The Reverse Mullet Healthcare Podcast
Ellen Brown, Justin Politi, and Dave Pavlik bring their 90 collective years of healthcare experience to BP2 Health where they're on a mission to effect real change in the industry. Connect with BP2 Health Here: https://bp2health.com/contact/
The Reverse Mullet Healthcare Podcast
Direct to Consumer 2.0 - Impending Cataclysm or Hypothetical Possibility? With guest, Mike Barrett
When healthcare industry stalwart Mike Barrett joins the conversation, you know you're in for an enlightening exchange. Our jaunt began with Mike sharing his wealth of knowledge from Centene's ACO division and NACOs—yet what really set the tone was the quirky tale behind our podcast's name, Reverse Mullet Healthcare. We're bringing you a blend of humor and hard-hitting discourse on the intricacies of the healthcare system as Mike dissects the financial stress on both employees and employers, and the looming question of whether traditional employer-sponsored healthcare can endure the test of time.
As Mike peels back the layers of healthcare's financial complexities, a vision for a revamped system emerges. We chew over the potential implications of cultural norms that have historically favored reactive sickness care over proactive wellness, and the seismic shifts that may come if employers reevaluate the role they play in their employees' healthcare. Join us for a candid look at the pressures reshaping the responsibilities of payers in the health landscape.
Fasten your seatbelts for a glimpse into the future, where "Consumer Direct 2.0" heralds a new epoch of patient-centric healthcare, with technology at the helm of this transformation. We spotlight innovations racing to keep pace with consumer expectations—think virtual clinics and outpatient services for procedures once synonymous with lengthy hospital stays. As we wrap up, chuckles are shared over our own health habits that might not yet be up to par, reminding us that the journey to better health is both personal and universal. It’s not just a podcast; it's a rallying cry to rethink how we approach healthcare, together with Mike Barrett, Ellen Brown, Dave Pavlik, and Justin Politi.
Welcome to the Reverse Mullet Healthcare Podcast from BP2 Health. Today we're talking with Mike Barrett about employer benefits and direct to consumer 2.0. First, who are we and why are we here? More importantly, I'm a little more used to it now. Why did we call this the Reverse Mullet Healthcare?
Speaker 2:Podcast. It's because we want to be relevant, informative and creative. We also want to be entertaining and have fun. What's like party in the front, business in the back? Like a mullet, only reversed.
Speaker 3:I'm Ellen Brown.
Speaker 1:I'm Justin Politi and I'm Dave Pavlik. We are passionate, innovative and collaborative, and we're committed to solving our industry's most important issues together with our clients. We've combined 90 years of experience in the industry so old. In each episode, we'll dig into a hot healthcare topic and maybe dig into each other a little bit except not our guests.
Speaker 3:And not me. I asked that they not dig into me. Don't be brutal.
Speaker 1:We'll be digging into you.
Speaker 3:Yes, but they do anyways.
Speaker 1:So let's introduce our guest today. Thanks for being here, Mike. I'm glad to be here. Mike Barrett has over 35 years experience in the healthcare industry.
Speaker 2:We're 120 plus years now.
Speaker 3:Yes, 125.
Speaker 1:And he's probably exaggerating.
Speaker 3:He's probably more like 40. A century and a quarter.
Speaker 1:Mike also co-founded NACOS, the National Association of HCOs, and was subsequently the chairman for many years and still acts as an advisor to NACOS today. He's run regional divisions of health plans, formed and run successful ACOs, held executive roles, had health systems and provider organizations and had his own consulting company throughout his career.
Speaker 3:So how like that's just I'm the Ben Franklin of healthcare.
Speaker 4:There you go.
Speaker 3:And the fact that we have you here. Right, I consider you the super smart friend who just comes.
Speaker 4:You need to get better friend. You are like this dearth of information, dearth would be the right word.
Speaker 3:Yeah, see, and we had this discussion this morning around the definition of dearth, because this is our thing, right, we like banter about this, but in as a compliment. You may not think this is a compliment, but I feel like you always make me think faster. You're just, you are a dearth of information about the industry and then you always have this really interesting way of looking at things and you process it quickly. Keep me on my toes when we have discussions about this stuff and I just, I always feel like you have an angle that I wouldn't necessarily come up with myself. And again, not that I'm some brilliant wonder, but I enjoy A lot of times you talk to somebody and you know that you come up to the same place and I just, I've always enjoyed your take on things. That's the benefit of having ADD and insomnia at the same time.
Speaker 4:This is typical, mike, right here, we're already getting into it, right? We knew this was going to happen.
Speaker 2:Which is why we're here. We knew this was going to happen.
Speaker 3:Which is why we're on a mission, and not to talk to Mike.
Speaker 2:So how in the world did we meet Mike?
Speaker 3:Right, okay, so was it on the Mayflower, apparently with our collective experience. Right Back in the days of the horse-drawn buggy? I don't know.
Speaker 2:No, seriously, how did we meet?
Speaker 3:I can answer this question. Okay, I think this is a cool story.
Speaker 4:Susan is to blame.
Speaker 3:Susan is to blame, hill. Okay, this was back when my son was one year old and he is now in ninth grade, so this was quite a many years ago and I was spending a ton of time in Johnson City, tennessee, with the health system up there On a big engagement. They were creating a health plan and I was helping them do all this, creating the model behind it and, should they do it, the financials. Then they decided to. Then we had to get the approval and we basically built the health plan. I was up there all the time and there was a woman that was Susan Buchanan.
Speaker 3:Exactly, and.
Speaker 4:Wonderful.
Speaker 3:Yes, and she was down in down the road Knoxville In Knoxville and Susan knew me and knew you.
Speaker 4:We were working on a project together.
Speaker 3:Exactly and said to Mike there's this woman up in Johnson City doing all this work that I think is your neighbor, and so she got us in contact with each other and come to find out. Mike and I both lived in celebration Florida at the time across.
Speaker 4:About four blocks. Yeah, maybe five.
Speaker 3:You could look across the golf course and we could see each other's homes, but yet and so how we met was through Tennessee, not the fact that we were neighbors.
Speaker 2:So what you're saying is Mike is like the Kevin Bacon of healthcare yes, with six degrees of yes. Three or five? How many degrees of separation? Six, Whatever?
Speaker 3:He has a podcast now called Six Degrees. I read this. I like Kevin Bacon and his wife. They're cool big goats. Do you know this? They have like songs that they do with goats, anyways.
Speaker 4:We're digressing. Yeah, rabbit hole. Yes, rabbit hole anyone.
Speaker 3:Bless the whole point of having the party in the front. It's a go down the rabbit holes. Yes, and then we also have now, mike and I have what is our collective love. I know you love photography.
Speaker 4:Oh, travel, right, yes. And what mode I drive my motor home places. I did the. I would call it the full stupid right. It's called the BAM Big Ars Motor Home and it's where.
Speaker 3:I planned it. Are we called ours the rolling turd?
Speaker 2:No my wife would call it that.
Speaker 4:But we tested can you actually truly work remote and meaning remote, and this summer, and it worked remarkably well. Certainly career extending because I can be literally anywhere and I'm going to limit myself to North America for the time being and be online full time. It's amazing. It's stunning.
Speaker 3:So we I have a love for RVs because now it was 20 years ago my husband and I spent a year and a half living in an RV, so we had 10 years of pre-kids, but we had done the whole professional thing and we walked away from our careers for a year and a half and we lived in RV and we sadly we did this before the internet was the way the internet is now, like we had to stop. For example, people wanted us to send all the pictures about the trip, right, everybody wanted to follow us. So if anybody knows me personally, I have a. My email is ellen at.
Speaker 3:Where are the brownscom? The? Where are the brownscom was our website. We had a website before. There was travel blogging before any of that because we would go to the internet cafe because that was a thing then and I would take my computer and get online through the wires and then upload all the pictures to the website so people could keep in touch with our trip. Because it was too much bandwidth after email pictures to people. You just literally couldn't do that back then. So we had the first travel blog, but then some hackers.
Speaker 1:Wait a minute. Are you saying that you invented the internet? I did, I did, I did, I did. You invented the internet.
Speaker 3:Benjamin Franklin and Al Gore sitting in the room today I'm just thinking, though.
Speaker 1:If you also love photography, the fact that you're traveling all over the place in the RV brings the photography to a new level.
Speaker 4:It does. So the best times to take landscapes are typically in the morning and the evening. You get up early and there's much like life. You need to arrive early and plan to stay late. Get up in the morning, plan your day, get to where you're going to take the photos, and I could take an hour and a half of photos and still be back in the workplace, fully connected by eight, 39 o'clock.
Speaker 3:Absolutely.
Speaker 4:The only time that doesn't work is winter, and in winter I'm at home in Florida.
Speaker 3:Yeah, not a pilot base.
Speaker 1:Something my wife wants to do, but she can't disconnect yet she's got to go to the hospital every day.
Speaker 4:Someday, someday.
Speaker 2:So we've got to get to our sponsor.
Speaker 1:Yeah, Before we dive into direct to consumer, we've got a sponsor our friends at Incline Actuarial Group. They are not a one size fits all approach with at Incline. Their actuaries have a multidisciplinary background across healthcare, with experience in Medicaid rate setting, pricing for risk bearing providers, Medicare, ACO, analytics, risk adjustment and reserving. They don't just check the box by repeating the same analytical approach. They strive to find creative solutions that are custom tailored to the problem. That's just like us. We love those guys. Their actuaries work as affordable staff extensions for small businesses. Furthermore, they specialize in serving government agencies to support public sector healthcare, no matter the size of the engagement. Their actuaries work with clients and a transparent and efficient manner that highlights areas of risk and don't overproduce the analysis that is requested. And you can find them at wwwinclineagcom.
Speaker 2:Shout out to Jerry and Colby.
Speaker 3:There you go. I like one day I want to just create my own sponsorship so I can have you read about me like that.
Speaker 1:And Ellen Brown. She thinks I've got a good radio voice.
Speaker 2:We both have great voices. We have looks for it. I know right, dave, and I definitely.
Speaker 3:Yes.
Speaker 2:Today we have our second ever podcast guest, as we've talked about Mike Barrett. We talked with him about our mission for the podcast to discuss real change in healthcare. We asked him what topic he was passionate about that needs to be addressed from the healthcare system to work. Again In typical Mike form, he gave us three topics. We narrowed it down to one and when they shared the choice with Mike, he managed to convince me that although there were three topics, there was really one big topic.
Speaker 3:How somebody like I said you're that friend.
Speaker 1:She called us and she said here are the three options. We all talked and we said let's do this one. I went back to Mike and he goes no, we're not going to do all three.
Speaker 2:That's all fine and good, but we're doing all three.
Speaker 3:So here we are, so as we do with all guests, and actually last time, we sang our second one, okay. But it's going to be a thing now. We did it once, we're doing it twice, so now it becomes tradition. So, with all guests, we're going to ask the buy the world a Coke or Winpigs fly question of if you had a magic wand and you could fix healthcare, right Then what would your idea be for fixing healthcare?
Speaker 4:It's not so much an idea for fixing healthcare, it's an inevitability that is going to happen to healthcare. It's really complex and the left-handed statement is 36 out of the 37 industrialized nations have actually figured this out and that's actually to become a single payer environment and we're not going to do there because we want to go there, we're going to go there because we have to go there. And the last segment of this and I actually just ran through all the numbers yesterday again in this morning the only thing that's stopping us from being a single payer system really is employer-sponsored healthcare. We've got Medicaid, Medicare and the exchanges that those are all quasi-governmental one form or another. There still is a role for a payer in that and an aggregation and processing Employers are getting really tired of the human.
Speaker 4:HR issues that this creates A number of employers. We're going back to something we experienced in the mid-90s, where wages, even though there was an acceleration, there seems to be a little bit of a pullback. Right now the wages real wages, disposable income is going down because the employer contribution is not keeping up with the premium rise and the employee cost-sharers are going up at the same time.
Speaker 4:So if you take that net, add those together and say out of that healthcare spend that employer-sponsored represents, the portion being paid by the employee is outpacing the increases in their wages, so their net disposable is going down.
Speaker 3:But people I couldn't agree more. People say to me there's got to be on the plane. It's always the guy next to on the plane. Okay, you work in healthcare. How are you going to fix it? What's the solution? And there's not any answer. There's just not, which is why it hasn't been fixed rate. And I always talk about the fact that there's this massive arms-length relationship where the person using the healthcare, consuming the healthcare, isn't even making the purchasing decisions.
Speaker 4:We've talked for decades about the triangle economics of healthcare. You think of a restaurant model? Right, I'm going to write you a script for a meal and Dave's going to pay for it.
Speaker 3:Right.
Speaker 4:Dave and I are. He's going to get mad at me, but you're coming into my office.
Speaker 3:Exactly.
Speaker 4:So there's a dysfunctional triangle there. The employer is getting out of that. Suddenly it becomes a much more bilateral. It's still going to be a payer, but the payers have started to move to make the providers at financial risk. This whole idea of value-based contracting or value-based care is really a misnomer. It's really financial risk Because every time I talk to the doctors and say, hey, we're moving to value-based care, and the doctor looks at me and goes and what I did before was not valuable. You might want to talk to my patients Juxtaposition there. The other juxtaposition that I think is going to be driving this quite a bit is when you look at the per unit price for services. Medicare and Medicaid have an ability to set a price that commercials just simply can't.
Speaker 4:So when you look at the equivalent, oh, I'm going to take out an appendix at a hospital or I'm going to do something like that for a hospital. Drg Employers are paying easily two and a half times, often three and sometimes four times as much for the same set of services at a hospital than. Medicare. In classic economic theory that's called an inefficient market.
Speaker 3:Or, as my daughter's microeconomics professor said, a broken failed market.
Speaker 4:A failed market.
Speaker 3:But the cross subsidization is insanity.
Speaker 4:Employers are getting really quite tired of being the last man to be cost shifted and their easy out is again. Big fly and I've been on the record for this before is part A. Bankruptcy is a few years away Now. Do I think that any time the hospitals aren't going to get paid for Medicare services?
Speaker 4:No I think they will always get paid. It's the manufactured crisis that the politicians are going to use, the employers are going to use. And if you don't include this as a possibility, we do strategic planning. My title is Vice President Strategy and Development. We don't do strategy based on what would happen. We first do a radar sweep of what could happen. Absolutely and if you can run back 18 months, would anybody believe that SIGNA was going to actually put its Medicare Advantage business on the block? Go back a couple more years. He made a, came out and said we're not going to be in commercial Right, which is just. You would not have thought those things, but those are the types of things that could happen. We're at 30-ish percent of total primary care physicians in the country are now independent. 70-ish percent of them are employed by either a very large group or a hospital, or what I call an aggregator. That sounds like a tipping point went by a little while ago.
Speaker 2:So if employers are going to exit, stage left when it comes to providing health care, what is the next?
Speaker 4:step Direct segue in back to direct consumer. So now the smarter, more thoughtful, forward-looking organizations are saying what is my platform for direct consumer? And the dynamics get pretty interesting when you sit there and say, ok, centine, my employer has number one Medicaid program, number one exchange program, up there in the top five or six for Medicare Advantage. Those are all direct consumer. There's this. We had to give them up our cell phones. There's this wonderful device that is just redefining what direct consumer means. We don't know yet what all of this means, and so now, as all care or all purchasing decisions on insurance start to be driven by direct consumer, one of the delivery system questions that I keep on coming back to is the northeast corner of some MSA. I got my hospital there. Maybe I have a second, two or three ambulatory facilities. I've bought up three quarters of doctors in the neighborhood. 70% are now consolidated. How far am I away?
Speaker 4:from being a health plan that markets only to my corner of the MSA.
Speaker 3:Especially, if you move from fee for service per click reimbursement to actually taking the financial dollar and distributing it amongst it, then you are at risk. Then you really are the health plan in essence. You just aren't administering it. You're a wholesaler, exactly.
Speaker 4:In the 90s we used to use the term. We're going to be a wholesale health plan. We're going to take x% of premium, we're going to have contracts with all the payers and we don't care what your ID card is, because it might shift from A to B to C to D.
Speaker 3:It will, it will.
Speaker 4:But you're still coming to me so I can make these investments into your care. That pay off next year when your ID card changes, but the value still comes to me. Those discussions have been had. Now you start thinking about that and that casts the payer in a completely different light.
Speaker 3:The insurance company when we talk about payer Insurance company.
Speaker 4:And it becomes a different role. They have a role, but it's a different role and it may be more what I call knowledge transfer, which is we discover some process in West Podunk is really efficient, really effective, has great outcomes. How do you get that transported to East Podunk? How do you get it transported to the next town, over, to the next state, over? That becomes a role that the payers, the insurance companies, can start to play Big data, analytics, things of this nature that are Transactional companies, they become financial institutions.
Speaker 3:In essence, they're almost banks.
Speaker 4:They just look at their SIC code.
Speaker 3:Absolutely.
Speaker 4:They're a financial services company.
Speaker 3:But they truly they step out of, because a lot of them have even though on the outside I think a lot of them look like they're trying to become health care companies In terms of health care delivery, they really aren't, they're just buying the assets. Because a lot of them really do want to step out and say I'm not delivering the health care. That's up to the physician, right. I'm just here to design benefits and take care of ID cards and the administrative component of things.
Speaker 4:Referred to as the administrative.
Speaker 3:Exactly.
Speaker 4:But there's also a content part to this. I'm not ready to quite throw them under the bus and under the matter, whatever you want to call it. They have a role of knowledge transfer, program development. Roll out different things of this nature where they can still provide significant value to the overall economy. It's not the bearing of risk.
Speaker 3:Absolutely.
Speaker 4:Justin mentioned catastrophic plans. When you look at the distribution of people who have catastrophic illness, it's really tiny. That's a really good place for, say, a governmental place to say anybody over X threshold their expense 90%, 80% expenses are ours. You still stay connected on 10% or 20% because you need somebody to manage something, but when you start looking at trying to manage all those chronics it's not catastrophic.
Speaker 4:And as the health Medicare is going to be challenged, not by episodic care but by chronic care, and we still suck at it. I know that's a technical term.
Speaker 3:We don't even own it as a culture. We don't own being healthy. And that's one of my biggest bones is and I again I get frustrated with this, but I think our system is not set up to have people feel that it's, it's financially rewarding for them to be healthy Because, to your point, it's sick care. We offer sick care so you feel better taking care of than when you're sick, than when you're healthy.
Speaker 2:And we have three different, real distincts when we're looking at. I'd say three, but buckets right. You've got Medicaid, which is covering 100 of care for the most part. You've got Medicare covering 80% I'm talking fee for service side.
Speaker 2:Then you have this employer market, you have the exchange, you have the other components, you have these other set of plans that really go the spectrum of covering almost nothing when it comes to hey, I got a high deductible plan and I'm going to go into my HSA and fund things through that realm and where my mind is going to when I was asking Mike before is this whole component if the employer's contribution just goes away and now it's left to me to go into the open market and really figure out what health care I'm going to purchase. First off, most people aren't equipped to be able to even come close to making that decision right now.
Speaker 3:In an informed way.
Speaker 4:Fair.
Speaker 2:Fair Because it is complicated. But not only that. It's all right. Now there are going to be increased government subsidies. Is there going to be taxes that employers have to pay because they've stepped aside? That should go to fund some of the purchasing through the Affordable Care Act, that component right, you're right, that's there. Maybe are they further enhanced, or the employer just steps away and now it's an expense that goes. They don't have to worry about it anymore.
Speaker 4:Well, go back to the price. Our employer is getting a good deal on a price per unit from the health care system. No, not even close right Terrible.
Speaker 4:At Centine we just went through our annual enrollment period and you get to pick your options and all that kind of stuff. And one of the things in the process is here's how much each one of those options costs. And even in the Affordable Care Act we have something called the Cadillac Land Tax which was originally, I think the threshold was $25,000 or something like that. We found out that pretty soon the union plans were blown right through that Absolutely.
Speaker 4:And we're not quite there, but we're pretty darn close. And you say, OK, the employer is paying some portion, yes, I have my cost here, my high deductibles, and yes, I'm contributing. I got my employee contribution and the employer still got that. That turns into that tax right. And now it becomes congressionally mandated, legislated, something of this nature on a certain sustainable growth rate, but the employers might actually be able to enforce an SGR on a health care tax versus. Oh, we'll just keep raising it and raising it.
Speaker 4:It solves an awful lot of productivity issues for the employers. If you look at productivity per employee over the last couple of decades, it's not been what it was the prior couple of decades. If our kids are to have a better life than what we've had our grandkids are to have a better life than what we enjoy, we have to become substantively more productive Health care system is not helping right now.
Speaker 3:And to your point, I would argue, you have to be substantively healthier too.
Speaker 4:And I was just going there. I'm financially trained at classic economics, that kind of stuff.
Speaker 3:That's why we get along.
Speaker 4:I've had actuaries in the past that were on my team. I would tell you that I think I understand the numbers. I have a degree technically of this. In insurance I was double-majored and so I had to do life insurance tables. I know the numbers.
Speaker 3:I didn't even know. That's not even a thing anymore, is it? Can you even get a degree in insurance anymore?
Speaker 4:I wouldn't encourage anybody.
Speaker 1:My honest thesis was the Social Security.
Speaker 4:Offset in ERISA. That's a page turner.
Speaker 3:Justin, did you bring that? Did you just?
Speaker 4:set off the annals of Mike's background.
Speaker 3:I'm just mad because I just said, the numbers, you just don't sound as smart.
Speaker 1:No, I just paid my tuition to get a degree in insurance.
Speaker 3:Oh, and I just dismissed it. Sorry to anybody who has that. I'm not dismissing it, I just didn't know if it was a thing anymore.
Speaker 4:So the four of us know the numbers in health care. We manage chronic care, we manage episodic care, gastrofocure. We're in this. There's only one person in this room or actually two that are tech over here that have an appropriate BMI, body mass index. It's none of the boys. No, it's not us.
Speaker 1:Me and my wearables. Y'all can make fun of my wearables, all you want. Thanks for coming. That was today.
Speaker 2:Mike's fat shaming us. This is why, oh, he put himself in me.
Speaker 4:I've only recently undertaken efforts to reduce my weight. That's why I'm here, because I started to get turkey neck. But so we, as a culture, we came out with a tax a little while ago in New York City about the big gulp right, yes, and we have brilliant people trying to convince us that the bacon double cheeseburger is what you want to have for lunch today.
Speaker 3:No, so there's there are no advertisements about kale salads with a side of carrots Bacon is so good, let's be sure. I don't know. I don't know.
Speaker 2:Bacon, so maybe our Bacon. I knew you were going to say that that's what we did, and in RV park.
Speaker 3:that is what I do. Oh, you walk outside in an RV park and that's the joke my husband had.
Speaker 4:I was able to withstand that onslaught for four days.
Speaker 3:Yeah, and then I had to make bacon. Did you just succumb to the bacon? I just had to do it.
Speaker 1:It's so hard. That's about me.
Speaker 2:It lasts like four days and then Yep yeah, four days of egg whites, and then the next thing is just a pile of bacon.
Speaker 1:I've never been publicly shamed like this.
Speaker 4:We have thousands. Oh, I have Millions of listeners.
Speaker 1:I'm going to now have to go and get serious, and anybody who actually watches it on the YouTube, you'll be able to be like Dave reduces BMI by the next recording Really interesting.
Speaker 4:That could be a score on the bottom like the ticker. Yes, exactly.
Speaker 3:I guess you have preempted me from giving the history of health benefits. Right, we're not going to do that, or am I allowed to do that?
Speaker 2:You could jump in.
Speaker 3:We're going to go back with a way back machine. I have the.
Speaker 2:Eisenhower administration.
Speaker 4:Roughly 1964 was when Medicare was passed in an S Right. So the question is, when did the federal government actually realize, oh crap, we got to do something about this 1967.
Speaker 3:Oh, two years later.
Speaker 4:The Office of HMO Health Maintenance Organization.
Speaker 3:Was formed.
Speaker 4:Was formed. Wait, what's your OHMO? Was formed in 1967. So the policy guys in the 60s realized that they had in effect, let the fox into the in-house or something like that, and we got to get somebody to start managing this environment.
Speaker 3:Because the Medicare spend was they knew right away, they knew right away, they knew right away the Medicare spend was going to be a problem. This isn't new, right?
Speaker 4:Yeah, this has been growing and we got really smart MBAs and PhDs and people go to school to learn how to sell stuff to us and we buy what they tell us and there's going to be an iteration where oh, wait a minute no one is making any more money by the more stuff we buy. Yeah, the whole Affordable Care Act and moving toward the single payer and putting providers at risk is it's not how much you can bill, it's how much you can keep. And going back to the wholesale HMO debate from the 90s was I don't care if you have a payer, insurance company, abcdefg, id card, right, because you're still my patient and you're going to be my patient and I need continuity and engagement direct to consumer and all those different things that come about it. So all this works together. That says we're on the cost of a pretty significant health care reform. Right, it's not next week, but it's certainly within the decade. And if you're not getting ready for it, then there's a term we use in the strategy world to describe you target.
Speaker 3:And so 60 years ago.
Speaker 2:It's so funny. Everything happened in the 60s. Like I'm saying, it's like we've gone back. We've done several episodes like on when things were born.
Speaker 3:I'm not gonna 1960 healthcare related. We're not like just figuring out when everything was born, but I'm just the first value based care components went back to the 60s.
Speaker 2:Primary care medical home Primary care, medical home, but that's also when health center movement was. That started in the 60s as well.
Speaker 1:It's British rock and roll invasion.
Speaker 3:But there's one thing we haven't hit on that. I won't make this super boring, I just find the background and the definition is interesting. But, is that it started in the 40s. This whole industry started in the 40s indirectly, when employers were given a tax break if they paid for health insurance.
Speaker 4:They couldn't raise wages. They had to be had to attract employees somewhere. The other thing, that the birth of the HMO right, kaiser, was done because Kaiser needed employees at work being productive versus not In a similar story, before my daughter was born and my wife. At the time we were having a robust debate and I was a CFO of a health plan about onsite childcare as a gender item, a quality item, and I looked at her and said I'm a finance person.
Speaker 4:You're missing the argument. I work in a company that has 110 employees. Five of them are boys and I think that's a significant number of my employees, every single day, are not productive because they have a child care related issue. I will do it because it's more productive for me as a business. You don't have to convince me.
Speaker 2:it's morally correct, ethically correct and all those different things I can do it out of pure mercenary economics when the day there be happy, yeah.
Speaker 3:So I think we're going to end up going back toward that single payer or single environment, because you think that the tax because that's been the big thing is that the employers have this tax benefit, which then created this system. It just created this money, this pot of money, and so your feeling is that tax will go away or the tax is there, so let's use the Cadillac plan as a threshold, to 25,000 as a proxy Meaning. When you say 25,000 Cadillac plan for those that are not in healthcare, what does that mean?
Speaker 4:So the Affordable Care Act allowed employers to continue to have very rich benefits non-standard but at some point, when they got their expensive plan, their plan expense got to such a level 25,000 they would have to pay an extra tax for, in effect, providing too rich of a benefit. That payment level that was set originally at 20, that premium level was set at 25,000. Within a couple of years the very rich plans went right on by.
Speaker 3:Absolutely.
Speaker 4:But if we take 25,000 as some sort of proxy for an average, and is that for an individual or a family? That was per employee.
Speaker 3:Okay, because for those listening to this, what we're talking about is the monthly, so anybody who buys their own health insurance knows that as a family, you can be spending even as an individual.
Speaker 2:you're looking at $1,200 easy If you with any kind of like a crummy plan with a big with just a normal with a what $2,500, $1,200 deductible.
Speaker 4:If you wanna get down to a low deductible plan, you're spending.
Speaker 3:yeah, you can spend 1,200 easy Point being as a family.
Speaker 4:Two people.
Speaker 3:Two people, you're easily above the $25,000. And that's for not a cat Like you don't feel like you have a Cadillac health plan not even close to that level.
Speaker 2:It's called a Cadillac, it's more like a Ugo.
Speaker 3:Yeah, you're still fighting over trying to get your pharmaceuticals filled and things like that.
Speaker 4:So let's go back to how much the employer is paying on a per unit price. Right, if they're paying 300% of Medicare allowable for each inpatient admission and with the wave of a wand I can extend that Medicare pricing to now the exchange or something to that effect. Suddenly the employer is at $25,000, and this is really gross math. Cut in half 12,000 in hospital, 12,000 for doctors and everything else.
Speaker 4:But yet that price per unit now gets cut by 75%. Now, hospitals right now are not happy, right, but 75% of 12,000 is nine grand. That's a lot of money. When you start multiplying it by the number of wage earners we have in the country, it's a lot of money that gets put into an Obamacare feeling For people.
Speaker 3:that again, people that are trying to put this in a box, trying to understand what we're talking about here is we're basically talking about all the employers in the world, in the country, that are taking care of their health benefits, insurance benefits for their employees on their behalf. They put all that money into a bucket. And then to Justin's point everybody has to try and figure out what to buy and your point is it's just a universal approach to it and then you're picking your benefit plan and like Obamacare for people who don't have benefits through their employer.
Speaker 4:Actually, to me it'd function much more like a supplemental market. You'd have standard plans, right. We have the exchange that has the silver, gold, platinum, bronze whatever, and those are levels and everyone is allowed to change the benefits a little bit. It would be much better if we said here's the half a dozen or so standard options. This is it.
Speaker 3:Required options.
Speaker 4:And there is no flexibility, Because as soon as you start getting flexible, then you let the MBAs and the PhDs start playing games with population selection. Where you want this to go is competition on customer service, the CAPS surveys. Think about all the quality measures, all the CAPS surveys. That is there.
Speaker 3:So is it customer service at the health plan level, or is it customer service at the physician level?
Speaker 4:Well, so if I'm picking my, this is where it all gets tied up right. So if I'm picking my administrative contractor called the insurance company, I want to be able to call up a telephone number, talk to somebody, get my answers had, without you know, 40 minutes on hold and 10 phone calls. I don't go to a doctor for which I think they're gonna get it wrong Core quality of healthcare. I might complain like crazy that my doctor makes me wait.
Speaker 4:You would never complain Me no, but we might complain like crazy that our doctors make us wait. But we wait because we think they're gonna get it right, not because they're gonna get it wrong. So the quality that we want out of the doctor is promptness we think they're gonna get it right and so the ability for the system to communicate to I don't know, though I gotta go down that rabbit hole for a second.
Speaker 3:I don't trust you guys are gonna really laugh at me. Now, justin's, the wheels are turning Conspiracy theories. No, it's not boring. I don't necessarily trust that my physicians are gonna get it right always anymore, because I don't think they have the time and I don't think.
Speaker 4:Magic word time Right. They're gonna get it right if they have the time.
Speaker 3:Right.
Speaker 4:And we've in the ACO business, the value-based business. We keep on telling doctors it's not the patient you have in front of you, it's what patient should you have in front of you? How much of the activity right now is the worry that there's nothing really wrong. We do an annual wellness visit to do quality scores and you're perfectly healthy. So you check all the boxes and you get paid the same versus under CPT codes. You get paid the same 99214 if you have two diagnosis codes or 15. The doctor worked a hell of a lot harder on the 15 than the one with two Under population-based health and making the system financially accountable. Suddenly we want that doctor to spend that extra time to get it right. It's gonna start to align Right and I think we're gonna end there because we have to.
Speaker 3:And that is going to be an outcome from this consumer, the direct to consumer 2.0. Because the so just why these three concepts come into one is the employer benefits change dramatically. It's like a seismic shift where your employer's not choosing your plan anymore. They're basically giving you money to pay for your plan.
Speaker 3:And then you argue that it's gonna be not argue, but your hypothesis you propose that those health plans are gonna be standardized, that they have to be, and we all know that a tremendous amount of benefits are regulated to begin with, government has already said these things have to be paid for and then so from that, if that happens now the consumer suddenly has the control over the dollar, they're making the decision, and it's a whole different ball game.
Speaker 2:The healthy people will all select the bronze plans, the lower cost plans, maybe Unless they have chronic condition or something in their nervous.
Speaker 4:Well, they're not healthy anymore.
Speaker 2:Or they're not healthy anymore. Then they're gonna pay for the richer benefit plan. I just worry that we're gonna wind up with an under like exacerbate the underinsured situation in this country where you've got a large swath of people are not accessing because of cost. If they're having to foot the bill themselves. You've got these high deductibles. They're gonna put off care. We're seeing that. I just think, if that's the future, that's my worry, is that all right. So now we've got a society, we're just, I guess, further exacerbating this underinsured issue.
Speaker 4:Let's unpack that, because that's a real good concern.
Speaker 3:Sounds like a consultant. Let's unpack that. I almost put that in for something I was gonna say, and then I'm like, no, it sounds in fact I was gonna put it for you, which is really funny. And then I was like, no, it's too consultancy.
Speaker 4:So who pays for the underinsured right now?
Speaker 2:Collectively, as a society, we all do.
Speaker 4:And it funnels through the healthcare provider right. So we all pay for it one way or the other, and every time it goes through that cycle it actually gets more expensive. So return back toward those classic HMO style benefit plans from the 70s and 80s early 90s, where it's the co-pays are very- $2, a dollar.
Speaker 3:Do you remember whenever people started? I remember when they became $25 for a specialist you would have thought it was $4,000.
Speaker 1:People were.
Speaker 3:I can't believe it. It's $35 for my primary to go see an orthopedic. Might be glad you got that.
Speaker 2:That's her grumpy old man voice. Right there it's really bad.
Speaker 4:I'm not good, he's not good.
Speaker 3:Dave is not good at accents, I'm not good at singing and I'm certainly not good at trying to imitate.
Speaker 4:I can't carry a tune in a dump truck.
Speaker 3:I'm glad we didn't try to sing a world cope then no.
Speaker 4:Because of the way the cost of underinsured gets cycled through the economy. We won't have, we shouldn't have those high deductible catastrophes, because the group that actually eats most of that cost is the provider, so the provider's gonna turn around and say I can afford.
Speaker 4:I'm getting paid this much for a population I really can't. What's in my best economic interest over a two or three quarter, or maybe even a five or six quarter, isn't to charge Mary McGillicuddy a bunch of money on a high deductible health plan and make her pay something that she can't afford. Right, and so she doesn't. And so, six quarters later, instead of it being a $5,000 item, it's a $50,000 item.
Speaker 1:Because she let it go? I, yeah, because she let it go.
Speaker 4:I'm highly incentivized to drive away those high barrier, high economic barrier health plans and reduce the barrier. Now I change from oh good, they'll come see me more to know who should be seeing me. Who should be coming in. Who should I be worried about? Not because they're gonna fail attribution, because they're gonna fail their health, okay so now we're getting the health status business instead of the sickness treatment.
Speaker 3:So that's where I was gonna go with. This is so we've talked about this from all the different angles. What we haven't talked about this from this consumer direct 2.0, is we haven't really talked about the implications, the opportunity. I like to see it as an opportunity for the healthcare delivery system.
Speaker 4:Gotta get much better really engaging with the consumer. It's not patient centeredness.
Speaker 1:Yeah, we should have Mike and Dr Pittman together, because this last episode we talked about patient engagement. Yeah yeah, but we didn't talk about but we talked about the dilemma of the physician shortage as well, them not having enough time to spend with the patients, to your point.
Speaker 3:Because of the payment system the fee for service hamster wheel. We talked about that, so being able to, but so let's, what do you think? I'm actually gonna ask Justin what do you think? And then it goes to Mike what do you think, either pick primary care, multi-specialty practice or health system any of those, what do you think they need to do under consumer direct 2.0, what we're talking about? This happens, the seismic cataclysmic event happens. That would be a big 24 if this happened.
Speaker 2:So I think we're already seeing it, but the outreach, the technological outreach primary care, specialty care needs to be at the forefront to get the engagement that's needed right. So the convenience factor to be able to Mike had pointed this out a little bit earlier like having the on-demand access to primary care through technology, through online scheduling, through telehealth through texting Right that to me that device you were referencing that we don't have here.
Speaker 1:That's a kind of a handage. Did she take it from you?
Speaker 2:Yes, but we need to get away from this six month out scheduling for a wellness visit when that's not reality, that's antiquated and that's how people wanna access. No, I feel, and we're already seeing it right Walmart's doing it, Centine's doing it where you have these online clinics, virtual online clinics that can marry up with you as your primary care provider. I think that's the future and I think we've gotta get even more and more on that. But that's how I think I go back to, like how I would be engaged, rather than having or getting chased down from my doctor with phone calls, whatever the case may be, If it's that easy and I'm able to access my primary care provider online and I go in if something is needed. But that, to me, is where the future is. I don't know.
Speaker 4:I'm gonna concur, but I'm gonna give a structure to it.
Speaker 1:Okay.
Speaker 4:That odd perspective. This is management. The task of management is all about filtering the signal from the noise, and so I want to engage according to my. I'm a consumer. Ah, this is bothering me. I want to engage and get a resolution to my anxiety. So I want to engage and get some resolution. Now I need to engage with somebody who's reasonably expert. Like a physician, you want a or a PA, or an nurse or somebody you want some medical professional to help you with something going on.
Speaker 4:I do my. I want a clinician that can help me resolve my anxiety about here, this little bump right there.
Speaker 3:It's some early on On your finger or something.
Speaker 4:And they need to know whether or not that is never going to go away. Taking an IBU profan of some sort and relax, it's no big deal.
Speaker 3:Or your appendage is going to fall off.
Speaker 4:Or that's a stage for melanoma. Hope your life insurance is paid off right or somewhere in between and can in trigger that next appropriate event. That's what I want, right? I don't want to go. Oh, I've gotten a lab test and now my doctor wants to talk to about it. Like I, drive an hour into the office, wait 15 minutes, get five minutes of their time, drive an hour back, and employers don't want that either.
Speaker 3:Or worse. Yet you wait six months to come in to get the lab order.
Speaker 1:And they said it's too bad, we're here. Four months ago we wouldn't have to amputee, and that's what drives me crazy?
Speaker 3:I always call the doctor I'm like, and especially if it's a doctor that you see and I'm like can. I just get the lab order now. So that when I come in, we can discuss. No, we don't do that.
Speaker 4:When there's a group that I worked with that worked very hard to make sure that you had your labs, your imaging, before you met with the doctor and it's that was a change and all changes resisted. So, yeah, it has a level of adoption and we fear change. So a lot of providers it is my we live our lives in habit judgment or habit bias judgment, right.
Speaker 3:So big, medium, teeny Right habit right, I drive a certain speed on the freeway Arm length apart.
Speaker 4:Huge. Then we have a bias. I break the wall because I drive above the speed limit seven miles an hour because they're not gonna pull me over. That's my bias. Oh wait, it's snowing. I'm gonna slow down, Bullseye. That's my judgment right. And so my diet is a habit. I know I'm not supposed to eat this ice cream at 930 at night. Lost my judgment right, so that commercial was really effective. Wasn't it though.
Speaker 3:So, physicians, from a clinical perspective we've there's a real opportunity for the healthcare delivery system. It's really time for them to make sure they're ready to be direct to consumers.
Speaker 4:And the winners and losers are gonna be the ones that get their direct consumer correct.
Speaker 3:Yep.
Speaker 4:That's it right. And the pandemic refreshed our memories because the last one was way before anybody's living memory that these things can happen that I talked to many of hospital CFOs and said, man, if I had gone to a fully capitated environment I'd be printing money in. March, april, may June.
Speaker 2:True, very much so.
Speaker 4:All of a sudden that capitation is some evil word. Maybe I can have a diversified remedy stream. Oh wait, this isn't so bad. I can put my toe in the water, I can put my foot in the water. Here comes the crush of acute care we used to make. As a former hospital administrator, big part of our margins were on hips and knees. They're outpatient right. In a few short years it went. When the ACO industry started the federal one, 2012, it was routine to have a four day link to stay in the hospital, followed by seven to 11 days in the nursing home for a hip replacement. Common Outpatient.
Speaker 4:And now it's done. My neighbor was limping to his mailbox one day and I said Doug, what happened? He goes well, I had my hip replaced yesterday.
Speaker 3:Oh, I know my husband has a. He's got these like massive scars on the side of his knees from ACL surgery and he was in the hospital.
Speaker 2:He had the hip cast and now you know, we just need robots at home to be able to help you out, like Twiggy, like we've talked about. I know, I know About grafters.
Speaker 1:Hey, the Jetsons was the future. Mike Barrett, thank you so much for being with us today. Hey guys, it was a blast.
Speaker 4:I do have. I've been called. Alternatively, I've been called a lot of things.
Speaker 3:I'll call you a friend.
Speaker 4:You can call me almost anything, just not late for dinner but For bacon cheeseburger. Absolutely. Some people call me a professor, Some people call me a preacher. What gets me up in the morning is making a dent in the way healthcare is delivered and accelerating that transformation to health status versus sickness.
Speaker 2:That's why we like you. So we're lucky enough to have people like you in the industry who are passionate about doing that, because what we've talked about consistently is that we haven't, I think, have not done enough to break down the barriers, to create something Like we've gone in our lanes.
Speaker 3:That's why we appreciate you taking the time, because we really have established this as a platform for people to have an open dialogue. We really talk about this stuff. We don't have time. We're always on conference calls. We were juggling that before we walked in this room and this is meant to be a space to say, hey, what fundamentally, what is something we need to change? And let's talk about what that looks like without all the political agendas and bureaucratic pulls and all of that that we deal with. Let's really think about it from a fresh lens of what this looks like. And I really appreciated this topic because it's not something that I certainly would have picked, nor would I have seen it as one big topic as a part of the three different.
Speaker 1:It's one big topic. I think I worked out great.
Speaker 2:Yeah, yeah, yeah, so let's go get some kale salads, kale salads, yeah, yeah, dave, and I need that definitely, cause our BMIs are much higher than mics.
Speaker 3:So thanks again. I'm Ellen Brown.
Speaker 2:I'm Dave Pavlik and I'm Justin Plihti. We are the partners at BP2 Health your best chance for real change. As you can tell, we can talk about healthcare all day. Drop us a line through our site, bp2healthcom.
Speaker 1:Reverse mullet podcast is produced by MMG Studios in Tampa Florida with Victoria and Gunther.