In December of 2019, Stellar Health hosted their 2nd Annual Board of Advisors Summit centered around policy updates, Stellar’s product road map, company growth plans as well as healthcare policy changes, and industry trends. During the Summit, Stellar asked five of our esteemed Board of Advisors to join Stellar CEO, Michael Meng on a panel discussing their healthcare market trend predictions for 2020. In this podcast, the diverse expert panel makes various healthcare predictions, including, the impact of private equity acquisitions on provider groups, big tech’s potential for disruption, the paradigm of price transparency, and many more.
General Introduction and Panel Announcement from CEO of Stellar Health, Michael Meng (START-3:08)
· Dr. Soujanya (Chinni) Pulluru, a family medicine physician and healthcare executive who served as Medical Director for DuPage Medical Group for 14+ years.
· Jonathan Blum, a senior healthcare professional with 20+ years of experience working in public and private healthcare financing organizations, including CareFirst BCBS and the Centers for Medicare and Medicaid Services (CMS) during the Obama Administration.
· Tanya Shah, Vice President in the Delivery System Reform Program, responsible for the high-need, high-cost population portfolio at the Commonwealth Fund.
· Dr. Marcus Zachary, a physician executive specializing in population health and current Chief Medical Officer for Babylon Health United States.
· Ben Kraus, Co-Founder and President of Stellar Health who once ran the largest MSSP ACO in the country.
The Trend and Impact of Private Equity Involvement in Healthcare (3:08–9:00)
· Dr. Pulluru believes that private equity in the market has had a positive impact on provider groups. Provider groups now have the capital to grow and build a sophisticated infrastructure.
· Provider groups can preserve their secret to success with private equity firms through the alignment of long term goals and the same time horizon.
· Dr. Zachary thinks that private equity gives practices the increased capital that leads to investment in technology, which allows for greater analytical capabilities.
The Key Differences Between Employed and Independent Providers (9:00–12:27)
· Dr. Zachary speaks on how performance is generally better for employed practices because they have the capability to capture data. They have more money to invest in an infrastructure that focuses on practice transformation and delegation of tasks.
· Jonathan sees increased engagement from payors with independent providers, and less with employed doctors.
· If independent providers have a uniform electronic medical record (‘EMR’), the care delivery in a practice can be great. But, ultimately, Dr. Pulluru sees that employed groups take more risk and that is what really gets providers engaged and where the innovation truly starts.
Value-Based Care Delivery (12:27–17:17)
· Jonathan’s view is that there needs to be better quality metrics for specialties outside of the primary care space. Until the standard of quality is set for specialty practices, the primary care provider will continue to be first in the value-based care (‘VBC’) world.
· Tanya talks about how there’s fewer dollars in Medicaid but also touches on the strict state regulations around the work that can be done here. Value-based care will be different for Managed Medicaid because of how unique the population and driving cost is.
· Tanya and Jonathan believe that the social determinants of health need to be integrated into care for VBC to be successful in a Managed Medicaid market. Physician engagement will be like the success value-based care has seen in Medicare Advantage, but the funding mechanism would differ.
M&A Healthcare Prediction for 2020 (17:17–20:31)
· “Large insurance companies will start to snatch up primary care provider practices,” says Dr. Zachary. Ben agrees and thinks that big companies are willing to take a bet on primary care providers as a risk sharing entity.
· Tanya feels we need to continue to work towards a unified patient goal, but primary care will look different in the future (e.g. venture capital investment in telehealth).
Medicare Advantage for All — Could this Happen in the US? (20:31–27:25)
· Since the system is so fragmented based on geography, Jonathan thinks it is possible with the right policy framework. Right now, CMS only views it from a national perspective but for this to happen, the policy needs to shift to accommodate all Medicare Advantage programs across all states in the US.
· Ben looks at this from two standpoints, universal coverage and managed care. The debate should be separate. Managed care can work in Dr. Zachary’s eyes. He thinks if the delivery system takes more risk, there will be better health outcomes associated with lower costs of care.
· Chinni and Tanya tend to agree but also think it should be shaped by the needs of the population at hand. We truly don’t know if Managed Medicaid is working because the states hold the data.
Big Tech and Silicon Valley — The Impact on the Healthcare Industry (27:25–33:48)
· Big tech has dominated in other industries, yet they have failed to gain market share at the same pace in health care products or services. Healthcare can be prime distribution for it, so what is the delay?
· Tanya, coming from a policy background, jumps in to answer prior to Dr. Zachary who is coming from Babylon Health, a growing health tech company. No one in the industry knows what is best but the patient so it should be a priority to help them become more informed consumers.
· Dr. Zachary thinks big tech has not yet impacted the healthcare system in a meaningful way. We need to give the consumer more information on their health.
· Ben points to a South African company that gives you a ‘vitality score’ that is impacted by the decisions you make. The higher the score, the lower your health insurance is. If patients are incentivized, they are less inclined to make poor health decisions.
Healthcare and Interoperability (33:48–45:09)
· Chinni touches on how providers are so busy all the time and just need the right information at the right moment. Interoperability has become a huge barrier with providers and their ability to deliver high value care.
· Interoperability hasn’t been influential in healthcare, but why is that? Jonathan believes that consumers still want that face-to-face interaction with their providers.
· Dr. Zachary has seen EMRs like EPIC halt the innovation of technology in healthcare, but since the market incentivized it, it was adapted across the board. Chinni and Ben also added that incentivization of interoperability has not happened yet.
· Policy needs to be more demanding in pushing interoperability in healthcare. Ben and Tanya talk about how no one wants to share their data and it’s up to the regulatory body to fix this in healthcare. Health data is everyone’s ‘secret sauce’ and in order to see change in the system, organizations need to get past this.
The Empowerment of Patient Data (45:09–49:08)
· We can empower patients to seek their data. Chinni believes if a patient knows more, it allows the provider to do a better job. The provider spends less time in a visit covering the basic information, if the patient is more involved and understands their health.
· Dr. Zachary talks about how information empowers patients to make the best decisions about their health. “The medical record is yours and you should be able to choose who you can share it with,” Tanya states.
The Tension Between Payors and Providers (49:08–53:09)
· Jonathan talks about how payors and providers believe they both know the patient best, causing tension between the two. We need to shift from fighting about ownership of care management and focus on better health outcomes.
· Tanya focuses on the lack of synergy in the market, the payor sits on all the data and the whole ecosystem but there’s no feedback loop to providers. There needs to be a shift to a more formalized partnership on a joint care model.
Price Transparency of Payors (53:09–1:01:06)
· Dr. Zachary believes that the push for payor price transparency is positive and can allow the consumer to make a more informed health care choice. Higher prices for insurance lead you down a path of better quality of care, which is a flaw in the current system.
· Jonathan thinks in order to have price transparency to lower costs you need to have ‘true’ market competition. Right now, most healthcare markets in the US don’t have ‘true’ competition allowing them to charge what they want.
· Payor vs. provider responsibility in risk stratification — how much resides with the payor? Tanya and Marcus give their thoughts on the current system.
Private vs. Public Sector Work in Healthcare (1:01:06–1:03:05)
· Jonathan describes his time in both the private and public sector in healthcare. He believes the decision making process is the biggest difference between the two.
Interesting Emerging Health Tech in 2020 (1:03:05–1:05:56)
· Chinni is really interested in the healthcare tech startups that function in EMRs to automate care (e.g. physician orders and refills can be replicated and automated easily).
· Patient activation is the missing piece of the puzzle. Tanya focuses on health tech startups that are gamifying patient activation.
· The most important factor in changing the current healthcare system is bridging the gap between clinical and social care.
Closing Remarks and Thank You to the Panel from CEO of Stellar Health, Michael Meng (1:05:56-END)