Podcast Episode Transcript: Breaking free from the health care status quo

With L. Gordon Moore, MD

Gordon Moore: Welcome to the 3M Inside Angle podcast. This is your host, Gordon Moore. With me today is Elizabeth Mitchell. She is the President and CEO of the Purchaser Business Group on Health, PBGH.

PBGH is a 501(c)(3) nonprofit organization focused on improving health outcomes, experience and affordability for consumers and purchasers across the United States. PBGH represents 40 of the largest public and private purchasers of health care services in the country who collectively spend $100 billion on health care annually for 15 million employees and their families.

As the leader of PBGH, Mitchell advances the organization’s strategic focus areas of redesigning care delivery, driving affordability, and optimizing health care markets, leveraging her extensive experience working with health care purchasers, providers, policymakers and payers to improve health care quality and cost.

Welcome, Ms. Mitchell.

Elizabeth Mitchell: Thank you. Glad to be here.

Gordon: Thanks so much for coming on. The reason I thought this would be an interesting conversation for our listeners was because of what I’ve been reading in testimony from you on the Hill around telehealth, reading papers that your organization puts out around primary care payment and transformation, and I’m interested in understanding where the employers are thinking about pushing and where their leverage should go and what you hope to get out of that.

Elizabeth: I would say that there is the collective view among my members that the U.S. health care system is deeply dysfunctional. Quality is poor for the most part, patient experience is poor, and it costs too much. So there’s a lot of work that needs to be done.

Because they are truly the ones at financial risk for the U.S. health care system, they’re the ones paying the bills, health plans are just the pass-throughs, they are truly invested in getting better value out of that spend, because they want to provide good benefits for their employees, they know that helping them stay healthy, is a strategic aim, it’s also the right thing to do. And they are trying to be stewards of their resources to make sure that they are investing it in care that actually helps people stay healthy.

So they are needing assistance, both technical and otherwise, to do that, because, frankly, the system has been pretty unresponsive over the last 30 years.

Gordon: I’m thinking about my own experience and thinking about health care transformation and trying to work it from within, and I have the same sense, that it’s something we’ve been talking about for decades and there’s been a lot of work and a lot of money poured into quality improvement. I was talking to some folks who were talking about the sense of a set of managed care organizations within a particular state, and saying, “Well, we don’t really know why we need to change the value-based care. Things seem to be going pretty well.” But that’s quite discordant from what I’m hearing. I’m wondering, how do we change that sense?

Elizabeth: Well, I would say it’s going very well for health plans and health systems who are well-paid under the status quo approach, and, frankly, aren’t accountable for value or outcomes. So they are quite vested in the current system. For those of us either using or paying for the system, I would say there’s a pretty big disconnect in how satisfied they are.

PBGH has actually been at it for 30 years. We are a 30-year-old organization. We have led all sorts of innovative programs that prove change is possible. And, frankly, what we have been able to prove in many cases is that better care does cost less. So if you get people to the right provider who has the best quality, for an appropriate service that they actually need, even if you pay more for that episode of care, you reduce your total spend. That’s what our members are after. They want to be able to scale those results, that we have been able to demonstrate on a regional basis for many years.

Gordon: What’s an example of one of the regions where you’ve seen that really work well?

Elizabeth: Sure. Well, a very recent one is we have designed maternity bundles, so, a bundle in which you pay for maternity services, that include mental health services, post-partum, and really help aggregate and integrate that care on behalf of the new mom. We did that in a pilot project between one of our members, Qualcomm, and a regional health system. It was very hard to make happen because, frankly, the health plan didn’t want to implement it initially, the health system was worried about taking the risk. But over time, we came to an agreement that this not only was achievable but it was actually better for patients. We’ve been able to implement that and we’ll be scaling it.

Another example is we ran a centers of excellence program on behalf of several of our employers. The results of that were really remarkable. By using really meaningful and robust quality measures, we were able to identify centers of excellence that were actually excellent. People got the right care, when it was appropriate. They weren’t referred for unnecessary procedures. And they had high-quality, good patient experience. So, patient outcomes were better, patient experience was better, and total cost went down considerably, because it was the right care. We had results from Walmart employees saying they didn’t know health care could be this way, where they felt cared for, that it was a truly seamless experience for them.

So, again, we know it’s doable. It’s kind of surprising that it would fall to an employer group to figure that out, but it’s something that the market has not done at scale. So the employers turn to us to help them design and implement those interventions in the system on behalf of their employees.

Gordon: You mentioned meaningful and robust quality measures, and I’m wondering, is that a signal for measures that are different from the usual and customary?

Elizabeth: Absolutely. I mean, I was part of the National Academy of Medicine’s study on core metrics probably 10 years ago. I was on the National Quality Forum board. There is a medical-industrial complex out there that works with really, I would say, unambitious measures of quality. They are typically claims-based because the data is easier to get. But we are not using meaningful measures that reflect patient outcomes, patient experience, functional status, activities of daily living, the things that people actually care about. Are they out of pain? Can they go to work? Can they care for their family?

Those measures exist. They have been tested for decades. They are reliable and robust. We have been piloting them with provider groups around the country. But people have not invested in the data collection systems necessary to actually get that type of information. So when we are doing contracting with our employers, we are insisting on using those more robust quality measures. It really reflects quality and outcomes from the patient experience and we find it is a much truer signal of actual care quality.

Gordon: What you’re describing reminds me of the Larry Green Center and measures that matter that use a lot of patient experience and care metrics. Is that the kind of thing you’re talking about?

Elizabeth: Patient experience is part of it and it’s an important part, but there are things called patient-reported outcome measures, PROMs or PROs. Again, they’ve been around for decades but they’re harder to collect, they’re not claims-based. One of the other reasons that there should be more momentum around these measures now is they also begin to introduce equity because you’re getting the patient voice, not through the lens of a clinician or care team member but truly the patient perspective on “Are they better? Did this surgery or procedure actually help them? Is the outcome good from the patient perspective?” These are technically tested and valid measures. They just have not been widely adopted.

Gordon: Let me pivot to another part of what I see coming from PBGH, which is a strong message around primary care. Where is that coming from?

Elizabeth: Well, we know that high-value primary care, robust primary care, is the foundation for a high-value system. You see that in all European countries, and you see it in the U.S. where it exists. So, one sort of recent undertaking of ours, we are a federal contractor and we had a federal grant to actually work with small, rural, independent primary care practices over four years. It was called the Practice Transformation Initiative. We worked directly with these practices, helping them transform themselves. So we would work on team design, workflow, data access and reporting.

Over the course of those four years of that project, we had results that truly, again, prove that better care costs less. We avoided over 67,000 hospital admissions and ED visits. We got better results on diabetes control, as an example. And we were able to avoid over $350 million in unnecessary spending. This is all quantified by CMS.

So, with the right support, primary care keeps people out of the hospital or emergency room unnecessarily. It keeps them healthier. Frankly, we really want to see mental health integrated into primary care. We know, where that’s been done, it has a huge impact on people’s health. So we believe that we are under-investing in primary care, which is leading to overuse and misuse of specialty and tertiary care. That’s why we’re really focused there. We think it’s the right investment.

Gordon: When you talk about where it’s been done with the mental health integrated with primary care, do you have any examples that you can point to?

Elizabeth: Well, again, we’ve done it on a small scale in California. There are some other entities and regions around the country who have done that. I would point you to Arnie Milstein’s research from Stanford called American Idol of Medicine, where they actually found some of the highest functioning primary care practices in the country and studied what made them that way. And one of them is connecting and/or integrating mental health care.

I will tell you, one of the top concerns of our employer members is how to get access to high-quality mental health care for their employees. That was true before the beginning of the pandemic; it is even more true now. It is a crisis. They can’t figure out how to make sure there is access to good mental health care around the country. We think one of the solutions is building that into primary care. And we are working with provider groups on how to do that most effectively.

Gordon: Makes me think of a conversation I once had with a medical director at Qualcomm. He was talking about the advances in telemedicine, this was 10 years ago, and saying telemedicine is such a valuable thing for him because, he said, “My engineers cost more than your doctors. Travel time is not in my best interest. Can you please use modern technology?” That was 10 years ago. It took us 10 years to get there.

Elizabeth: It took us more than that. I would say 20 or 30 years. Because, again, we’re not even talking about a new technology. We are talking about Facetime or something that we have fully adopted in every other industry. Health care is so slow to innovate. We’re still using fax machines. Right now you’re seeing the opportunity for telehealth that was exposed with the pandemic, which is a great thing. And it is starting to address some of the inequity of access. So you might have a whole lot of psychiatrists in Los Angeles but maybe not in rural Idaho where they’re really needed. Telehealth can bridge that gap.

But we have got to use it effectively, pay for it effectively, and remove some of the regulatory barriers like restrictions on practicing across state lines. So we’ve got to get the regulatory payment framework right, and then we can fully leverage, not a very new technology but one that could add a lot of value.

Gordon: I was just thinking about this researcher Peter Yellowlees who studied store-and-forward tele-psychiatric consultations from federally qualified health centers in California, and showed that it eliminated barriers to access and travel time for people who had transportation issues, was hugely successful in making a diagnosis and delivering a treatment plan back within almost 24 hours of the consultation request. It was done in a randomized controlled trial and published that. But again, that was years ago. So it really makes me think that the innovation is incredibly slow. How is it that we can make changes more quickly?

Elizabeth: Well, it goes back to your first statement. There’s a lot of people who are quite happy with the status quo. There are health plans and health systems who really don’t feel an urgent need to change. But that is completely disconnected from employers and purchasers who, as we’ve been talking about, aren’t getting value for spend. And, frankly, with the pandemic where they are under economic pressure that they may not have been before, that urgency has only increased.

You look at a company like Disney who’s having to lay off tens of thousands of employees, that spend on wasteful health care could be going into jobs. It could be going into wages, or keeping some of their divisions open. This is a very real trade-off for companies. That is money that comes out of their core business to go into health care. Again, they don’t mind paying for good health care, but they do mind paying for wasteful spending.

Gordon: I’m thinking also about a Princeton economist, Uwe Reinhardt, who talked about the microeconomics that, when the threshold for out-of-pocket spending crosses a certain level, that people don’t seek care, and sometimes that’s quite harmful to them. I’m thinking about the high deductible plans that are out there right now and that many employees and families are facing, and thinking that’s a further constraint on access, which degrades outcomes.

Elizabeth: Well, yeah, but, I mean, employers have been really working hard to control health care spending for their companies, right? And health care inflation just continues without any sign of slowing down, without any sensitivity to the customers. I think there was a while there where brokers were pitching the idea that, “Well, the easy solution to this is just have your employees pay more.” For a year or two or three, it actually looked like it was working. But then, to your point, Uwe Reinhardt and others have quantified that those financial barriers to care were actually really detrimental.

And I will say just on behalf of a lot of my members and, again, people join PBGH because they want to do more to fix health care, they are looking for other ways of approaching the current system. They are wanting to be much more interventionist in the health care system itself, because many of them are really acknowledging that they can’t put any more cost burden on employees. That was a strategy that is maxed out at best.

So they are looking to actually do more of this themselves, including direct contracting, going and creating direct relationships with provider partners, that might eliminate some of the administrative ways. So they are looking to try to have a much more active interventionist role in solving some of this, because putting all the burden on employees just doesn’t work.

Gordon: The amount of pain and suffering throughout the health care system is just breathtaking, when I think about the number of deaths of primary care physicians due to COVID, which is way disproportionate compared to other specialties in health care, but also everybody in the workforce and then hospitals suffering because of this pandemic. But this was there before, it just got much, much worse with the pandemic. So there’s so much pain and suffering. How do we change the system?

I hear big employers and your members are very interested in this. But then when I hear “We need to change the legislation and rules like that,” my knees get weak thinking about what a tall mountain that is. Is there a path forward?

Elizabeth: There is. There has to be. And yet I would not suggest that any of it is easy. If it was, it would have been done. There are glimmers of hope on the policy front. They passed the Surprise Billing legislation last year. Yes, it was watered down and, yes, it took a really long time, but it happened. We’ll be involved in the rule-making process there.

We are looking at drug pricing through policy intervention, and, frankly, provider pricing. I believe we are getting to the point where you can have an actual debate about maybe tying provider pricing to Medicare rates. Because, remember, by law, Medicare rates are required to cover the cost of a procedure. They are designed to cover costs. I know providers always say they don’t, but I really think that that’s debatable. So, maybe it would be simplist if commercial payers just said, “Fine, we will pay you 200 percent of Medicare or 300 percent of Medicare.” Still, that’s more than they’re getting from Medicare, but it’s not the 800 percent that we’re seeing now.

So I think you are going to start seeing debate that might not have been politically feasible before around provider pricing. I think that’s long overdue. Transparency is going to drive some of that. Frankly, the last administration’s hospital transparency rules, while certainly not enough to fix the system, they were an important step. And some hospital systems are actually complying with those rules meaningfully and we’re starting to get more and more insight into actual variation.

Frankly, eventually, employers are going to use that information. And as ERISA entities, there is a fiduciary risk if they don’t use that information once it’s available. If they knowingly do not choose the highest-value provider partners when that data is transparently available, there is a risk to them. So this is going to force some very different conversations. So, again, it’s not everything but there are signs of movement and I think reasons for hope that things will change.

Gordon: I think some of the parts that need to change, the fee-for-service incentive system, “do more, earn more,” has a pernicious effect, I think, on the profession of health care, but, sure, capitation might as well. I wonder, can we envision a system that moves clinicians to a capitated system with a patient experience measure set to balance the potential for restraining access?

Elizabeth: Absolutely. I mean, I was the co-chair of the Physician Focused Payment Model Technical Advisory Committee, created by Congress to actually advise CMS and CMMI on alternative payment models that would actually improve quality outcomes and value. I chaired that for about three years. We got proposals from clinicians in the field, that’s who came to PTAC, which is the name of the committee. We had so many great proposals for how to make care better, make experience better, bring down costs. None of them were fee-for-service. They were by definition alternatives to that, alternative payment models.

We approved at least 10 very promising models that could have been adopted, but, frankly, the health plans that administer these models are not designed to actually pay differently. They are all set up to pay fee-for-service. It’s really as simple as just having these legacy claims system that won’t do a prospective bundle. They just aren’t equipped to do what we know needs to be done. So, again, it’s not that you can’t do this. It’s that we will need new partners with new capabilities to do it.

Gordon: Oh, my goodness. Now my knees are weak again. I’m thinking about all of America’s health insurance plans saying, “What? You want new players? You want to disrupt this market? Is that what it’s going to take?”

Elizabeth: Let me jump in there, because they could have changed their operations decades ago. They just came out of an 11-year bull run. People have been talking about moving to new payment models for decades. They could have invested in that capacity. So it’s not that they haven’t had the opportunity, it’s not that they haven’t been at the table hearing that this was important to their constituencies. At some point though, people are going to lose patients and look for alternative approaches.

One of my members, I just spoke to her, we are trying to come up with new standards for primary care to take to the plans, she said, “I’ve given up on them. I’m going to go directly to my provider partners.” That’s not representative of everybody, but it is certainly a theme that I am hearing more and more. If the plans can’t do it, employers will find other ways to make it happen.

Gordon: Do you think there are any likely regions or parts of the states that might step out and try something comprehensive and bold?

Elizabeth: I think there’s a lot of states trying things comprehensive and bold. I was actually in the legislature in Maine in 1998 or something. We were doing innovative approaches to tiering hospitals based on quality. There have been ideas and efforts around for decades. I think it has just been very difficult to scale because the big players have, frankly, just not enabled it.

California just passed the Office of Health care Affordability. They’re going to be creating that now. That came out of the governor’s budget. That’s a pretty big move. You had Maryland do global budgets for hospitals years ago, and it’s actually working. Minnesota has been a huge leader in quality and working with providers to improve mental health care. We just have to make it all national.

Gordon: Those are exciting examples, I’ve heard of some of those and I’d like to see them spread. I’m thinking about a conversation a colleague of mine had recently with a head of a regional health plan. It’s like, “Well, sure, maybe we can put some monthly fee towards primary care so that they can enhance what they’re doing for people around mental health, but it’s got to be zero sum and you got to show me you’re reducing ED visits.”

I’m thinking, hey, now, all those constraints on it make it such an incremental approach and make it so hard to do the work. And again I keep thinking, if we’re going to resource primary care to do the full work, it seems a lot more like the OECD 15 to 20 percent of health care spend goes to primary care as opposed to the 5 to 7 percent spend we get in the states. But when I think about that delta, I don’t know how we climb that.

Elizabeth: We just did a survey on behalf of our members of their health plan spending on primary care. What we found is that the percentage from total spend is actually dropping. It’s not that they’re paying less, it’s just that they’re spending more for everything else and the percentage of primary care is diminishing. We are going in the wrong direction.

So we’re going to make that public and our employer members are going to take that to their plans and say, “You’ve got to fix this.” So, again, there’s no quick fix. Don’t get me wrong. But we start with transparent, reliable information, and you need leadership. Right now, our members are ready to lead.

Gordon: That may be the way forward. I think it’s going to be some bold employers and heads of corporations who are saying, “This is unsustainable. We need to do something right now. It needs to be significant. It can’t be tepid.” Maybe it’s shift primary care financing so that more than 60 percent of their revenue is coming from non-fee-for-service payments. Increase the primary care spend maybe 15 percent to the dollar, so that they can afford to do the work. Implement advanced practice models that incorporate mental health and behavioral care within the practices. Do you think that’s going to be the suite of interventions that would take care of the problem?

Elizabeth: Well, it would certainly help. One of the things that we sometimes forget is everything that you just said is also what the physicians and care teams want to do. They are navigating this morass of administrative burdens that actually prevent them from giving optimal care, and fighting for prior authorization of a service that they know is the right thing for their patients. If they were in, say, a sort of prospective population based payment with accountability for outcomes and experience, that also gives them more flexibility on caring for people the way they were trained and they want to practice medicine.

In our centers of excellence program that I mentioned, we did prospective bundles with warranties for the participating specialists. So they knew how much they were getting, they knew what they were accountable for, and they weren’t at risk. And they really liked it. We had incredibly enthusiastic provider partners, because they were being paid in ways that enabled them to give the best care. So, I say this all the time, employers and providers want the same thing. It’s just all the noise in the middle that makes it so hard.

Gordon: Ms. Mitchell, as we move towards close, I wonder if there are any things we haven’t touched on or other pieces of advice you would give to health plan executives, Medicaid, or government purchasers?

Elizabeth: Well, those are all very different. Government purchasers align with private purchasers who are going in this direction. I think there’s huge opportunity in the Biden administration to do multi-payer payment reforms. So we’re all sending the same signals, we’re all asking for the same things, that will reduce provider burden and make change faster.

I think, to the executives who are protecting the status quo, I would say, talk to your customers. Find out how your current business practices are impacting them. Because it’s not a pretty picture. It’s too expensive, it’s fragmented. The experience is poor, and too often the outcomes are poor. So I really think they’re going to need to read the room that things have to change. It would be great if they were partners in that change.

Gordon: Elizabeth Mitchell from the Purchaser Business Group on Health. Thank you so much for your time today.

Elizabeth: Thank you.

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