Relentless Health Value‪™‬ Stacey Richter

In Episode 439 of 'Relentlessly Seeking Value,' host Stacey Richter discusses the convoluted issues surrounding generic drug pricing with pharmacy consultant Luke Slindee.
To read the full article and show notes with links mentioned as well as a full transcript, click here.
They delve into the ways traditional Pharmacy Benefit Managers (PBMs) exploit the system to make immense profits, often leading patients to pay more even with insurance. The conversation explores various solutions, such as the removal of "Usual and Customary Prices" from PBM contracts, the advantages of bypassing insurance, and giving patients direct payment tools like health savings accounts.
Luke Slindee, with his extensive background in pharmacy and consulting, provides valuable insights into rebalancing the generic drug market to benefit patients, pharmacies, and plan sponsors alike. Additionally, the broader implications of these dysfunctional systems on pharmacy operations and staff conditions are discussed.
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08:12 Where do cash prices fall when pharmacies have contracts with PBMs?
08:39 What is a usual and customary price?
12:14 How is the usual and customary price affected by PBMs?
16:49 Should pharmacies be allowed to have two sets of cash prices?
17:14 Where does GoodRx fit into this because of the pharmacy/PBM dilemma?
19:06 What’s happening with Amazon and the anticompetitive contract lawsuit, and how does it relate back to pharmacy contracts with PBMs?
20:38 EP395 with Brennan Bilberry.
21:05 EP420 with Ge Bai, PhD, CPA.
23:27 Why is there a new wave of cash-only pharmacies?
24:02 EP418 with Mark Cuban and Ferrin Williams, PharmD, MBA, from Scripta.
25:41 What would allow the generic market to return to normal competitive pricing?
26:39 How does this dysfunction create a negative downstream effect?

In this episode of Relentless Health Value we dive into the concept of Cognitive Dissonance in the healthcare industry with Dr. John Lee, an ER physician and chief medical information officer. We explore how healthcare professionals navigate the conflict between their beliefs and actions, especially in large healthcare organizations. Dr. Lee shares practical advice on celebrating small wins, incremental improvements, and fostering a supportive culture among colleagues.
This conversation sheds light on the challenges and solutions for those striving to deliver better patient care despite systemic obstacles. 
To read the full article and show notes with links mentioned as well as a full transcript, click here.
Dr. John Lee is an ER (emergency room) doc by training, who is also an informaticist and chief medical information officer. I can tell you from personal experience that Dr. Lee is one of the most creative and pragmatic problem solvers that I have encountered. He says he’s dedicated to trying to help move the ball forward and changing our healthcare system using information technology and using our ability to be far more transparent with the things that we try to do in a positive way in healthcare.
Join us for an insightful discussion on balancing ideals and realities in modern healthcare.
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The Unseen Influence of the RUC on Healthcare
This episode of 'Relentless Health Value' features a discussion with Brian Klepper, a healthcare analyst and former CEO of the National Business Coalition on Health, about the powerful yet obscure RUC (RBRVS Update Committee) and its significant impact on the economics of primary care and the broader healthcare system. The RUC, a committee within the American Medical Association, plays a critical role in determining the relative value of medical procedures, which directly influences Medicare payments. The episode reveals how the RUC's composition—dominated by specialists over primary care physicians—skews the financial incentives in healthcare, affecting the viability of primary care practices and mental health services. The discussion also explores the flawed assumption that the financial value assigned to healthcare services by the RUC equals their true value to patients, highlighting the need for a better understanding of the inner workings of American healthcare to address its shortcomings.
To Read the Full Article with Show Notes Including Links Mentioned, Visit Our Site.
00:00 Introduction
02:29 Unpacking the RUC: The Power Behind Healthcare Economics
04:26 The Financial Impact of the RUC on Primary Care
07:43 Exploring the Value of Healthcare Services
10:29 The Real-World Consequences of RUC Decisions
12:50 Debunking the Equivalence of Value and Money in Healthcare
15:09 Final Thoughts and How to Stay Informed
Brian Klepper, PhD, is principal of Worksite Health Advisors and a nationally prominent healthcare analyst and commentator. He speaks, writes, and advises extensively on the management of clinical and financial risk, on high-performance healthcare, and on realizing the potential of primary care.
His current focus is on high-performing healthcare organizations that consistently deliver better health outcomes at lower cost than usual approaches in high-value niches and how, integrated with advanced primary care, they can be configured into turnkey comprehensive high-value health plans that can disrupt the status quo.
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In this episode of Relentless Health Value we follow up on the topic of employer inertia discussed with Lauren Vela in episode 406, turning our focus to third-party administrators (TPAs), administrative services only (ASOs), and health plans.
Elizabeth Mitchell from the Purchaser Business Group on Health (PBGH) joins us to discuss the roles of TPAs and ASOs, highlighting the gap in the market for independent, efficient TPAs not owned by health plans. We also delve into the trend of direct contracting between employers and providers to enhance access, quality, and outcomes.
Bottom line, right now, there’s a gap in the market. What is needed are indie TPAs who are effective and efficient and not owned by a health plan because, if history is any predictor of the future, the second the TPA gets owned by a health plan, the TPA sort of ceases to be a TPA and becomes a health plan.
The conversation today with Elizabeth Mitchell pretty quickly gets into the shift toward direct contracting between employers and providers to improve access quality and outcomes. If you can’t beat them, get ruthlessly practical is my takeaway. I have to say, I truly admire some of these HR folks and their leadership willing to do what it takes on behalf of protecting the people that work for them.
There are certainly some health plans at least trying here, so I don’t want to imply otherwise. There are some interesting initiatives that are afoot at, I’m gonna say, usually regional health plans. Elizabeth Mitchell has talked about some of these and made this clear also elsewhere.
Join us for a deep dive into these critical components of the healthcare system and their impact on self-insured employers.
To read the full article and show notes with links mentioned as well as a full transcript, click here. 
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For a full transcript of this episode, click here.
I’m gonna encore this episode with David Scheinker, PhD, for several reasons; but here’s a big one: Why are we as an industry not doing what David Scheinker suggests in this episode?
Why are we not doing, I don’t know, kinds of logical things to reduce admin burden in this country when everyone agrees admin burden is a problem?
But let me back up for a moment for context. Two things happened since this show originally aired. One is that I was invited to a fireside chat by the Advisory Board to talk with Abby Burns, one of the amazing hosts over at Radio Advisory; and we talked about value in the healthcare industry. And if you define value as benefit divided by costs, and you can cut costs—like cut admin burden costs in half—then you have created some really nice communal value, which we talked about at length during that aforementioned fireside chat.
Here’s the other thing that happened since this show originally aired. I read the book by Mike Leavitt, mainly because Steve Schutzer, MD, kept talking about it. The title of the book is Finding Allies, Building Alliances. Maybe I will do a book report about this at some point, but let me share a couple of key quotes just to get the party started here.
Mike Leavitt wrote, “A diverse alliance, well led and well managed, can bring resources to bear on a problem that no organization can match—even the largest of organizations. The synergy of resources—from financial to intellectual—can deal effectively with a wide range of issues confounding organizations today.”
I found that very interesting. Here’s the second quote, which deals with what the top reason is that such diverse alliances may wish to hook up. “[It’s] a common pain: A shared problem that motivates people and groups to work together in ways that could otherwise seem counterintuitive.” Hmm … so, back to administrative burden.
Let’s review the facts that David Scheinker, PhD, shares in the interview that follows. He says any given transaction will cost provider organizations 14% of the total transaction costs to manage to get paid. Yes, it costs 14% of a transaction merely to get paid for the transaction. This is a big reason why both Peter Hayes, in the episode with him (EP424), and also Marshall Allen (EP425) talk about for why cash prices can be a whole lot less than going through insurance prices because you can skip a lot of insurance burden.
Now, on the payer side, add to that 14% an additional 5% to 15% to pay said transaction. That 30% of healthcare is waste stat that keeps getting tossed around. Listen to the show with Will Shrank, MD (EP413) for more on that. But, yeah … here’s 20% to 30% of every transaction that is waste. And we haven’t even gotten into redundant care or inappropriate back surgery yet. Our industry spends up to 30% of our money just trying to get paid and pay.
Here’s a case study for you. You know who has already solved for this whole “it’s really hard to get paid and pay” dilemma? Derivative traders. It used to cost derivative traders $100,000 to do a contract, any given contract. And they worked together and got this down to $5000 by doing some of the stuff that David Scheinker talks about in the show. And, I don’t know, I feel like the healthcare industry could also do this, too, if they wanted to. But there are a whole bunch of reasons why our industry cannot seem to get together and be as ruthlessly practical as derivative traders—or banks, who have figured out how to work together to process credit cards to reduce their own common pain.
Here are but a few of the reasons, potentially, why the healthcare industry doesn’t get together to reduce administrative burden in some of the ways that Dr. Scheinker talks about.
1. Some organizations actually make a lot of money off of that transactional waste. As but one example—and not to just pick on one, but we don’t have all day

Optimizing Pharmacy Benefits in Value-Based Care: A Conversation with Dan Mendelson
In Episode 435 of 'Relentless Health Value,' Stacey Richter hosts Dan Mendelson from Morgan Health to discuss the importance of integrating pharmacy benefits into the broader context of value-based care. The conversation stems from a LinkedIn post by Mendelson outlining five key considerations for optimizing pharmacy benefits. Topics include the total cost of care, the need for value-based decision-making in pharmacy benefits, the integration of clinical teams in formulary development, and the critical role of patient engagement. The episode also explores how employers can better manage healthcare costs by aligning incentives and navigating the complexities of the pharmaceutical landscape. Key advice for various healthcare stakeholders, including pharma companies, hospitals, and primary care doctors, is also provided.
To read the full article and show notes with links mentioned as well as a full transcript, click here.
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00:00 Introduction
00:28 The Intersection of Pharmacy Benefits and Value-Based Care
00:57 The Critical Role of Pharmacy in Healthcare Outcomes
03:16 Exploring Pharmacy Benefits Optimization with Dan Mendelson
03:39 Morgan Health's Mission and Healthcare Innovation
04:46 The Conversation with Dan Mendelson: Deep Dive into Pharmacy Benefits
06:13 Strategies for Optimizing Pharmacy Benefits in Value-Based Care
11:19 The Future of Pharmacy Benefits and Employer Concerns
12:40 Advice for Pharma Companies in a Value-Based Healthcare System
16:13 Innovative Approaches to Managing Pharmacy Benefits
16:56 Engaging Patients in Pharmacy Benefit Decisions
18:06 Experimental Drug Tiers and Formulary Design
21:49 The Importance of Value-Based Contracting for Pharma
31:23 Lightning Round: Advice for Various Healthcare Stakeholders
34:47 Closing Thoughts and Invitation to Engage Further