:47):
doing all the right things.

(00:17:48):
I mean,

(00:17:49):
I didn't change my exercise regimen one iota,

(00:17:52):
still walk two miles a day,

(00:17:54):
but food and the lower alcohol and all the things that made a huge difference.

(00:18:00):
So I jokingly called, you know, GLP Vinny, you know, because I mean, I was like, I did my own

(00:18:07):
you know,

(00:18:08):
it's journey,

(00:18:09):
but people have to,

(00:18:10):
you were saying this before we started this morning,

(00:18:15):
people need to want to be engaged.

(00:18:18):
You need to, to get these people engaged in their own health.

(00:18:22):
Yeah, and people need support.

(00:18:23):
So as an example,

(00:18:26):
you were lucky enough to have people around you who sort of understood what was

(00:18:29):
needed.

(00:18:31):
But that may not be everybody out there.

(00:18:33):
And so where you can provide that support, for instance, staying on the weight loss topic,

(00:18:40):
If you had a nutritionist at the get-go,

(00:18:42):
when you first began to put on some weight and you decided,

(00:18:45):
hey,

(00:18:45):
I need some professional help.

(00:18:47):
Let me sort of sit down and do a food diary with somebody who understands

(00:18:51):
carbohydrates and calories and proteins and how all of that stuff works together in

(00:18:56):
your body.

(00:18:57):
And get some help designing a plan that works for me,

(00:19:01):
a meal plan that works for me,

(00:19:02):
that's culturally,

(00:19:03):
that fits with my culture,

(00:19:04):
with the foods that I like to eat.

(00:19:06):
And also, you know, fits with my own personal metabolism.

(00:19:10):
So that kind of support is what health insurances can do.

(00:19:14):
And should be doing.

(00:19:16):
But to make that happen, you have to be very close to the practice of medicine.

(00:19:20):
You have to be very close to the providers,

(00:19:22):
the physicians who are providing the care to understand what the needs are out

(00:19:25):
there.

(00:19:26):
And then also be extremely close to what the members are looking for.

(00:19:30):
Yes.

(00:19:35):
Everybody is seeing that GLP-1 medications are very, very effective, very, very efficacious.

(00:19:42):
But the costs at which they're being sold out in the market are so incredibly high

(00:19:48):
that if every health plan was to,

(00:19:50):
you know,

(00:19:50):
sort of cover,

(00:19:51):
you know,

(00:19:52):
carte blanche,

(00:19:52):
you know,

(00:19:53):
whatever medicine you need,

(00:19:54):
you can sort of have it.

(00:19:56):
You can't run the business of the financing piece of it, right?

(00:20:00):
And so how does one balance that tension?

(00:20:03):
That's where...

(00:20:04):
being smart enough to understand what's the demand out there.

(00:20:08):
How can we go after it?

(00:20:10):
What are the different areas that can, the levers that you have to pull?

(00:20:15):
So for instance,

(00:20:17):
the member awareness piece,

(00:20:18):
the education piece,

(00:20:19):
the provider education piece,

(00:20:21):
and then the support that you need around it.

(00:20:22):
If you can stand up a program and you can get members to work through this weight

(00:20:26):
loss journey with the help of the health insurance company,

(00:20:29):
with the help of providers who understand what it is to lose weight and how do you

(00:20:33):
do it.

(00:20:34):
Because not every physician is trained in weight loss medicine, right?

(00:20:38):
I'm a primary care physician.

(00:20:39):
I certainly was not, which is why I needed the help of a nutritionist for my

(00:20:43):
my patients who had eating disorders, as an example.

(00:20:47):
So I think that's the key is,

(00:20:49):
and I think that's sort of in our DNA as a help plan was an advantage,

(00:20:54):
is really understanding what the needs are and then being responsive to those needs

(00:20:59):
in a personal way.

(00:21:00):
When a patient calls us,

(00:21:02):
when a member calls us and asks for help,

(00:21:05):
we should be there to answer that call.

(00:21:08):
And that's something that I'm lucky enough to have sort of joined an organization

(00:21:12):
that's built this into their DNA over time.

(00:21:15):
And now the job as the new CEO is really...

(00:21:19):
maintaining that important piece of our DNA and doubling down on it and being able

(00:21:24):
to do it in a way that's smart from the business perspective as well.

(00:21:28):
Yeah.

(00:21:28):
No, I think that all makes tremendous sense.

(00:21:31):
I mean,

(00:21:31):
you know,

(00:21:32):
one of the things I made a note is,

(00:21:34):
you know,

(00:21:34):
sort of,

(00:21:36):
it's almost like a rhetorical question,

(00:21:37):
but to me,

(00:21:38):
you know,

(00:21:38):
is the story of WHA that managed care can actually be sustainable?

(00:21:45):
I think the big challenge we've seen in the market is,

(00:21:49):
like I say,

(00:21:50):
when other Buka-type insurers have gone to market with HMOs here in California,

(00:21:59):
they don't price it right.

(00:22:00):
It swings rate-wise.

(00:22:02):
And here's old WHA sitting there,

(00:22:04):
I think,

(00:22:05):
in kind of the catbird seat because you've kind of figured it out.

(00:22:09):
It's always been a magical mystery to me how you could perform that way.

(00:22:15):
You know,

(00:22:15):
I think a lot of it is to do with understanding that at heart,

(00:22:19):
we are not a,

(00:22:20):
you know,

(00:22:21):
we're a non-for-profit company.

(00:22:23):
And so our margins are enough to keep us in business and keep us going forward and

(00:22:28):
keep the lights on.

(00:22:29):
But we're really there to return those premium healthcare dollars back into the

(00:22:34):
health systems who sponsor us.

(00:22:36):
But to do that in a smart way and to ask the questions of our own sponsors,

(00:22:41):
you know,

(00:22:42):
you know,

(00:22:42):
can we hear our ideas to reduce care costs in the health care system?

(00:22:47):
Right.

(00:22:48):
Can you take these and run with us?

(00:22:49):
And I think that that's where that close partnership that we have really benefits us.

(00:22:53):
And obviously the partners you've had have been long term partners and they have

(00:23:00):
obviously hung in.

(00:23:01):
Yeah, we've been lucky enough to do that, yes.

(00:23:04):
And I think,

(00:23:05):
you know,

(00:23:05):
also sort of over time you realize what kind of a partner you need to offer that

(00:23:11):
care at that value,

(00:23:12):
that high quality care at that value where the care is affordable.

(00:23:17):
And so over time,

(00:23:19):
you know,

(00:23:21):
we've made our missteps over time and gotten to bed with partners that,

(00:23:24):
you know,

(00:23:24):
didn't sort of work out.

(00:23:26):
But that's where experience and maturity helps a lot.

(00:23:29):
No, for sure, for sure.

(00:23:30):
Now,

(00:23:30):
so you alluded to this a little bit,

(00:23:32):
and that's kind of where I wanted to pivot a little bit.

(00:23:35):
You talked about GLP-1s, and so I want to kind of talk about drug cost in general, right?

(00:23:41):
That's my case.

(00:23:43):
Let's get on this.

(00:23:44):
Let's go.

(00:23:47):
Oh, my God.

(00:23:47):
Well, I mean, listen, I mean, I have this weird hobby, right?

(00:23:51):
When something is advertised to me on TV,

(00:23:53):
I take out GoodRx and I just see what the retail price of this damn thing is.

(00:23:58):
And there's nothing advertised to you on TV that's less than $3,000 a month.

(00:24:03):
I mean, it's insane.

(00:24:06):
Couple that with, and this is like a two-part question, right?

(00:24:09):
Yeah.

(00:24:10):
Couple this with the things like we mentioned right before we started about the 60

(00:24:15):
Minutes episode about gene therapies,

(00:24:18):
you know.

(00:24:18):
So you have these incredibly expensive brand name drugs coming to market.

(00:24:22):
You have these tremendously multimillion dollar one and done gene therapies.

(00:24:28):
Right.

(00:24:29):
Back in the day, I remember as a broker, we'd take a look at pricing.

(00:24:35):
You'd get the quotes from the insurance company,

(00:24:37):
and there was a disaggregated price in large group.

(00:24:41):
You'd see a medical premium, and then you saw a pharmacy premium.

(00:24:46):
You add the two of those together to get your full premium for the month per employee.

(00:24:53):
Over time, that drug component went from being about

(00:24:58):
15% of the plan to now it's probably upwards of a third or more of the overall premium cost.

(00:25:07):
How does, what's your take on that?

(00:25:11):
What is WHA doing to play the game and understand and,

(00:25:15):
and,

(00:25:16):
and really work to the members advantage in that area?

(00:25:22):
So, you know, as a, as a physician, um,

(00:25:25):
it was impossible for me to know what the cost of the medication was that he was describing.

(00:25:31):
And I think that's the biggest issue, right?

(00:25:33):
If you don't know how powerful your pen is, you don't know how powerful your pen is.

(00:25:38):
And therefore, you don't understand how can you be smart about what you're prescribing.

(00:25:42):
And I think the point here is that the only way to make this work,

(00:25:47):
well,

(00:25:47):
there's a few different ways.

(00:25:48):
The first thing is the cost is what the cost is.

(00:25:52):
Let's set that aside for a second, although I have issues with that too.

(00:25:56):
But downstream,

(00:25:58):
how do we educate the providers,

(00:26:00):
the physicians,

(00:26:01):
the clinicians who are writing those prescriptions on here's the cost of this

(00:26:05):
medicine that you wrote for this patient.

(00:26:07):
Here is an alternative medication, which is equally efficacious.

(00:26:11):
And here's the medical science behind it.

(00:26:13):
Here's the evidence published in literature so the physicians can understand that,

(00:26:18):
yes,

(00:26:18):
they're not doing a disservice to the patient by writing a medicine that's cheaper.

(00:26:23):
If the medical efficacy is the same,

(00:26:25):
then just about every doctor would be perfectly happy writing a prescription that's

(00:26:29):
cheaper.

(00:26:30):
Why?

(00:26:30):
Because in the end,

(00:26:32):
doctors care about their patients and they don't want patients to have to spend

(00:26:35):
more than they have to spend,

(00:26:36):
you know,

(00:26:37):
for care.

(00:26:38):
That's what they call provider detailing.

(00:26:40):
Understanding at the individual prescriber level, you know, where is the opportunity?

(00:26:46):
You know, this medication for this kind of, you know, disease state.

(00:26:50):
At this cost,

(00:26:51):
if you had written a different medication for the same disease state with the same

(00:26:54):
efficacy,

(00:26:54):
here's how much the cost you would reduce.

(00:26:57):
That's the kind of work that we are doing now.

(00:27:00):
But that's being really, really trying to be really innovative and also being supportive.

(00:27:05):
In the end, health insurance companies, their job is to help finance health care.

(00:27:12):
And to finance health care,

(00:27:13):
it means that you have to be working closely with the providers who are providing

(00:27:17):
the health care to give them the support that they need so they can make

(00:27:20):
intelligent,

(00:27:21):
smart decisions about the cost of care as well.

(00:27:24):
You know,

(00:27:26):
for the longest time culturally,

(00:27:28):
it's always been difficult for physicians to think about the cost of the care that

(00:27:32):
they're providing.

(00:27:33):
Why?

(00:27:34):
Because perhaps doctors feel helpless.

(00:27:35):
They can't control the cost, so they can only focus on providing good care.

(00:27:39):
But it's really important as part of the job,

(00:27:42):
as a health insurance company,

(00:27:44):
at West North Advantage specifically,

(00:27:46):
because of our close relationship with the providers,

(00:27:48):
we can have that kind of dialogue.

(00:27:50):
Yes.

(00:27:51):
We have physicians and pharmacists sitting on our pharmacy committees,

(00:27:55):
helping us decide what tier do you put medications at?

(00:27:59):
Helping us decide what medicines should be covered, you know, for what kind of care.

(00:28:03):
And I think that that's the piece that's important.

(00:28:06):
Now, how do you scale it up?

(00:28:08):
I think it's very, very difficult for the large national carriers to be able to do that.

(00:28:13):
You've got hundreds of thousands of providers in your panel.

(00:28:16):
How do you go about educating them?

(00:28:18):
We have the privilege of being a regional health plan with a few small health

(00:28:23):
systems in our geography where we can go out and visit them on a regular basis.

(00:28:29):
And we also have the privilege of having that access into the health system.

(00:28:33):
We're not closed off from them, unlike the large network.

(00:28:36):
You're also,

(00:28:36):
and just by the nature of your relationship,

(00:28:38):
you know,

(00:28:39):
it's not a contentious relationship,

(00:28:41):
right?

(00:28:42):
It's understood by your partners.

(00:28:43):
I would say the large systems,

(00:28:45):
the large insurers have contentious relationships with their provider network.

(00:28:49):
Yeah, but just, you know, I mean, that's just the nature of the beast, right?

(00:28:52):
If you're a large system,

(00:28:53):
then you're mostly negotiating and trying to find kind of,

(00:28:56):
you know,

(00:28:56):
opportunities there.

(00:28:58):
But we can go several levels deeper.

(00:29:01):
We can go beyond the negotiation point.

(00:29:04):
to say we can help you with reducing the cost of the care.

(00:29:08):
Let us help you.

(00:29:09):
And do you trust us to do that?

(00:29:11):
And so I think that that's been a big part of our DNA and something that I believe

(00:29:15):
very,

(00:29:15):
very strongly in.

(00:29:16):
No, that's great.

(00:29:18):
I mean,

(00:29:19):
one of the folks I interviewed,

(00:29:21):
one of my guests this year,

(00:29:23):
Farron Williams,

(00:29:25):
she is a PhD pharmacist.

(00:29:27):
And I think I might have connected her with your chief pharmacy officer,

(00:29:31):
because she works for a company that does pharmacy navigation for members.

(00:29:34):
I mean, she helps people pick the right

(00:29:36):
Do exactly what you just said.

(00:29:37):
They prescribe something,

(00:29:39):
and her company is hired by employers to help their employees make better decisions

(00:29:44):
about the script.

(00:29:46):
You get prescribed this.

(00:29:48):
If you use this, it's going to cost you $400.

(00:29:50):
If you use this, it's going to cost you $12.

(00:29:53):
And that could be literally the economies that we're talking about,

(00:29:56):
depending on what people are prescribed.

(00:30:00):
What else about drugs?

(00:30:01):
Let's go back to the other point, which is the input costs.

(00:30:04):
Why are medications priced at that high level?

(00:30:07):
Other than the fact that,

(00:30:11):
yes,

(00:30:12):
we work in a market-based capitalistic economical system,

(00:30:17):
we understand that.

(00:30:19):
But does every single pound of flesh really need to be extracted?

(00:30:24):
So fine.

(00:30:25):
So the GOP ones came out.

(00:30:26):
There's research and development costs that the pharmaceutical companies have to

(00:30:29):
offset by pricing the drug in the market.

(00:30:34):
But when you are selling millions and millions of doses, shouldn't that cost start coming down?

(00:30:39):
Why does it take somebody as brave as,

(00:30:42):
and this is where I will give kudos to the current administration,

(00:30:46):
to have those conversations directly with the manufacturers and use the bully

(00:30:50):
pulpit that the president is using right now to say,

(00:30:54):
why are we paying so much?

(00:30:56):
Let's drive down the cost in Medicare and Medicaid by negotiating stronger for drugs.

(00:31:01):
Right.

(00:31:01):
And the previous administration started this work and did a great job,

(00:31:04):
you know,

(00:31:05):
with sort of setting the breaking the ground on this.

(00:31:08):
So keep it up.

(00:31:09):
But then Medicare and Medicaid is just,

(00:31:11):
you know,

(00:31:11):
these are large facets of the population,

(00:31:14):
but the commercial population is still huge as well.

(00:31:17):
Who's going to help us?

(00:31:18):
Well,

(00:31:19):
this is a great point because,

(00:31:21):
you know,

(00:31:22):
I remember about two years ago,

(00:31:24):
the Business Journal published the payer mixes of all the hospital systems.

(00:31:28):
And the gist was basically that in this region,

(00:31:32):
Medicare,

(00:31:33):
Medi-Cal represents between 70 to 75 percent of the inputs,

(00:31:40):
you know,

(00:31:40):
for any given hospital system and 25 percent is commercial.

(00:31:44):
But it's the commercial system.

(00:31:48):
that subsidizes everything else.

(00:31:50):
And I think this is something that most people don't understand is that there's

(00:31:53):
fixed reimbursement coming from Medicare and Medi-Cal or Medicaid and the rest of

(00:31:58):
the country,

(00:31:59):
but it's the commercial plans are the ones that have been taking it on the chin for

(00:32:04):
so many years when they're paying twice or more the level of reimbursement for just

(00:32:09):
about anything.

(00:32:10):
Yes, and so that's why, I mean, reducing the cost on Medicare and Medi-Cal will help.

(00:32:16):
downstream over the next few years but in the meantime we need to have a larger

(00:32:22):
national conversation about the cost of drugs in this country the cost of

(00:32:26):
pharmaceuticals in this country why is it that you can travel to europe where the

(00:32:30):
care is just as good um but the cost is a lot less so i have a family in sicily and

(00:32:37):
and i was visiting there a few years ago

(00:32:40):
My cousin was taking a shower outside after a swim at the beach and a loose tile

(00:32:46):
fell on his foot and he fractured a toe.

(00:32:49):
And so he needed to get some imaging and he was kind enough to show me his bill for

(00:32:53):
his,

(00:32:54):
he needed a CT scan.

(00:32:55):
And it was, you know, 10 times cheaper to get a CT scan in Italy than it is over here.

(00:33:03):
Why is that?

(00:33:05):
You know,

(00:33:06):
is it just because,

(00:33:07):
you know,

(00:33:07):
the public keeps paying because they have no other option?

(00:33:09):
And so let's just keep extracting more and more public.

(00:33:13):
It doesn't seem fair to me.

(00:33:15):
Well, I've always, and I maintain this to this day.

(00:33:18):
I mean,

(00:33:18):
I really believe,

(00:33:19):
I mean,

(00:33:20):
there's,

(00:33:20):
listen,

(00:33:21):
you and I are fortunate to have gone to a prestigious business school,

(00:33:27):
to the same business school,

(00:33:28):
UC Davis Graduate School of Management.

(00:33:30):
So that,

(00:33:31):
we were afforded the benefit of some good business training,

(00:33:34):
but at the same time in healthcare,

(00:33:36):
I still feel that it's truly the blind leading the blind.

(00:33:40):
I mean, everybody does want to extract their pound of flesh

(00:33:45):
And I felt like,

(00:33:46):
and this was just my own opinion,

(00:33:48):
the ACA,

(00:33:50):
Affordable Care Act,

(00:33:51):
was the root of a lot of this because there was so much uncertainty going into that

(00:33:57):
that everybody just literally circled their own wagons, right?

(00:34:02):
Every entity,

(00:34:03):
hospital systems,

(00:34:04):
providers,

(00:34:06):
pharmaceutical companies,

(00:34:08):
insurance,

(00:34:09):
everybody circled their wagons because it was like they were hoarding their

(00:34:13):
resources for the day when they wouldn't make enough money.

(00:34:18):
And here we are now, almost 15 years later, and they're still hoarding them.

(00:34:24):
they never realize that it's okay to not try to extract our maximal pound of flesh.

(00:34:31):
Well, you know, that's where it really goes to, you know, which tune are we marching to?

(00:34:38):
If you are a health insurance company that's beholden to the shareholders,

(00:34:43):
by nature,

(00:34:44):
you have to maximize profits because that's what you are your shareholder,

(00:34:47):
right?

(00:34:48):
And so where does, you know, how do you maintain that balance between staying profitable?

(00:34:52):
Because obviously you have to be to stay in business, but also providing good quality care.

(00:34:57):
I think, you know,

(00:34:58):
If you think about it,

(00:34:59):
the Affordable Care Act,

(00:35:00):
just going back to the 2010s when it was being sort of cobbled together,

(00:35:04):
it was a whole system effort.

(00:35:10):
led by the government to sort of facilitate all the insurers coming together and

(00:35:14):
saying,

(00:35:14):
how do we design a marketplace that makes sense?

(00:35:17):
And if you think about the original design,

(00:35:18):
if you just go back to,

(00:35:19):
you know,

(00:35:20):
just boring stuff like,

(00:35:21):
you know,

(00:35:22):
risk pool mechanics,

(00:35:23):
you know,

(00:35:23):
how do you sort of really finance?

(00:35:25):
It makes sense that the more people that you have in a population paying into a,

(00:35:29):
you know,

(00:35:30):
into a,

(00:35:31):
um,

(00:35:31):
system of health care.

(00:35:33):
Some folks are going to be sick.

(00:35:34):
Some folks are going to be healthy.

(00:35:36):
The logic is that if you are healthy,

(00:35:38):
you're still paying into the system that helps pay the cost of folks who are sick.

(00:35:43):
And so you sort of spread that burden.

(00:35:46):
But over the years, what we have not done well is really understand.

(00:35:52):
So you set up a foundation.

(00:35:53):
You have to maintain it.

(00:35:55):
You have to optimize it.

(00:35:57):
You have to make it stronger and stronger.

(00:35:58):
Right.

(00:35:59):
I think what we've just done historically in this country is we set up a system.

(00:36:05):
We don't like it because it doesn't work on day one.

(00:36:07):
And then we're too busy trying to sort of tear it down and sort of,

(00:36:10):
you know,

(00:36:10):
work on the fringes of it.

(00:36:12):
You just have to be sort of holistic about the overall approaches as well.

(00:36:16):
And so health care needs care, needs a dose of medicine.

(00:36:23):
How do we do that?

(00:36:25):
we can't do that in isolation.

(00:36:26):
So people really have to get together around the table to say,

(00:36:29):
all right,

(00:36:30):
let's roll up our sleeves and make this better.

(00:36:31):
And that means that legislators need the help of the industry.

(00:36:37):
They need advice from the lobbyists and whatnot,

(00:36:40):
the experts,

(00:36:41):
the academics,

(00:36:42):
but also the folks who are practicing medicine out there.

(00:36:45):
The people working at the rural hospitals who understand what it is to lose a

(00:36:50):
hospital from a community

(00:36:52):
What are you going to do?

(00:36:53):
So,

(00:36:53):
yes,

(00:36:54):
in the short term,

(00:36:54):
you reduce funding to community hospitals for whatever the reason is.

(00:36:58):
Economically,

(00:36:59):
it might make sense in the short term,

(00:37:00):
but in the long term,

(00:37:01):
you've just driven the cost of care up because now those folks in that community

(00:37:05):
have to go somewhere else,

(00:37:06):
burning another hospital,

(00:37:08):
perhaps not getting care,

(00:37:09):
and then overall getting sicker and sicker,

(00:37:12):
and then you have downstream runaway effects.

(00:37:15):
And so...

(00:37:17):
I think one of the questions you've asked is,

(00:37:20):
Karam,

(00:37:20):
where do you see the state of healthcare in five years?

(00:37:23):
And as a doctor,

(00:37:24):
I would tell you that I think we have to think of this as a patient and how

(00:37:28):
critical this patient is.

(00:37:29):
And I would say the prognosis at this point is what we use the term guarded in the

(00:37:34):
medical world,

(00:37:34):
right?

(00:37:35):
Where you have to keep a close watch on this patient and to help them get better.

(00:37:41):
You can't take your eye off the ball.

(00:37:44):
And you've constantly got to be trying new things that you think might work in an

(00:37:49):
effective way.

(00:37:50):
But you have to be honest about it.

(00:37:51):
You really have to get down to work on that.

(00:37:54):
You cannot do it alone.

(00:37:55):
Yes.

(00:37:56):
And I think in your favor, speaking of Western Health Advantage specifically,

(00:38:03):
Not like you have your own controlled environment, but you almost do.

(00:38:07):
I mean,

(00:38:07):
your culture,

(00:38:09):
your ethos,

(00:38:09):
how you do business,

(00:38:10):
how you have partnerships with your provider partners,

(00:38:15):
it almost oddly insulates you from a lot of the crazy, right?

(00:38:20):
You get to do what you're doing in geographies that you choose to do it in.

(00:38:25):
I mean,

(00:38:25):
you guys did a,

(00:38:26):
you got a foray into the San Francisco Bay area a few years back and you pulled

(00:38:30):
back from that because it wasn't making sense because it was just a different,

(00:38:34):
different,

(00:38:36):
different beast,

(00:38:37):
right?

(00:38:38):
And so you, you pulled back and decided to stay successful where you're successful.

(00:38:43):
And I think that is,

(00:38:45):
a very good story to tell about you and WHA.

(00:38:50):
So you mentioned the word innovation.

(00:38:52):
I mean, what strikes me today in the marketplace is you've got...

(00:39:00):
There's so many layers of healthcare.

(00:39:03):
I kind of view it as, I literally have one in the house.

(00:39:07):
I made a ball of Band-Aids, right?

(00:39:10):
Because we just keep putting Band-Aids on top of Band-Aids.

(00:39:13):
You're getting a pretty fat ball now.

(00:39:14):
It's a pretty fat ball.

(00:39:16):
And,

(00:39:16):
you know,

(00:39:16):
it's not like it's not like you,

(00:39:18):
you know,

(00:39:18):
and,

(00:39:19):
you know,

(00:39:19):
it's not like anybody's really willing to take a white piece of paper or clean

(00:39:23):
sheet of paper and start from there,

(00:39:27):
because even though you should and look at it.

(00:39:31):
Because we've hit an inflection point, especially on the commercial side.

(00:39:34):
I think employers are becoming more and more frustrated about the cost of premiums.

(00:39:38):
When I started in this industry,

(00:39:40):
you could insure an individual for $150 a month and $400 for a family.

(00:39:45):
Now we've almost added a zero.

(00:39:48):
Not WHA, mind you, but other insurers.

(00:39:50):
Now you're at $1,000, $1,200 a single?

(00:39:51):
Yeah.

(00:39:54):
4000 plus for a family.

(00:39:55):
And that's on the employer commercial side.

(00:39:58):
And it's even worse sometimes on the on the individual side without subsidy.

(00:40:02):
Right.

(00:40:03):
So I think we're barreling toward the need for exactly what you say is is these

(00:40:10):
conversations around how do you fix the patient?

(00:40:15):
Yeah.

(00:40:15):
And, you know, let's let's talk about employers.

(00:40:17):
You know, we meet with our with our employers on a regular basis to share with them.

(00:40:23):
Here is how your population of employees is performing in the health care space and

(00:40:29):
and really where we need help is partnership.

(00:40:33):
employers who are affording their employees to get their health insurance are eager

(00:40:39):
to partner and figure out what is it that we can affect.

(00:40:45):
Where do you need our help?

(00:40:48):
For instance, smart things.

(00:40:49):
If an employer is able to give their employee an incentive to go and see the doctor,

(00:40:55):
That's a great thing.

(00:40:56):
If they can put in front of the employee,

(00:40:59):
you know,

(00:40:59):
here are all the different kinds of bells and whistles available to you through

(00:41:03):
your health insurance.

(00:41:05):
Take advantage of them.

(00:41:08):
I'll give an example.

(00:41:09):
So we know that the patients seek care of the emergency room when they,

(00:41:15):
you know,

(00:41:16):
are in trouble in the middle of the night and they're not quite sure where to get

(00:41:19):
help.

(00:41:20):
um what are we doing to educate members about you know what how do you get help at

(00:41:24):
like midnight on saturday you know do you really have to go to the emergency room

(00:41:28):
every single time is there somebody you can call at that time um you know for

(00:41:33):
instance if you know we offer an advice nurse service and their job is clinically

(00:41:37):
trained nurses can triage using medical protocols whether you need to go to the er

(00:41:41):
tonight

(00:41:43):
whether you should get care at an urgent care this evening,

(00:41:46):
or whether you can wait to see the primary care physician the next day,

(00:41:49):
or can you just take care of this at home,

(00:41:51):
this issue at home.

(00:41:52):
When I was a practicing pediatrician, I took calls at night.

(00:41:56):
And often the advice nurses would triage,

(00:41:59):
you know,

(00:41:59):
if somebody needed to talk to the doctor that night,

(00:42:01):
I got on the phone.

(00:42:02):
I remember one night I was talking to his dad.

(00:42:05):
who had a new baby,

(00:42:07):
and he was convinced that this baby had meningitis because the baby was crying all

(00:42:10):
night long.

(00:42:12):
And the baby had colic.

(00:42:13):
The baby had, you know, stomachache.

(00:42:16):
And we went through,

(00:42:18):
you know,

(00:42:18):
it was a 15,

(00:42:19):
20-minute call at like 2 o'clock in the morning,

(00:42:21):
and we went through all the different scenarios.

(00:42:24):
And at a certain point,

(00:42:26):
We ran out of options.

(00:42:27):
What could this dad do in the middle of the night?

(00:42:30):
And I told him, you know what you need to do is you need to be a father.

(00:42:33):
You've got to pick up your child and you've got to walk around till they fall

(00:42:36):
asleep because I can assure you mentally your child is safe.

(00:42:39):
I don't want you to panic.

(00:42:40):
Go to the ER,

(00:42:42):
wait there for five hours,

(00:42:44):
pay an exorbitant copay,

(00:42:45):
get your kid tapped and God knows what,

(00:42:48):
all these tests done to them.

(00:42:50):
They just need your tender love and care.

(00:42:53):
And that reassurance, that's the important piece.

(00:42:56):
How do you keep that connection alive in today's world?

(00:43:00):
How can the help plan be a part of that story?

(00:43:02):
I think that's the sort of, I guess you can call it secret sauce.

(00:43:07):
It's not that secret.

(00:43:08):
It's pretty obvious.

(00:43:09):
If you get good customer care and you trust your doctor, you'll follow their advice.

(00:43:14):
Similarly with employers.

(00:43:15):
Employers have to trust their health insurers.

(00:43:18):
How do you establish trust?

(00:43:19):
Transparency, visibility, going there and talking to them and sharing with them.

(00:43:25):
Here's where your costs are being driven.

(00:43:27):
Can we get more of your diabetic employees into our diabetes programs,

(00:43:31):
as an example,

(00:43:32):
or your patients with high blood pressure?

(00:43:34):
Can we get them a smart blood pressure monitor to monitor the care at home?

(00:43:38):
Not every single item of care needs the doctor to sign off.

(00:43:42):
People are smart.

(00:43:44):
Members are smart.

(00:43:45):
Consumers are smart.

(00:43:46):
Let's give them the tools that they need.

(00:43:49):
Make them aware of those tools.

(00:43:50):
Give them reasons to engage in them and come to the table to help us out.

(00:43:54):
Yeah.

(00:43:55):
No, no.

(00:43:55):
I mean, this is this is you're you're you're speaking all the right language.

(00:43:59):
But I think the key thread that what you just said and it's only done.

(00:44:05):
It's not done as as well or as completely as it could be, is.

(00:44:11):
the education the consumer education on on where to where and how to access care

(00:44:16):
yeah so i mean this is part of the thread that this podcast is going to be going in

(00:44:20):
in 2026 is is really talking to experts as as part of my thread of interviewing

(00:44:26):
people is is really let's talk about care navigation let's let's use that same

(00:44:30):
story you just said that person who doesn't know where to turn at two in the

(00:44:35):
morning on a saturday who's got a colicky kid right

(00:44:38):
Where do they go?

(00:44:38):
What do they do?

(00:44:39):
Or the person who's now diagnosed with cancer who's freaking out,

(00:44:43):
what does their journey look like?

(00:44:45):
And how do they have resources or where do they find the resources to give them information?

(00:44:52):
the handholding, so to speak, through the journey?

(00:44:55):
And who really is responsible for that?

(00:44:58):
Is it the insurer?

(00:44:59):
Is it the provider?

(00:45:01):
Is it themselves?

(00:45:02):
Is it a third party somewhere?

(00:45:05):
And so I think these are questions that people really want answers to.

(00:45:10):
Well, yes.

(00:45:11):
And I think who's responsible is everybody has a piece of this, right?

(00:45:17):
Has a piece of the solution.

(00:45:20):
And this is where, you know, you have to look at where are we investing in healthcare today?

(00:45:26):
Are we investing in large facilities, you know, which may look and feel like lovely hotels?

(00:45:35):
Are we investing in care navigation?

(00:45:40):
There's nothing scarier than somebody getting a diagnosis of cancer and turning

(00:45:44):
every which way to get help.

(00:45:47):
Can there be somebody there to support them in that journey?

(00:45:50):
Yes.

(00:45:50):
You know,

(00:45:51):
our hospitals,

(00:45:52):
our health systems,

(00:45:53):
our medical groups investing in patient advocates,

(00:45:56):
in care navigators.

(00:45:59):
And this is where the rubber sort of hits the road, right?

(00:46:02):
Because when you talk about care navigation and you're hiring,

(00:46:05):
let's say you staff up,

(00:46:06):
you know,

(00:46:07):
10 nurses to do care navigation.

(00:46:10):
What's the return on your investment?

(00:46:12):
How do you explain to the chief financial officer this is worth doing?

(00:46:15):
Because downstream, here's how we avoid costs.

(00:46:18):
Absolutely.

(00:46:19):
Let's talk about palliative care.

(00:46:21):
When patients are in terminal stages of life due to an illness,

(00:46:27):
how much more care do you keep providing them?

(00:46:30):
And what kind of care do you provide them?

(00:46:32):
Is it sufficient to say,

(00:46:34):
try this medication,

(00:46:36):
let's get you in the hospital,

(00:46:37):
let's do X,

(00:46:38):
Y,

(00:46:38):
and Z?

(00:46:39):
Or do we also talk to patients about the reality of the fact that at a certain point life ends?

(00:46:45):
Can we support patients with dignity throughout that journey?

(00:46:50):
Can we educate them about here are your options?

(00:46:54):
You can have chemo,

(00:46:56):
which has these side effects and can extend your life for X number of months versus

(00:47:02):
would you like to be made comfortable at home?

(00:47:04):
What's important to you as a patient?

(00:47:07):
Do you want to, you know, have a quality of life so you can enjoy your grandkids?

(00:47:12):
You know, where is that balance there?

(00:47:15):
But that's an important, important conversation that few people... Who's having that?

(00:47:21):
Who's having that, right?

(00:47:22):
And so that's where,

(00:47:23):
so,

(00:47:24):
you know,

(00:47:24):
a primary care physician,

(00:47:25):
you know,

(00:47:25):
they can have that conversation.

(00:47:27):
A nurse can have the conversation.

(00:47:29):
A specialist can have the conversation.

(00:47:31):
But how do you have that conversation when you have 10 or 15 minutes to see your patient?

(00:47:35):
How do you have that conversation, right?

(00:47:37):
And so the system is set up to just grind people through, churn people through.

(00:47:44):
What happens to the quality of care when you're doing that?

(00:47:47):
If you're spending all of your time tapping away on a keyboard trying to do data

(00:47:50):
entry for the patient...

(00:47:52):
That you're seeing,

(00:47:53):
how much time are you really spending being mindful,

(00:47:55):
having a conversation like this?

(00:47:57):
Right.

(00:47:57):
Right.

(00:47:58):
And so this is where investing in that care wraparound is incredibly important.

(00:48:07):
Yeah.

(00:48:08):
And you have to be brave enough.

(00:48:10):
You have to have...

(00:48:12):
you know, ideas that you're almost afraid of, but you have to try to see if they'll work.

(00:48:16):
Yes.

(00:48:17):
Yes.

(00:48:18):
No,

(00:48:18):
I mean,

(00:48:18):
and I think this is,

(00:48:19):
this is again,

(00:48:20):
part of you having the ability of creating your own world a little bit at WHA,

(00:48:29):
you know,

(00:48:29):
you're able to lead the way.

(00:48:31):
And I think there's so many best practices that are under the hood at WHA that,

(00:48:38):
you know,

(00:48:38):
we've talked about it.

(00:48:39):
I think,

(00:48:40):
The world needs to know about it.

(00:48:42):
The Sacramento region and the Northern California region need to know more about it.

(00:48:47):
I feel like your peers,

(00:48:50):
it may be one thing to be running a big health insurer,

(00:48:53):
but at the same time,

(00:48:53):
there's so many gems that WHA as a small,

(00:49:00):
functional,

(00:49:01):
professional health plan has to offer

(00:49:06):
the conversation in the country far broader than it is today.

(00:49:11):
And I really am excited for you to start having those conversations with people.

(00:49:17):
So let's take this, I mean, I wanna kind of start wrapping up.

(00:49:20):
We've been chatting a while.

(00:49:23):
What is next for WHA?

(00:49:25):
Where do you see,

(00:49:26):
what are the top two or three initiatives that you see happening in the next couple

(00:49:31):
of years?

(00:49:33):
whether it's network expansion, technology rolling out, AI.

(00:49:37):
What are the exciting things you would like to talk about WHA?

(00:49:43):
We are pushing across multiple fronts.

(00:49:45):
So let's talk about physician shortages.

(00:49:48):
So recently, Mercy San Juan Hospital has launched an internal medicine residency program.

(00:49:54):
We were one of their earliest supporters.

(00:49:56):
And I was I was very grateful to be able to go out there and meet the new class of

(00:50:00):
residents who have just joined Sacramento as a community.

(00:50:03):
These are doctors that are going to train into a community and hopefully stay with us.

(00:50:07):
So that's one side of things.

(00:50:09):
Let's talk about innovation.

(00:50:11):
When you look at the different value-add programs that we have,

(00:50:15):
when I say value-add,

(00:50:16):
I'm talking about disease management.

(00:50:18):
We have a lot of innovative programs out there that we want to engage our members

(00:50:24):
in more deeply because we see the good clinical outcomes for the members who are

(00:50:28):
engaged in those programs.

(00:50:29):
We've got to spread the word out.

(00:50:31):
Let's talk about being more efficient as a health plan.

(00:50:33):
If you can be more efficient as a health plan, you can reduce waste in the system.

(00:50:38):
That's less cost to pass on in your rates, right?

(00:50:41):
Right.

(00:50:42):
So let's be efficient.

(00:50:43):
Let's look at,

(00:50:43):
we talked about pharmacy and looking at how prescriptions are being written and

(00:50:47):
partnering with the doctors to be smart about the cost of medications.

(00:50:52):
Let's talk about the use of artificial intelligence.

(00:50:56):
I will tell you,

(00:50:57):
Up till last October, I was afraid of the term artificial intelligence.

(00:51:03):
I had no idea what chat GPT was or any of those things.

(00:51:07):
But,

(00:51:08):
you know,

(00:51:08):
when you have new innovation,

(00:51:10):
if you can be smart about embracing it and deciding,

(00:51:13):
hey,

(00:51:13):
I think this can help us with the kind of care that we are delivering.

(00:51:16):
And it's going to help the member experience, the consumer experience.

(00:51:20):
Let's go ahead and try it.

(00:51:21):
Give an example.

(00:51:23):
Utilization management is what health HMOs do, right?

(00:51:27):
Managed care.

(00:51:28):
What is utilization management?

(00:51:30):
It's basically trying to help ensure that the care that's being delivered is

(00:51:35):
medically appropriate.

(00:51:37):
It's supported by the medical evidence and it is cost effective.

(00:51:40):
That's basically managed care.

(00:51:43):
And, you know, a consumer cannot do it by themselves.

(00:51:45):
A doctor cannot do it by themselves.

(00:51:47):
So this is what health insurance companies who work in the HMO space do.

(00:51:52):
But when you're looking at a patient case,

(00:51:54):
a nurse can take about two hours to review medical chart notes and to help make

(00:51:58):
recommendations on whether this care should be authorized or not based on the

(00:52:03):
medical necessity.

(00:52:05):
Can you shorten that time that the nurse spends on that case?

(00:52:09):
And so we are in the middle of evaluating AI solutions that can pull the information together

(00:52:15):
For the clinical person to now start using their clinical brain,

(00:52:19):
their expertise,

(00:52:20):
you can reduce your average processing time for a chart from two hours to 30

(00:52:25):
minutes per nurse per case.

(00:52:28):
Think about the cost avoidance you have as a result.

(00:52:30):
We're not talking about putting nurses out of business or letting go of all of our

(00:52:35):
staff because AI is going to do everything.

(00:52:37):
That's a crazy notion.

(00:52:38):
We would never allow it.

(00:52:40):
Because in the end, we're responsible for the care of patients, human beings.

(00:52:45):
But can you make that care more efficient?

(00:52:48):
Those are the kinds of AI solutions that you can put out there.

(00:52:51):
When we have members calling our call center,

(00:52:55):
we have just deployed a new AI solution to help our call center staff.

(00:52:59):
When the call comes in,

(00:53:01):
If the staff is able to talk to the patient,

(00:53:03):
the consumer,

(00:53:04):
and really understand what's going on and not spend all their time taking notes

(00:53:08):
while they're working,

(00:53:08):
which that doesn't really work,

(00:53:10):
really,

(00:53:10):
does it?

(00:53:12):
But the ambient AI can do the transcription of the call.

(00:53:15):
Well, even Zoom.

(00:53:17):
I mean, it's Looney Tunes.

(00:53:18):
The summary of this call that we're going to get is mind-blowing.

(00:53:24):
And how much time will you save?

(00:53:25):
And you and I have a real conversation.

(00:53:28):
So those are the kinds of solutions that are out there that we're carefully evaluating.

(00:53:32):
We're putting lots and lots of thought.

(00:53:35):
We have an AI steering committee with a whole company hands-on approach to help guide us.

(00:53:42):
to be ethical about it,

(00:53:44):
to make smart decisions,

(00:53:45):
but to really think,

(00:53:46):
where do I reduce waste in the system?

(00:53:48):
So that not because we want to inflate our profits,

(00:53:51):
but because we want to keep our premiums at a reasonable level.

(00:53:54):
And I think that's our history is...

(00:53:58):
Keep the premiums as stable as you can.

(00:54:00):
Understand that premiums have to rise with costs,

(00:54:02):
but they don't have to be runaway costs either.

(00:54:04):
What are we doing to go after those costs?

(00:54:07):
And to be able to communicate that to the employers who we do business with so they

(00:54:11):
keep trust in us,

(00:54:12):
keep coming back to us year after year,

(00:54:15):
but then also to get the word out and to challenge our peers,

(00:54:18):
we can do better together.

(00:54:19):
Yes.

(00:54:19):
No, I mean, those are all amazing things that you're working on.

(00:54:22):
Yeah.

(00:54:24):
And that was one of the threads is that,

(00:54:26):
you know,

(00:54:27):
there's been so many different solutions coming to market here in the last couple

(00:54:31):
of years.

(00:54:32):
First of all,

(00:54:33):
it's got to be tough to even try to evaluate them because everybody's making all

(00:54:36):
kinds of claims.

(00:54:37):
And,

(00:54:37):
you know,

(00:54:37):
you're talking to a VC-backed company that maybe has their second round of funding.

(00:54:41):
And,

(00:54:41):
you know,

(00:54:42):
oh,

(00:54:42):
by the way,

(00:54:43):
we just need your,

(00:54:44):
you know,

(00:54:44):
protected health information for all your membership.

(00:54:47):
And you're like, oh, no.

(00:54:48):
Oh, no.

(00:54:50):
And so there's a lot of that that goes on.

(00:54:54):
What about network or geographical expansion?

(00:54:57):
Do you want to comment on any of that?

(00:54:58):
Yeah.

(00:54:59):
I mean,

(00:55:01):
we have been in our 10 counties here for a lot of time,

(00:55:05):
and we are being very thoughtful about where do we expand care.

(00:55:10):
And so we are talking with hospital systems who want to do business with us.

(00:55:16):
But they need to get to a certain level of efficiency before we will do business with them.

(00:55:21):
I'd rather that we keep delivering the value that we offer in spades and not go

(00:55:27):
crazy trying to expand if you cannot assure that you can keep costs under control.

(00:55:31):
Brilliant.

(00:55:32):
Right?

(00:55:32):
Yeah.

(00:55:33):
Expansion is glamorous.

(00:55:34):
It's great.

(00:55:35):
We've done it before.

(00:55:36):
We've had to kind of pull back.

(00:55:38):
So let's do business where we can do it well and keep the quality high and keep

(00:55:43):
innovating and optimizing it.

(00:55:45):
And in time, we will grow into additional spaces.

(00:55:48):
But the important thing is to build the core.

(00:55:52):
Our current three-year strategic plan is called the Plan for Foundational Excellence.

(00:55:57):
And it came from our 300 staff,

(00:55:59):
our managers getting together at a retreat a couple of years ago.

(00:56:03):
And really, we asked them, what can we do better?

(00:56:06):
You guys are doing the work every day.

(00:56:08):
Tell us leadership.

(00:56:09):
What should the strategy be?

(00:56:10):
And we heard across the board,

(00:56:12):
our core job,

(00:56:13):
which is to deliver good health insurance product at a good price with a really,

(00:56:18):
really high customer level of support.

(00:56:20):
We need to do that better.

(00:56:22):
We can do that better if we break down silos.

(00:56:25):
Let's look at the foundation and let's make it excellent.

(00:56:28):
Yeah.

(00:56:28):
Well, I mean, I would argue you are already at that point.

(00:56:31):
I mean, I thought that, you know, my relationship... We can do better.

(00:56:34):
Of course, we always can do better.

(00:56:35):
You can always do better.

(00:56:36):
You know,

(00:56:36):
I mean,

(00:56:36):
I've had a 20 plus year relationship with WHA and,

(00:56:41):
you know,

(00:56:42):
all the things you've done...

(00:56:46):
are all good.

(00:56:47):
You do business well and you take care of your patients well and members well.

(00:56:53):
And so the way I look at it is you're the right guy at the right time in the right

(00:57:00):
role to take this organization to the next level.

(00:57:04):
I'm cheering you on for sure.

(00:57:06):
I wanna see you succeed like crazy and just build this enterprise to grow under control.

(00:57:15):
Right.

(00:57:16):
Let's let's just do what you said.

(00:57:17):
Let's not bring on the partners that aren't playing to our standards, not the other way around.

(00:57:21):
Absolutely.

(00:57:22):
You know,

(00:57:22):
you know,

(00:57:24):
my wife uses this expression,

(00:57:25):
you know,

(00:57:26):
you want to be the target,

(00:57:27):
not the arrow,

(00:57:28):
you know,

(00:57:29):
and I think you've earned that.

(00:57:31):
You've earned that.

(00:57:34):
This is amazing.

(00:57:35):
I really appreciate this conversation.

(00:57:37):
I appreciate your eloquency,

(00:57:38):
your knowledge,

(00:57:40):
your friendship,

(00:57:40):
and everything you brought to this conversation.

(00:57:43):
As we close, you're a wine guy, right?

(00:57:46):
Yeah, I dabble.

(00:57:47):
You dabble.

(00:57:48):
So one of the things I always like to ask my guests as we close is,

(00:57:54):
do you have a favorite region,

(00:57:56):
grape,

(00:57:57):
wine,

(00:57:57):
wine?

(00:57:59):
What's the thing that sticks out for you?

(00:58:02):
The Russian River Valley.

(00:58:04):
Pinot Noir.

(00:58:05):
Pinots, Chardonnays, that's the region.

(00:58:08):
It's an example of a hidden gem.

(00:58:10):
A lot of people don't know about Russian River Valley,

(00:58:12):
but that's the place to go on a nice summer day and drive down West River Road and

(00:58:19):
go wine tasting along the way and really meet the people who are doing the work.

(00:58:21):
Yes.

(00:58:22):
And, you know, find the value.

(00:58:24):
It's already there.

(00:58:25):
Right.

(00:58:26):
It's a hidden gem.

(00:58:27):
Right.

(00:58:27):
So we sort of think ourselves, West Nelda Van is sort of like that.

(00:58:31):
We're out there.

(00:58:32):
We're doing the work.

(00:58:33):
I really appreciate you, Winnie, for inviting me and helping us sort of get the word out.

(00:58:37):
Mm-hmm.

(00:58:39):
It's a huge responsibility.

(00:58:42):
You know, you were asking, you know, how do you feel about sort of coming into this role?

(00:58:46):
It's a huge responsibility.

(00:58:48):
You know, we have, you know, 100,000 plus members who depend on us for our care.

(00:58:55):
So how do we continue to navigate this well for them?

(00:58:58):
Yes.

(00:58:59):
We can't do this alone.

(00:59:00):
So we need all of our partners at the table.

(00:59:02):
We need our members.

(00:59:02):
We need our staff.

(00:59:04):
And it's a privilege being here.

(00:59:05):
So thank you so much.

(00:59:06):
Excellent.

(00:59:06):
Thank you.

(00:59:06):
Appreciate it.

(00:59:08):
Thank you.