Chris Keller (00:04):
Good day and welcome to today's webinar, The inevitable revolution from healthcare to an ecosystem of health. My name is Chris Keller, and I'll be one of your hosts today. Joining us is David Holmberg, president and CEO of Highmark health and Annie Lamont co-founder and managing partner of Oak HC/FT. Today you're in for a real treat as Seth, David, and Annie have a conversation about healthcare, innovation, disruption, and an inevitable revolution.
Chris Keller (03:02):
Seth is co-founder and co CEO of OODA health previous to OODA health. Seth served as the vice president of sales and alliances for Castlight health at Castlight. Seth led the team responsible for market partnerships in key national accounts. Seth was one of the earliest employees at Castlight and served on the leadership team. Seth is currently a member of Castlight's board of directors prior to Castlight. Seth was a management consultant at McKinsey and company and McKinsey. Seth was a member of the healthcare payer and provider practice and a founding member of McKinsey center for healthcare reform. Seth earned and an MBA from Harvard business school as a Baker scholar and an MBA from Harvard Kennedy school. Seth completed his undergraduate studies at Stanford university as a Phi beta Kappa. Seth loves outdoor sports and performing impromptu musicals with his three young children.
Chris Keller (03:55):
Joining us as well is David Holmberg. David leads Highmark Health, an $18 billion blended health organization that includes one of America's largest Blue Cross Blue Shield insurers and a growing regional hospital and physician network. David joined Highmark Inc. in 2007 and served in a series of executive positions, including president of its Diversified Businesses, where he was responsible for businesses representing more than $3.5 billion in revenue, chief executive officer for HVHC Inc. and chief executive officer and chairman for HM Insurance Group, United Concordia Dental and San Antonio, Texas-based Visionworks, which was divested in 2016 for $1.6 billion. David is the Chairman of the Blue Cross Blue Shield Association (BCBSA) and member of the board of directors with America's Health Insurance Plans (AHIP). He received his Master of Business Administration from the University of Texas at Dallas and is a graduate of the Harvard Business School’s Advanced Management Program.
Chris Keller (04:59):
Any Lamont is co-founder and managing partner at Oak HC Ft, and Annie focuses on growth equity and early-stage venture opportunities in Healthcare and FinTech. Annie currently serves on the Boards of Advise Health Holdings, Brightline, CareBridge, Independent Living Systems, Oncology Analytics, OODA Health, Precision Medicine Group, Quartet, Rubicon Founders, Truepill, Vesta Health, VillageMD and is a Board Observer at Notable. Annie is also actively involved with Blend, Devoted Health, Inscripta, and Komodo Health. Annie was the first recipient of the National Venture Capital Association’s award for Excellence in Healthcare Innovation. Annie was honored with Healthcare Private Equity Association’s 2017 Russell L. Carson Award for lifetime achievement in healthcare investing. Annie serves as a core participant of the Health and Human Services Deputy Secretary’s Innovation and Investment Summit(DSIIS). Annie received a Bachelor of Arts degree from Stanford University.
Seth Cohen (05:58):
So with that, let me turn the time over to Seth. Seth, please go ahead. Thank you. Um, I was going to offer, uh, uh, David and Annie wanted to add anything to the introductions, but I think we've covered that. Um, and I'm just grateful that you introduced me first. Um, so thank you. Um, I'm really excited for this conversation. And one thing that wasn't covered in the introductions is just how grateful I am personally that I get to lead this with two mentors of mine. Um, you know, Annie for a very long time across the different companies David recently. And so I'm just so, so grateful to be able to be here with you both. Um, so we're going to dive in in a second, but I do want to go to the next slide briefly, Chris and just acknowledge today is, uh, quite a day.
Seth Cohen (06:38):
I didn't, we didn't necessarily plan for this webinar to take place, um, at a milestone announcement for our company, but I'm delighted that the coincidence and I just want to briefly note that as of this morning, we officially announced that Cedar and Huda health are coming together. As one company, Cedar is an amazing company in the patient financial space. They have created a leading platform to serve providers in their engagement with the patient financial needs. OODA of course has been in this space for a long time, but more oriented to the payer side of the world and coming together, we will be the first complete patient financial solution. So I just wanted to offer this brief, uh, announcement, um, please check out social media or follow up with us on our website to learn more. Um, there's a press release posted there, but really thrilled. Um, this is a, this is a momentous day for our company.
New Speaker (07:27):
Okay. Well with that, um, let's dive in. So David, let's start with you. Um, you've talked before about this notion of the inevitable revolution and that consumers are demanding it. Um, it's, it's been a long time coming, so is it here? Has it arrived? And what is it
David Holmberg (07:45):
From my perspective, it has been a long time coming, you know, we've all talked about evolution and revolution within, uh, healthcare and, you know, when 18% of the GDP for our country is spent on some form of healthcare, uh, you really start to have to question, uh, how affordable is it for individual families, particularly when you think about it on the percentage of household income. And so, uh, I think we're here. I think, you know, the pandemic, uh, showed the extraordinary capabilities we have as a country and fighting, um, you know, a, um, a common enemy at the same time. It showed the need for, uh, dramatic innovation. Uh, and when I think about it, you know what I mean, I look at, uh, telemedicine, uh, virtual medicine and, you know, the dramatic uptake that we saw and how it really, uh, created a new bridge to creating access to care and also has the potential to make healthcare
Seth Cohen (08:41):
Affordable. And do you think because of the pandemic, we will see this revolution arrive now, is that, is it that has been the key catalyst or do you think it's other factors coming together to make now the time?
New Speaker (08:53):
Well Seth, the way I think it is, you know, As consumers have clearly, um, you know, let us know that they have unmet needs and, you know, there's a unique opportunity for those of us in healthcare, whether you're a startup or a larger institution like ours, and is transforming, uh, to be able to fill those needs and to be much more customer and patient centric. And so what the pandemic did was amplify, uh, the cracks that were already there. And so when you think about, um, how our system works today with specialty care and how we do referrals, and then, you know, the, the need for pre-authorizations and things like that, uh, those are all friction points. And what consumers have told us is, you know, if you simplify the experience, make it a greater or a better experience, if you eliminate the friction points. And if you tell me how much I'm going to owe and assure me that I'm going to be taken care of, uh, they're in, and they're willing to adapt and adjust. And so we think there's a unique opportunity that the pandemic has driven, you know, to, uh, accelerate it. And, and that's why organizations like yours and what Annie does and what we believe we're doing with our LivingHealth model. Uh, we think can be quite effective.
Seth Cohen (10:11):
That's great. We're going to come back to living health shortly, but any, let me turn it to you. I mean, to say that your fund has been active over the past year is a little bit of an understatement. So is the, is this a revolution in healthcare? What is your point of view on the consumer and all of this? You've been doing this for a long time.
Annie Lamont (10:26):
Yeah, absolutely. It's definitely a tipping point. And I think the wonderful thing about innovation in healthcare was that there were a number of tech entrepreneurs and new young talent, including yourself years ago that have come into healthcare. And I think that began to revolutionize what we're doing and transform it, but there is no doubt. I mean, we were more active than we've ever been in the last year. And it's because companies were actually growing faster. And in part, because of this virtualization, we've been focused on virtualization and home care, uh, for a long time. But the reality is that you had massive behavior change, which is the hardest thing to do. And it's not just on the consumer's part, but very much on doctor's part too. Like, and they, they were, yes, everyone was forced to be virtual, but also have reimbursement And no one is gonna, you know, no one wants to ask a doctor to, uh, knock a page for a visit.
Annie Lamont (11:23):
Right. And the reality was when they weren't getting paid for, um, a visit, whether it was telephone or video visit, you know, they weren't going to do it. Um, and so you have just had a transformation, um, reimbursement, uh, that we hope sticks, uh, and hopefully licensure, you know, follows it, uh, along with just behavior change by by individuals. Um, so I think that is, we would say is literally accelerated, uh, innovation by five to 10 years. And I think, well, you know, I know get into this, but we'll talk about like what that means, because it's not just that one visit with the doctor. It's really the whole B2C online revolution has happened. And, um, and it's being enabled by a number of companies that create the ability to have a doctor visit along with diagnostic home diagnostics, along with them prescribing, um, that that make for a totally different experience.
Seth Cohen (12:16):
That's interesting. Will you say a little bit more on the B to C point? I thought was really interesting because I remember when I first got into this space, 10, 15 years ago, B to C was not a place you wanted to go and healthcare, it was always an enterprise approach and the B2C companies, and I won't name them. We can think of some of them didn't work out. So do you feel like now is the time for that B2C approach?
Annie Lamont (12:35):
Yeah. Well, it's so interesting. Cause if you literally asked me two years ago. Like, no, we don't do B to C in healthcare because consumers don't pay. Right. And so you've obviously seen some examples of consumers Pang, but the, the, the rethink on this online is simply, may start B to C, but it's really just another PA provider in the network is just another pride or in the network. So when I think, when you think about healthcare going to your local doctors, B to C, right, how did you find that doctor? Well, you might've found him on Zoc doc. You might've found it usually through a friend, you know, references them. It's a piece of your experiences. It just happened to be in person. And then that doctor or provider has a relationship with a payer where they're getting reimbursed for what they're doing. So it's really just, it's like omni-channel and e-commerce and, you know, we do e-commerce FinTech and it was like, wow, to see them both explode at the same time last year was absolutely fascinating because of the virtualization of the home experience to like doing your, you know, like buying a house and getting a mortgage and a title on everything from your bedroom was the same thing that was effectively going on in the healthcare world.
Annie Lamont (13:49):
And like all of a sudden the virtual experience where, you know, we're being enabled. So, you know, we've now been investing in some of these games like cerebral. That is, yes, it's a B2C online company. That's doing, you know, talk therapy, but a subscription model of depression and anxiety, drugs that have come in that they're presenting, coaches and doctors behind them are prescribing, uh, you know, actually with, uh, uh, you know, and I hate the idea of like pill mill it's, it's absolutely not because just looking at, like, we knew that your local doctor, they actually won't give you another prescription unless you've seen it, you know, talked to a doctor online, uh, and you know, are, are actually Parallon, just prescriptions, you know, and that companies is now getting reimbursed by payers because the reality is that it is just another way to access the healthcare system. And I've talked to, in fact, one of the CEOs and one of the blue said his son was in another state within New York, and didn't have a local doctor and needed his anti-anxiety meds. And, you know, so they had to go to the doctor in one of the other Northeast states and prescribe for basically get a prescription FedEx app, prescribe it, right, get it local, FedEx it to him in New York city. Like that's just a horrible experience for everyone. Uh, certainly for the, you know, the patient. So it's really just an enablement. It's another, it's just a better, additional provider network.
Seth Cohen (15:23):
Um, so omni-channel virtual consumer first strategies. I mean, David, this seems like the time to talk about living health. Right. Um, so what is living health, maybe let's start there. Why now? Um, and what does it mean for Highmark?
David Holmberg (15:39):
So living health for us is, is, um, you know, working with consumers and truly understanding their unmet needs and moving, you know, I, I totally agree with Annie, you know, um, historically payers have been on one side of the, of the table. Providers have been on the other side of the table and, you know, there was some sort of negotiation. LivingHealth is about bringing everybody to the same side of the table, uh, in service of our customers, our members, our patients. And so, uh, so, and, and that's what we're doing, you know, with the Allegheny health network, uh, and Pennsylvania, uh, we just announced with Christiana in Delaware. This is all about working together? And, you know, and again, figuring out those unmet needs, reduce the friction points and make sure that the economics reinforce the right behavior, which is about getting upstream and dealing with the issues, bringing in mental health and behavioral health, uh, into the equation and finding ways to, to avoid those acute incidences that that tend to happen.
David Holmberg (16:47):
And so, uh, our, our interest is in bringing together, um, the, the rich technology that exists today, that wasn't here 20 years ago, uh, adding our clinical expertise and, you know, and bringing to bear, you know, um, you know, all the financial components that are necessary to really change things. That's why we're doing the Google partnership and with Verily to develop different clinical pathways. You know, that's why we're embedding them in products and solutions on the insurance side, so that, um, so that, uh, employers understand the value and you start to bring all this together in a way that's different than what has been done in the past.
Seth Cohen (17:26):
Hmm. So what will that look like if I'm a member of Highmark and I'm in this LivingHealth model. You talk about moving upstream. So how, how will this model help anticipate and engage me in things versus today's kind of model?
David Holmberg (17:40):
You know, essentially you're in the center of the model, you and the clinician, and you have a curated experience that comes around and that curated experience, you know, will be different for each individual. Uh, think of it as mass customization, you know, because, you know, we used to own an eyewear a company and that's exactly, what we did. No one pair of glasses was exactly like the next pair. Um, but at the same time you had a suite of products and solutions that you offer you as an individual. Um, if, you know, at the age you're at today, and I'm pretty sure Annie said that you're an old guy now, by the way, I could be wrong. But, you know, with three kids, you know, your healthcare needs are different than somebody who's 65 and about to retire from a factory and who's got a chronic disease.
David Holmberg (18:31):
So it's all about, you know, creating a suite of solutions that surround you and that, you know, you're able to draw on depending on what your needs are at that point in your life. It's all about consumer insights, you know, and as you know, I come from an unconventional background, started my career as a retailer. And in retail, you gotta, win your business every single day by having the right products and solutions, but the consumer chooses. The healthcare s ystem today is one of the few things that, you know, in this country that consumers purchase, where they have to conform to it. And so when Annie talks about all the different, uh, organizations that she's involved with, what they're doing is disrupting the existing, you know, sort of status quo and they're filling unmet needs. And then what we're trying to do with living health is to bring the right set of solutions, uh, to surround you so that they meet your need, um, at that particular point in your life.
Seth Cohen (19:28):
I want to turn that to you then Annie, is that, do you agree with that? Is, is mass customization the model that you're seeing successful? I mean, what, or maybe give us an example or two of what you've seen as like just dynamite consumer models, um, here in this space.
Annie Lamont (20:02):
Great. Okay. Well, I think, yeah, I guess I'd love to step back because I think one advantage David has, is an integrated system. He carries payer, he understands provider, you know, I think it's incredibly important to be thinking about how you pay and how systems are set up because it's all about incentives. So it's really like about payment models. We're thinking about where the consumer patient is, you know, uh, is primary in it, you know, but the reality is if I'm an employer and generally I am being delivered, you know, one or two options. Um, and I'm not the one actually choosing what those insurance options are. Um, so the, you know, the, what we're focused on is, and when we, when we think healthcare in general right now is we think about it from kind of primary care out, uh, and someone who's a caregiver, who is, you know, let's start with a primary care physician being incented to think about that patient over the longterm and their health.
Annie Lamont (21:06):
Uh, and the only way you do that is by the right incentives of having, um, basically that capitated individual, uh, being covered, um, you know, their full global cap responsibility for the cost of that individual. Cause eventually they should be driving 70% of the costs in healthcare for, you know, for a member. Um, and I, you know, and I, I think the reality is saying that we're consumers when we're all right, and we're patients when we are sick. And the reality is what happens is we listen for doc, right? We should listen to our doctors and we should obviously educate ourselves too, but we need somebody who actually is thinking about managing all the ways we interface with the system and for a consumer, just be out there. I mean, I could be saying, Hey, I want to go to this orthopedic surgeon and I want to go to this person.
Annie Lamont (22:03):
I want to go to this doctor. None of those doctors are talking to each other. Nobody knows what I'm doing. I'm trying to manage my health. Right. But I have no data and I don't know that that doctor is much more likely to give you back surgery. I don't know that OB GYN is a 30% cesarian rate when, you know, really the average would be 11%. Um, so the health system, like we have to be wrapped around by somebody who cares, a provider who is actually incentivized to provide excellent quality care and cares about the longterm costs, you know, for us as individuals, but for the system. Um, so that is what we're interested in when we're investing in things. We want to be in things that are lowering costs, improving outcomes, quality, and patient experience. So like putting that all together. Um, so, you know, that's how we think about the interfacing.
Annie Lamont (22:54):
Like you have got to have a great, ultimately all these entities need to come together to create a singular unified patient experience. Um, and that is, that is going to be when the consumer patient wins. Um, I, what I, one thing I love Seth was that when the JD Powers survey came out after, uh, the affordable care act came out of Obamacare was implemented and are all these people screaming about narrow networks and limiting choice and oh my, Americans do not like to have choice limited on them, you know, but then you saw the JD powers survey five years later of like, what were consumers happiest in, where did they think they were getting the best care? Narrow networks. You know, like they were care coordination and narrow networks that is actually, where people got the best value
Seth Cohen (23:39):
And people love their Kaiser plans. People love when you're in Kaiser, they love it. Right. So there's clearly it's not about having a limit right now. I really appreciate that. Um, I'm going to get to a couple of the questions in the chat in a second, but I want to touch on something that you both mentioned, you know, payment model kind of requires a certain structure partnerships. David, you mentioned Allegheny, you mentioned Christiana, you mentioned Google. Right. So I do think that one of the reasons I was so excited for this conversation is that you have taken a very unique strategy, especially in the blues ecosystem, um, with the way that you've thought about partnerships and structure. And so maybe we just spend a moment on that because to Andy's point, let's take a step back because LivingHealth exist within that structure. Right. And so can you give us a little bit of the history there, um, and talk to a little bit about why you've chosen to pursue that strategy?
David Holmberg (24:25):
Well, Seth, I was very fortunate that, um, you know, we, we live in a hyper competitive market and we were in a unique position as, uh, as, uh, the fourth largest blue cross blue shield plan at Highmark, you know, to, um, you know, to choose, to invest in stabilize a, um, at scale health system, the Allegheny health network, which was 12 hospitals, you know, a couple thousand physicians, uh, it does about three and a half billion dollars a year in revenue today. And, you know, and what we found, um, was in our efforts to preserve, uh, competition and choice in the community, you know, that we had this very unique, um, you know, a live laboratory where we could, you know, we could see, you know, the decisions that we made on the payer side, how they played out, uh, in a health system and on the front lines.
David Holmberg (25:16):
And we could draw, uh, with a physician led organization, uh, and you know, the, the various physicians in and get the concepts and ideas and understand, you know, where the opportunities were. And so, uh, we've turned it into, you know, uh, what I would consider a transformational startup, uh, at scale. I mean, uh, I have, uh, you know, I love Annie and the work that she's done and the organizations she's involved with some days I say to myself, gee, I'd like to go down to the warehouse district here in the strip and open up a startup down there and disrupt healthcare from that perspective. I look at it as though, um, Highmark health. We have a unique position because we do have market density. When it comes to insured lives, we have the ability to, um, to bring organizations like yours in, at, with the Allegheny health network, learn from it and quickly scale it over millions of people.
David Holmberg (26:12):
Um, and so, you know, while we start from a little different position, you know, we both are looking to accomplish the same thing, which is, uh, is bring value for the consumer, you know, find ways to improve access, to care, quality, and care and outcomes. And, you know, we're using the, the integrated model, uh, to do that. And so, uh, in our world, you know, I mean, uh, it's a blended model. I mean, we have the physicians at the table, you know, with the insurance people and the actuaries and you, and we're working together around clinical pathways and what product design should be used in order to move care to at home, you know, rather than trying to protect an existing position, we want to partner with others and innovate and find ways to, you know, to deliver care differently.
Seth Cohen (26:59):
Yeah. I love the point that you mentioned that you and Annie are coming from different places, but with similar goals of looking for those partnerships, and I could be the first to acknowledge that our partnership with you and your team has been extraordinary, and we couldn't be more excited to work with you and Alleghany on the personalized billing experience that mass customization, no patient bill should look the same, just like no eyeglass should look the same. And so we're proud of that. You have built a structure that has enabled partnerships with small tech companies like ours and big tech companies like Google. And I think a lot of folks who might be listening to this will say, well, I know how I know how it works for me to work with Annie and her team. Like they're a venture capital fund and I get the venture model, but a lot of people would say, gosh, a really large integrated health payer provider. Like that must be a really tough partner to have with a young startup. I think it's worked well, but speak more to that. How do you think about partnering with companies like ours and how do you ensure that those relationships are successful?
David Holmberg (27:57):
Well, the way I think about it is, you know, I look for partners that make us better and that we make them better. So, uh, and yes, I mean, we have a great partnership with your organization and, and we're very excited about the potential to reduce the friction for the consumer simplified billing and, you know, and, and eliminate maybe some of the barriers to people, uh, engaging in the healthcare system. And so, um, what we look for is people that have similar values that, um, are looking to, you know, that are not satisfied with the status quo. Uh, and so when you're talking about a, um, a big blue cross blue shield plan in a blended model like we have with the Allegheny health network, know, I mean, the biggest challenges is the bureaucracy on our side that sometimes, you know, gets in the way.
David Holmberg (28:45):
And so, um, when we're working with somebody who's new, a startup, you know, we have a team that's responsible for trying to, um, eliminate those barriers and that bureaucracy and simplify it at the same time, because we do have 6 million or 7 million insured lives. You know, there are some things that we have to do from a regulatory standpoint. It's incumbent upon us to teach your organization, uh, what those things are, and then not to be so married to the past that we're not willing to try things that are different. So part of the reason why we like the partnership with Google, I could have gone out and hired a thousand, um, you know, engineers. They w you know, what they bring together is, you know, their consumer experiences, their speed of, uh, of new product introductions, those kinds of things. What I like about working with you is you're nimble, you know, you're creative, you've got great ideas and they fit and fill unmet needs that, you know, that we have as an organization, our clients do and our, and our members too.
Seth Cohen (29:44):
And for the record, David at one point said, bring more crazy ideas to us. Right. Bring your crazy. So I love that you don't get that from a lot of CEOs of organizations like yours,
David Holmberg (29:53):
South. We've talked about having, you know, having Friday, uh, you know, if, if you're, you know, you're probably too young, but, you know, um, you know, there used to be a show called the gong show and, you know, and people would come on and do crazy things. And the crazier, that was the, that was how some people won. One of the things that's really important to me is, you know, that, um, we, you know, we're open to new ideas that we're open for business, and you know, that, um, that we are able to be an innovator, uh, at scale, you know, and be able to scale whatever the idea is. And so, uh, it's very easy when, you know, you're successful. Um, you know, as, as many of the people on this call are, uh, to get comfortable. And I like to think of it as though we've got somebody running right behind us and we hear footsteps. So, uh, we're willing to listen to crazy.
Seth Cohen (30:43):
I love that. Um, all right. Let me turn to some of the questions in the chat for a moment. So Annie, since you run a fund that does both FinTech and healthcare, I think this one is for you. What is the role of cryptocurrency and blockchain, uh, when you think about payment models in healthcare? So,
Annie Lamont (30:59):
Yeah, well, it's interesting. We, we've actually just made an investment company called Paxos and that's the crypto infrastructure for, uh, Venmo and PayPal. And while it's not going to healthcare, yet, they are doing T zero settlement for trades for major banks. Um, that will be announced quite soon. Um, and so what's exciting about that is the use of blockchain for real-time payment. It was actually used, um, at Sotheby's recently and their auction, and they love it because Sotheby's is actually taking risks every time. You know, they try to verify internationally the, um, the status of an individual who's bidding on product, but they generally have a settlement delay of getting cash. And they have a lot of breakage in that. And it's interesting, that was like immediate settlement time. So I think there are going to be some interesting ways. I mean, we've, we've looked at things and blockchain for supply chain, right. Follow a drug all the way from, you know, from component to factory, to, to the consumer. Like there are some actually interesting things you can do with blockchain there.
Seth Cohen (32:09):
Interesting. Um, I'm going to bundle a couple of questions here. Um, you know, again, back on the theme of payment models, um, how, how are both of you, uh, maybe from a large incumbent standpoint and a venture capital standpoint, thinking about capitation either partial at risk episodes of care bundles, is that a fundamental part of living health? Is that a parallel process? You may be David first, your thoughts on those kinds of models.
David Holmberg (32:34):
So, you know, we believe that, um, in order for us to truly innovate, everybody has to be at risk and, you know, part of the living health model is, you know, is holding people accountable for outcomes, uh, and overall health. And if we do this right, um, you know, along the way, there's an opportunity for, you know, for organizations to work with us, you know, that understand that, you know, so in a long-term, uh, fee for service is going to be here for awhile. Uh, but over time, that's not going to be the winning hand. You know, we think that more of a value approach will will matter. And those that can bring value in terms of outcomes, in terms of clinical, uh, quality, uh, and, you know, and have an affordability filter on it. Uh, they're going to do quite well. And we're willing to share in that success with people. So, you know, so we're looking for people that have great ideas and have the confidence to put their money where their mouth is. That's great.
Annie Lamont (33:40):
Yeah. Annie, anything you want to add to that? Yeah. I, I love that because like, I fully believe it. And, you know, I think one thing that we're focused on is if we're creating lower costs, better solutions, like why shouldn't our companies actually benefit by the reduction in costs? Like, I want them to take risks. It's like smart financially, I think for the system. I just think the only thing that really works is a global cap model that you are responsible for everything around that patient. Um, because otherwise, like bundles don't work. I just don't, you know, I know it's a transitional thing. I know we're learning like knees hips. I mean, there's some advantage to being responsible for post-acute care, but that doesn't change the, how many you do. Right. Doesn't it that, you know, and that's a fundamental question, right?
Annie Lamont (34:30):
Like what did you need to do? What could have been done differently with their physical therapy? I, I really hate things like MLTC model. I hate models where you're responsible for the home care or you're responsible home and community based care, but the minute that, uh, there there's any risks with that patient, you're shoving them over to the hospital system or, you know, to somebody else like that is a terrible model. Like, I didn't even know how we got there in America. I mean, we should absolutely shut down those programs because while I believe in home and community base, you can't like make people at risk for something where they're incented to actually push people out when they get more expensive and you throw them back into the most expensive place to take care of them. So that I'm, again, I think every primary care you know villageMD we're invested in and EverSide and Firefly and Galileo, and those are going to be all fully at risk models.
David Holmberg (35:29):
Yeah. This is a webinar and I know your inclination is to be really polite, but I really want you to feel comfortable saying exactly how you feel don't hold back. So,
Seth Cohen (35:38):
Um, no, I appreciate that. And helpful, by the way, I think a little bit about that with the patient administrative experience. I mean, you're talking about it clinically, but you know, in my world, uh, when we think about the patient financial experience, it's often sliced up that way too. You've got one vendor that's kind of handling pre-service and like, Hey, David, like, I'd like to collect a couple dollars from me before you show up. And then there's that post, that, that kind of point of service like, Hey, let me collect $20 right here. And then the post services, let me know, chase you for whatever's left in that bill. And if I don't get you, I'm going to send you to a bad debt vendor into a delinquency vendor. And it's like, everyone gets this little slice of that patient administrative experience too. And I think that, that what you just said is something I think a lot about is like, how do we be more holistic about that?
Seth Cohen (36:16):
Like, why aren't we thinking more collectively, like where we want to engage them. And maybe David prefers to be more upfront versus posts and maybe others are kind of more the flip and like, let's not just have one touch, you know, there. So I think that's an interesting analogy. My friend, Nate Gussie had an interesting question here about the role of big pharma and life sciences, um, which we haven't really talked about. So is big pharma, a partner here? Could they be a partner? Are they a blocker of some of the innovation we're trying to do? Maybe David you start. Yeah.
David Holmberg (36:50):
Well, I would say that, um, you know, and I'll just take one example, Pennsylvania, you know, 27% of the healthcare costs for, you know, the average commercially insured person in Pennsylvania goes to a pharma. Uh, so, you know, I mean, uh, you know, they need to be part of the equation, uh, and there's potential to be, um, be part of the solution there. And so, you know, we, we think that, uh, whether it's civic RX or some of the other things that we're doing, um, you know, that's a part of the solution, uh, but there's a lot of work that's gotta be done. And, you know, I mean, we're coming off of a pandemic where, um, where research that, you know, goes back to 2008, 2009, you know, has, um, you know, been part of the vaccine solution, uh, that, you know, that everybody believes happened overnight.
David Holmberg (37:43):
But the reality of it was there was a lot of work that was done prior to that, and they deserve to be paid for that, you know, and we have to find ways to make sure that we encourage that kind of research and development. Um, but you know, again, uh, pharma needs to be part of the solution. I think Annie described it well, you know, you don't want to just have the slice of the at-home care. And then as soon as things could start to go South, you dump them on somebody else you want to, um, you know, have a global risk of some sort. Uh, we've done that with some of our innovative cancer drugs, uh, where they're now performance-based and outcome based. And so the compensation is based on their ability to deliver as promised. And we think that those kinds of things will be critically important. And again, we don't want to stifle innovation. We want to reward, um, you know improvements in quality and outcomes.
Seth Cohen (38:38):
That's great. Annie, are you seeing big pharma or big life science working constructively with your portfolio?
Annie Lamont (38:45):
Yeah, I mean, we don't directly invest in anything that really goes to the FDA, um, used to, um, but I would say absolutely everybody knows that pharma David's living this every day. The pharma is getting a bigger, bigger piece of the pie. Um, and we have more and more expense there as amazing drugs are created. And there's lots of innovation. And I think half of the drug spend is now specialty drugs. Um, so, you know, it's, it's absolutely an issue. Um, I think that, but I, you know, obviously the COVID vaccine is like such a miracle of modern medicine. It's just, it's just incredible. And we are the innovation engine for the world, uh, and that we want to remain. So, so I think it's a conundrum. I do think that the whole distribution chain is absolutely ridiculous and broken. We've owned a PBM, you know, in the past, we've, you know, we're doing a transparent PBM, uh, now, uh, in terms of trying to take out and make it very transparent and take out the cost and show people what the real costs are. You know, these drugs are, uh, and I do think between, you know, the distribution networks and PBMs, and there's just a lot of costs layered in to something that we absolutely need to simplify and figure that out. And I think you could, you could take certainly 5% out of the cost right there.
Seth Cohen (40:05):
There was another question here that I'm going to open up a bit, which was around kind of consumers and their financing needs and payment plans. And I think we are seeing to the question, you know, a big explosion around payment plans and affordability solutions for patients because patients have higher deductibles and kind of, we know that trend, but the way I want to open the question for you both is for David. If you think about the next five years, what are some of the patient innovations or patient experiences that are coming online or that you're seeing in the frontier that you're most excited about? You know, Annie, you mentioned earlier, you know, the virtualization of care and that home-based care is really here and we've now created a reimbursement model that hopefully will stick. So is it the virtual settings that we think is going to be the most impactful for the patients or something else on your minds? And David, maybe I'd ask you to kick that off?
David Holmberg (40:49):
Well, I, I think, um, I mean we have a company called Helion, which is, you know, as, um, our, at home, um, you know, footprint and, you know, and it's a combination of again, of clinical insights, uh, technology and a understanding that, you know, in a global cap model or in a, um, a blended health model, like, you know, like we have, you know, that, you know, that if we can treat the patient at home, uh, and we can keep them in a, in a better setting that it's okay to lose that revenue that you get from being in a hospital. And, you know, we feel as though, um, that we're in a point now where you have the, the tools from a technological standpoint, the monitors, et cetera, that if you have a bricks and mortar light footprint, uh, and one that's more mobile and you can bring the clinicians to people that, you know, that's the wave of the future. I mean, how my 30 year old son in Los Angeles, consumes healthcare is dramatically different than the way I did when I, when I was growing up, his expectation is to leverage, uh, every resource that's possible, that's virtual. And, but at the same time, he's not willing to accept a poor performance. And so finding a blend there is where I think we're headed.
Seth Cohen (42:14):
Hmm. Interesting. And so what, what would you say that in the next like five years that like some sort of home-based setting will be a critical part of a network like that will be in that part of in network care?
David Holmberg (42:25):
Absolutely. Uh, and again, you know, I mean, uh, what you have to do is to rethink the economics of the system and rethink, um, but start with the clinical pathways, you know, today, uh, if you own a hospital system, uh, or if you're a provider, and you're paid fee for service, it's not in your best interest to send that patient home early, unless there's some sort of a cap of the reimbursement. And if they can hold a patient for an extra day in a hospital, um, then there's a revenue that comes associated with that. In our model, you know, we are paying our people for performance, you know, quality outcomes, uh, and making sure that the care is right size so that it's the right care, the right place and the right time. And so if we can avoid having them in the hospital, that's good news. And my perfect example is right behind me is Allegheny general across the river.
Seth Cohen (43:23):
And by the way, quite literally, I don't think people know we pointed is that's literally the building. Yeah. Okay.
David Holmberg (43:28):
It's the number one promise center in the region. Number one heart program in Pennsylvania, uh, has the highest, um, complex medical case index in the state and, and, uh, what that means is the really complex and the really sick, uh, go there. And that's where you want to be. One of the ways we've been able to do that is by, you know, by reducing the level one and two, uh, emergency room visits. And the way we did that was by providing same-day appointments with primary care physicians, you know, finding ways to, uh, to get care closer to where people lived in the neighborhoods and that freed up a center like Allegheny general, to be able to do the most complex work, uh, which is a win for the clinicians. And it's a win for the patients, uh, and it's a win for the families. And so, uh, so when you start to think about it, that way it changes and your incentives are realigned. Um, you're doing what's right for your patients and for your employers and everybody involved and doing good for the community,
Seth Cohen (44:32):
Annie, what would you add to that? What do you see as the big patient innovation on the horizon?
Annie Lamont (44:37):
Well, I think it, it is all about site of care and home care and virtualization or the movement. You know, we have things all the way from investments in companies, a dispatch, uh, which is essentially a hospital in a home. Um, it's going to be advanced care, uh, advanced medical care from a car. So they've literally outfitted cars and have contracts with payers all over America. Uh, and we're seeing them in Connecticut and we're seeing them everywhere. And we're so excited because they figured out a model to provide really, you know, sort of acute and advanced care from a car and, and minimizing, uh, trips to the ER, uh, which is brilliant in my mind. Um, and then just home care in general. I mean, if somebody said to me, Oh gosh, you know, I mean, obviously if you look at the haves and have nots during COVID, you know, technology was an issue and there was an equity issue in terms of who had access and who had wifi, who had broadband.
Annie Lamont (45:34):
And I actually think technology is the great equalizer in healthcare, because if you look at systems at risk, I mean, if you look at Medicaid where they're at risk for individuals, you look at the dual eligible programs. The reality is those programs can now and are now with number of our companies like Vesta and CareBridge, we are putting remote patient monitoring. We can afford to put patient remote patient monitoring in the home. So that instead when you push the button and instead of going to 911 with only one option to go to the hospital, like all of a sudden it goes to dispatch, or, you know, it goes to a care supervisor, nurse supervisor at say a $15 or $10 an hour caregiver who can ask what's the issue? No, you don't need to go to the hospital or we'll get you somebody to your home. Um, and so you can really provide a, a great environment at much less cost than the seriously ill patients are costing the system. And it's just a much better experience for them. And, uh, and obviously saves the system a lot of money. So we are all about home care and virtualization and enablement.
Seth Cohen (46:40):
Yeah, that's great. And so very similar theme. It's interesting. A lot of the companies you just referenced, Annie are doing this kind of outside of a hospital construct, or kind of, uh, sometimes in competition with it, David, you're working within a system that has that hospital construct, and you're evolving it, um, to handle this more complex cases. So it's fascinating to kind of see that evolution. Um, so, you know, I want to make sure that we're keeping close track of the time, and I'll probably wrap up with this question, um, which is the role of the payer. Um, and, and by payer, I mean, both the health plan and the employer know Highmark has a health plan works with many large ASOs. We've talked about virtualization of care, different sites of setting payment models of capitation, where a lot of the risks might go to primary care doctors. So then what is the role of the payer ASO/ health plan in that world?
David Holmberg (47:30):
Well, I think the role of the payers is, I mean, there's a lot of different pieces and parts. I mean, in the case of an ASO, obviously, you know, I mean, um, you know, we handle all the transactions, the back office, how, you know, how things flow through. Uh, I think this year almost $30 billion has flowed through our system, uh, and you know, and has been used to pay for care all across the country. And so I think there's always going to be a need for that because I, as we've seen even really large companies struggle, uh, with interacting in the healthcare systems. Uh, and I mean, we've seen, uh, large companies who have tried to go it alone and figure out their own approach and that hasn't worked. And part of that reason is because, um, you know, they can't get through the last mile and, you know, and what I mean by that is, you know, the, you know, in that last mile, you have the physician engagement and you have the patient engagement and you've got to change behavior.
David Holmberg (48:32):
And I think that's where, um, like the Highmark, uh, and, and having a integrated, or a blended model like we do with the Allegheny health network, uh, puts us in a unique place where we add value to, uh, employers. Uh, that's a little different than just aggregating risk and paying claims cause the future for all payers, uh, is to move from just aggregating risk and paying claims and being, uh, a partner in how care is delivered, uh, incentivizing the right care, uh, and doing it in the right ways. And so, um, you know, we no longer can be across the table from people as I described with Christiana, we're now on the same side with Christiana, um, and you know, being the second largest integrated health system in the country behind Kaiser, you know, uh, between Highmark and the Allegheny health network, we're full at risk. I mean, if we deliver the outcomes, uh, we win. If we, if we keep people out of that acute setting, then the hospitals, um, and you know, and we deliver better value than large corporations ASOs, um, will, you know, will seek us out. Uh, and that's our objective.
Seth Cohen (49:44):
No, I mean, is it fair to say that in some ways the health plan and your system is evolving from managing risk to managing information too? And I think about like the work you're doing with Google and the Google cloud, being more of a data company and leveraging the data that you have to drive these experiences.
David Holmberg (49:59):
Absolutely. Seth, I mean, it's where it's, you know, we sort of started this conversation is, you know, a curated health experience means we give you the tools to be able to make good choices and it's up to you. But we also give, uh, we take that data and more importantly, the insights that we're developing with Google, you know, the insights that we can bring to the table that also, um, enable you and your clinicians to be proactive. And that's how we're going to avoid some of the, know some of the really difficult things that we see. We have a country that, um, is a wash in chronic disease. And, you know, and if we, if we want to change how healthcare is delivered and the cost of healthcare, you know, we've got to, um, you know, bend the curve around chronic disease.
Seth Cohen (50:47):
Okay. Annie, I'll turn it over to you for any concluding thoughts? I'll just say that, you know, for us, at OODA, we founded the company because we felt that it was imperative now for payers and providers to work together on behalf of the patient and work for the patient versus putting the patient in between two organizations or entities that were just fighting with each other uncoordinated. So to hear you talk about the work that you're doing and the evolution you've taken is so energizing for us because that's truly the mission of what we built. Um, so with that, Annie, I'll leave it to you. Any final thoughts you wanted to share on the role of the payer?
Annie Lamont (51:17):
No, I, I agree with everything David said, and, you know, and we seeded it and worked with Seth and Giovanni, it really was about this, this integrated view and the reality that the consumer was losing out. Uh, and the only way to actually create a better member experience for a payer, uh, and for the consumer was to have the payer ultimately responsible for the lifeline of that bill, right? Because you, you go to many different, maybe touching many different providers that may be in different systems and the patient has no idea actually what, you know, what their real bill is and what they owe. And I have heard so many people from payers and providers say, Oh, I wait nine months before I pay anything, because I have no idea, you know, like what do I actually owe? Um, and so, you know, what is interesting to me is it ended up being about the member experience at the end of the day. And the only entity that has the longitude relationship with the member is the payer. So that's where, you know, it has to reside. They are a very important part of your system.
Seth Cohen (52:28):
Thank you. I think that's a great place to end it. Um, David, Annie, thank you so much for taking the time to participate in this and for your support and evangelism of all this great innovation out there was really a pleasure. Thank you both. We appreciate the opportunity.
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