Gregg Masters 00:12 You’re listening to PopHealth Week on HealthcareNOW Radio. I’m Gregg Masters, Managing Director at Health Innovation Media and co-founder and co-host of PopHealth Week. I’m flying solo today as my partner and lead co-host Fred Goldstein is away. On today’s show. I’m thrilled to reengage with a colleague, who’s a published author, consultant, thought leader, speaker, tech entrepreneur, and healthcare redemption evangelist and we’ll learn more about that shortly. Dave Chase is the creator of The Health Rosetta and co-founder of The Health Rosetta Institute and Health Rosetta group. When I first met Dave, he was CEO and co-founder of Avado, a digital health company acquired by and integrated into WebMD and Medscape. The Health Rosetta is the blueprint for purchasing healthcare wisely. Sourced from real life experience, implementing practical nonpartisan solutions Dave’s work applies the Health Rosetta in two areas. The Health Rosetta Institute creates LEED like certifications for better purchasing of health care benefits. While the Health Rosetta group is a holding company and investment group that drives health care’s transformation. It uses innovative approaches to build and fund the next generation of healthcare tech and services companies. Dave’s TEDx talk Healthcare Stole the American Dream, Here’s how We Take it Back, sums up health care’s devastation on the middle class and the redemption coming via a grassroots movement. Dave co-authored the Health Information Management System Society also known as HIMSS, healthcare Book of the Year in 2014, titled Engage, Transforming Healthcare through Digital Patient Engagement. In 2017, he published the CEOs Guide to Restoring the American dream, how to deliver world class health care to your employees at half the cost. In 2018, the opioid crisis wake up call Healthcare is Stealing the American dream. So needless to say, Dave’s a prolific writer with a message in there certainly a common theme throughout his writings. Dave Chase, welcome to PopHealth Week.
Dave Chase 02:41 Thanks for having me on, really appreciate the opportunity.
Gregg Masters 02:43 Glad to see you in the queue, and that you made it. So Dave, you’ve heard the intro, which I’ve sourced from some various public profiles of you it should be relatively current. If not, you can certainly update it. But let’s cycle back to what you’re doing at the Health Rosetta writ large. Give us some background on its genesis. And the work you’ve you’re doing today?
Dave Chase 03:10 Yeah, I mean, the the Genesis immediate, it really goes back to when we you know, you were mentioning, we were crossing paths. And, you know, I have the startup Avado that ultimate WebMD be acquired. And essentially, I came away with this conclusion you like any startup, you know, you look for a market gap. And I went looking for a market gap and found it. But what I actually found was what I believe the greatest heist in American history. And that’s what the healthcare system has done to devastate the working in middle class in this country, you know, and, you know, in our country, if you’re not elderly, or low income, overwhelmingly you get your benefits through your job. And it’s not that employers aren’t spending a lot more money than they did 20 years ago. The problem is, all that money went to a wildly underperforming health care system and at a personal level, kind of in that timeframe. Unfortunately, by the time I was about 40, I had had 10 friends that were my age or younger, die, and other than one that was a kayak drowning. They were all you know, sort of classic medical issues. And the last one hit me particularly hard because this was a somebody who kind of a similar profile and had a successful tech career should have had access to the best our healthcare system had to offer. But by the end, the healthcare system had devastated her medically, financially, emotionally. You know, ultimately leaving behind a 10 year old daughter And it was a complete system failure. And I realized I had been part of that system, you know, and the way I was raised is if you don’t, you see a problem. And you don’t do something about it, you’re complicit. And so that really put me on this scavenger hunt that I’ve been on last 10 years to essentially find all the fixes. And so what The Health Rosetta was about kind of the name there was, you know, Egyptian hieroglyphics, or, you know, we’re indecipherable once upon a time, and the Rosetta Stone helped decode those. And healthcare for a lot of people is kind of indecipherable. And the great news is, what I’d found was what we say on our website, which is both true and aspirational, health care is fixed. You know, we’re just forgetting the fixes. And so every solution to the many problems that healthcare has, have already been invented, proven and modestly replicated our challenge is to massively replicate that so I decided to, to found this kind of LEED like organization, that if you’re familiar with LEED, you know that mainstream to once fringe idea of more sustainably built buildings. And, you know, they accredited professional, certified buildings, you know, the equivalent and kind of the tip of the spear for us is accrediting benefits professionals, and ultimately, certifying plans to, you know, kind of do a similar thing to what happened in the built environment and the built environment, kind of like healthcare, very entrenched, very local, doesn’t change overnight. But if you are determined over a five to 20 year period, you can make a lot happen. So that’s some of the the long and winding journey. Obviously, there’s a lot of details around that, but hopefully gives you a little sense.
Gregg Masters 06:55 Yeah, that’s awesome. And think I was not aware of that personalized skin in the game in the game calling around your passion there. That makes a lot of sense. So let’s talk a little bit about those fixes. But first, in the trailer, for the mockumentary, the Big Heist, you state healthcare has created a middle-class depression, crushed nest eggs, and put millennials on a path to indentured servitude. So that’s not a pretty picture. Dave, tried it. Let’s connect some of the dots for us. How do you how do you support that? That assessment?
Dave Chase 07:38 Yeah, and when you when you hear that, you wouldn’t know that I’m a congenital optimist. But I’m also one who keeps their, you know, eyes and ears open. And so what I mean is, you know, one definition of economic depression is two or more years of wage stagnation or decline by that definition. The working in middle class isn’t a 20 year-long economic depression, it’s far longer than the Great Depression. And it’s brutal. You know, that’s it. Because of that wage stagnation combined with health care costs going up, people are cutting spending on food, housing, transportation, clothing, you know, they’re not canceling trips to the Bahamas. And in terms of the crushing nest eggs, if you look at the youngest Boomer, they’re like, 53 or 54, or something like that. And, you know, they’ve had about a 30-year career, if you looked at had health care costs, track regular inflation versus what happened with medical inflation. And you invested that spread, you know, between the two. That would be if you just put it in an S&P index fund, the average Boomer would have a million dollars in their retirement fund. Instead, we have the reality that 60% of the workforce makes $20 an hour or less, the average family of four premiums are over 20,000, over half of the households have less than $1,000 in savings and over half of the workforce has over $1,000 deductible. So you are a bad stubbed toe away from financial ruin in our healthcare system. And if that wasn’t bad enough, on the millennial side, if you look at the current trends, and actually the this is, believe it or not kind of the optimistic view, where millennials will spend half of their lifetime earnings on the health care system. This is very well-sourced data actually out of a book called Catastrophic Care by David Goldhill. This assumes that healthcare inflation only grows at half the rate of regular inflation which it almost never does usually exceeds the growth at the current trajectory. Two-thirds of a lifetime earnings of a millennial Typical millennial will go to the healthcare system. So in a sense, they become indentured servant, you know, servants care system, I don’t think that’s going to happen. Just like millennials drove adoption of social media, better food. You know, you name the internet smartphones, the oldest Millennials are now waking up. Because they are leaving that invincible stage of life. And realizing, you know, I kind of joke the healthcare system is designed perfectly for millennials. That is if you do the exact opposite of what the healthcare system does, and they have no loyalty to the obsolete old plans that pervade our system. And so that’s going to bring massive change, they’re already the largest chunk of the workforce in five years, they’re 75% of the workforce. And I think that’s probably the greatest underestimated piece of all this.
Gregg Masters 10:56 And, and I might add that all of the fixes, and we’ll, we’ll spend more time on that all of the fixes tend to push more of the cost burden onto them with the assumption that tech can provide support to better navigate and choose with transparency and access and, and and open-source availability of these things, that they can actually navigate the burden, the disproportionate burden that may be put on them by cost-shifting, higher deductibles, increasing co-pays, if you’re in the insurance system, excuse me, opting out into a DPC, which we’ll touch on shortly, is another matter. But they have a higher burden in the event that they can’t optimize prudent utilization of healthcare resources through tech tools and such. So let’s go back to your optimism thing. It clearly at what you’re doing at Health Rosetta has minimally revealed some best practices. In fact, I found a tweet of yours where I think it’s also on the website, healthcare’s already fixed, join us to scale those fixes. So let’s talk about some of those fixes. One, which you’ve advocated, in the past that I’m aware of is Direct Primary Care DPC. And the other seemingly at the core of Health Rosetta is the smart buying a by self employer self-funded employer groups, let’s spend a few moments on each please amplify your advocacy where you see DPC fitting in this millennial surge, and as a quote cure to what I’ll still call the health healthcare costs conundrum, popularized by Atul Guwande in 2009 2010. And and then spent a lot of time talking about the DPC model, and whether it can scale absent operating standards and perhaps some tiered risk assumption.
Dave Chase 13:06 Yeah, I mean, first, I’d say, you know, the the fixes, I would call that your reference or so called fixes. You know, healthcare is unique. And it’s the only industry that I know of that uses tech as an excuse for prices to go up and productivity to go down. And so that’s why you need a new blueprint. And transparency, again, the way it’s been implemented, incredibly easy to gain, and often has the opposite effect of what people actually want. Because of the nature, the deductibles if you sum up a great plan, it makes smart decisions free and bad decisions expensive. You know, I just heard another case study that from one of the advisors in the program is working with a manufacturer and recycler in Montana. And they put in these programs while they’ve improved benefits over the last four years, their spending went from 8 million to $3.4 million. And so how do you do that? And that kind of relates to your question on primary care. So we talk a lot about value-based primary care DPC is one flavor of that. And so, that recognizes there’s no health care system in the world that’s not built on a proper primary care foundation, what we call primary care. We basically already abandoned patients with our primary care. I would argue that nothing created more fertile ground for the opioid crisis than our devastated primary care. You know, because we have these drive by appointments. I mean, for example, the second most common reason people go to the doctor is lower back pain after cold and flu. And it’s the number one driver of disability guess what, it’s the number one driver of opioid prescriptions, even though there’s zero evidence that opioids are effective other than short-term masking of pain while things continue to get worse. Yet, even to this day we, we prescribe at extraordinary rates. And so what you’ve got to do in terms of rebuilding primary care is, you know, have their license. If you look at the great value based primary care models, for sure the docs are important. And I’ve lived this personally through, you know, my dad’s journey through Parkinson’s the last four years, and he passed in November. And, you know, he got, you know, I don’t think there’s a better care model in the world than what he received through one of the great Medicare Advantage programs didn’t despite, you know, the Parkinson’s journey, didn’t spend the day in the hospital, despite a lot of things going on. It was far better for my mom, for him family, we probably saved the taxpayers, probably over a couple $100,000. And what you see in those models is for sure, you know, complex stuff. It’s great to have the doc and we really appreciated that Doc, but it was health coaches, PTs, OTs, dietitians, social workers, nurses, nurse practitioners, and so on. And so everybody’s practicing the top of their license. And, you know, I wrote a piece about the so called primary care shortage, which is just a failure of imagination, because, you know, we have a typical primary care doc, and Doc’s, in general, are spending two hours on bureaucracy for every hour of patient time. And so you kind of have to rebuild this. And that’s what you see happening. You know, so the model, my folks were in for examples, Iora health, and there’s a bunch of these, and so, the DPC and you know, there’s different flavors of them their step on the journey, and so
Gregg Masters 17:10 I cannot get out of Can I interrupt? Yep. Dave, can I interrupt you there? So I put on Iora because I was I was wondering, is he telling the story about your dead? I’m sorry, for your loss? I’m thinking okay, most likely Pacific Northwest, most likely a risk-bearing integrated delivery system that has a culture of team-based, coordinated integrated care. Am I right?
Dave Chase 17:38 Absolutely.
Gregg Masters 17:39 Okay, second question. Iora Fernando, Fernandopulle Rushika Fernandapulle, Ipra health is one of the DPCs that stretching into and integrating with benefit plans, specifically I believe, Humana, being one and Humana is perhaps the most prolific Medicare Advantage operator in the country is is and whereas DPC is the pure-play DPC, direct primary care is really a carve-out that exits, the the funding mechanism of health benefits, and it really goes into a singular pod of what is provided is simply within the scope and practice and expertise of that primary care physician, which may vary from A to B to C to D. So, you’ve got on the one hand a system, the systemic cure or fix you, and then you’ve got maybe a somewhat of a blend, and then you’ve got essentially an exit. So, is that a fair characterization of some of these pillars of fixes that are out there in your experience?
Dave Chase 18:48 Well, I would say it’s exit from the failed system. And what we see with the plans that, you know, our community is doing, they’re sort of, you know, both on built-in and built around in terms of proper primary care, and DPC. So, if you look at the
Gregg Masters 19:07 right,
Dave Chase 19:08 the, the health plans, and, you know, the employers, you know, in our country, you know, for better for worse, you know, most people you know, we see their, their care that way today, they’re very much like plug compatible with the best of, you know, great Medicare Advantage plans. In fact, you look at Iora, you know, they got their start in the employer and union space, and then expand it in. And so these are, you know, again, the employers that are spending 20, 30, 50% last, they built it into the plan. And, and then the key here is replication. And one thing I would correct you on off of our site is we might have had it on our site at one time, but we are realize it was the wrong choice of words, is we’re focused on replicating, not scaling fixes. And the difference is scaling. You know, like venture the venture world, prays at the altar of scalability. You know, one thing becoming massive, and versus replication is recognizing that, you know, healthcare is very local. And, you know, you need to adapt for the different markets. And there’s just basically, there’s no scale economies, there’s scale diseconomies and healthcare. And, you know, the evidence is quite strong on that. And so, to me, it’s, it’s like how PCs begot local area networks, you know, because people want to share printers and, and files, and then that begot wide area networks, because people wanted to connect, you know, people in different locations, and that all laid the foundation for when the web came along, literally and metaphorically, the wires that are already been laid there and took off. And so to me, we just have to get on it in terms of rebuilding proper primary care as the foundation of the health care system. And, and, to me DPC is one step on that journey. The Medicare Advantage plans are probably where it’s taken off the most, because there is that model. And you have a more complex, risk-adjusted based thing, whereas an employer arena, they’re just paying on a fixed amount every month. And they’re not going through all the risk scoring stuff. But it’s basically the same approach.
Gregg Masters 21:44 And again, under the Medicare Advantage model, this is a risk transfer to a risk savvy, more often than not risk savvy supported by infrastructure and culture, where risk is embraced, and in turn engages the, shall we say downstream and sub-acute continuum of care providers as cost centers, versus typically seeing hospitals as revenue centers, imaging centers as revenue centers, outpatient surgery centers, as revenue centers, they’re all expenses in a room fully out of global risk. Yeah, primary care medical. But that’s not something you’ve seen in a traditional DPC model that’s really just as a single solution for an individual doc or small group practice.
Dave Chase 22:39 I would debate that point, because the thing that you have in common between a Medicare Advantage plan and an employer plan is they both they’re at risk, right. So the employer is at risk the employees and directly and in both cases, whether it’s Rushika’s, Iora plan, they have Stop Loss Coverage that covers the outlier things, but in both cases, they want to manage total risk. And so they will, you know, the smart ones will contract out for primary care. And so, you know, it could be the employer is already at risk there, you know, it may be there’s a carrier that’s processing the claims very inefficiently for them. But, you know, essentially about two-thirds of the workforce already in our in self-insured programs. And the other ones, for all intents and purposes, they’re already self-insured, because I can guarantee you, if they have a bad claims year, the carrier is going to claw that back. And so, so long as we have an employer-based health care system, that is, you know, what happens so I’m not an advocate for or against, you know, particular public policy things, we just have the employer space as sort of the the tip of the spear and the lever because no Act of Congress is needed. And I kind of look at it as you know, we have this reality, I tend to believe the Churchillism of you can count on Americans to do the right thing after they exhausted every other option. When the employer the employer place to me at best, what it is, is CMMI on steroids, where rather than a couple of dozen different tests out of CMS, you have potentially 1000s of tests, and then it’s put up or shut up what actually works. And there are some things working and they say, okay, well how do we massively replicate that just like what happened with LEED, you know, that started out in places like Portland and Boulder and Austin, they proved out the ROI and through replication model, you know, today there’s probably not a building built that’s not following those practices. Some don’t get the certification. But they all pretty much follow those practices. So that’s the system change model that we’re following. That’s actually what lifted 10s of millions of people out of poverty in India and is remaking a key part of the food system. And, you know, the LEED is another example. That’s, that’s what we actually see working. And, you know, again, the evidence is quite clear that we’ve got 50 years of, of public policy from both sides of the aisle that, you know, largely haven’t produced what we all believe we should produce, which is the quadruple aim is great for the clinicians, it’s great for the patient leads to better outcomes and lower costs. We’ve had the opposite of all those things for decades now.
Gregg Masters 25:49 So let’s we’re, we’re running out of time ago, just above about three minutes. But let’s talk a little bit about that arbitrage thing. You mentioned upfront the spread that was created between CPI and the healthcare cost index. But how did PPO’s account for the essentially that excess way, spend a few minutes on that quickly, and then maybe pivot to perhaps what you’ve seen at Rosen Hotels and how they’re solving that through smarter structuring of their network?
Dave Chase 26:19 Yeah, PPO’s probably a once good idea. Theory would be that a carrier has purchasing power and could get a better deal. The reality is, we spend 2.6 times for the same things on health care that other countries spend. And you know about that in terms of in the employer space on Medicare. So you basically rent a network, you pay for the privilege privilege of wildly overpay, you know, a longer amount of time, I would explain why it is that carriers have that economic incentive to do that. But that’s the reality. And then, in terms of what Rosen’s doing, again starting with primary care, in a proper primary care, like you see there, like you see, in Denmark, 92% of the issues that people come into the healthcare system for can be fully addressed in a primary care setting. So I mentioned lower back pain. That’s a good kind of micro example of this, you know, rather than the problem that other employers have enabled through their spending, and kind of being asleep at the wheel, they actually have a PT full time in their clinic, and if they can fully address those issues. And and then when, you know, there’s actually some complex or expensive things like pregnancy, 56% of their pregnancies are high risk. So they have a care management program. They work with the right places, and they get those costs down. And that’s how they’ve been able to spend half of what other employer spend even with a significant disease burden.
Gregg Masters 27:54 And that’ll have to be the last word on today’s episode of PopHealth Week on HealthcareNow Radio, Dave, thanks for your time, energy and rather candid observations.
Dave Chase 28:04 Thanks so much for having me on. Really appreciate it.
Gregg Masters 28:06 Considering we only scratched the surface of this deep and complex story, we’ll have to get you back for an introduction and progress report on the Community Health Savings project and if we have time perhaps deeper dives into Health Rosetta insights on what’s actually working do follow his work on the web via www.HealthRosetta.org and follow Dave on twitter @chasedave. In my experience most of Dave’s postings on Forbes and other publications can generally be sourced via a tweet for Fred Goldstein, HealthcareNOW Radio and Dave Chase. This is Gregg Masters saying bye now.