veeva systems
24 videos
Spencer's Guide To LinkedIn In 2025
Self-Funded
@SelfFunded
Jan 2, 2025
This video provides an in-depth exploration of building an effective LinkedIn presence for sales professionals and career advancement, particularly within the healthcare industry. The speaker, Spencer, shares his personal journey from an anonymous insurance representative to a recognized industry authority through consistent social media content creation. He emphasizes that anyone, regardless of their starting point or industry experience, can leverage platforms like LinkedIn to establish credibility, generate leads, and foster professional relationships. The presentation is structured as a practical guide, moving from foundational steps to more advanced strategies, while also addressing common fears and pitfalls that hinder individuals from starting their content creation journey. Spencer's approach is highly practical and empathetic, acknowledging the initial apprehension many feel about public posting. He outlines a stair-step method, starting with low-barrier-to-entry activities like commenting on others' posts, and gradually progressing to creating original written content, incorporating visuals, and eventually producing video or podcast appearances. A core theme is the importance of authenticity and sharing personal stories to build trust and relatability, which he argues is crucial for doing business in today's environment. He also champions the concept of "exponential awareness," where a single piece of content can generate perpetual value and reach a far wider audience than traditional cold outreach methods. The video details specific strategies for maximizing LinkedIn's potential, such as using compelling visuals to stop scrolling, leveraging guest appearances on podcasts to gain exposure, and strategically engaging with industry leaders. Spencer shares several compelling anecdotes, including how his first video on a niche subject (stop loss insurance) trended in the top 1% on LinkedIn, and a personal story about a high ER bill that became his most viral post, leading to new connections and solutions. He also recounts a direct sales success story where a client was pre-sold on his expertise simply because they recognized him from his podcast, highlighting the immense power of established credibility. The speaker concludes by stressing the importance of consistency and resilience, cautioning against the common mistakes of over-investing in equipment, striving for unattainable perfection, or giving up too soon due to a lack of immediate engagement. Key Takeaways: * **Start Small and Overcome Fear:** Many professionals hesitate to start social media content creation due to fear. Begin with low-barrier activities like commenting on other people's posts to build confidence and gradually escalate to more involved content. * **Optimize Your LinkedIn Profile:** Ensure your LinkedIn profile is complete with a professional picture, a detailed "About Me" section, and an updated resume. This forms the foundational hub for your online professional presence. * **Strategic Commenting for Network Expansion:** Actively comment on posts from respected industry figures or target prospects. Provide genuine value, perspective, or opinion to establish yourself as a credible authority and expand your reach into their networks. * **Consistent Content Creation:** Aim to write at least one post or article per week on topics you are knowledgeable about. This consistent cadence helps establish your expertise and keeps your audience engaged. * **Utilize Visuals to Enhance Engagement:** Always include a visual element (picture, graphic, or short video) with your posts. Visuals are crucial for stopping users from scrolling and drawing them into your written content. * **Leverage Guest Appearances on Podcasts:** Seek opportunities to be a guest on industry-relevant podcasts. This allows you to showcase your expertise without the burden of production, providing shareable content and expanding your reach. * **Embrace Personal Storytelling:** Share relatable personal stories, experiences, or insights (within your comfort level) to build trust and rapport. People connect with authentic human experiences, which can significantly enhance your professional relationships. * **Avoid Perfectionism and Over-Investment:** Do not delay content creation by striving for perfection or investing heavily in expensive equipment. Your smartphone and basic accessories (like a tripod and ring light) are sufficient to start; imperfections make content more relatable. * **Prioritize Consistency Over Immediate Results:** Building an audience and achieving impact takes time. Do not give up too soon if initial posts don't gain traction; consistency over months and years is key to long-term success. * **Exponential Awareness for Sales:** Social media content creates "exponential awareness," allowing a single effort (e.g., one video) to reach thousands and generate perpetual benefit, significantly amplifying your sales efforts compared to one-to-one cold outreach. * **Content Builds Credibility and Trust:** A strong online presence establishes credibility before you even meet a prospect, making them more receptive to your message and significantly shortening the sales cycle. * **Learn from Industry Leaders:** Follow and observe successful content creators in your industry. Analyze their styles, topics, and engagement strategies to inform your own approach without needing formal coaching. **Tools/Resources Mentioned:** * **iPhone:** Recommended as the primary device for video and content creation, negating the need for expensive cameras. * **Amazon:** Suggested source for affordable tripods and ring lights. * **Nathaniel:** An editor mentioned as a resource for video editing. * **Goodbill:** A company mentioned in Spencer's personal story that helped lower his medical bill. **Key Concepts:** * **Exponential Awareness:** The idea that a single piece of content, once published, can continuously reach a vast audience over time with minimal ongoing effort, generating leads and building authority far beyond one-to-one outreach. * **Self-Selecting into Your Ecosystem:** When prospects discover your content and proactively engage with you, signaling their interest and effectively "opting in" to learn more about what you offer, leading to warmer leads. **Examples/Case Studies:** * **First Viral Video:** Spencer's initial video on the niche subject of "stop loss and insurance," created with an iPhone and no prior experience, trended three times in the top 1% of all LinkedIn content, demonstrating that niche topics can find an audience. * **$4,200 ER Bill Post:** A personal story shared by Spencer about receiving a large, unexpected bill for his son's urgent care visit, accompanied by a picture of him and his son. This post became his most viral, generating significant engagement, new connections, and even leading to a service (Goodbill) that helped reduce the bill. * **Kansas City Broker Sales Conversion:** A direct sales example where a young producer in a meeting recognized Spencer from his podcast, immediately establishing credibility. This rapport led to a contract being signed with the agency before Spencer even returned home, illustrating the power of a pre-established reputation.
Doctors Can't Own Hospitals... Why the Stark Law Is a Joke.
AHealthcareZ - Healthcare Finance Explained
@ahealthcarez
Jan 12, 2025
This video provides an in-depth exploration of the Stark Law, a federal regulation designed to prevent physician self-referral, and argues that its original intent has been largely undermined by various loopholes and compensation structures. Dr. Eric Bricker, the speaker, begins by outlining the Stark Law's 1989 origins, which prohibited doctors receiving Medicare funds from referring patients to medical facilities they own. The law's primary motivations were to prevent "cherry-picking" (treating only high-paying commercial insurance patients), "lemon-dropping" (avoiding complex or less lucrative patients), and "overutilization" (ordering excessive and unnecessary tests or procedures, thereby increasing healthcare costs). The Affordable Care Act (ACA) further solidified these restrictions by closing a loophole, allowing only grandfathered physician-owned hospitals to continue operating. Despite its noble intentions, Dr. Bricker contends that the Stark Law is effectively a "joke" due to widespread circumvention. He details three primary mechanisms: first, "Safe Harbors" that permit surgeons and proceduralists (like gastroenterologists) to self-refer to ambulatory surgery centers (ASCs) they own. Second, the existence of joint venture hospitals where physicians hold minority ownership stakes, creating similar financial incentives for self-referral, cherry-picking, and overutilization. Third, and most prominently, the prevalent RVU-based (Relative Value Unit) compensation system for physicians employed by hospitals, which essentially pays doctors on commission. This structure directly links physician pay to the volume of services they perform and order, creating the very financial biases the Stark Law was designed to prevent. The speaker shifts the focus from the debate over who owns hospitals (doctors versus administrators) to a more fundamental question: "Does whoever is running the hospital put the patient first?" He argues that both doctors and administrators are equally capable of prioritizing or neglecting patient interests. The core issue, according to Dr. Bricker, is not the ownership structure but the pervasive financial misalignment within the healthcare system, which he characterizes as a "human battle for money and power." He criticizes the common "no margin, no mission" mantra, proposing instead "no mission, no dice" – meaning if patient care isn't prioritized, the entity shouldn't participate in healthcare. To address this systemic problem, Dr. Bricker proposes two practical solutions centered on transparency. First, complete transparency in compensation incentives, not necessarily revealing exact salaries but clearly communicating *how* doctors and hospital administrators are paid, particularly the percentage of compensation tied to patient care. This information, he suggests, should be readily available on hospital websites. Second, transparent accountability for clinical policies. Drawing an analogy to the Sarbanes-Oxley Act, which requires CEOs to sign off on financial statements, he advocates for a system where specific individuals (including those at insurance companies like United and Optum) publicly sign off on clinical policies, making them personally liable and fostering more responsible decision-making. Key Takeaways: * **Stark Law's Original Intent:** The Stark Law, passed in 1989, aimed to prevent physician self-referral to facilities they own, thereby curbing practices like "cherry-picking" (only treating high-paying patients), "lemon-dropping" (avoiding difficult patients), and "overutilization" of tests and procedures. * **Widespread Circumvention:** Despite its intent, the Stark Law is routinely circumvented, rendering it largely ineffective in preventing financial biases in physician decision-making. * **Safe Harbors for ASCs:** A significant loophole, known as "Safe Harbors," allows surgeons and proceduralists (e.g., gastroenterologists) to legally own and self-refer patients to Ambulatory Surgery Centers (ASCs), directly contradicting the law's spirit. * **Joint Venture Hospitals:** Doctors can be minority owners in joint venture hospitals with larger hospital systems, creating similar financial incentives for self-referral and potentially excessive care, even if they don't hold majority ownership. * **RVU-Based Compensation:** The most prominent circumvention is the RVU-based compensation model for employed physicians, which pays doctors more for performing more services, essentially functioning as a commission system that incentivizes overutilization. * **Financial Misalignment is the Core Issue:** The speaker argues that the debate over whether doctors or administrators own hospitals is a distraction; the real problem is the inherent financial misalignment that exists regardless of ownership structure. * **Prioritizing the Patient:** The fundamental question should be whether the individuals or entities in charge of healthcare delivery prioritize the patient's well-being above financial gain. * **Transparency in Compensation:** A crucial solution involves making compensation incentives completely transparent, publicly detailing *how* doctors and hospital administrators are paid, especially the percentage linked to patient care outcomes or volume. * **Transparency in Accountability for Clinical Policies:** Clinical decisions and policies made at hospitals and even insurance companies should have specific individuals publicly sign off on them, similar to Sarbanes-Oxley requirements for financial statements. * **Sarbanes-Oxley as a Model:** The Sarbanes-Oxley Act's principle of personal liability for financial statements could be adapted to clinical policies, ensuring that those making critical healthcare decisions are publicly accountable. * **"No Mission, No Dice" Philosophy:** The speaker advocates for replacing the "no margin, no mission" adage with "no mission, no dice," emphasizing that if patient care is not the primary mission, an organization should not be allowed to participate in healthcare. * **Broad Applicability:** These transparency and accountability principles should apply to all healthcare entities, including large hospital corporations (e.g., HCA, Tenet), and health insurance companies (e.g., United, Optum) that employ physicians or own healthcare facilities. * **Underlying Power Struggle:** The speaker views the current healthcare landscape as an ongoing "human battle for money and power," where whoever controls the finances ultimately dictates the rules.
Episode 6: Data Managers: Driving the Future of Clinical Research
Veeva Systems Inc
/@VeevaSystems
Dec 2, 2022
This video directly addresses the evolving landscape of clinical data management within the pharmaceutical industry, the strategic importance of data, and the increasing role of advanced technologies like AI/ML. This video explores the transformative journey of clinical data management, highlighting its shift from a back-office function to a strategic imperative driving the future of clinical research. Richard Young and Mayank Anand discuss how data professionals' roles are evolving in an era of decentralized data, emphasizing the critical need for data to optimize trial protocols, operations, and patient access to treatments. The conversation delves into GSK's innovative approach to data strategy and management, which integrates various data functions and prioritizes an enterprise mindset, stakeholder collaboration, and patient-centricity. A key theme is the operationalization of AI/ML in clinical research, moving beyond buzzwords to real-world applications, while also considering ethical implications and the need for continuous professional evolution. Key Takeaways: * **Strategic Elevation of Data Management:** Clinical data management is no longer a secondary function but is now "front and center" in optimizing clinical trials, requiring professionals to drive the future of research rather than just support it. * **AI/ML as an Operational Reality:** AI and Machine Learning are no longer just buzzwords but are becoming integral to clinical data management, offering significant opportunities for efficiency and transformation, necessitating discussions around ethical AI and regulatory alignment. * **Integrated Data Strategy for End-to-End Oversight:** Leading pharmaceutical companies like GSK are adopting a holistic "Data Strategy and Management" approach, consolidating functions such as data acquisition, medical coding, core data management, centralized monitoring, and data analytics to ensure comprehensive and strategic data oversight. * **Enterprise Mindset and Collaborative Innovation:** Successful data transformation requires an "enterprise mindset" that considers all stakeholders (clinical operations, biostats, pharmacovigilance, etc.) and fosters collective ownership, utilizing agile methodologies to accelerate delivery and manage complex interdependencies. * **"Total Experience" for Adoption and Impact:** Designing new technologies and processes with "Total Experience" (TX) in mind—encompassing change management, communication, and the impact on all end-users, including patients and investigators—is crucial for successful adoption and achieving desired outcomes. * **Evolving Role of Data Professionals:** The traditional "data manager" role is transforming into future-oriented positions like "data scientist" or "data engineer," emphasizing continuous learning and adaptation to new technologies, rather than fearing job displacement by AI. * **Challenges in Infrastructure and Data Democratization:** Significant industry challenges persist in modernizing legacy infrastructure and achieving broader data democratization, highlighting areas for future innovation and collaborative efforts to unlock the full potential of clinical data.
The Tokio-Marine HCC 2025 Stop-Loss Report: 5 Key Takeaways
Self-Funded
@SelfFunded
Aug 15, 2025
This video provides an in-depth exploration of the Tokio Marine HCC 2025 Stop-Loss Report, breaking down five key takeaways that illuminate the current hardening market for stop-loss insurance. The speaker, a self-proclaimed "stop-loss geek," aims to equip listeners with critical knowledge to navigate projected medical cost increases of 9-10% in 2025 and increasingly challenging renewals. The analysis delves into the specific trends driving these shifts, offering a granular look at the frequency and severity of large claims, the surprising cost implications of COBRA claimants, the prevalence of policy "lasers," and the crucial concept of loss ratio maturity. The presentation systematically unpacks the report's findings, starting with diagnostic categories, differentiating between those most frequently leading to large claims (e.g., neoplasms/cancer, cardiovascular diseases) and those driving the highest severity costs (e.g., transplants, congenital anomalies, blood diseases like hemophilia). It then transitions to a striking analysis of large claims over time, revealing a dramatic increase in the frequency of multi-million dollar claims, which have necessitated a redefinition of what constitutes a "catastrophic" claim. The speaker attributes some of these trends to the impact of the Affordable Care Act (ACA), particularly the removal of lifetime and annual maximums, and the rise of expensive treatments like gene therapies. Further insights are provided on the financial burden posed by COBRA claimants, who are shown to be significantly more likely to incur large claims than active employees, prompting a discussion on potential solutions for employers. The video also clarifies the concept of loss ratio maturity, explaining how a policy's loss ratio at different points in its term can predict its final outcome, which is highly relevant for renewal negotiations. Finally, the analysis covers the frequency of "lasers" (specific deductibles for named individuals) on stop-loss policies, comparing market averages with Tokio Marine's own practices and discussing the influence of "no new laser" provisions and captive insurance models. The overarching message is that the market is experiencing a significant rebound and hardening, partly due to underwriters misinterpreting the post-COVID cost plateau as normal rather than a unique event, leading to artificially suppressed rates that are now correcting sharply. Key Takeaways: * **Hardening Stop-Loss Market:** The stop-loss market is experiencing significant hardening, with renewals becoming tougher due to projected medical cost increases of 9-10% in 2025, a trend expected to continue for several years. * **Dramatic Increase in Large Claims:** Claims exceeding $2 million are now 1,250% more frequent than in 2013, while $500,000 claims are up 250%. This necessitates a redefinition of "catastrophic" claims, with $1 million no longer considered exceptionally large and $2 million becoming the new benchmark. * **Key Diagnostic Cost Drivers (Frequency):** Neoplasms and cancer consistently rank as the most frequent large claim categories, followed by cardiovascular, musculoskeletal, and digestive diseases. Nervous system diseases (e.g., Multiple Sclerosis, with expensive medications) have recently moved into the top five. * **Key Diagnostic Cost Drivers (Severity):** Transplants remain the most expensive category, with congenital anomalies (e.g., malformations, premature babies in NICU) and blood diseases (e.g., hemophilia, often requiring costly gene therapies or ongoing medication) also being major drivers of severe costs. * **Impact of Medical Advances:** Advances in medical technology, particularly gene therapies, are significant contributors to the rising cost and duration of large claims, as they often involve ongoing, expensive treatments rather than cures. * **High Cost of COBRA Claimants:** Individuals electing COBRA are substantially more expensive on average than active employees. They are 13.5 times more likely to have a $200,000 claim, 14.1 times more likely for a $500,000 claim, and 15.5 times more likely for a $1 million claim, highlighting a significant risk for plan sponsors. * **Employer Solutions for COBRA:** Employers should consider offering solutions or guidance to COBRA-eligible members to explore open market options. This can help mitigate the significant financial risk associated with retaining high-cost claimants on the employer's plan. * **Loss Ratio Maturity for Renewals:** Understanding loss ratio maturity is crucial for renewals. The further into a policy period (e.g., 9 months), the more predictable the final loss ratio becomes, allowing stop-loss carriers to price renewals more accurately and potentially less conservatively. * **Laser Frequency Trends:** On average, about one in four policies in the market has a "laser" (a specific deductible for a named individual), with an average of one laser per policy. However, carriers like Tokio Marine HCC demonstrate significantly lower laser frequency, suggesting better data, larger case sizes, or higher risk tolerance. * **Influence of "No New Laser" Provisions:** The growth of "no new laser" provisions and captive insurance models is likely contributing to a slight decrease in the overall number of policies that have lasers placed on them. * **Post-COVID Rebound Effect:** The current market hardening is exacerbated by stop-loss underwriters having viewed the cost plateau in 2021-2022 (due to COVID-related deferral of care) as normal credible experience rather than a unique event. This artificially suppressed rates, leading to a more severe "boomerang" effect now. * **Contributing Factors to Rising Costs:** Beyond medical inflation and large claims, other factors include supply and demand dynamics, lower Medicare reimbursements shifting costs to the commercial sector, and the post-COVID rebound in healthcare utilization. Key Concepts: * **Stop-Loss:** Insurance that protects self-funded employers from catastrophic claims. * **Laser:** A specific, higher deductible applied to one or more named individuals on a stop-loss policy, carving out their exposure. * **Loss Ratio Maturity:** The concept that a policy's loss ratio at different points in its term can predict its final loss ratio, with predictability increasing as the policy matures. * **Medical Inflation/Trend:** The rate at which healthcare costs are increasing over time. * **Leverage Trend:** The amplified impact of underlying medical trend on stop-loss costs, as stop-loss covers only the portion of claims above a certain deductible. * **ACA (Affordable Care Act):** Legislation that impacted healthcare coverage, including medical loss ratio (MLR) requirements and the removal of lifetime and annual maximums, contributing to changes in large claim frequency. Tools/Resources Mentioned: * Tokio Marine HCC 2025 Stop-Loss Report (linked in the video description) * Paro (speaker's partner)
Hospital Chargemaster Explained
AHealthcareZ - Healthcare Finance Explained
@ahealthcarez
Nov 10, 2024
This video provides an in-depth explanation of the hospital chargemaster, a critical yet often opaque component of healthcare finance. Dr. Eric Bricker, from AHealthcareZ, meticulously breaks down what the chargemaster is, how it functions within a hospital's revenue cycle, and highlights its profound inefficiencies and irrationalities. The presentation, drawing insights from billing expert Wendy Kennedy, aims to demystify the complex process of how hospitals bill for supplies, medications, and services, ultimately exposing a system that adds no value to patient care while creating immense administrative burden and financial distress. The video begins by defining the chargemaster as a comprehensive list or database of all billable items and services provided by a hospital, along with their associated prices, known as "billed charges." It then contextualizes the chargemaster within the hospital's "revenue cycle," which encompasses charge capture, bill generation (UB-04), submission to payers (Medicare, Medicaid, commercial insurance), and eventual payment. The chargemaster acts as the foundational database that translates captured services into the billable items. Dr. Bricker details the specific components of each entry in the chargemaster, including hospital-specific identifiers like department numbers and charge codes, a concise description (often abbreviated to 36 characters), standardized revenue codes from the American Hospital Association, CPT/HCPCS procedure codes, optional modifiers, and finally, the billed price. A central theme of the video is the monumental complexity and administrative waste generated by the billing process. Dr. Bricker emphasizes two primary issues. First, different payers (e.g., Medicare, Blue Cross, Cigna) accept varying combinations of revenue codes, CPT codes, and modifiers for the exact same procedure. Hospitals are not explicitly told which combinations are acceptable and must resort to a frustrating process of trial and error, leading to frequent denials and re-submissions. This lack of standardization and transparency forces hospitals to dedicate significant resources to coding and billing, a process that adds no clinical value. Second, the video exposes the utterly irrational nature of hospital pricing. Hospitals often employ "strategic pricing" consultants to set chargemaster prices, inflating charges for high-volume services to maximize revenue, even if it means lowering prices for less frequent procedures. This results in exorbitant markups on basic medical supplies and medications, with examples like Oxytocin (costing $0.02, billed at $264 – a 13,200x markup) and Propofol (costing $0.20, billed at $295 – a 1,540x markup). Dr. Bricker concludes with a passionate critique of the entire system, arguing that these practices are not only inefficient but also ethically questionable, potentially leading to severe financial hardship for patients. He highlights instances where patients' wages were garnished due to denied claims stemming from these arbitrary coding and pricing practices. The video serves as a powerful call for systemic change, advocating for a more rational and transparent approach to healthcare billing and pricing that prioritizes patient value over administrative complexity and profit maximization. Key Takeaways: * **Hospital Chargemaster Definition:** The chargemaster is a comprehensive database listing all hospital supplies, medications, and services, along with their associated "billed charges" to insurance companies, Medicare, or Medicaid, not the actual cost to the hospital. * **Role in Revenue Cycle:** It is integral to the hospital's revenue cycle, facilitating the translation of "charge capture" (all services and items provided to a patient) into the final bill (UB-04 form) sent to payers. * **Chargemaster Components:** Each entry includes a hospital-specific department number and charge code, a concise (often abbreviated) description, a standardized Revenue Code (from the American Hospital Association), a CPT/HCPCS procedure code, optional modifiers (e.g., for left/right side procedures), and the billed price. * **Payer-Specific Coding Complexity:** A major source of administrative waste is that different payers (Medicare, Medicaid, various commercial insurers) accept unique combinations of Revenue Codes, CPT codes, and modifiers. Hospitals are not given clear guidelines and must engage in a "trial and error" process, leading to frequent claim denials. * **Administrative Burden:** This lack of standardization and transparency forces hospitals to employ large billing departments to constantly adjust codes based on payer requirements, diverting resources that could otherwise be used for patient care. * **Irrational Pricing Practices:** Hospital prices on the chargemaster are often arbitrary and not tied to actual costs. Many hospitals hire consultants for "strategic pricing," where prices are inflated for high-volume services to maximize overall revenue, even if it means reducing prices for less common procedures. * **Exorbitant Markups:** Specific examples illustrate extreme markups, such as Oxytocin costing the hospital $0.02 but billed at $264 (a 13,200x markup), and Propofol costing $0.20 but billed at $295 (a 1,540x markup). Even with insurance discounts, these markups remain astronomically high. * **Impact on Patients:** Denied claims due to incorrect code combinations can result in patients being wrongly billed. The speaker warns against paying the "first bill" and advises patients to work with hospitals or navigation services to ensure claims are resubmitted correctly. * **Ethical Concerns and Legal Consequences:** The video highlights cases where patients' wages were garnished for bills stemming from these highly marked-up and often denied charges, raising serious ethical and legal concerns about the system's fairness. * **Lack of Transparency:** Insurance companies do not proactively inform hospitals about which code combinations they accept, forcing hospitals into a reactive, inefficient guessing game. * **Call for Systemic Change:** Dr. Bricker argues that the current system of irrational pricing and complex, non-standardized coding combinations adds no value to patient care and should not be allowed to persist. Key Concepts: * **Hospital Chargemaster:** A comprehensive list of all billable items and services provided by a hospital, including their prices. * **Revenue Cycle:** The entire process of how a hospital generates revenue, from patient admission and charge capture to billing, claims submission, and payment collection. * **Charge Capture:** The process of documenting and recording all services, supplies, and medications provided to a patient during their hospital stay. * **UB-04:** The standardized claim form used by hospitals to bill Medicare, Medicaid, and commercial insurance payers. * **Department Number:** A hospital-specific identifier for the department where a service was rendered. * **Charge Code:** A hospital-specific numeric code for a particular service or medication, acting as its unique identifier within that hospital. * **Revenue Code:** A standardized three or four-digit code, established by the American Hospital Association, that categorizes services for billing purposes (e.g., "ER level five visit"). * **CPT/HCPCS Code:** Standardized procedure codes used to describe medical, surgical, and diagnostic services performed by physicians and other healthcare providers. * **Modifiers:** Two-digit codes added to CPT/HCPCS codes to provide additional information about the service performed (e.g., indicating laterality like left or right). * **Billed Charges:** The prices listed on the chargemaster that hospitals submit to payers. * **Strategic Pricing:** A method used by hospitals, often with the help of consultants, to set chargemaster prices based on factors like patient volume and payer mix, rather than actual cost, to maximize revenue. Examples/Case Studies: * **Oxytocin Markup:** An intravenous medication used during labor and delivery, costing the hospital $0.02, was billed at $264, representing a 13,200x markup. * **Propofol Markup:** An IV medication used for sedation in the ICU, costing the hospital $0.20, was billed at $295, representing a 1,540x markup. * **Payer Denials:** The video illustrates how the same gallbladder surgery, when billed with identical Revenue and CPT code combinations, might be paid by Medicare, denied by Blue Cross (requiring a different combination), and then denied again by Cigna (requiring yet another unique combination). * **Wage Garnishment:** Mention of cases in Virginia and Tennessee where patients' wages were garnished due to unpaid hospital bills, often stemming from these highly marked-up and denied claims.
What An Intentional Company Culture Looks Like | with Rob Gelb
Self-Funded
@SelfFunded
Aug 1, 2025
This video provides an in-depth exploration of Vālenz Health®'s intentional company culture, as presented by CEO Rob Gelb during an office tour. The primary purpose of the discussion is to illustrate how a deeply ingrained culture, built on specific tenets and philosophies, drives innovation and success within a healthcare company dedicated to making healthcare "smarter, better, and faster." Gelb elaborates on the origins of the company's name, its evolving mission, and the core values that shape its operations, partnerships, and employee experience. The discussion delves into several key themes, beginning with the etymology of "Veilance" (Latin for strong, vigorous, and healthy) and how this concept permeates their brand promise to build strong partnerships and empower individuals in their healthcare journeys. Gelb explains how their mission statement, initially focused on optimizing cost, quality, and utilization, was refined to emphasize "high-value healthcare" and patient protection after a strategic acquisition. A significant portion of the video is dedicated to Vālenz Health®'s unique cultural tenets, such as encouraging "spilled milk" – a metaphor for celebrating learning from failures – and adopting a "yes, and" mindset, borrowed from improvisational comedy, to foster collaborative idea generation and trust among team members and partners. The progression of ideas moves from foundational identity to operational philosophy and leadership principles. Gelb highlights how language is intentionally used throughout their office design to communicate core values, such as breaking down "challenge" into "look, listen, enable" to drive change, and balancing "aspirational" dreams with "perspirational" execution. The conversation also covers the importance of fearlessness, embracing criticism as a gift, and building "player-led" teams where accountability is shared. The video culminates with a powerful affirmation of their innovative culture, evidenced by customer feedback collected in a word cloud where "innovative" was overwhelmingly the largest and most frequent descriptor, reinforcing that their cultural practices directly translate into how they are perceived by their clients. Key Takeaways: * **Intentional Culture as a Strategic Asset:** Vālenz Health® demonstrates how a meticulously crafted company culture, from its name's meaning to its office aesthetics, serves as a foundational pillar for its business strategy and market differentiation. This intentionality helps align employees, partners, and customers with the company's core values. * **Evolving Mission for Refined Focus:** The company's mission statement, initially broad, was strategically refined to "optimized utilization, high-value healthcare" and "protecting patients and helping employers." This highlights the importance of adapting a mission as the company grows and gains deeper market understanding, ensuring it remains relevant and impactful. * **"Smarter, Better, Faster Healthcare" as a Brand Promise:** Vālenz Health®'s brand promise emphasizes efficiency and effectiveness in healthcare delivery, with cost optimization being an implicit outcome rather than the sole focus. This positions them as a value-driven partner focused on holistic improvements. * **Embracing "Spilled Milk" for Learning and Growth:** A core cultural tenet is the encouragement and celebration of "spilled milk," meaning learning from failures. This fosters psychological safety, allowing employees at all levels to experiment, take risks, and grow without fear of punitive consequences. * **The "Yes, And" Mindset for Collaboration:** Inspired by improvisational comedy, the "yes, and" principle promotes additive thinking and collaborative storytelling within the company and with partners. This encourages building upon ideas rather than shutting them down, fostering innovation and stronger relationships. * **Language as a Cultural Driver:** Rob Gelb emphasizes the deliberate use of language and wordplay to instill company values, such as dissecting "challenge" to reveal "change" (Look, Listen, Enable) or balancing "aspirational" dreams with "perspirational" execution. This shows how words can be powerful tools for shaping mindset and behavior. * **Fearlessness and Limitlessness in Innovation:** The company promotes a culture of being "limitless" and "fearless," encouraging employees to dream big, be unafraid to fail, speak unpopular truths, and view criticism as a valuable gift. This mindset is crucial for continuous innovation and breaking new ground. * **Player-Led Teams for Enhanced Accountability:** Vālenz Health® aspires to be a "player-led" organization, where every team member understands their role, knows how to execute for success, and holds peers accountable. This decentralizes leadership and empowers individuals, leading to higher performance and ownership. * **Consistency Over Occasional Greatness:** The philosophy of striving to be "consistently good" rather than "occasionally great" underscores the importance of maintaining high standards and reducing performance variability. This leads to more reliable outcomes and builds trust with partners and customers. * **Customer-Validated Innovation as an Affirmation:** The video highlights how customer feedback, specifically a word cloud overwhelmingly featuring "innovative," serves as a powerful affirmation of their culture. This external validation reinforces that their internal practices of embracing failure and continuous learning translate into perceived innovation by their market. * **Focus on Unmet and Underserved Needs:** Vālenz Health® approaches potential clients not with a sales pitch, but with an invitation to discuss their "unmet and underserved needs" in healthcare. This problem-solving orientation positions them as a caring partner genuinely interested in finding solutions. Key Concepts: * **Vālenz (Veilance):** Latin for strong, vigorous, and healthy, reflecting the company's aspiration for its business, partnerships, and members. * **Spilled Milk:** A metaphor for learning from failures, encouraged as a vital part of growth and innovation. * **Yes, And:** A principle from improvisational comedy adopted to foster collaborative idea generation and build trust by accepting and expanding on others' contributions. * **Challenge = Change:** An internal philosophy where "challenge" is broken down into "Look, Listen, Enable" to facilitate meaningful transformation. * **Aspirational & Perspirational:** The balance between dreaming big (aspirational) and executing diligently (perspirational) to achieve goals. * **Player-Led Organization:** A team structure where individuals are empowered to understand their roles, execute, and hold each other accountable, rather than relying solely on top-down leadership. * **Unmet/Underserved Needs:** The core of Vālenz Health®'s problem-solving approach, focusing on identifying and addressing gaps in the healthcare industry.
Orthopedic Surgery--Major Changes in Hospital Care and Payment
AHealthcareZ - Healthcare Finance Explained
@ahealthcarez
Aug 13, 2022
This video provides an in-depth exploration of the dramatic and rapid shift in orthopedic surgery, specifically total knee and hip replacements, from traditional hospital inpatient settings to outpatient hospital departments and Ambulatory Surgery Centers (ASCs). Dr. Eric Bricker, from AHealthcareZ, meticulously details how this seismic change, occurring largely between 2017 and today, was primarily driven by changes in payment policy from the Centers for Medicare & Medicaid Services (CMS) and significantly accelerated by the COVID-19 pandemic. He emphasizes that clinical site-of-service decisions were dictated by payment rules rather than solely patient need, leading to profound financial implications across the healthcare ecosystem. The presentation begins by illustrating the historical context, where 100% of total knee replacements in 2017 were performed in an inpatient setting. Following CMS's removal of total knee replacements from its "Inpatient Only List" in 2018 (and total hip replacements in 2019), and the subsequent disruption caused by COVID-19, inpatient volumes plummeted. Today, only 25% of total knee replacements and 37% of total hip replacements occur in inpatient settings, with the vast majority now performed in hospital outpatient departments (39% knee, 40% hip) and ASCs (33% knee, 21% hip). This shift means patients often go home the same day, challenging the previous assumption that an overnight stay was clinically necessary for such procedures. Dr. Bricker then delves into the significant financial ramifications for various stakeholders. Employers benefit from lower facility fees at ASCs, which can be as much as $60,000 less per surgery compared to hospitals. Conversely, hospitals face substantial revenue losses as lucrative commercially insured patients, who represent the highest reimbursement rates, increasingly choose ASCs. This shift severely impacts hospitals' "payer mix," leaving them with a higher proportion of lower-reimbursing traditional Medicare patients for these procedures. The video highlights Tenet Healthcare's strategic pivot from a hospital-centric company to the largest operator of ASCs, with ASC revenue growing from 5% to 42% of its total revenue between 2015 and 2021, as a prime example of industry adaptation to this change. Finally, the analysis touches upon the stark difference in joint replacement rates between traditional Medicare and Medicare Advantage, attributing the significantly lower rates in Medicare Advantage to prior authorization requirements. Key Takeaways: * **Dramatic Site-of-Service Shift:** Total knee and hip replacements have rapidly moved from 100% inpatient in 2017 to a combined majority in outpatient hospital settings and Ambulatory Surgery Centers (ASCs) today. Inpatient volumes are now only 25% for knees and 37% for hips. * **Payment Drives Clinical Decisions:** The primary catalyst for this shift was CMS removing total knee (2018) and total hip (2019) replacements from its "Inpatient Only List," allowing Medicare to pay for these procedures in outpatient settings. This demonstrates how payment policy, not just clinical necessity, dictates care delivery models. * **COVID-19 as an Accelerator:** The pandemic further propelled this transition, as hospitals faced staffing shortages and infection concerns, leading orthopedic surgeons to move elective procedures to ASCs where scheduling was more reliable and risks of cancellation were lower. * **Significant Cost Savings for Employers:** ASCs offer substantially lower facility fees (often less than $15,000) compared to hospitals ($30,000-$75,000+), resulting in significant cost reductions for employer-sponsored health plans. * **Revenue Loss for Hospitals:** Hospitals are experiencing a substantial decline in revenue from these procedures, particularly losing the highly profitable commercially insured patient volume, which negatively impacts their overall "payer mix." * **Rise of Ambulatory Surgery Centers:** ASCs, both independent and hospital-owned, have seen massive growth. Tenet Healthcare's strategic shift to become a dominant ASC provider (310 centers, 42% of revenue from ASCs in 2021, up from 5% in 2015) exemplifies this industry trend. * **Payer Mix Deterioration for Hospitals:** Commercial insurance patients, who offer higher reimbursement, are disproportionately choosing ASCs (64-69% of ASC volume), leaving hospitals with a higher percentage of lower-reimbursing traditional Medicare patients (51-65% of hospital outpatient/inpatient volume). * **Impact of Medicare Advantage Prior Authorization:** Despite 45% of Medicare beneficiaries being enrolled in Medicare Advantage (MA) plans, MA patients undergo significantly fewer total knee and hip replacements compared to those with traditional Medicare, largely due to stringent prior authorization requirements. * **Implications for Medical Device Manufacturers:** Companies producing orthopedic implants and related devices must adapt their commercial strategies, sales force targeting, and market access approaches to effectively engage with and serve the growing ASC market. * **Future of Healthcare Change:** The impending removal of the "Inpatient Only List" for all surgical procedures by 2024 signals that similar shifts will occur across other surgical specialties, further accelerating the move to outpatient and ASC settings. * **Rapid Change is Possible:** The orthopedic surgery example demonstrates that while healthcare change is often perceived as slow, significant and rapid transformations can occur when changes in payment policy align with external catalysts like a pandemic. Tools/Resources Mentioned: * The Gist Newsletter * Stratasan (healthcare analytics firm) * Chartis (insights) * Healthcare Dive (news) Key Concepts: * **Inpatient Only List:** A list maintained by CMS specifying procedures that Medicare would only reimburse if performed in an inpatient hospital setting. * **Ambulatory Surgery Center (ASC):** A distinct entity that operates exclusively for the purpose of providing surgical services to patients not requiring hospitalization. * **Payer Mix:** The proportion of patients covered by different types of insurance (e.g., commercial, Medicare, Medicaid), which significantly impacts a healthcare provider's revenue. * **Prior Authorization:** A requirement from an insurance company that a healthcare provider obtain approval before providing a service or prescribing a medication to be covered by the plan. Examples/Case Studies: * **Tenet Healthcare's Strategic Shift:** One of the largest for-profit hospital systems, Tenet, has strategically pivoted to become the preeminent provider of ambulatory surgery center services for musculoskeletal care, with ASCs accounting for 42% of its revenue in 2021, up from 5% in 2015.
3 Secrets to Ochsner Hospital System Success
AHealthcareZ - Healthcare Finance Explained
@ahealthcarez
Jan 5, 2025
This video provides an in-depth exploration of Ochsner Health System's remarkable success in simultaneously lowering healthcare costs and improving patient care quality. Dr. Eric Bricker, the speaker, highlights Ochsner's strategic shift from a reactive, fee-for-service model to a proactive, value-based approach, driven by their unique payer mix in the Gulf South region. The core message revolves around three "secrets" that enabled Ochsner to save $56 million in one year for 500,000 patients, re-investing $45 million into provider bonuses, while achieving significantly better health outcomes for chronic conditions like diabetes and hypertension. The presentation details Ochsner's methodology, starting with a deliberate effort to reduce costly ER visits and inpatient hospitalizations by moving care into outpatient settings. This involved leveraging data and analytics to identify specific patient populations and pathologies, establishing strong primary care relationships for behavior modification and chronic disease management, and ensuring seamless outpatient care coordination. The second secret involves Ochsner taking on financial risk for the total cost of care for their patient population, effectively "owning" the entire care continuum. This allowed them to capture savings from reduced hospitalizations and increase their overall revenue by efficiently managing a larger patient panel in less expensive outpatient environments. The third and most impactful secret is Ochsner's success in actively decreasing pathology—preventing disease, suffering, and death. The video cites impressive statistics: 88% of diabetic patients achieved controlled A1c levels (compared to a national average of 50-60%), and 85% of hypertensive patients had controlled blood pressure (versus a national average of 20%). This proactive disease management directly led to fewer heart attacks and strokes, demonstrating that financial incentives can align with dramatic improvements in patient health. Dr. Bricker emphasizes that Ochsner's innovation was spurred by a necessity born from a predominantly Medicare and Medicaid patient base, which offers significantly lower reimbursement rates compared to commercial insurance, forcing them to find efficiencies that other systems, cushioned by high commercial reimbursements, often avoid. Key Takeaways: * **Strategic Shift to Outpatient Care:** Ochsner's first secret involves a deliberate strategy to decrease ER visits and inpatient hospitalizations by shifting care to proactive, outpatient settings. This includes using data and analytics to target specific populations and pathologies, strengthening primary care, and enhancing outpatient care coordination. * **Embracing Financial Risk for Total Care:** The second secret highlights Ochsner's willingness to take on financial risk for the entire patient population's care. This "total cost of care" model allows them to benefit financially from efficiencies and improved outcomes, contrasting sharply with the traditional fee-for-service model where revenue increases with more procedures and hospitalizations. * **Prioritizing Disease Prevention (Decreasing Pathology):** Ochsner's ultimate success stems from its focus on preventing disease rather than just treating it more efficiently. By improving the control of chronic conditions like diabetes and hypertension, they reduced the incidence of severe events like heart attacks and strokes, leading to better patient health and lower overall healthcare costs. * **Significant Cost Savings and Reinvestment:** Through these strategies, Ochsner achieved $56 million in cost savings in one year for 500,000 patients. A substantial portion ($45 million) was reinvested as bonuses for doctors and other healthcare providers, aligning financial incentives with quality and efficiency. * **Dramatic Improvement in Chronic Disease Management:** The system demonstrated exceptional clinical outcomes, with 88% of diabetic patients achieving controlled A1c levels (compared to a national average of 50-60%) and 85% of hypertensive patients having controlled blood pressure (versus a national average of 20%). * **Data and Analytics as a Foundation:** Ochsner utilized data and analytics to identify and target specific individuals and populations for proactive intervention, underscoring the critical role of data-driven insights in modern healthcare optimization. * **Payer Mix as an Innovation Catalyst:** The video posits that Ochsner's innovation was largely driven by its challenging payer mix, with a high proportion of lower-reimbursing Medicare and Medicaid patients. This financial pressure forced them to find new ways to deliver care efficiently, unlike systems reliant on high commercial insurance reimbursements. * **The "Peter Drucker" Principle in Healthcare:** The speaker invokes Peter Drucker's quote, "It is completely useless to do more efficiently what should not be done at all," to emphasize that true healthcare innovation lies in preventing pathology rather than just optimizing the treatment of existing diseases. * **Increased Revenue Through Efficiency:** By being more efficient and effective in outpatient care, Ochsner was able to care for a larger panel of patients, increasing its total revenue despite decreasing the cost per patient. This demonstrates that financial success can be achieved through improved health outcomes and expanded patient reach. * **Implications for the Broader Healthcare Ecosystem:** Ochsner's model challenges the status quo of many hospital systems that remain reactive due to the financial cushion of high commercial reimbursements. It suggests a path for aligning financial incentives with patient health outcomes, which has significant implications for how pharma, medical device, and other life sciences companies engage with healthcare providers. Key Concepts: * **Fee-for-Service:** A traditional payment model where providers are paid for each service they perform (e.g., office visit, test, procedure). * **Value-Based Care:** A payment model that rewards healthcare providers for the quality of care they provide, rather than the quantity of services. It often involves taking on financial risk for patient outcomes. * **Pathology:** The study of disease; in this context, refers to the presence and progression of disease. * **Hemoglobin A1c:** A blood test that measures a person's average blood sugar level over the past 2-3 months, used to monitor diabetes control. * **Hypertension Control:** Managing high blood pressure to keep it within healthy limits, crucial for preventing heart attacks and strokes. * **Medical Loss Ratio (MLR):** The percentage of premium revenue that an insurance company spends on medical care and quality improvement activities. Examples/Case Studies: * **Ochsner Health System:** A large health system in New Orleans, Louisiana, and across the Gulf South, with over 40 facilities, serving 500,000 patients. The video details their specific strategies and outcomes in transitioning to a value-based, proactive care model.
The Big 3: ANET, HSY, VEEV
Schwab Network
/@SchwabNetwork
Jul 24, 2025
This video from Schwab Network provides a market overview and detailed stock analysis for Arista Networks (ANET), Hershey's (HSY), and Veeva Systems (VEEV), including technical chart breakdowns and options trading strategies. The discussion on Veeva Systems highlights its recent strong performance and evolving market perception, particularly concerning its position within the AI landscape. Key Takeaways: * **Veeva's Emerging AI Perception:** The market is shifting its view of Veeva Systems, moving from previously considering it an "AI laggard" to now being "pulled up with the rest of these companies" in the AI space. This suggests growing recognition of Veeva's potential or role in artificial intelligence, which is highly pertinent for IntuitionLabs.ai's AI solutions and Veeva CRM consulting. * **Robust Market Performance:** Veeva Systems is identified as an "Outperformer year to date," demonstrating significant upside momentum driven by a "big gap up on a fundamental change" (earnings) and achieving new intraday highs. This positive market sentiment can influence client investment and confidence in Veeva-related technologies and services. * **Reinforcement of Cloud-Based Identity:** The analysis reiterates Veeva's core identity as a "cloud based software solutions company," which aligns with IntuitionLabs.ai's expertise in enterprise software and digital transformation within the pharmaceutical and life sciences industries. * **Technical Market Pulse on Veeva:** The detailed technical analysis, including specific breakout points (e.g., 241), current high resistance (around 291), and support levels (e.g., 281), offers insights into investor sentiment and market dynamics surrounding Veeva. While primarily for traders, this information provides a financial pulse on a key platform within IntuitionLabs.ai's ecosystem.
$5.8 Billion Healthcare Startup Teaches About Patient Engagement
AHealthcareZ - Healthcare Finance Explained
@ahealthcarez
Dec 29, 2024
This video provides an in-depth exploration of how Hims & Hers, a $5.8 billion direct-to-consumer (DTC) telemedicine company, has achieved massive success through innovative approaches to patient and employee engagement. Dr. Eric Bricker begins by highlighting Hims & Hers' impressive financial performance, including $402 million in quarterly revenue, $51 million in profit, and 2 million subscribing customers, emphasizing that their success stands out in a landscape of failing healthcare startups. The core of the presentation focuses on dissecting the unique strategies employed by Hims & Hers, founded by "healthcare outsider" Andrew Dudum, and extrapolating these lessons for traditional healthcare entities like Direct Primary Care (DPC) clinics and employer-sponsored health plans. The presentation delves into four key pillars of Hims & Hers' success, which align with the "Four Ps" of business: Product, Price, Placement, and Promotion. Firstly, the "Product" is highly differentiated, with completely separate websites and tailored offerings for men (Hims) and women (Hers), addressing specific health concerns like sexual function, hair growth, weight management, and mental health with targeted prescriptions and services. Secondly, their "Promotion" strategy is aggressive and data-driven, allocating 45% of revenue to marketing across diverse media channels, underscoring the critical role of communication in customer acquisition and engagement. Thirdly, "Placement" is optimized through a seamless internet-to-home-delivery experience, eliminating traditional healthcare friction points by integrating telehealth visits, online prescriptions, and discreet home delivery. Finally, "Price" is transparent and flexible, with upfront cash-pay options ranging from $15 to $115 per month, condition-specific pricing, and effective cross-selling strategies that encourage customers to explore additional services. Dr. Bricker then translates these DTC principles into actionable advice for DPC clinics and employer-sponsored health plans. He advocates for adopting gender-specific messaging and service offerings, significantly increasing marketing and communication budgets, prioritizing a seamless digital-first patient journey, and implementing flexible, transparent pricing models with opportunities for cross-selling. The video emphasizes that people want their health problems solved efficiently, not necessarily the traditional "experience of seeing a doctor," and that healthcare providers and benefit plans must adapt to consumer expectations shaped by successful DTC models. The overarching message is that by embracing these consumer-centric strategies, traditional healthcare can dramatically improve patient engagement and utilization of services. Key Takeaways: * **Tailored Product Offerings:** Hims & Hers demonstrates the power of gender-specific health offerings, with distinct websites and services for men (Hims) and women (Hers) that cater to their unique health priorities (e.g., sexual function and hair for men; weight and wellness for women). This highlights the need for personalized product-market fit in healthcare. * **Strategic Marketing Investment:** A significant portion of revenue (45%) is dedicated to marketing across numerous channels, emphasizing that robust communication and promotion are paramount for success and engagement, not just service quality. Traditional healthcare entities often underinvest in this area. * **Seamless Digital-First Experience:** Hims & Hers provides an end-to-end digital journey from telehealth consultation to online prescription fulfillment and discreet home delivery. This frictionless "internet-to-home" model prioritizes convenience and problem-solving over traditional, often cumbersome, healthcare processes. * **Transparent and Flexible Pricing:** The company operates on a cash-pay model with upfront, condition-specific pricing ranging from $15 to $115 per month. This transparency and variety of price points attract a broader customer base and simplify the financial aspect of care. * **Effective Cross-Selling and Upselling:** Hims & Hers excels at cross-selling additional services once a customer engages for an initial condition, demonstrating a successful strategy for expanding customer lifetime value and addressing multiple health needs. * **"Healthcare Outsider" Advantage:** The founder, Andrew Dudum, brought a fresh, non-traditional perspective to healthcare, focusing on consumer growth and scaling principles from other industries, which proved instrumental in the company's innovative approach. * **Focus on Problem Solving, Not Just "Doctor Visits":** Patients primarily seek solutions to their health problems, not necessarily the traditional experience of visiting a doctor. Healthcare providers should prioritize efficient problem resolution, leveraging telemedicine and digital tools. * **Lessons for Direct Primary Care (DPC):** DPC clinics should consider distinct messaging and service offerings for men and women, invest heavily in marketing to increase patient acquisition, enhance their telehealth experience, and offer condition-specific, lower-price entry points to attract new patients. * **Lessons for Employer-Sponsored Health Plans:** Benefit managers should treat their offerings as direct-to-consumer products, utilizing diverse marketing channels and segmented messaging to drive utilization of point solutions. A seamless member experience, free of "scavenger hunts," is crucial for engagement. * **The Four Ps of Business in Healthcare:** The success of Hims & Hers perfectly aligns with the fundamental business principles of Product (distinct offerings), Price (multiple points), Placement (seamless delivery), and Promotion (large budget), demonstrating their universal applicability even in regulated industries. Key Concepts: * **Direct-to-Consumer (DTC) Telemedicine:** A model where healthcare services and products are offered directly to patients online, bypassing traditional intermediaries like insurance companies or physical clinics. * **Patient Engagement:** The process of involving patients in their own healthcare decisions and encouraging active participation in managing their health, often facilitated by accessible, convenient, and personalized services. * **Cross-selling/Upselling:** Strategies to encourage customers to purchase additional, related products or services (cross-selling) or upgrade to a more expensive version of a product/service (upselling). * **Seamless Experience:** A user journey designed to be smooth, intuitive, and free of friction points, from initial contact to service delivery and follow-up.
CEOs Control $1.3 Trillion in Healthcare Spending for 165 Million Americans
AHealthcareZ - Healthcare Finance Explained
@ahealthcarez
Nov 2, 2025
This video provides an in-depth exploration of the profile and psychology of CEOs who control a significant portion of America's healthcare spending, specifically for employer-sponsored health plans. Dr. Eric Bricker, the speaker, begins by establishing the immense financial responsibility these CEOs bear, overseeing $1.3 trillion in healthcare spending for 165 million Americans. He highlights that while this responsibility is often acknowledged, the specific characteristics and motivations of these decision-makers are frequently overlooked. The presentation aims to equip viewers with a practical understanding of how to effectively engage and persuade CEOs to improve healthcare outcomes, emphasizing that understanding "who these people are" is crucial for driving change. The video then delves into a detailed demographic and psychological profile of the typical American CEO. Demographically, CEOs are predominantly male (80%), white (90%), college graduates (98%), with an average age of 51-52, and a significant portion (57%) play golf. Politically, a majority (55%) lean Republican based on donation patterns. Psychologically, using the Five Factor Model of Personality, CEOs score high on Openness (indicating they are risk-takers and open to new ideas), high on Conscientiousness (action-oriented, organized, and focused on getting things done), and high on Extroversion (outgoing). Conversely, they score low on Agreeableness (tending to be self-centered and less empathetic to others' problems) and low on Neuroticism (meaning they are generally unemotional and stable). Building on this profile, Dr. Bricker outlines a strategic approach to persuasion using the ancient Greek framework of Ethos, Pathos, and Logos. For Ethos (credibility), he suggests understanding and engaging with their interests, such as golf, and maintaining high enthusiasm, as extroverts dislike low-energy interactions. For Pathos (empathy), the advice is to appeal directly to their financial self-interest, demonstrating how healthcare improvements will save their business money and increase its valuation (e.g., through EBITDA multiples), and to consider the impact on their immediate family. Crucially, he warns against broad appeals to "fixing healthcare in America" or emotional stories of employee suffering, as these do not resonate with the typical CEO's low agreeableness. Finally, for Logos (logic), the recommendation is to present rational arguments backed by hard numbers and to paint a clear, positive vision for their company's future, leveraging their openness to new ideas and risk-taking nature. Key Takeaways: * **CEOs as Key Decision-Makers:** CEOs are ultimately responsible for the budgetary and policy decisions regarding employer-sponsored health plans, controlling $1.3 trillion in spending for 165 million Americans. Understanding their profile is essential for anyone seeking to improve healthcare within this segment. * **Demographic Profile of CEOs:** The typical CEO is 80% male, 51-52 years old, 90% white, 98% college-educated, 88% married, and 57% play golf. Politically, 55% tend to support Republicans. * **Personality Traits (Big Five Model):** CEOs exhibit high Openness (risk-takers, open to new ideas), high Conscientiousness (action-oriented, organized), high Extroversion (outgoing), low Agreeableness (self-centered, less empathetic), and low Neuroticism (unemotional). * **Ethos (Credibility) Strategy:** To build credibility, understand and engage with their interests, such as golf culture (even if not playing, be present in the milieu). Additionally, always project enthusiasm and high energy, as extroverted CEOs tend to dislike low-energy interactions. * **Pathos (Empathy) Strategy:** Appeal to the CEO's direct financial self-interest by clearly demonstrating how proposed healthcare changes will save their business money, improve profitability, and increase business valuation (e.g., through higher EBITDA multiples). * **Focus on Immediate Family:** CEOs often make decisions based on how health plan changes will impact their immediate family (spouse and children), which can be a more effective emotional appeal than broader concerns for employees. * **Avoid Generic Appeals:** Do not attempt to persuade CEOs with broad, emotional appeals about "fixing healthcare in America" or stories of general employee suffering, as their low agreeableness means these messages are unlikely to resonate. * **Logos (Logic) Strategy:** Present arguments with strong, rational evidence backed by hard numbers and data. CEOs are analytical and require concrete proof for any proposed changes. * **Paint a Vision for the Future:** Leverage their high openness and risk-taking nature by presenting a clear, positive vision for their company's future with the proposed changes, rather than focusing solely on current problems. * **Quantify Financial Impact:** Translate healthcare cost savings into direct impacts on business valuation. For example, a $3 million reduction in healthcare costs could increase a company's sale value by $15 million (based on a 5x EBITDA multiple). * **"Business is Show Business":** Maintain a professional and enthusiastic demeanor, even on challenging days, as this aligns with the extroverted nature of many CEOs. * **Strategic Networking:** Being present in environments where CEOs congregate, such as golf courses or charity events, can be a highly effective strategy for building relationships and generating leads. Tools/Resources Mentioned: * **Zippia.com:** Cited as a source for CEO demographic data. * **Wiley Online Library, NBER, Benefitspro.com, GAO, AEAweb, Verywellmind.com:** Various research and professional publications referenced for CEO data and personality traits. * **The Big Five Factor Model of Personality:** A psychological framework used to describe CEO personality traits (Openness, Conscientiousness, Extroversion, Agreeableness, Neuroticism). * **Ethos, Pathos, Logos:** An ancient Greek rhetorical framework for persuasion, applied to interacting with CEOs. * **John Torres, CEO of Saragraph:** Mentioned as a successful example of a CEO who kept health plan costs flat for nine years. * **"The Companies That Solved Healthcare":** A book written by John Torres. * **"16 Lessons in the Business of Healing":** A book by Dr. Eric Bricker. Key Concepts: * **Employer-Sponsored Health Plans:** Healthcare coverage provided by employers to their employees and dependents. * **Big Five Factor Model of Personality:** A widely accepted model describing five broad dimensions of personality: Openness to Experience, Conscientiousness, Extraversion, Agreeableness, and Neuroticism. * **Ethos, Pathos, Logos:** Three modes of persuasion identified by Aristotle: Ethos (appeal to credibility), Pathos (appeal to emotion), and Logos (appeal to logic). * **EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization):** A measure of a company's financial performance, often used in business valuation where a company's sale price is a multiple of its EBITDA. Examples/Case Studies: * **John Torres, CEO of Saragraph:** Successfully managed to keep his company's health plan costs flat for nine consecutive years, demonstrating effective leadership in healthcare cost management. * **Business Valuation Impact:** The video illustrates how a reduction in healthcare costs, such as $3 million, can significantly increase a company's overall valuation (e.g., by $15 million if the business is valued at a 5x EBITDA multiple), directly appealing to a CEO's financial self-interest.
Insurance Company Subsidiaries... Dozens of Companies Hidden within United, Cigna, CVS, Blue Cross
AHealthcareZ - Healthcare Finance Explained
@ahealthcarez
Sep 22, 2024
This video, presented by Dr. Eric Bricker of AHealthcareZ, offers a detailed exposé on the complex and often hidden subsidiary structures of the four largest health insurance carriers in the United States: United Health Group, The Cigna Group, CVS Health, and Elevance Health (the largest Blue Cross company). The primary purpose of the analysis is to demonstrate how these corporate behemoths, through their vast networks of owned companies, create an illusion of choice and competition within the healthcare market. Dr. Bricker contends that this extensive consolidation is largely a result of growth by acquisition, financed by cheap debt, rather than through the delivery of superior customer value in terms of better, faster, or cheaper services. The presentation systematically breaks down each major carrier, detailing its core insurance arm and numerous other ventures. For United Health Group, Dr. Bricker highlights United Healthcare, UMR (a TPA), and the expansive Optum, which itself includes OptumRx (a major Pharmacy Benefit Manager or PBM), Emisar (a Group Purchasing Organization or GPO for pharma payments), Optum Specialty Pharmacy, Change Healthcare (a critical electronic billing interface that recently suffered a ransomware attack), and Interqual (which sets standards for hospital bed days). United also owns consulting firms like The Advisory Board Company and large physician practices such as Kelsey-Seybold, WellMed, and Atrius. The Cigna Group's structure is similarly dissected, revealing Cigna Healthcare, Allegiance (TPA), and Evernorth (Cigna's equivalent to Optum), which encompasses Express Scripts (another massive PBM), Ascent Health Services (a GPO), eviCore (a leading prior authorization company), MDLive (telemedicine), and significant investments in physician groups like VillageMD and Summit Health. A unique and central methodology employed throughout the video is the "up/down arrow" framework. For each subsidiary, Dr. Bricker analyzes whether its business model primarily profits from increasing or decreasing overall healthcare costs. This reveals a fascinating and often contradictory set of financial incentives within these integrated healthcare giants. For instance, while the core insurance arms (e.g., United Healthcare, Cigna Healthcare) generally profit from lower healthcare costs, many of their PBMs (e.g., OptumRx, Express Scripts), billing interfaces (Change Healthcare), and even some physician groups (e.g., Atrius, Summit Health) are structured to make more money as healthcare costs increase. This internal tension underscores the complexity of their revenue models. The analysis continues with CVS Health, detailing its health insurance arm Aetna, the TPA Meritain, the colossal CVS Caremark (PBM), Zinc (a GPO), CVS Specialty Pharmacy, the ubiquitous CVS retail pharmacies, and the intriguing Cordavis—a newer subsidiary that acts as a "shell" pharmaceutical manufacturer, licensing drugs from other companies. Elevance Health (Anthem, WellPoint) is presented with its healthcare services arm, Carelon, which includes AIM Specialty Health (another major prior authorization company) and large physician groups like Millennium Physician Group. The video concludes by emphasizing that the proliferation of these subsidiaries serves to mask market concentration and that their growth strategy has been predominantly through mergers and acquisitions, fueled by readily available cheap debt, rather than through genuine competition or the delivery of enhanced value to consumers or the healthcare system. Key Takeaways: * The US health insurance market is highly concentrated, with four major players (United Health Group, Cigna Group, CVS Health, Elevance Health) controlling vast and complex networks of subsidiaries that obscure their true market power and interconnectedness. * These conglomerates have vertically integrated across the healthcare ecosystem, owning not just insurance plans but also Pharmacy Benefit Managers (PBMs), specialty pharmacies, Group Purchasing Organizations (GPOs), prior authorization companies, telemedicine services, consulting firms, physician practices, and even venturing into pharmaceutical manufacturing. * PBMs like OptumRx, Express Scripts, and CVS Caremark are critical components within these structures, significantly influencing drug pricing, formularies, and distribution channels, which directly impacts pharmaceutical companies' market access and commercial strategies. * A key insight is that different subsidiaries within the same parent company often have conflicting financial incentives; some profit from increasing healthcare costs (e.g., PBMs, billing services), while others benefit from decreasing them (e.g., traditional insurance plans, capitated physician groups). * Entities such as Change Healthcare (United Health Group) and eviCore/AIM Specialty Health (Cigna/Elevance) are central to healthcare operations, managing electronic billing, payments, and prior authorizations, which are crucial touchpoints for patient access to pharmaceutical products and services. * The primary driver of growth for these health insurance giants has been aggressive industry consolidation through acquisitions, largely financed by cheap debt, rather than organic growth stemming from superior customer value, innovation, or efficiency. This suggests a market where financial engineering outweighs competitive service delivery. * The existence of GPOs like Emisar, Ascent Health Services, and Zinc highlights the intricate mechanisms PBMs use to collect payments from pharmaceutical companies, a critical area for pharmaceutical commercial and market access teams to understand and strategize around. * CVS Health's subsidiary, Cordavis, acting as a "shell" pharmaceutical manufacturer, signals a trend of payers entering the drug production space, which could significantly alter market dynamics and competitive landscapes for traditional pharmaceutical companies. * The ownership of large physician practices (e.g., Kelsey-Seybold, WellMed, VillageMD, Summit Health, Millennium Physician Group) by health insurance groups represents a strategic move towards integrated care delivery, potentially influencing prescribing patterns, referral networks, and patient pathways for pharmaceutical products. * The complex web of subsidiaries creates an illusion of extensive choice and competition for employers, patients, and government entities, masking the concentrated power and coordinated pricing strategies that exist across various healthcare services. * For pharmaceutical and life sciences companies, understanding these intricate relationships, financial incentives, and operational structures is paramount for navigating market access, optimizing commercial operations, developing effective data integration strategies, and ensuring regulatory compliance. * The video implicitly warns that the current market consolidation, driven by financial leverage rather than value creation, may not necessarily lead to better or more efficient healthcare services for patients or the broader system. **Key Concepts:** * **Subsidiaries:** Companies controlled by a parent company. * **PBM (Pharmacy Benefit Manager):** Third-party administrator of prescription drug programs for commercial health plans, self-insured employer plans, Medicare Part D plans, and other government-sponsored programs. * **TPA (Third-Party Administrator):** An organization that processes insurance claims or certain aspects of employee benefit plans for a separate entity. * **GPO (Group Purchasing Organization):** An entity that helps healthcare providers realize savings and efficiencies by aggregating purchasing volume and using that leverage to negotiate discounts with manufacturers, distributors, and other vendors. * **Prior Authorization:** A requirement from a health insurance company that a patient obtain approval before receiving a specific medical service or medication. * **Capitated Payment:** A fixed amount of money paid per patient to a provider or health plan for a specific period, regardless of how many services the patient uses. * **Fee-for-Service:** A payment model where services are unbundled and paid for separately. **Examples/Case Studies:** * **United Health Group Subsidiaries:** United Healthcare, UMR, Optum (OptumRx, Emisar, Optum Specialty Pharmacy, Change Healthcare, Interqual, The Advisory Board Company), Kelsey-Seybold, WellMed, Atrius. * **The Cigna Group Subsidiaries:** Cigna Healthcare, Allegiance, Evernorth (Express Scripts, Ascent Health Services, eviCore, MDLive), VillageMD, Summit Health. * **CVS Health Subsidiaries:** Aetna, Meritain, CVS Caremark (Zinc), CVS Specialty Pharmacy, CVS Retail Pharmacies, Cordavis. * **Elevance Health Subsidiaries:** Anthem, WellPoint, Carelon (AIM Specialty Health), Millennium Physician Group.
Medical Fraud Waste and Abuse Explained
AHealthcareZ - Healthcare Finance Explained
@ahealthcarez
Sep 1, 2025
This video provides an in-depth explanation of medical fraud, waste, and abuse (FWA), a significant issue estimated by the FBI to account for 3-10% of all healthcare spending. Dr. Eric Bricker, the speaker, breaks down FWA into four distinct categories as defined by the Centers for Medicare and Medicaid Services (CMS): mistakes, waste, abuse, and deliberate fraud, focusing on their impact on employer-sponsored health plans. He emphasizes that while insurance carriers are theoretically responsible for catching FWA, their automated claims processing and historical refusal to allow external audits often lead to substantial financial losses for self-funded employers. The presentation delves into each FWA category with vivid, real-world examples. "Mistakes" are illustrated by a $250,000 infusion medication claim that was double-billed to both a medical plan and a pharmacy benefits manager (PBM) by the same carrier, resulting in a half-million-dollar payout for a quarter-million-dollar service. "Waste" is exemplified by a healthy, normal-risk pregnant woman receiving monthly ultrasounds without clinical indication. "Abuse" is explained through "upcoding," where conditions like pneumonia or urinary tract infections were re-coded as sepsis to secure higher Medicare and commercial plan reimbursements, despite no change in patient management or hospital costs. The most egregious category, "deliberate fraud," is highlighted with two impactful case studies reported by ProPublica. One involves a personal trainer for Southwest Airlines employees who billed over $4 million in physical therapy claims over several years, despite not being a licensed physical therapist. Another details out-of-network physical therapists in New Jersey charging $667 per "medical massage" to a state employee health plan with rich out-of-network benefits, a clear scam. Dr. Bricker points out that carriers often auto-adjudicate claims under $10,000-$15,000 without human review, allowing such fraud to persist, particularly in self-funded plans where the carrier bears no risk. He also addresses the common counter-argument that prior authorizations balance out FWA, illustrating with a diagram how both problems can co-exist and impact different providers, meaning neither should be ignored. The video concludes by offering a concrete solution: independent auditing. Dr. Bricker advocates for employers and benefits consultants to hire separate data analytics firms specifically to review claims for FWA, thereby auditing the carrier's performance. He cites a benefits consultant who reduced health plan costs by 6% for large Fortune 500 companies by strictly addressing FWA. Another example includes an insurance captive that has kept healthcare costs flat for over a decade by employing two outside data analytics vendors to scrutinize carrier data. This "trust but verify" approach, enabled by demanding data access from carriers or switching to those who comply, is presented as a proven method to reclaim significant healthcare spending. Key Takeaways: * **Significant Financial Impact of FWA:** Medical Fraud, Waste, and Abuse (FWA) accounts for an estimated 3-10% of all healthcare spending, representing a substantial financial drain on health plans, including employer-sponsored ones. * **Four Categories of FWA:** CMS categorizes FWA into Mistakes (e.g., double billing), Waste (e.g., unnecessary procedures), Abuse (e.g., upcoding for higher reimbursement), and Deliberate Fraud (e.g., billing for services not rendered or by unqualified personnel). * **Carrier Limitations in FWA Detection:** Traditional insurance carriers often fail to detect FWA due to automated claims adjudication processes for claims under $10,000-$15,000 and a historical reluctance to allow external audits of their FWA departments. * **"Trust But Verify" is Essential:** For self-funded plans, carriers bear no risk for FWA, making it crucial for employers to implement a "trust but verify" strategy rather than solely relying on carrier assurances. * **FWA and Prior Authorization Are Separate Issues:** The existence of egregious prior authorization denials does not negate the need to address FWA; both are distinct problems that require separate solutions and can impact different providers. * **Independent Data Analytics as a Solution:** The most effective strategy to combat FWA is to hire independent, third-party data analytics firms to review claims data and audit the carrier's FWA detection efforts. * **Actionable Steps for Employers:** Employers should demand access to their claims data for independent review. If a carrier refuses, they should consider issuing an RFP (Request for Proposal) to find a new carrier that allows such audits. * **Tangible Cost Savings:** Addressing FWA through independent auditing can lead to significant cost reductions, with one benefits consultant reporting a 6% decrease in health plan costs for large employers. * **Empowering Claims Management:** With independent data analysis, employers can instruct carriers to stop payments on fraudulent claims or withhold future payments to providers who have previously received fraudulent payouts. * **Proven Success Models:** Examples like an insurance captive maintaining flat healthcare costs for over a decade by utilizing multiple outside FWA auditing vendors demonstrate the efficacy of this approach. * **Data Access is Paramount:** The ability to access and analyze comprehensive claims data is fundamental for identifying patterns of FWA that automated carrier systems often miss. **Key Concepts:** * **FWA (Fraud, Waste, and Abuse):** A broad term encompassing intentional deception (fraud), inefficient or unnecessary use of resources (waste), and practices that directly or indirectly result in unnecessary costs (abuse). * **Upcoding:** Billing for a more expensive service or diagnosis than what was actually provided or justified, often to increase reimbursement. * **Auto-adjudication:** The automated processing and payment of claims by an insurance carrier's computer system without human review, typically for claims below a certain monetary threshold. * **Self-funded Plan:** An employer-sponsored health plan where the employer directly pays for employees' healthcare costs rather than paying premiums to an insurance carrier, making them directly responsible for FWA losses. * **Prior Authorization:** A requirement from an insurance plan that a healthcare provider obtain approval before providing a service or prescribing a medication, often used to control costs and ensure medical necessity. * **RFP (Request for Proposal):** A document issued by an organization to solicit bids from potential suppliers for a specific project or service, used here to find carriers willing to allow independent FWA audits. **Examples/Case Studies:** * **Double-billed Infusion Medication:** A $250,000 infusion drug was billed twice (medical and pharmacy claims) by the same carrier/PBM, resulting in a $500,000 payout for a $250,000 service. * **Unnecessary Monthly Ultrasounds:** A healthy, normal-risk pregnant woman received monthly ultrasounds without clinical indication, representing medical waste. * **Sepsis Upcoding:** A significant increase in sepsis diagnoses (from 248,000 to 541,000 cases) was observed after Medicare increased reimbursement, with conditions like pneumonia being re-coded as sepsis to gain higher payments without changes in patient care. * **Southwest Airlines Personal Trainer Fraud:** A personal trainer billed Southwest Airlines' employee health plan over $4 million for physical therapy claims, despite not being a physical therapist. * **New Jersey Out-of-Network Massage Fraud:** Out-of-network physical therapists in New Jersey billed $667 per "medical massage" to a state employee health plan with generous out-of-network benefits, amounting to significant fraud. * **Benefits Consultant Cost Reduction:** A benefits consultant achieved a 6% reduction in health plan costs for Fortune 500 employers by rigorously addressing FWA through independent auditing. * **Insurance Captive Flat Costs:** An insurance captive maintained flat healthcare costs for over 10 years by employing two outside data analytics vendors to audit carrier claims for FWA.
How Prescription Drug Coverage Works: Formulary Tiers, PBM, Rebates, Spread-Pricing Explained
AHealthcareZ - Healthcare Finance Explained
@ahealthcarez
Dec 11, 2021
This video provides an in-depth exploration of how prescription drug coverage functions within the U.S. healthcare system, focusing on formularies, formulary tiers, and the intricate financial mechanisms of Pharmacy Benefit Managers (PBMs). The presenter, Dr. Bricker, begins by establishing the significant impact of prescriptions, noting they constitute approximately 20% of all healthcare spending, thus necessitating a clear understanding of their coverage. The discussion progresses from the foundational concept of a formulary—a list of covered medications—to the nuances of non-formulary drugs and the tiered structure that dictates patient co-pays. The core of the video delves into the role and operations of Pharmacy Benefit Managers (PBMs), which are presented as critical intermediaries, often divisions of major health insurance companies. PBMs are responsible for negotiating drug prices with pharmaceutical manufacturers, determining which drugs are included in formularies, and assigning them to specific tiers. The video identifies the four major PBMs—Express Scripts (now Evernorth/Cigna), Caremark (CVS Health/Aetna), OptumRx (UnitedHealth Group), and Prime Therapeutics (Blue Cross plans)—highlighting their dominant market share and their integration within larger healthcare conglomerates. A significant portion of the analysis is dedicated to demystifying how PBMs generate revenue, explaining two primary methods: rebates and spread pricing. Rebates, applied to brand-name medications, are depicted as commissions paid by pharmaceutical manufacturers to PBMs, a substantial portion of which PBMs retain, passing only a fraction to employers as a "rebate." This system, the speaker argues, creates an incentive for PBMs to favor higher-cost drugs and increased prescription volume. Spread pricing, conversely, applies to generic medications, where PBMs purchase drugs at a low cost but charge employers a significantly higher, marked-up price, often based on a fictitious "Average Wholesale Price" (AWP), creating a substantial profit margin for the PBM. Key Takeaways: * **Prescription Drug Spending:** Prescriptions account for a substantial 20% of total healthcare spending, underscoring the importance of understanding their coverage and cost structures. * **Formulary and Non-Formulary Medications:** A formulary is a list of medications covered by insurance, while non-formulary drugs (e.g., most over-the-counter, cosmetic, and some reproductive medications) are typically not covered, requiring patients to pay cash. * **Tiered Formulary Structure:** Health plans typically categorize covered medications into four tiers—Generics (Tier 1, lowest co-pay), Preferred Brand (Tier 2), Non-Preferred Brand (Tier 3, higher co-pay), and Specialty Medications (Tier 4, highest cost, often 20% coinsurance). These tiers directly influence patient out-of-pocket costs. * **High Cost of Specialty Medications:** Specialty drugs are exceptionally expensive, often costing thousands of dollars per month, and are typically used for complex conditions like rheumatoid arthritis, HIV, or hepatitis C. Their high cost, combined with coinsurance, can lead to significant annual patient expenses. * **Role of Pharmacy Benefit Managers (PBMs):** PBMs are crucial intermediaries that negotiate drug prices with pharmaceutical manufacturers, establish formularies and tiers, and process pharmacy claims. They are predominantly owned by major health insurance companies, creating integrated healthcare ecosystems. * **PBM Revenue through Rebates:** For brand-name drugs, PBMs receive "rebates" (effectively commissions) from pharmaceutical manufacturers. PBMs often retain a large portion of these rebates, passing only a smaller percentage to employer clients, which incentivizes PBMs to favor higher-cost medications and increased prescription volume. * **PBM Revenue through Spread Pricing:** For generic medications, PBMs profit from "spread pricing," where they charge employer clients a significantly higher price than what they reimburse pharmacies for the drug. This spread can be substantial, often based on an inflated "Average Wholesale Price" (AWP) that is not reflective of actual acquisition costs. * **Fictitious Pricing Benchmarks:** The "Average Wholesale Price" (AWP) used in generic drug pricing is often a made-up figure, leading to a lack of transparency and enabling PBMs to negotiate discounts off an artificially high starting point, further obscuring the true cost and profit margins. * **Self-Funded Plan Flexibility:** Employers with self-funded health plans have the option to "carve out" their PBM services, allowing them to choose an independent PBM or one from a competing health insurance carrier, potentially offering more flexibility and cost control. * **Patient Cost-Saving Strategies:** Patients should be aware that the cash price of some generic medications can be lower than their insurance co-pay. Tools like GoodRx can help patients compare prices and potentially save money by paying cash instead of using insurance. * **Clinical Efficacy vs. Cost:** For certain conditions, highly effective and significantly cheaper generic first-line therapies (e.g., methotrexate for rheumatoid arthritis) exist, yet patients are often prescribed expensive specialty drugs (e.g., Humira) without first trying the generic option, leading to higher costs for both patients and health plans. **Key Concepts:** * **Formulary:** A list of prescription drugs covered by a health insurance plan. * **Non-Formulary:** Medications not covered by a health insurance plan. * **Formulary Tiers:** Categories of drugs within a formulary, each with a different co-payment or coinsurance level. * **Co-pay:** A fixed amount a patient pays for a covered healthcare service, including prescriptions, after their deductible has been met. * **Coinsurance:** A percentage of the cost of a covered healthcare service that a patient pays after their deductible has been met. * **Pharmacy Benefit Manager (PBM):** A third-party administrator of prescription drug programs for health insurance companies, Medicare Part D plans, and large employers. * **Rebates:** Payments from pharmaceutical manufacturers to PBMs, often tied to formulary placement or market share, which PBMs may partially pass on to clients. * **Spread Pricing:** The practice where a PBM charges a health plan or employer more for a drug than it reimburses the pharmacy for dispensing it, keeping the difference. * **Average Wholesale Price (AWP):** A benchmark price for prescription drugs, often considered an inflated list price that is not reflective of actual transaction prices. * **Maximum Allowable Cost (MAC):** The maximum amount a PBM will reimburse a pharmacy for a generic drug. * **National Average Drug Acquisition Cost (NADAC):** A survey-based measure of the actual cost pharmacies pay to acquire prescription drugs. * **Self-Funded Plan:** An employer-sponsored health plan where the employer directly pays for employees' healthcare costs rather than paying premiums to an insurance carrier. * **Carve Out PBM:** The practice by self-funded employers of contracting directly with a PBM separate from their medical insurance carrier. **Tools/Resources Mentioned:** * **GoodRx:** A platform mentioned as a resource for patients to check cash prices for medications, potentially finding lower costs than their insurance co-pay. **Examples/Case Studies:** * **Non-Formulary Medications:** Tylenol (OTC), cosmetic creams for wrinkles, Viagra (lifestyle medication), and certain infertility treatments are cited as examples of drugs typically not covered by insurance. * **Formulary Tiers:** The cholesterol medications Simvastatin (generic), Zocor (preferred brand), and Crestor (non-preferred brand) are used to illustrate how different tiers lead to varying co-pays ($10, $30, $60 respectively). * **Specialty Medications:** Humira (for rheumatoid arthritis and Crohn's disease), certain HIV pill medications, oral chemotherapies, and Hepatitis C treatments (e.g., a $40,000 one-month supply) are highlighted as examples of extremely expensive specialty drugs. * **Cost-Saving Alternative:** Methotrexate, a generic medication, is presented as an effective and significantly cheaper first-line therapy for rheumatoid arthritis compared to Humira, emphasizing the potential for substantial cost savings if patients are started on appropriate generic alternatives. * **Cash Price vs. Co-pay:** A personal anecdote about a diaper rash cream costing $1.80 cash versus a $10 co-pay demonstrates how paying cash can sometimes be more economical than using insurance for low-cost generics.
The $30 Billion SaaS Company You’ve Never Heard of
Bret Larsen
/@brtlrsn
Sep 17, 2025
This video explores the strategic journey of Veeva, a $30 billion SaaS company that achieved immense success by adopting a highly specialized approach within the pharmaceutical industry. The speaker details how Veeva's founder, Peter Gasner, identified a critical unmet need in pharma for industry-specific software, particularly for CRM, compliance, and regulated workflows, at a time when major companies were still relying on spreadsheets. Veeva's "monk strategy" involved ignoring venture capital trends, focusing exclusively on one vertical, and building a product that deeply understood the nuances and high stakes of the life sciences sector. Initially built on Salesforce's platform, Veeva strategically evolved to develop its own comprehensive "Vault" platform, expanding beyond CRM to encompass document management, clinical trials, regulatory approvals, and manufacturing quality, thereby becoming an indispensable infrastructure for modern medicine. The video emphasizes Veeva's disciplined, profitable business model and its ability to build an unassailable moat by embedding itself across the entire pharmaceutical lifecycle. Key Takeaways: * **Power of Vertical Specialization:** Veeva's success demonstrates the profound impact of extreme focus on a single, complex, and highly regulated industry (pharmaceuticals), addressing its unique challenges rather than pursuing broad market appeal. * **Industry-Specific Solutions:** The initial product, a custom-built CRM for life sciences sales reps, included critical features like sample tracking, compliance checks, and regulated workflows that generic CRMs could not provide, directly meeting the industry's specific needs. * **Strategic Platform Evolution:** Veeva leveraged Salesforce's platform for initial speed and credibility but strategically developed its own "Vault" platform to gain greater control, flexibility, and margin, ultimately achieving independence and owning its technology stack. * **Holistic Industry Infrastructure:** Beyond CRM, Veeva expanded its offerings into document management, clinical trial systems, regulatory approvals, and manufacturing quality, embedding itself as a mission-critical operating system across the entire pharmaceutical product lifecycle. * **Disciplined Business Model:** Veeva achieved significant growth and profitability with minimal venture capital, prioritizing lean operations and a disciplined approach over rapid, cash-burning expansion, proving that sustainable growth can be achieved without aggressive fundraising. * **Addressing Regulatory Complexity:** A core element of Veeva's value proposition was its ability to build software that inherently understood and streamlined the stringent compliance, regulatory, and GxP requirements of the pharmaceutical industry.
Prescription Medication Prior Authorization Explained
AHealthcareZ - Healthcare Finance Explained
@ahealthcarez
Aug 29, 2022
This video provides an in-depth explanation of the prescription medication prior authorization (PA) process, detailing the complex, multi-step journey a prescription takes from a prescriber to a patient when a PA is required. Dr. Eric Bricker, the presenter, systematically breaks down each stage, highlighting the numerous inefficiencies, potential for error, and significant delays inherent in the current system. His analysis underscores how this administrative burden not only frustrates healthcare providers but also poses serious risks to patient health, framing the process itself as a "public health threat." The discussion begins with the prescriber's initial challenge of determining if a medication requires PA, a task complicated by the vast and varied formularies across different insurance carriers and Pharmacy Benefits Managers (PBMs). For instance, CVS alone lists approximately 495 medications requiring PA. The submission methods are then explored, ranging from archaic fax machines, which often involve lengthy, standardized forms (e.g., Illinois' 40-field form), to various electronic prior authorization (e-PA) routes through intermediaries like CoverMyMeds and Surescripts, or direct PBM portals. Critically, most physicians are forced to use a combination of these methods, adding to the administrative complexity. Upon receipt by the PBM, the process continues with a prior authorization technician manually abstracting information from faxes into their system, a step prone to data entry errors. Subsequently, a prior authorization pharmacist reviews the request against specific criteria, which can include patient age, lab values (e.g., blood glucose, BMI for medications like Risperdal), and even the prescriber's specialty (e.g., a dermatologist for Retinol). The pharmacist's role often involves independent clinical judgment, introducing a degree of subjectivity. If denied, the request is sent back to the prescriber, who can provide additional clinical information or escalate the decision to a medical director, prolonging the process further. The video concludes by emphasizing the severe consequences of these delays, citing physician surveys indicating that 24% of PAs result in adverse patient events and 16% lead to hospitalizations, while prescribers spend an average of 14 hours per week on PA-related tasks. Key Takeaways: * **Complex PA Determination:** Identifying whether a prescription requires prior authorization is a significant initial hurdle due to the sheer volume (e.g., ~495 medications on CVS's formulary) and variability of requirements across different insurance carriers and PBMs. * **Inefficient Submission Pathways:** Prescribers must navigate a fragmented system involving fax machines (with lengthy forms, e.g., 40 fields in Illinois) and multiple electronic portals (CoverMyMeds, Surescripts, individual PBM sites), often using a combination of these methods, which is highly inefficient. * **Manual Data Entry and Error Risk:** Prior authorization technicians at PBMs frequently abstract information from faxed forms and manually enter it into their systems, creating opportunities for transcription errors that can lead to denials and further delays. * **High Workload and Subjectivity for PA Pharmacists:** PA pharmacists are often expected to review a high volume of cases (e.g., 60 cases per 8-hour day, or one every 8 minutes), and their decisions can involve a significant degree of independent clinical judgment, leading to potential inconsistencies. * **Diverse and Specific Denial Criteria:** Prior authorization requests can be denied based on various criteria, including patient age (e.g., Retinol for acne), specific lab values (e.g., blood glucose and BMI for Risperdal), and even the specialty of the prescribing physician (e.g., requiring a dermatologist for Retinol). * **Significant Delays in Patient Care:** The PA process typically takes 1-3 business days, with urgent requests sometimes taking up to 24 hours. This often results in delays in treatment, with surveyed physicians reporting that half of PA requests cause a delay in care. * **Direct Link to Adverse Patient Outcomes:** The delays caused by prior authorizations are not merely inconvenient; 24% of surveyed physicians reported that the process led to adverse health events in their patients, and 16% stated it resulted in hospitalizations. * **Substantial Prescriber Time Burden:** Physicians spend a considerable amount of time on prior authorizations, with surveyed doctors reporting an average of 33 PAs per week, consuming about 14 hours of their time—time that could otherwise be spent on direct patient care. * **E-Prior Authorization Efforts are Incomplete:** While electronic prior authorization (e-PA) is an ongoing effort to streamline the process, it is not yet universally adopted or fully integrated, meaning the inefficiencies of manual and hybrid systems persist. * **The System as a "Public Health Threat":** The cumulative effect of these inefficiencies, delays, and patient harms leads the presenter to characterize the current healthcare delivery and payment mechanism, particularly the PA process, as a significant public health threat. **Tools/Resources Mentioned:** * **CoverMyMeds:** An electronic prior authorization solution, a subsidiary of McKesson. * **Surescripts:** An intermediary for electronic prescribing and prior authorization, co-founded and co-owned by CVS and Express Scripts. * **PBM Direct Electronic Portals:** Many PBMs offer their own direct electronic submission methods for prior authorizations. **Key Concepts:** * **Prescriber:** A general term for healthcare professionals authorized to prescribe medications, including doctors, nurse practitioners, physician assistants, podiatrists, and dentists. * **Pharmacy Benefits Manager (PBM):** A third-party administrator of prescription drug programs for commercial health plans, self-insured employer plans, Medicare Part D plans, and other government programs. * **Formulary:** A list of prescription drugs covered by a health plan, often indicating which medications require prior authorization. * **Prior Authorization (PA) Tech:** A technician at a PBM responsible for processing prior authorization requests, often involving manual data entry from faxed forms. * **Prior Authorization (PA) Pharmacist:** A pharmacist at a PBM who reviews prior authorization requests against clinical criteria to approve or deny them. * **Medical Director:** A physician at a PBM who reviews escalated prior authorization denials and can override previous decisions. * **E-Prior Authorization (e-PA):** The electronic submission and processing of prior authorization requests, aimed at streamlining the traditional paper-based or fax-based methods. **Examples/Case Studies:** * **Retinol (Retinoic Acid) for Acne:** Used as an example where PA criteria might include patient age (e.g., covered for under 18 but not over 18) and require the prescriber to be a specific specialty, such as a dermatologist. * **Risperidone (Risperdal):** Used as an example of a psychiatric medication where PA criteria might require specific lab values (e.g., blood glucose levels) and patient metrics (e.g., BMI) due to potential side effects like high blood sugar and weight gain.
Do Insurance Carriers Want Healthcare Costs Up or Down? It Depends.
AHealthcareZ - Healthcare Finance Explained
@ahealthcarez
Jun 8, 2025
This video provides an in-depth exploration of how health insurance carriers' financial incentives regarding healthcare costs vary significantly based on their specific lines of business. Dr. Eric Bricker, the speaker, systematically breaks down six distinct types of health plans, illustrating that there isn't a single answer to whether an insurer wants costs to go up or down; rather, "it depends" on the particular line of business a member is enrolled in. This nuanced perspective is crucial for understanding the complex financial motivations driving decisions within the healthcare ecosystem. The core of Dr. Bricker's analysis categorizes the lines of business into two main groups: employer-sponsored plans and government-sponsored plans, each with fundamentally different financial structures. For self-funded and fully-insured employer plans, the video argues that health insurance companies are incentivized to see healthcare costs rise. In self-funded arrangements, the carrier charges an Administrative Services Only (ASO) fee, while the employer directly pays the claims. Here, the carrier profits through its Pharmacy Benefit Manager (PBM) arm, which benefits from a higher volume and cost of prescriptions, and by taking a percentage of "savings" from negotiating large out-of-network claims. For fully-insured plans, carriers aim to maintain a Medical Loss Ratio (MLR) slightly above the mandated 85% (or 80% for ACA plans) to justify annual premium increases, thereby growing their fixed 15% administrative margin on a larger revenue base. Conversely, for government-sponsored plans—including Medicare Advantage, Medicaid Managed Care, Affordable Care Act (ACA) plans, and Medicare Part D Prescription Plans—the incentive shifts dramatically towards wanting healthcare costs to go down. These plans operate under a risk adjustment model, where the government pays a premium to the carrier based on the member's diagnoses and their severity. Carriers are still subject to an MLR, meaning they must pay out a certain percentage of premiums in claims. To maximize profit, they strategically enroll sicker individuals (who bring higher government-paid premiums) and then rigorously control costs through stringent prior authorization to keep claims just below the MLR threshold. Dr. Bricker emphasizes that reimbursement rates for these government plans are often significantly lower than for employer-sponsored plans, with Medicaid rates sometimes falling below even Medicare rates, impacting provider participation. Key Takeaways: * **Divergent Payer Incentives:** Health insurance carriers possess conflicting financial incentives regarding healthcare costs, which are entirely dependent on their specific line of business. This foundational understanding is critical for pharmaceutical and life sciences companies in navigating market access and commercial strategies. * **Employer-Sponsored Plans Drive Cost Escalation:** For both self-funded and fully-insured employer health plans, carriers are financially motivated for healthcare costs to increase. This seemingly counter-intuitive dynamic is fueled by administrative fees, PBM profits, and the strategic justification for annual premium hikes. * **PBMs as Primary Profit Centers:** Pharmacy Benefit Managers (PBMs), frequently owned by major health insurance carriers (e.g., CVS/Aetna, Cigna), generate substantial profits from higher prescription volumes and more expensive medications. This creates a direct incentive for carriers to see pharmacy costs rise within employer-sponsored plan segments. * **Profit from Out-of-Network "Savings":** In self-funded plans, carriers can profit by negotiating down large out-of-network claims (e.g., an ICU stay) and subsequently charging the employer a percentage of the "savings." This mechanism can inadvertently incentivize the occurrence of such claims. * **MLR Strategy for Premium Growth:** For fully-insured plans, carriers strategically aim for a Medical Loss Ratio (MLR) slightly above the mandated 85% (or 80% for ACA plans). This allows them to consistently justify annual premium increases, thereby expanding their fixed 15% administrative margin on an ever-growing total premium. * **Government Plans Mandate Cost Reduction:** For Medicare Advantage, Medicaid Managed Care, ACA plans, and Medicare Part D, carriers are incentivized to actively drive healthcare costs down. This is due to government premiums being risk-adjusted based on patient sickness, requiring carriers to manage claims tightly to stay just below the MLR threshold. * **Risk Adjustment Attracts Sicker Patients:** The risk adjustment mechanism in government-sponsored plans provides higher premiums from the government for sicker patients with more diagnoses. This incentivizes carriers to attract and enroll individuals with greater healthcare needs. * **Prior Authorization as a Cost-Control Lever:** Stringent prior authorization is a primary strategy employed by carriers in government-sponsored plans (Medicare Advantage, Medicaid, ACA, Medicare Part D) to control healthcare costs and ensure their claims payouts remain close to, but not exceeding, the MLR. * **Significant Reimbursement Rate Discrepancies:** Reimbursement rates to healthcare providers vary drastically across different lines of business. Employer-sponsored plans often pay 250-400% of Medicare rates, while Medicare Advantage typically pays around Medicare rates, and Medicaid Managed Care can pay even less (e.g., 85% of Medicare), influencing provider network participation. * **Direct Impact on Pharmaceutical Access:** The incentives for Medicare Part D plans to reduce prescription costs through strict prior authorization directly affect patient access to pharmaceutical products and necessitate sophisticated market access strategies from pharma companies. * **Strategic Implications for Pharmaceutical Companies:** Pharmaceutical and life sciences companies must deeply understand these varied payer incentives to develop effective market access strategies, optimize pricing models, and structure commercial operations that account for differing reimbursement landscapes and prior authorization hurdles. * **Leveraging Data for Market Insights:** Insights derived from MLR data, risk adjustment models, and claims analysis are crucial for pharma companies to analyze market dynamics, accurately forecast demand, and tailor their product offerings and support services to specific payer segments. Key Concepts: * **Lines of Business:** Refers to the different types of health insurance products offered by carriers, such as self-funded, fully-insured, Medicare Advantage, Medicaid Managed Care, ACA, and Medicare Part D. * **Administrative Services Only (ASO) Fee:** A fee charged by health insurance carriers to self-funded employers for the administrative tasks of processing claims, without the carrier assuming the financial risk of paying the claims themselves. * **Stop-Loss Insurance:** Insurance purchased by self-funded employers to protect against catastrophic individual or aggregate claims that exceed a predetermined financial threshold. * **Medical Loss Ratio (MLR):** The percentage of premium revenue that health insurance companies spend on medical care and quality improvement activities, as mandated by regulations (e.g., 85% for large groups). * **Risk Adjustment:** A methodology used in government-sponsored health plans where the premium paid to the health plan by the government is adjusted based on the health status and diagnoses of its enrolled members, with sicker members generating higher premiums. * **Prior Authorization:** A process requiring healthcare providers to obtain approval from a health insurance plan before a prescribed medication, treatment, or service is covered, often used as a cost-control mechanism. * **Pharmacy Benefit Manager (PBM):** A third-party administrator of prescription drug programs that negotiates drug prices, creates formularies, and processes claims for various health plans. Examples/Case Studies: * **CVS/Aetna and Cigna:** These major health insurance carriers are cited as examples of companies that generate more profit from their PBM arms than from their traditional health insurance operations, underscoring the significant role of PBMs in the pharmaceutical cost landscape. * **Out-of-Network ICU Stay:** An illustrative example where a carrier in a self-funded plan negotiates a $500,000 out-of-network ICU claim down to $300,000, then charges the employer a percentage of the $200,000 "savings," demonstrating a profit mechanism for carriers. * **Provider Reimbursement Rates:** Dr. Bricker highlights the stark contrast in reimbursement rates, noting that employer-sponsored plans often pay 250-400% of Medicare rates, while Medicare Advantage pays around Medicare rates, and Medicaid Managed Care can pay even less (e.g., 85% of Medicare), explaining why many providers limit their acceptance of Medicaid. * **Oscar:** Mentioned as a prominent ACA carrier that exemplifies the strategies of focusing on risk-adjusted plans and employing strict prior authorization to manage costs within the ACA market.
How to Choose a Doctor...Excerpt from Choosing a Doctor Webinar
AHealthcareZ - Healthcare Finance Explained
@ahealthcarez
Sep 21, 2023
This video provides an in-depth exploration of how patients should choose a doctor, emphasizing that this choice is the most powerful tool a patient possesses in navigating the healthcare system. The speaker, Dr. Bricker, begins by highlighting the fundamental issue of non-standardized medical practice, illustrating this with striking examples of varying treatment approaches across different geographic regions and medical institutions. He argues that because doctors practice medicine differently, the patient's choice of provider significantly impacts their care trajectory and outcomes. The core of the presentation revolves around a practical framework for selecting a doctor in non-emergency situations, which constitute the vast majority of healthcare encounters. This framework is built upon four logistical criteria: the severity and complexity of the patient's condition, geographic constraints, appointment availability, and affordability/in-network status. Dr. Bricker meticulously explains how these criteria must be applied differently depending on whether the medical situation is of low or high severity, underscoring that a one-size-fits-all approach to doctor selection is ineffective and potentially detrimental. He provides specific clinical examples for both low and high severity scenarios. For low-severity conditions, the emphasis is on convenience and accessibility, suggesting options like telemedicine, urgent care, or simply getting an appointment with an available primary care physician. Conversely, high-severity conditions demand a more rigorous and time-intensive selection process, prioritizing quality and expertise over convenience. The video concludes by summarizing the four basic needs of patients with employer-sponsored health insurance: understanding their benefits, finding a doctor, navigating the complex healthcare system, and ultimately, getting better. Key Takeaways: * **Non-Standardized Medical Practice:** The practice of medicine is not standardized, leading to significant variations in treatment approaches and outcomes. For instance, spine surgery rates can vary by 300% between different cities, and 55% of cancer treatment plans may be changed upon seeking a second opinion at a Center of Excellence like the Mayo Clinic. * **Patient Choice as a Powerful Tool:** For non-emergency situations, choosing the right doctor is the most impactful decision a patient can make, directly influencing the quality and efficacy of their care. * **Four Core Criteria for Doctor Selection:** Patients should evaluate doctors based on the severity/complexity of their condition, geographic convenience, appointment availability, and affordability/in-network status. * **Severity Dictates Selection Strategy:** The approach to choosing a doctor must fundamentally change based on the severity of the medical condition; a strategy suitable for a minor ailment is inappropriate for a serious illness. * **Low Severity Prioritizes Convenience:** For low-severity conditions (e.g., URTI, UTI, minor sprains, hypertension, high cholesterol), the priority is often simply getting in the door quickly and conveniently, utilizing options like telemedicine, urgent care, or readily available primary care physicians. * **High Severity Demands Rigorous Selection:** Serious medical situations (e.g., cancer, joint/spine surgery, diabetes, autoimmune diseases) require a significant investment of time and effort, potentially involving travel and less convenient options, to find the highest quality care. * **Academic Medical Centers for Complex Cases:** For high-severity conditions, physicians at academic medical centers (university hospitals) are often preferred. They are typically salaried (reducing financial influence on clinical judgment), have dedicated time to stay current, and manage a higher volume of complex patients, leading to greater expertise. * **Utilize Outcomes Data When Available:** For certain diseases and conditions, data on doctor and facility outcomes exists and should be leveraged to inform selection, though such data is not universally available. * **Chronic Conditions Can Be High Severity:** Conditions like diabetes and autoimmune diseases (e.g., Crohn's, rheumatoid arthritis), while chronic, are categorized as high severity due to their long-term dire consequences, complex management, and reliance on expensive specialty medications. * **The "Center of Excellence" Model:** Programs like Walmart's Center of Excellence, which direct patients to top-tier institutions like the Mayo Clinic for complex conditions, highlight the value of specialized care and demonstrate the prevalence of treatment plan variations. * **Fundamental Patient Needs:** Patients primarily seek assistance with understanding their benefits, finding a suitable doctor, navigating the often-complicated healthcare system, and ultimately, achieving better health outcomes. Examples/Case Studies: * **Spine Surgery Variation:** In New York City, there are 2.5 spine surgeries per 1,000 Medicare patients, compared to 9 per 1,000 Medicare patients in the suburbs of Dallas, illustrating a 300% difference in treatment rates for similar pathologies. * **Walmart's Cancer Center of Excellence:** Walmart's program sends plan members to the Mayo Clinic for second opinions on cancer. A striking 55% of these patients have their original treatment plan changed, demonstrating the significant lack of standardization in cancer treatment. * **Low Severity Clinical Examples:** Upper respiratory tract infections, urinary tract infections, minor muscular sprains (ankle, shoulder, knee), hypertension, and high cholesterol are cited as conditions where convenience and timely access are paramount. * **High Severity Clinical Examples:** Cancer, joint or spine surgery, diabetes (due to potential long-term blindness, dialysis, amputations), and autoimmune diseases (e.g., Crohn's disease, rheumatoid arthritis) requiring expensive specialty medications are presented as conditions demanding a highly selective approach to doctor choice.
Insurance Float Explained: What is it? Impact on Health Insurance?
AHealthcareZ - Healthcare Finance Explained
@ahealthcarez
Jun 29, 2025
This video provides an in-depth exploration of "insurance float" and its specific implications for the health insurance sector. Dr. Eric Bricker, the speaker, begins by defining insurance float as the money an insurance company holds between receiving premium payments and paying out claims, which they then strategically invest to generate additional income. He establishes that this investment income, alongside underwriting profit (premiums minus claims and operational expenses), constitutes the two primary sources of an insurer's profitability, citing Warren Buffett's Berkshire Hathaway as a prime example of leveraging float for substantial returns. The presentation meticulously details how the volume of float and its contribution to overall profit vary significantly across different insurance types. For Property and Casualty (P&C) insurance, float can be 1 to 2.5 times total premiums, accounting for approximately 70% of total profit. Life insurance exhibits even higher float, ranging from 4 to 10 times premiums, contributing a remarkable 90% to its profit. In stark contrast, health insurance maintains a much smaller float, typically only 0.1 to 0.3 times its premiums, primarily due to faster claim payouts. Consequently, only about 20% of health insurance companies' profit stems from investment income generated by float, with the overwhelming majority (80%) derived from underwriting profit, heavily influenced by factors such as the medical loss ratio. Dr. Bricker then draws a crucial connection between insurance float and healthcare providers' accounts receivable (AR). He clarifies that the float held by health insurance carriers directly corresponds to the unpaid accounts receivable of doctors and hospitals. To maximize their float and the resulting investment income, health insurance companies intentionally delay reimbursement to healthcare providers. He quantifies this impact, illustrating that a typical 250-bed hospital can have approximately $113 million in AR tied up in insurance float, translating into millions of dollars in annual investment income for insurers. Through examples of major hospital systems like HCA, Common Spirit, and Mass General Brigham, he demonstrates that billions of dollars in provider AR are held as float, yielding hundreds of millions in annual investment revenue for the insurance industry. The speaker concludes with a critical insight: the persistent average of 47 AR days for hospitals, unchanged for decades, is not a technological problem solvable by AI, but rather a deliberate and entrenched business strategy by health insurance companies to maximize profit, viewing float as an intentional "feature" rather than an operational "bug." Key Takeaways: * **Understanding Insurance Float:** Insurance float is the capital an insurance company holds between receiving premiums and paying claims, which is then invested to generate additional income, forming a significant component of an insurer's overall profitability. * **Dual Profit Sources:** Insurance companies derive profit from two main avenues: investment income generated from their float and underwriting profit, which is the surplus remaining after paying claims and operational expenses from collected premiums. * **Varying Float Impact by Insurance Type:** The magnitude of float and its contribution to profit differ substantially. Property & Casualty (P&C) insurance has float 1-2.5x premiums (70% of profit from float), Life insurance has 4-10x premiums (90% of profit from float), while Health insurance has a much smaller float of 0.1-0.3x premiums, contributing only about 20% to its total profit. * **Health Insurance Profit Drivers:** For health insurance companies, the majority of their profit (approximately 80%) comes from underwriting, making factors like the medical loss ratio and claims management critically important to their financial performance. * **Float as Provider Accounts Receivable:** From the perspective of healthcare providers (doctors, hospitals), the insurance float held by carriers represents their accounts receivable (AR). This means that money owed to providers is actively being used by insurers for investment. * **Intentional Delay of Reimbursement:** Health insurance companies strategically delay reimbursement to healthcare providers to maximize their float. This is not an operational inefficiency but a deliberate business strategy to increase investment income. * **Significant Financial Impact on Providers:** The amount of money tied up in insurance float (provider AR) is substantial. A typical 250-bed hospital can have over $100 million in AR, generating millions in annual investment revenue for insurers from that single entity's unpaid claims. * **Large Scale Financial Implications:** Major hospital systems like HCA, Common Spirit, and Mass General Brigham have billions of dollars in accounts receivable, which translates into hundreds of millions of dollars in annual investment income for the insurance industry from their float alone. * **AI's Limited Role in AR Reduction:** The speaker argues that new technologies, including AI, are unlikely to significantly reduce healthcare provider accounts receivable days. This is because delayed payment is not a technological problem but an intentional, profit-maximizing strategy by health insurance companies. * **Persistent AR Days:** The average accounts receivable days for hospitals has remained consistently around 47 days for decades (since 1998), indicating the entrenched nature of this financial dynamic and the unlikelihood of it changing without fundamental shifts in incentives. * **Float as a "Feature," Not a "Bug":** The video emphasizes that high accounts receivable and insurance float are considered a "feature" by health insurance companies, serving as a reliable and significant source of investment income, rather than an operational "bug" to be fixed. Key Concepts: * **Insurance Float:** The amount of money an insurance company holds between receiving premium payments and paying out claims, which it invests to earn a return. * **Underwriting Profit:** The profit an insurance company makes from its core business of selling insurance policies, calculated as premiums collected minus claims paid out and operational expenses (e.g., commissions, payroll). * **Medical Loss Ratio (MLR):** A regulatory requirement (especially in the U.S.) that mandates health insurance companies spend a certain percentage (e.g., 85%) of their premium revenue on medical care and quality improvement, rather than administrative costs or profits. * **Accounts Receivable (AR):** Money owed to a business (in this context, healthcare providers) for goods or services delivered but not yet paid for. For providers, this is the money tied up in insurance float. * **AR Days:** A metric measuring the average number of days it takes for a business to collect payment after a sale or service. In healthcare, it indicates how long it takes for insurers to reimburse providers. Examples/Case Studies: * **Berkshire Hathaway/Warren Buffett:** Cited as the "poster child for float," demonstrating how significant investment income can be generated from holding large amounts of float. * **Typical 250-Bed Hospital:** Generates about $2.4 million in bills daily and has approximately $113 million in accounts receivable (at 47 AR days), which translates to $4.5 million in annual investment revenue for insurers. * **Hospital Corporation of America (HCA):** Estimated to have about $8.4 billion in accounts receivable, generating roughly $336 million annually in investment revenue for the insurance industry. * **Common Spirit:** Estimated to have about $4.4 billion in accounts receivable, generating approximately $177 million annually in investment revenue for the insurance industry. * **Mass General Brigham (MGB):** Estimated to have about $2.7 billion in accounts receivable, generating around $106 million annually in investment revenue for the insurance industry.
Top 6 Communication Tactics in Healthcare
AHealthcareZ - Healthcare Finance Explained
@ahealthcarez
Mar 9, 2025
This video provides an in-depth exploration of six key communication tactics specifically tailored for the healthcare industry. Dr. Eric Bricker, the presenter, begins by establishing the fundamental premise that successful interactions, whether for improving patient care or transforming healthcare, hinge on people's propensity to do business with those they like and trust. He introduces a framework from communication expert Dr. John Lund, which posits that recipients of communication are primarily concerned with three things: the potential for pain, the duration of the interaction, and the communicator's underlying objective. The presentation systematically categorizes communication into two main forms—speaking/listening (in-person, video, phone) and writing/reading (email, text)—and then combines these forms with Dr. Lund's three recipient concerns to create a matrix of six actionable tactics. For verbal communication, the video emphasizes the importance of one-on-one interactions for relationship building, the strategic use of enthusiasm, and the critical skill of active listening to make conversations less "painful." For written communication, particularly emails, tactics include optimizing send times and ensuring readability through larger font sizes, acknowledging the prevalence of mobile email consumption. The discussion then shifts to addressing the "how long" concern, advocating for concise conversations (10-15 minutes) and short meetings (under 30 minutes) to respect attention spans. Similarly, emails are advised to be brief, resembling text messages with approximately two sentences and 30 words, given the average 9-second read time. Finally, to clarify "what do you want," the video recommends setting clear expectations in conversations regarding tasks, responsibilities, and deadlines, ideally allowing the other person to set their own timeline. For emails, a clear, questioned call to action, highlighted for visibility, is presented as essential. Dr. Bricker concludes by stressing the importance of managing expectations for others' communication quality, acknowledging that healthcare organizations often struggle with miscommunication, and encouraging individuals to focus on controlling their own communication effectiveness. Key Takeaways: * **Build Liking and Trust for Success:** The foundation of effective communication in healthcare is building like and trust, which is crucial for improving patient care, fostering collaboration, and driving positive change within the industry. * **Address Core Recipient Concerns:** When communicating, always consider the other person's three primary, often subconscious, questions: "Is this going to be painful?", "How long is this going to take?", and "What do you want from me?". Tailor your approach to proactively alleviate these concerns. * **Prioritize One-on-One Interactions for Relationships:** For verbal communication, one-on-one conversations are paramount for forming genuine relationships, which Stephen Covey refers to as "production capability," essential for sustained and effective future communication. * **Cultivate Enthusiasm in Conversations:** Injecting enthusiasm into your verbal interactions, even when not naturally inclined, can make the conversation less painful for the recipient and can also be personally refreshing, contributing to a more positive exchange. * **Practice Active Listening:** To minimize the "pain" of a conversation for the other person, allow them to do the majority of the talking. Seek first to understand their perspective before attempting to convey your own. * **Optimize Email Timing and Readability:** Send emails earlier in the day and earlier in the week to maximize engagement before recipients experience email fatigue. Crucially, use a 14-16 point font (14pt is a recommended compromise) as 50-60% of work emails are read on mobile devices, and larger fonts improve readability, especially for those with vision challenges. * **Keep Conversations and Meetings Concise:** Respect attention spans by limiting conversations to 10-15 minutes and meetings to 30 minutes or less. This approach minimizes the perceived "pain" of long interactions and increases productivity. * **Draft Emails as Concise Text Messages:** Given that the average person spends only 9 seconds reading an email (approximately 25-30 words), structure your emails to be around two sentences and 30 words long, much like a text message, to ensure key information is absorbed. * **Clearly Define Expectations in Verbal Communication:** To address the "what do you want" concern, explicitly state who is responsible for what, what specific tasks need to be done, and by when. Whenever possible, allow the other person to set the deadline, as this fosters greater commitment and accountability. * **Implement a Clear Email Call to Action:** For written communication, place a clear call to action, phrased as a direct question (e.g., "Could you do this?"), within the second or third sentence of your email. Bold or underline this question to ensure it stands out and explicitly communicates your request. * **Manage Expectations for Others' Communication:** Recognize that a significant portion of the workforce (up to two-thirds, according to a Gallup poll) is disengaged, which often translates to poor communication. Maintain low expectations for others' communication quality but hold yourself to high standards, as you can only control your own actions. * **Acknowledge Widespread Miscommunication in Healthcare:** The video highlights that "all Healthcare organizations are essentially cesspools of miscommunication," underscoring the critical need for individuals to master these tactics to navigate and improve communication within this complex sector. Tools/Resources Mentioned: * **Daniel Kahneman's "Thinking Fast and Slow":** A book by the Nobel laureate in economics, referenced for insights into human decision-making and the importance of trust in business interactions. * **Dr. John Lund:** A communication expert whose framework on the three primary concerns of communication recipients (pain, time, want) forms a central pillar of the video's tactics. * **Stephen Covey's PPC Balance:** A concept (Production vs. Production Capability) used to illustrate the dual importance of achieving immediate tasks and building strong relationships in communication. * **Gallup Poll:** Referenced for statistics on employee engagement, indicating that a large percentage of employees are not engaged at work, which can impact communication effectiveness. Key Concepts: * **Recipient-Centric Communication:** An approach to communication that prioritizes understanding and addressing the needs and concerns of the person receiving the message. * **PPC Balance (Production vs. Production Capability):** A framework emphasizing that effective interactions not only achieve immediate goals (production) but also nurture the underlying relationships (production capability) that enable future collaboration. * **Introvert/Extrovert Communication Preferences:** The understanding that individuals' personality types can influence their preferred communication channels, with introverts often favoring written communication and extroverts preferring verbal. * **Low Expectations for Happiness:** A pragmatic philosophy suggesting that by setting realistic, often low, expectations for external factors (like others' communication quality), one can better manage personal satisfaction and focus on controllable actions.
Revenue Cycle Management in Healthcare Explained
AHealthcareZ - Healthcare Finance Explained
@ahealthcarez
Apr 14, 2024
This video provides an in-depth explanation of Revenue Cycle Management (RCM) in healthcare, defining it as the intricate process of "getting the bills paid" for healthcare providers such as hospitals, doctors, physical therapists, and imaging centers. Dr. Eric Bricker emphasizes the immense complexity and difficulty of RCM, highlighting it as a $29 billion per year industry growing at over 13% annually, reflecting the broader $4.5 trillion healthcare economy it supports. The core of the video meticulously breaks down the nine distinct, sequential steps of the RCM process, clarifying that despite the term "cycle," it functions more like a linear progression for each service rendered. The progression of ideas in the video starts with the initial patient interaction and moves through the entire billing and collection lifecycle. It details the steps from pre-registration (initial appointment scheduling and basic info gathering) to actual registration (verifying insurance changes upon arrival), followed by charge capture (meticulously documenting all services and supplies used during treatment). A critical phase, utilization review, involves ongoing negotiation with insurance companies for multi-day hospital stays. The process then moves to coding, where medical records are translated into standardized ICD-10, CPT, and HCPCS codes, often influenced by Clinical Documentation Integrity (CDI) efforts to maximize reimbursement. This leads to claim submission, typically through clearinghouses like the recently hacked Change Healthcare, to a multitude of payers. Remittance processing involves the payer's explanation of benefits and initial payment, often leaving a balance for patient collection. A significant pain point highlighted is the labor-intensive "follow-up" stage, where providers chase delayed or denied claims from insurance carriers, a problem that has persisted for decades. The final step is patient collection for deductibles and co-pays. Dr. Bricker's perspective underscores the profound inefficiencies and fragmentation within the RCM industry. He notes that the RCM market is highly fragmented, with over 354 companies, implying low barriers to entry and highly variable service quality. A key metric for RCM effectiveness, Accounts Receivable (AR) Days, is discussed, ranging from 30 to 70 days. He illustrates the massive financial impact of this variation with an example of a $3 billion hospital system, where reducing AR Days from 70 to 30 can free up $328 million in cash flow. The video concludes by explaining how the overwhelming complexity of RCM is a driving factor behind many physician practices selling out to larger hospital systems, which possess the resources and scale to manage these intricate billing processes more effectively. Key Takeaways: * **Massive and Growing Industry:** Revenue Cycle Management is a $29 billion annual industry within healthcare, experiencing over 13% year-over-year growth, underscoring its critical and expanding role in the financial viability of healthcare providers. * **Nine-Step Linear Process:** RCM is not a true cycle but a linear sequence of nine steps: pre-registration, registration, charge capture, utilization review, coding, claim submission, remittance processing, follow-up, and patient collections, each presenting unique challenges. * **Dynamic Patient Information:** The distinction between pre-registration and registration is crucial due to frequent changes in patient insurance plans and deductibles, particularly at the start of a new year, impacting initial billing accuracy. * **Meticulous Charge Capture:** Accurately capturing all services, equipment, and medications used during patient care (charge capture) is a detailed process involving scanning and physician documentation, forming the basis for billing. * **Utilization Review as a Negotiation:** For inpatient stays, utilization review involves ongoing negotiation between providers and insurance companies to approve the length of stay, directly impacting reimbursement. * **Coding and Clinical Documentation Integrity (CDI):** Medical records are translated into standardized ICD-10, CPT, and HCPCS codes. CDI is a significant effort by hospitals to optimize documentation to maximize coding and reimbursement, walking a fine line to avoid "upcoding." * **Complex Claim Submission:** Claims are submitted through clearinghouses (e.g., Change Healthcare) to a vast array of payers (Medicare, Medicaid, commercial insurance), making the process fragmented and vulnerable to system-wide disruptions. * **Labor-Intensive Follow-Up:** The "follow-up" stage, where providers chase delayed or denied claims from insurance carriers, is described as the "most labor intensive ridiculous process humanly possible," often done manually via phone calls, and has remained inefficient for decades. * **Fragmented Industry with Variable Quality:** The RCM industry is highly fragmented with hundreds of companies, leading to low barriers to entry and a wide variability in the competence and performance of RCM firms. * **Accounts Receivable (AR) Days as Key Metric:** The effectiveness of RCM is measured by AR Days (the average number of days it takes to collect payments), with a range of 30 to 70 days, directly impacting a provider's cash flow. * **Significant Financial Impact:** For a medium-sized hospital system generating $3 billion annually, improving AR Days from 70 to 30 can result in a cash flow improvement of $328 million, highlighting the immense financial stakes involved. * **Driver for Provider Consolidation:** The overwhelming complexity and difficulty of managing RCM effectively is a primary reason why many physician practices are selling to larger hospital systems, which have the resources to handle these intricate processes. Key Concepts: * **Revenue Cycle Management (RCM):** The entire process of identifying, managing, and collecting patient service revenue. * **Accounts Receivable (AR) Days:** A key performance indicator in RCM, measuring the average number of days it takes for a healthcare provider to collect payments due after a service has been rendered. * **Clinical Documentation Integrity (CDI):** A program aimed at improving the quality and completeness of medical record documentation to accurately reflect the patient's severity of illness and optimize coding for appropriate reimbursement. * **Upcoding:** The practice of billing for a more expensive service or procedure than was actually provided or justified by the patient's condition, often considered fraudulent. * **Clearinghouse:** An intermediary that processes and transmits electronic health information, such as insurance claims, between healthcare providers and payers. * **Remittance Processing:** The process by which healthcare providers receive and reconcile payments from insurance companies, often accompanied by an Explanation of Benefits (EOB) that details the payment, adjustments, and patient responsibility. * **Explanation of Benefits (EOB):** A statement sent by an insurance company to a policyholder explaining what medical treatments and/or services were paid for on their behalf. Examples/Case Studies: * **Financial Impact Example:** A $3 billion per year hospital system, billing $8.2 million daily, can have $246 million in unpaid bills at 30 AR Days versus $574 million at 70 AR Days, representing a $328 million difference in cash flow. * **Change Healthcare Hack:** The recent cyberattack on Change Healthcare is cited as a real-world example of the vulnerabilities and critical role of clearinghouses in the claim submission process.
High Cost Orphan Disease Drugs Explained
AHealthcareZ - Healthcare Finance Explained
@ahealthcarez
Oct 27, 2024
This video provides an in-depth exploration of the escalating costs of orphan disease drugs and their profound impact on the American healthcare system, particularly on employer-sponsored health plans. Dr. Eric Bricker begins by defining orphan diseases as rare conditions affecting fewer than 200,000 people in the U.S., setting the stage for a discussion on the unique economic challenges they present. He uses Cystic Fibrosis (CF) as a primary example, detailing its genetic nature, severe symptoms, and historically short life expectancy, which has now extended to an average of 47 years thanks to revolutionary treatments like Trikafta. The core of the video highlights the exorbitant pricing of these life-saving medications. Trikafta, for instance, carries an annual cost of $200,000, translating to a staggering $9 million over a patient's lifetime. This single drug has propelled its maker, Vertex Pharmaceuticals, to a market capitalization of $123 billion, making it larger than major entities like Blackstone, UPS, and Citi Group, with almost all its revenue stemming from Trikafta. Another example, Elevidys, a gene therapy for Duchenne Muscular Dystrophy, costs $3.2 million for a single treatment. Dr. Bricker argues that this runaway pricing is largely attributable to the Affordable Care Act (ACA), which eliminated lifetime maximums on health insurance policies. This change, he contends, removed a critical ceiling that previously incentivized pharmaceutical companies to price drugs more reasonably, effectively giving them a "blank check" to charge whatever they desire, with the burden ultimately falling on employers. The video then delves into the unsustainable nature of this model for employer-based health plans and explores potential, albeit imperfect, solutions. Dr. Bricker discusses the existing mechanism of Social Security Disability Income (SSDI) and subsequent Medicare coverage for certain diseases, citing End-Stage Renal Disease (ESRD) as a precedent from the 1970s. However, he points out the severe limitations for conditions like CF, where patients typically must demonstrate significant deterioration to qualify, an unacceptable requirement, especially for children. For self-funded employers, he suggests strategies like joining insurance captives to avoid "lasering" (where stop-loss insurance excludes high-cost individuals) or, in extreme cases, considering non-coverage, a dire choice that could save a business but devastate an individual. He also touches on the complexities of patient assistance programs and alternative funding, noting how pharma companies are increasingly blocking access if employers use these programs. Ultimately, Dr. Bricker advocates for systemic change, urging employers to lobby for automatic Medicare coverage for orphan diseases, mirroring the ESRD model, and for the government to leverage its power to negotiate drug prices with pharmaceutical companies. Key Takeaways: * **Definition and Impact of Orphan Diseases:** Orphan diseases are rare conditions affecting fewer than 200,000 people in the U.S., often genetic, and historically associated with short life expectancies. Advancements in treatment, while life-changing, come with significant financial implications. * **Exorbitant Drug Pricing:** Revolutionary drugs for orphan diseases, such as Trikafta for Cystic Fibrosis ($200,000/year, $9 million lifetime) and Elevidys for Duchenne Muscular Dystrophy ($3.2 million for a single treatment), carry extremely high price tags. * **Pharmaceutical Market Power:** The high cost of these drugs can create immensely valuable companies; Vertex Pharmaceuticals, primarily from Trikafta revenue, has a market capitalization of $123 billion, surpassing major firms like Blackstone, UPS, and Citi Group. * **ACA's Role in Price Escalation:** The Affordable Care Act (ACA) eliminated lifetime maximums on health insurance policies, which the speaker argues removed a critical market constraint and allowed pharmaceutical companies to charge virtually unlimited prices for high-cost medications. * **Unsustainability for Employers:** The current employer-based model for drug payment is deemed unsustainable, as individual employers, even large ones, struggle to absorb annual costs of hundreds of thousands or millions of dollars for a single employee or dependent. * **International Pricing Disparities:** Pharmaceutical companies like Vertex engage in negotiations with other countries that refuse to pay U.S.-level prices, leading to situations where patients in other nations may die due to lack of affordable access. * **Limitations of Current SSDI/Medicare Access:** While SSDI can lead to Medicare coverage, the criteria for orphan diseases like Cystic Fibrosis often require significant health deterioration (e.g., lung dysfunction, hospitalizations), which is an ethically unacceptable prerequisite, especially for children. * **Self-Funded Employer Strategies:** Self-funded employers can consider joining insurance captives to mitigate the risk of "lasering" (where stop-loss insurance excludes high-cost individuals). However, in extreme cases, employers might face the difficult choice of non-coverage to avoid business failure. * **Challenges with Patient Assistance Programs:** Many pharmaceutical patient assistance programs now specifically exclude eligibility for individuals whose employers utilize alternative funding programs, creating a complex barrier to access for some patients. * **Advocacy for Medicare Coverage:** A proposed solution involves lobbying for automatic Medicare coverage for orphan diseases, similar to the precedent set for End-Stage Renal Disease in the 1970s, to shift the financial burden from employers to a federal system. * **Government Price Negotiation:** The federal government, unlike states or businesses, has the ability to issue unlimited debt and negotiate (i.e., implement price controls) with pharmaceutical companies, which is seen as a necessary step to control drug costs. * **Ethical Dilemma of Access:** The video underscores the profound ethical dilemma of life-changing, revolutionary therapies being financially out of reach for many patients, both domestically and internationally, due to aggressive pricing strategies. Key Concepts: * **Orphan Disease:** A rare disease or condition, typically affecting fewer than 200,000 people in the United States. * **Lifetime Maximums:** A cap on the total amount an insurance plan will pay for a person's healthcare over their lifetime. Eliminated by the Affordable Care Act. * **Self-Funded Employer:** An employer that directly pays for its employees' healthcare costs rather than purchasing a fully insured plan from an insurance company. * **Insurance Captive:** A group of self-funded employers that pool their risks to collectively purchase stop-loss insurance, often with "no laser" policies. * **Stop-Loss Insurance / Lasering:** Insurance purchased by self-funded employers to protect against catastrophic claims. "Lasering" occurs when a stop-loss policy specifically excludes coverage for a high-cost individual. * **SSDI (Social Security Disability Income):** A federal program that provides benefits to people who are unable to work due to a disability. Qualification can lead to Medicare coverage. * **Patient Assistance Programs:** Programs offered by pharmaceutical companies to help patients afford their medications, often based on income or insurance status. * **Alternative Funding Programs:** Employer-sponsored programs designed to help cover high-cost medications, sometimes by leveraging patient assistance programs. Examples/Case Studies: * **Cystic Fibrosis (CF) and Trikafta (Vertex Pharmaceuticals):** Used as the primary example of a rare genetic disorder with a revolutionary, but extremely expensive, medication. The video highlights Vertex's market dominance based almost entirely on Trikafta's sales. * **Duchenne Muscular Dystrophy (DMD) and Elevidys:** Cited as another instance of a rare disease with a gene therapy costing millions for a single treatment. * **End-Stage Renal Disease (ESRD):** Presented as a historical precedent where patient advocacy led to automatic Medicare coverage in the 1970s due to the high cost of dialysis, serving as a model for how orphan diseases could be covered.
Electronic Medical Records Are a Mess! Here's Why.
AHealthcareZ - Healthcare Finance Explained
@ahealthcarez
Oct 9, 2022
This video provides an in-depth exploration of the critical issues plaguing Electronic Medical Records (EMRs), specifically focusing on the pervasive problem of "copy and paste" documentation and its detrimental effects on healthcare quality and patient safety. Dr. Eric Bricker, an internist, explains that EMR documentation serves three primary purposes: communication among healthcare practitioners, justification for billing, and as a legal record. He argues that the stringent and complex requirements for billing codes, particularly Evaluation and Management (E&M) codes (e.g., 99201-99205 for new patients, 99211-99215 for established patients), force doctors to document extensive details about patient history, physical exams, and medical decision-making (often structured as SOAP notes). The core of the problem, according to Dr. Bricker, lies in the EMR's word-processing-like "copy and paste" functionality. Faced with overwhelming documentation demands, doctors frequently copy previous notes—either their own or those of other clinicians—to save time and meet billing requirements. This practice, while seemingly efficient, leads to a massive accumulation of redundant and often inaccurate information within patient records. Dr. Bricker cites a significant study published in the Journal of the American Medical Association (JAMA) on September 26, 2022, conducted at the University of Pennsylvania Hospital System, which found that 50% of EMR text across inpatient, outpatient, and ER notes was copied and pasted. This percentage increased from 33% in 2015 to 54% in 2020, with AI being used to identify verbatim text. The consequences of this widespread copy-pasting are severe. Firstly, it creates "chart lore," where outdated or incorrect information (e.g., misidentified allergies) is perpetuated throughout the record, potentially leading to suboptimal or harmful patient care. Secondly, it results in immense information overload, making EMRs incredibly long and difficult to navigate. Dr. Bricker vividly illustrates this by stating that the average patient record is 56% the length of Shakespeare's "Hamlet," and reviewing records for just 10 patients is equivalent to reading an 85-page book, with nearly half of it being copied "junk." This forces doctors to skim records, increasing the likelihood of missing crucial "golden nuggets" of information, which can lead to medical errors and patient harm. He concludes by highlighting a rare positive example from the Sanford hospital system (South Dakota), which uses structured note templates to minimize copy-pasting and promote succinct, effective communication, ultimately leading to better patient care. Key Takeaways: * **Fundamental Flaw in EMR Documentation:** Electronic Medical Records are inherently flawed due to the pervasive practice of "copy and paste" documentation, driven primarily by complex billing requirements rather than optimal patient care. * **Threefold Purpose of EMR Notes:** Documentation in EMRs serves to facilitate communication among healthcare providers, justify billing for services rendered, and act as a legal record in case of disputes. * **Billing Code Complexity Drives Documentation Volume:** Evaluation and Management (E&M) codes (e.g., 99201-99205, 99211-99215) mandate extensive and specific documentation regarding patient history, physical exams, and medical decision-making, including face-to-face time. * **Pervasive Copy-Pasting:** The "copy and paste" function within EMRs, while a perceived time-saver for busy clinicians, is widely abused. A JAMA study from the University of Pennsylvania found that 50% of EMR text was copied and pasted, increasing from 33% to 54% between 2015 and 2020. * **AI for Text Analysis:** The study utilized Artificial Intelligence to analyze EMR text and identify verbatim copied content, demonstrating AI's capability in uncovering documentation patterns and quality issues. * **"Chart Lore" and Inaccurate Information:** Copy-pasting leads to the propagation of "chart lore," where outdated or incorrect information (e.g., non-allergies like metallic taste from contrast dye) is repeatedly documented, potentially leading to inappropriate medical decisions. * **Severe Information Overload:** The volume of copied text creates massive information overload, making EMRs excessively long and difficult to review. An average patient record is 56% the length of Shakespeare's "Hamlet." * **Increased Risk of Medical Errors:** Doctors are forced to skim through voluminous, redundant records to find critical information, significantly increasing the risk of missing vital details and contributing to medical errors and patient harm. * **Doctor Reluctance for Universal Records:** The overwhelming amount of irrelevant "junk" data in EMRs makes many doctors resistant to universally shared medical records, as it would necessitate reviewing even more extraneous information. * **Structured Templates as a Solution:** The Sanford hospital system provides an example of a potential solution by implementing structured note templates within their EMR to minimize copy-pasting and encourage succinct, effective communication. * **Value of Succinct Documentation:** Highly succinct, clear, and focused notes, often exemplified by surgeons' documentation, are more effective communication tools and contribute to better patient care. * **Tension Between Billing and Care:** A fundamental tension exists between the detailed documentation required for billing purposes and the concise, relevant information needed for efficient and safe patient care. Tools/Resources Mentioned: * **AI:** Used in the University of Pennsylvania study to analyze EMR text for copied content. * **EMR Systems:** Generic reference to prominent EMR systems with copy-paste functionality (unnamed). * **Journal of the American Medical Association (JAMA):** Source of the study on EMR copy-pasting. Key Concepts: * **Electronic Medical Records (EMR):** Digital versions of patient charts, central to healthcare documentation. * **Evaluation and Management (E&M) Codes:** A category of CPT codes used by physicians to bill for patient visits based on complexity. * **CPT Codes:** Current Procedural Terminology codes, used to describe medical, surgical, and diagnostic services. * **SOAP Notes:** A common method of documentation in medical records, standing for Subjective, Objective, Assessment, and Plan. * **Chart Lore:** The phenomenon where incorrect or outdated information is perpetuated in a patient's medical record through repeated copying and pasting. * **Information Overload:** The state of being exposed to too much information, making it difficult to make decisions or extract relevant details. Examples/Case Studies: * **University of Pennsylvania Hospital System Study:** A six-year study (2015-2020) that found 50% of EMR text was copied and pasted, increasing over time, and used AI for analysis. * **Sanford Hospital System (South Dakota):** Cited as an example of a system that uses note templates to minimize copy-pasting and encourage succinct documentation, leading to better communication and patient care.
United Health Group Acquisition of Change Healthcare... Healthcare Data Goldmine
AHealthcareZ - Healthcare Finance Explained
@ahealthcarez
Sep 25, 2022
This video provides an in-depth exploration of United Health Group's (UHG) acquisition of Change Healthcare, focusing on the strategic value of the vast healthcare claims data that Change Healthcare processes. Dr. Eric Bricker begins by outlining the context of the acquisition, which was initially challenged by the Department of Justice on antitrust grounds but ultimately approved by a federal court in September 2022. This sets the stage for understanding why such a seemingly small acquisition (Change Healthcare's $3.1 billion revenue compared to UHG's $288 billion) holds immense strategic importance for a healthcare giant like United. The presentation then delves into the history and function of Change Healthcare, tracing its origins back to a division of WebMD in the late 1990s that pioneered electronic billing for hospitals and doctors. This division evolved into Emdeon and later rebranded as Change Healthcare, becoming the primary billing clearinghouse for 5,500 hospitals and 800,000 doctors across America. It facilitates the electronic submission of claims to over 2,100 insurance payers, including major competitors like Blue Cross, Cigna, and Aetna, processing an astounding $1 trillion in claims annually. Dr. Bricker emphasizes that this central role means Change Healthcare possesses a "healthcare data goldmine" encompassing patient IDs, provider IDs, diagnoses, procedures, billed charges, and allowed amounts for the vast majority of commercial health insurance plans in the U.S. The core of the video highlights three key ways United Health Group could leverage this comprehensive claims data. First, for fully-insured employer groups, UHG could use the detailed clinical history (e.g., cancer, diabetes diagnoses) embedded in the data to more accurately underwrite policies. This would allow them to offer highly competitive, lower price quotes to healthier groups, potentially taking business away from competitors, or conversely, to avoid quoting on groups with exceptionally high healthcare needs. Second, in the lucrative Medicare Advantage market, UHG could target healthier seniors turning 65. By analyzing their prior clinical history, United could identify and specifically market to individuals less likely to incur high costs, optimizing their sales and marketing efforts for this rapidly growing segment. Finally, the data could enable UHG to create "High Performing Networks" by identifying outlier specialists who order significantly more tests and procedures than their peers. By subtly carving out these 2-3% of high-utilization providers, United could create a more cost-effective network that remains broad enough not to alienate patients or employers, thus offering the best of both worlds: cost efficiency without the perception of a "narrow network." Key Takeaways: * **Strategic Value of Comprehensive Claims Data:** Change Healthcare's position as a central billing clearinghouse for 80% of U.S. doctors and the majority of hospitals provides access to an unparalleled dataset including patient IDs, provider IDs, diagnoses, procedures, billed charges, and allowed amounts across virtually all commercial payers. This data is the true "goldmine" for UHG, far outweighing Change Healthcare's direct revenue contribution. * **Data-Driven Underwriting for Fully-Insured Groups:** Access to detailed clinical history through claims data allows insurers like UHG to precisely assess the health risk of employer groups. This enables them to offer highly competitive, lower premiums to healthier groups, gaining market share, or to strategically decline to quote on groups with high-cost health conditions. * **Optimized Medicare Advantage Targeting:** The data allows for the identification of healthy individuals turning 65, enabling highly targeted marketing efforts for Medicare Advantage plans. This precision targeting can significantly improve the profitability and growth of an insurer's government programs segment by focusing on beneficiaries with lower expected healthcare costs. * **Creation of "High Performing Networks":** By analyzing provider-specific claims data across all payers, insurers can identify outlier specialists who consistently order a disproportionately high number of tests and procedures compared to their peers. Excluding a small percentage (e.g., 2-3%) of these high-utilization providers can create a more cost-effective network without making it appear "narrow" to patients or employers. * **Historical Evolution of Healthcare Billing:** The video highlights the transition from paper-based billing in the late 1990s to electronic clearinghouses, with WebMD's billing division evolving into Emdeon and then Change Healthcare, underscoring the long-standing drive for efficiency in healthcare administration. * **Antitrust Concerns and Data Monopolies:** The Department of Justice's challenge to the acquisition on antitrust grounds underscores the significant competitive implications of one major insurer gaining access to such a vast, cross-payer dataset. The concern was that UHG could gain an unfair advantage by knowing the clinical and billing patterns of its competitors' members. * **Discrepancy Between Revenue and Strategic Value:** Change Healthcare's relatively small revenue ($3.1 billion) compared to UHG's ($288 billion) indicates that the acquisition was not primarily for revenue growth but for the strategic, data-driven advantages it provides. The data's value is in its potential to optimize UHG's core insurance businesses. * **Impact on Commercial Operations:** The ability to leverage this data for underwriting, targeted marketing, and network design directly impacts an insurer's commercial operations, enabling more efficient customer acquisition, retention, and cost management. * **The Power of Holistic Data:** The key insight is not just having *some* data, but having *all* the data – patient, provider, diagnosis, procedure, and payment information across all major payers. This comprehensive view allows for predictive analytics and strategic decision-making that is otherwise impossible. Key Concepts: * **Billing Clearinghouse:** A third-party entity that processes and transmits healthcare claims between healthcare providers and insurance payers, ensuring data accuracy and compliance. * **Fully-Insured Groups:** Employer-sponsored health plans where the employer pays a fixed premium to an insurance carrier, and the carrier assumes the financial risk for employees' healthcare costs. * **Medicare Advantage:** A type of Medicare health plan offered by private companies that contract with Medicare to provide Part A and Part B benefits, often including additional benefits like vision, hearing, and dental. * **High Performing Network:** A healthcare provider network designed to be more cost-effective by including providers who demonstrate high quality and efficiency, often by excluding those with unusually high utilization rates. * **Antitrust:** Laws designed to promote competition and prevent monopolies or anti-competitive practices that could harm consumers. Examples/Case Studies: * **United Health Group's Acquisition of Change Healthcare:** The central case study illustrating the strategic importance of healthcare data. UHG's $7.8 billion acquisition was driven by the desire to leverage Change Healthcare's extensive claims data, despite its small revenue contribution to UHG. * **Evolution of WebMD to Emdeon to Change Healthcare:** This historical progression demonstrates the increasing sophistication and consolidation in the electronic healthcare billing and data processing industry. * **Specific Data Utilization Examples:** The video provides concrete examples of how the data could be used: identifying breast cancer patients for underwriting, healthy seniors for Medicare Advantage marketing, and gastroenterologists who perform scopes on every new patient for network optimization.