Making Rounds: The up and downside of disintermediation [Podcast]

Health systems are facing the Big Squeeze, the combination of factors including market forces, labor pains, a clinical tsunami, and disintermediation, that threaten the ability to fully deliver on their mission.

Traditional healthcare services face growing competition from new entrants which have more resources to put towards services that meet consumer demands and preferences. As patients’ choices for how and where they receive care grow, conventional healthcare players should consider the three A’s of efficiency and adapt to this new ecosystem.

In this episode of the In Network podcast feature Making Rounds, Head of Thought Leadership Dr. Jerome Pagani discussed key aspects of the Big Squeeze with Chief Medical Officer Dr. Craig Joseph. They share their views on the pros and cons of disintermediation, digital crumbs, risks of increased access to personal data, big tech, and how decentralized and team-based care are the future of healthcare.

Listen here:



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Show notes:

[00:00] Intros

[02:14] Pros and cons of using data to improve clinical and operational processes

[09:21] Auto insurance, its real-life ties to new players in the health insurance space, and the potential risk to patients

[16:35] Combining data and capabilities for a three-legged stool approach

[20:41] With these new partnerships and technologies, what’s the future of care delivery?

[24:42] Team-based care and considering digital determinants of health

[26:33] Outros



Dr. Jerome Pagani: Hey, Craig.

Dr. Craig Joseph: Hey, Jerome.

Dr. Jerome Pagani: Good talking to you today.

Dr. Craig Joseph: I'm looking forward to this conversation, slash debate, slash conversation.

Dr. Jerome Pagani: Quite excellent. Me too. So, we've talked a lot as a company about the big squeeze, which is that confluence of factors that are affecting healthcare systems right now. And that's things like the clinical tsunami, labor pains, and market forces, which are making it harder for them to respond at a time when they need to be sort of the most nimble and innovative. There's sort of an additional factor there that we haven't talked a lot about yet, and that's really the risk of disintermediation.

Dr. Craig Joseph: Jerome, I don't want to be disintermediated, and I think possibly a lot of people and organizations in healthcare don't want to be disintermediated. It sounds painful and something to be avoided.

Dr. Jerome Pagani: Well, it could be like disimpaction, which may be unpleasant at first, but really great once it's done. Really great.

Dr. Craig Joseph: Thank you, Jerome.

Dr. Jerome Pagani: One of the ways that health enterprises have looked to become innovative in sort of a light and lean way is to really use the best of their clinical expertise and use the best of the expertise from the tech world to become a little savvier in the way they use data to inform clinical and operational processes. So, we thought it would be interesting to kind of have a conversation around what those data look like. What are some areas where I think there's clear promise and maybe some areas that might be fraught with peril?

Dr. Craig Joseph: Yeah, well, I think it makes a lot of sense. We're talking about population health. How much data can you get on a group of people to say that, hey, they all share the same problem, they're all lacking a certain test or not getting their preventative care as well as they could, and to be able to target them for outreach, as opposed to the vast majority of patients who are on track and don't need those interventions. And that makes a lot of sense to me. So, using data to help patients make sense. I get a little bit concerned when we start talking about using data to limit patients' access or using even more data depending on who you are in the healthcare ecosystem for what might benefit you as an organization but may not benefit the people that you're taking care of or that you want to take care of, or that you should be taking care of.

Dr. Jerome Pagani: Let's back up for a second and talk about kind of that delicate balance between being able to help people and respect their privacy for a second. So, you brought up the pop health example. And, you know, one thing that the research community has had to grapple with for quite some time is the ability to share de-identified data in a way that's specific enough that it's useful for furthering our knowledge about a given condition or how what treatments may work and for what populations. And doing that in a way that is still safe enough that individuals can't be identified on, you know, even a zip code level basis. Right? So, I think one of the risks has been that when you combine data from lots of different sources, you're able to slice very narrowly. And even when the data are de-identified to a certain extent, there's a risk that you're able to go in and, because of the number of factors that you have, really slice down exactly who an individual is. And so that's one of the risks. But one of the promises is, as you mentioned, being able to do things on a population level when you sort of extract away and have a really clear idea of how to define a subpopulation.

Dr. Craig Joseph: Sure. And just to, you know, put a finer point on it, I think that makes a lot of sense. And so, you know, certainly, we want to take is data from different sources pooling it together to make the best picture that we can representing the patients that that we're taking care of, either in the clinic, in the hospital, or as a population as a whole. And as you mentioned, certainly, there's a risk whenever you put a bunch of different data points together that there could be abuse. And as you mentioned, if someone's got a rare disease and we know that they live in a certain zip code, it's possible. And it's been shown that with enough computing power and enough data that that person could be identified, and then all the associated data points with them could be identified. Certainly, that's a risk. I think that's, in general, a small risk for a big benefit to most of the folks that are in that clinical pool. And that doesn't worry me too much. I think that certainly research organizations and clinical organizations have an ethical responsibility to minimize that. You'll never get rid of all risk. There's always going to be some small risk there from a privacy leak. But anything that we can do to make that safer is a good thing. Meanwhile, the benefit is so obvious that, hey, we can now slice and dice our patient population and focus interventions on those that need it and not spend our time, money, resources, trying to tell people who are already doing what we think is the right thing, that they should do the right thing.

Dr. Jerome Pagani: And this isn't a problem that's unique to healthcare. Right? So, if you look at things like the commercial genomics industry, right? So, we know that folks have gone through and used those databases to identify people who've committed crimes in the past. What most of the companies are offering at this point is sort of entertainment-value genomics data. So, I guess that's the benefit. But then the risk is that if your data could be used to find someone, you or someone related to you, who may have committed a serious crime in the past, and that's one of those examples of being identified from data that you provide even at your consent. Retail organizations have long been trying to gather enough information about you and your buying patterns to personalize your experience with them, personalize the way they market to you, and do a better job of driving your consumption behavior.

Dr. Craig Joseph: Sure. And outside of healthcare, or even related to healthcare, we know a decade ago that organizations were sending coupons for baby products to women who sometimes didn't even know that they were pregnant. And so that that magic has happened and that secret, you know, has been out of the bottle for a long time. And so not much to do to get that genie back in there. That's a done deal. What I'm concerned about is kind of the direction that we might be going in where you didn't actually make a purchase, or you didn't actually say it was okay to get my genomic information. But that information about you, once it's compiled, puts you at risk of not being able to get certain services or being, you know, priced out of different options in life.

Dr. Jerome Pagani: Just as an aside, an anecdote, my daughter was born about ten years ago, and as a joke, when she was born, I, on a very popular social media platform, said that her name was Shadrach, which was not actually her name, but was meant to be amusing to my friends and family. And two days later, an ad showed up on that social media platform calling me Shadrach and offering me a Chevy pickup truck that they thought I might like. So, all the little digital crumbs that we leave have long been gathered up, and folks try to use that for better insights about you. As you've alluded to, there are clear cases, sort of bright line cases, where you look at that risk-benefit relationship. And clinical care is one of them where, yeah, there's a risk of being identified. There's a risk of giving out information that is very personal. There's a risk, even when you're consenting to not necessarily understanding everything that goes into or could be done with those data, particularly if there are clauses in there about what third parties can do with those data. But the benefit to the clinical care that you could receive seems pretty clear. And this is a bright-light example of that risk-benefit ratio goes in the right direction.

Dr. Craig Joseph: Yeah, well, let's talk about one that's maybe not necessarily directly related, but will lead to a healthcare situation. Let's talk about auto insurance, Jerome. So traditionally, some of us pay more for auto insurance than others. And the insurers base that on information that they have collected about us. So, some of that information includes how many tickets we've had, how old we are, how long we've been driving, what kind of car we drive, what color car we drive. Red cars generally are more expensive to insure than not red cars. We could talk about the psychology of that for some fun. But now you have another option. You can voluntarily give up significant information about how you drive to the insurance company, presumably to prove to them that you're a good driver and deserve a discount. So, you put a little fob into your car's computer that then can communicate with your insurance company. It tells them how fast you’re driving, tells them how quickly you stop sometimes, how often you're potentially driving in a, what they would consider, dangerous way.

Dr. Jerome Pagani: How many times you get flipped off?

Dr. Craig Joseph: It does not tell them that.

Dr. Jerome Pagani: To me, that’s the marker.

Dr. Craig Joseph: That would be a good thing.

Dr. Jerome Pagani: That's like a biomarker for health, for how well you drive.

Dr. Craig Joseph: The car’s computer does not tell them that. I'm not going to argue with you or engage with you.

Dr. Jerome Pagani: It’s an indirect measure, but it's clearly a marker of how responsibly you’re driving.

Dr. Craig Joseph: I mean, that makes sense. We'd have to take into account the state and city that you live in.

Dr. Jerome Pagani: The auto insurance example is, there are real-life ties to health insurance, though. There are companies that are offering pay-as-you-live kinds of policies where if you're willing to surrender data about your activity levels, your shopping habits, maybe even genetic information, so, they have some idea of what conditions you're predisposed to have, might be. All of that can then get you a reduced rate on your health insurance.

Dr. Craig Joseph: It sure can. It can totally reduce your rate, or it could …

Dr. Jerome Pagani: Jack it up.

Dr. Craig Joseph: … make it astronomically high.

Dr. Jerome Pagani: Yeah.

Dr. Craig Joseph: And one of my concerns about insurance, specifically, whether it be health or auto, is that this is supposed to be a pooled resource, meaning some of us are going to need it, most of us are not going to need it. And the insurance company's job is to try to figure out as best they can with the limited information that they have, how they stay in business while making those bets. Right? When we get auto insurance or life insurance, let's talk about life insurance. When we get life insurance, we're making a bet with the insurance company for a term, for a specific term. Our bet is that we're going to die, and they're going to owe our ears ... Owe our …

Dr. Jerome Pagani: Heirs?

Dr. Craig Joseph: Yeah. A lot of money. And their bet is that they won't, and that's fine. But when it comes to healthcare and health insurance, giving them all of this information, they might say that, hey, your risk of requiring services, healthcare services is very high. And either, A, we won't insure you or, B, if we're required to insure you, we are going to make it so very expensive that you couldn't possibly afford it. And from an insurance company standpoint, I totally understand why they would want to do that. But I think the problem is that this is a resource that I absolutely need, at least in the United States, that I need health insurance. And this is not an optional exercise for me. And so, I am concerned that if a health insurance company specifically gets access to tons of information, especially without my permission, that they will do what I consider to be the wrong thing.

Dr. Jerome Pagani: And it wasn't all that long ago where using information about your past medical history to help determine prices was completely allowed, was totally fine. And so, for folks that had, quote-unquote, preexisting conditions, they might easily have been priced out of the marketplace. And I think that's part of the concern that you're expressing there, that we could go back to that.

Dr. Craig Joseph: That is not only part of, it is the entire concern. It was a horrible system that we had where people with preexisting conditions or things that might lead to preexisting conditions were priced out of the marketplace.

Dr. Jerome Pagani: Very slippery slope. Yeah. So, I think probably one of the reasons that you're raising this is that there's been some news fairly recently that there are players in the big tech world, for instance, who are thinking about getting into the health insurance market as well.

Dr. Craig Joseph: And leveraging some of this information. Again, information that they didn't get specific or need specific information.

Dr. Jerome Pagani: So what's but what's the complaint that they're operating more efficiently than a traditional healthcare system because they happen to have access to a wider range of data?

Dr. Craig Joseph: The complaint is that I will not be able to get healthcare or someone who has either a preexisting condition or is deemed likely to get some sort of condition that will require a big payout from a payer, insurance company, that I won't be able to get that service in the future from them. And I understand that they're interested. I totally understand that they, as an entity are trying to minimize the number of people that are going to need money from them and maximize the amount of money that they can get in terms of costs from perfectly healthy people. That's always been their goal.

Dr. Jerome Pagani: So if I understand the risk correctly, it's really around them skimming the cream off of a population, the folks that are least likely in their data-fueled, insight-generated experience to develop a serious health condition and so, therefore, will be cheapest to insure, skim those folks off and then drive away with the threat of high premiums, anyone who they deem more risky. So, in essence, what they're doing is they're changing the risk pool of the population, they'll tend to pull off folks who are higher SES (socioeconomic status), have more disposable income, who tend to be healthier anyway. And what's going to happen to the risk pools for all of the other insurance companies in the country is that they'll be left with a now shifted profile towards a more risky population. We’re pretty clear about when we get into behaviors that seem like they are not beneficial to any of the insured. The question is, how do we stay within that upper end of the gray zone into that sort of bright line zone of, there's clear benefit here, but if not, how do we put guardrails in place so that we don't end up going back to the days when preexisting conditions or the new data insight-generated equivalent are used to discriminate against folks who may end up costing more to care for.

Dr. Craig Joseph: That's a great question. I don't have the answer. Right? So, I think that there is this spectrum, and somewhere on the spectrum is probably a fairly sweet spot where companies who need to stay in business have the means to do so, but also to provide the service, the care, the financing for health that folks need to the people that need it.

Dr. Jerome Pagani: And I mean, I think we have some idea because we're already seeing those models in place where you're as we mentioned in the beginning of the podcast, we're seeing that combination of the partnership where there's a health system that's bringing the best clinical expertise that they have and combining it with the best data and data infrastructure and analytics expertise from the big tech world. And doing that in a way that enables the two of them together to sort of form not only a partnership where they're bringing that into play, but then maybe that payer piece as well. And so, you can end up with things that look like a clinical and big tech provider who ends up being a pay-vider, or they pull in a traditional payer, and that becomes a three-legged stool where each is bringing the best expertise from their area. And this is one of those ways to get a value-based care kind of model without having to have that sort of mandated, without that being a top down legislative or regulatory type action.

Dr. Craig Joseph: If it's just the payers, then yeah, there's great risk for them maximizing their fiduciary responsibility to their shareholders by skimming off the top and not offering insurance to those who might actually need it. But when you combine the payers with the providers, both the physicians and the hospitals, then you're really talking about value-based care where everyone will be covered because that's how value-based care works. But at the same time, you're really leveraging all of those excellent data points to improve the care of everyone and saving money for all three parties, the payer, the physicians, and the hospitals.

Dr. Jerome Pagani: Just to back up, within any sector there's danger of combining data from other places. And on the retail side, there's the danger that combining health data with what they know about you and your habits of spending could lead to things like marketing more directly to you health-related products at a time when you're really sort of vulnerable and may not be making best decisions, financial decisions. Healthcare tends to be very mission-driven. There is at the end of the day sort of that idea that you're doing what's best for the patient, regardless of whether or not they even have insurance. Right? So less there. And so, I think one of the things that I hear you saying is that one of the ways to stick with the better angels of our nature is through these kinds of partnerships where there are overlapping but somewhat competing interests that are joined in such a way that the patient is still becomes the primary thing. And yes, there are concerns, there are considerations around making money or delivering services in a particular way or whatever the other missions are. But combining data across groups that have overlapping but somewhat competing interests may be a way out of avoiding the sort of very clear on the dark side of the line.

Dr. Craig Joseph: Yeah, I like your approach of trying to do good. I certainly respect the fact that there's no margin, there's no mission. And so, whether you're a health insurance company, a group of physicians or a group of healthcare systems, you definitely need to earn a profit. But what we should try to be doing is all rowing in the same direction and using the technology that we can to maximize both health and profit. Right? The benefit to the patients who ultimately are the reason that you're in business will, if the system brings you more reward for the more benefit you bring to patients, then we're all going to win. However, if that's not the case, then the system that we devise incentivizes any of those groups to not do the right thing financially, then, boy, that's tough to be a corporate leader under those circumstances, right?

Dr. Jerome Pagani: Well, I mean, if they're a publicly traded company, they have a fiduciary responsibility to maximize their profit.

Dr. Craig Joseph: Absolutely.

Dr. Jerome Pagani: There's nothing wrong with introducing that element together with something that's very mission-driven and patient-focused to make sure that the care being delivered is essential and as efficient as possible. Yeah. So, this is one of the ways that we can get to the place we'd like to get to, which is the efficient and affordable delivery of high-quality care that leads to high-quality outcomes. So, I think the question becomes, in these kind of relationships, where do we see health going, where there’s strong clinical group, partnered with a tech group, partnered with a payer. What are the promises there for how the delivery of clinical care could be changed?

Dr. Craig Joseph: I think that there's lots of potential, obviously, it's what we do every day is to try to help healthcare organizations provide better care while also staying in business by being able to pay their folks and to build buildings and to buy equipment that they need. I think it’s important to make sure that our incentives are aligned and that I think that's the major thing that concerns me is when incentives get out of line, when the push to, you know, maximize your return while not trying, at the same time, maximize the care that you're providing, whether that be for small number of patients or for a large population. That's where we get into some danger areas. And as long as we're kind of going in with our eyes wide open, I think it's all a great thing.

Dr. Jerome Pagani: So, there are a whole host of technologies that are going to change the way care is delivered. And some of these have really gotten a boost from the necessities driven by the COVID-19 pandemic and things like telehealth, remote patient monitoring, remote patient therapeutics, digital therapeutics, things like that, mean that the reach of the clinician has become longer and the ability to do more than just consult but actually to monitor, diagnose, and eventually treat remotely is only going to grow. And so, you know, we have that whole perspective around decentralized care, which is talking about the places where care is going to be delivered are going to grow, the number of people delivering care is going to need to grow. And so, the number of partnerships that you are going to need to make sure that you can be an effective part of the healthcare ecosystem is going to grow. And so that really requires a strategy for thinking about not only what your click and mortar approach is, you know, what your physical versus virtual capabilities are, but also how you are going to partner to connect, combine, and share those data that you need to provide the best care that you can and also enable the other stakeholders within that kind of decentralized care, health ecosystem do the same.

Dr. Craig Joseph: Yeah.

Dr. Jerome Pagani: That's our vision for one of our visions for how the future of care is going to change. It's going to be changed by those technologies that we mentioned. And that's going to require, you know, as those technologies come on board, we're going to need new operational processes, new supply chain. We're going to need new clinical workflows. We're going to need to think about how we use people's time most effectively. We hear all the time about the need to have people operating at the top of their licenses, for instance. And we see some examples like the command center approach and managing by exception being combined in a way that allows a relatively small number of staff members to take care of a relatively large patient population. And typically, those are nurses, and then they only kick things up to the doctors, and there's an even smaller number of doctors. They only kick things up to the doctors when there are things that are go outside of bounds and then there can be an intervention. And so, I think these technologies become very powerful from an efficiency standpoint, and allow us to, if we are thinking about flexibility, about how to use them and not just trying to as I think we initially did with the EHR, just digitize our paper records, for not thinking about how to how to just weave technology into existing workflows, we can actually be really creative about the way that care gets delivered and what that means in terms of the patient experience and the kinds of outcomes that they're able to have.

Dr. Craig Joseph: Yeah. So, I think the idea of team-based care and everyone working at the top of their license makes complete sense.

Dr. Jerome Pagani: Go team.

Dr. Craig Joseph: So, that's something that we have been in healthcare in the United States really pushing for a long time. Sometimes we run into regulatory problems. Rarely we run into technology problems. Sometimes we run into legal issues. However, that's definitely the direction that we're all going in. I think most people are very comfortable with technology both in their house and they expect to see it in healthcare. And so that's not a problem. I think one issue is certainly going to be that some folks have access to the technology and others don't. And so, we need to kind of overcome that gulf where you can send one group of people home with a technology package that they just plug in and can quickly get online. And others, they don't have some of the tools that we need to work when that goes home. And so, they'll need even more resources. And so looking at the bigger picture, I think taking into account all the different diverse, A, viewpoints and, B, backgrounds that our patients have, is going to be essential if we're going to be successful in taking some of these patients out of the hospital system or out of the high risk area and moving them to a low risk, whether we're talking about inpatient or outpatient, the risk and the reward remain the same.

Dr. Jerome Pagani: I think you touched on something really great there, which is this idea that we need to be designing whatever systems that we create for this future of healthcare that we're talking about with the people delivering and receiving care and mind. So this is a nice tie back to that idea that we have to make healthcare work for the humans who are involved in the care and receipt … the delivery and receipt of care.

Dr. Craig Joseph: We should make healthcare work for humans.

Dr. Jerome Pagani: This has been a great conversation, Craig, thanks for spending some time to chat this through.

Dr. Craig Joseph: It's been a pleasure. I love talking about how technology and healthcare can work together in positive ways while minimizing the negative effects.

Dr. Jerome Pagani: Excellent.

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