Christopher Kerns: From Advisory Board, we're bringing you a radio advisory. My name is Christopher Kerns. You can call me Christopher. I'm again filling in for Ray Woods, who's currently starring at a Broadway revival of Cats. Try to guess which character she is. I think you'll be pleasantly surprised. Christopher Kerns: As most of our listeners here know, Advisory Board has a unique vantage point in the healthcare world. Our members span the entire industry, as does our research, and for the past few years now, we've been convening what we've termed Cross-Industry Value Summits in which we gather a motley crew of healthcare executives from different sectors and backgrounds to discuss some of the most vexing issues facing our industry. Why is containing healthcare costs so intractable? Why are durable clinical standards so hard to develop? Why is it that alone among musicians, it's only Queen and Carly Ray Jepsen that have never written a bad song? These are all questions that we answer, except for that last one. Christopher Kerns: So this year's topic focused on better understanding value. Is value inherently relative and zero-sum, or can it be defined in absolute terms? Why do different stakeholders struggle so mightily to agree on terms of value-based care? And we apply these questions to emerging technologies and innovations poised to transform the industry, the tech that's changing clinical trials, the rapid deployment of everywhere care, the promise of scale with artificial intelligence, and huge opportunities and costs associated with precision medicine. Solomon Banjo and Katie Schmalkuche were the principal Advisory Board facilitators of our summit. So they've joined me today to talk about what we and our attendees learned at the summit. Solomon, Katie, welcome. Solomon Banjo: Thanks for having us, Christopher. Katie Schmalkuche: Yeah, good to talk to you. Christopher Kerns: Let's start with a little background. Solomon, would you mind giving our listeners a bit of context on the summit? Why was it convened? Who joined us? Where did they come from? And did any of them talk any trash, because you know how much we love gossip here at Radio Advisory? Solomon Banjo: Yeah, happy to do that. So we've been holding these summits, specifically around the tensions and value, since 2019. And it really stemmed from the fact that if you look at a lot of strategic plans across the healthcare ecosystem, you'll see the same challenges over and over. Total cost of care, how do we manage that? How do we be more patient centric? But if you're talking to a health plan about this, if you're talking to a medical device company or a provider, they mean different things. And so we wanted to see if we could convene a session where people could actually come to grounds on what value means to them, what it should mean to the ecosystem as, hopefully, a way to drive the entire industry forward. For this year, we had 35 executives across health plans, health systems, pharma, med device, all convening in our Washington DC offices to have a candid conversation around the tension between delivering value at the population level and delivering that at the patient level. Christopher Kerns: Honestly, this sounds like a recipe for an unintentional fight club. Did it devolve into a brawl at some point? Solomon Banjo: It came close, and the reason it didn't is because actually something Katie pushed us to do, which is have people, rather than run from the elephants in the room, go at them directly and actually name "Okay, I'm about to say something that feels like the elephant in the room of this conversation. Let's actually grapple with it because those elephants are what's actually preventing a lot of progress." Christopher Kerns: So that's an important concept. You mentioned the elephants in the room, and I believe there's something else, the light-bulb moments. Katie, you want to give us a hint on why you chose those particular terms and why were those used to ground day? Katie Schmalkuche: Yeah, absolutely. So, as Solomon alluded to, I think in order to have a productive conversation, when you are talking about a topic that can be contentious and when there are conflicting priorities and incentives and all of that, it can be more productive to just give space and air out those elephants in the room. So we actually encourage people to state them out loud and even preface their statement with "An elephant in the room for me is X." It was an ambition, and I think we achieved it. By virtue of convening folks that don't typically talk to one another, that there might be what we called light-bulb moments. That could be anything from a new idea, a new insight, a new question that was raised, or a new way of looking at a problem. So we also encouraged people, and they did participate. And we encouraged people to state and write down on paper what new light-bulb moments occurred to them throughout the conversation? Christopher Kerns: What's the tenor of these sessions? Are they contentious? Are they stressful? Are they generally cordial? Because I know they're always extremely well received. I saw the feedback on it. The feedback was uniformly glowing. Katie Schmalkuche: I would say they're not as tense as you might think. Christopher Kerns: That's a little disappointing. I'm kidding. Katie Schmalkuche: Not as much drama as we might have hoped for. To the credit of all the participants, they all came with open minds. They all came assuming positive intent and looking for common ground, as opposed to looking for ways to bash each other or whatever. So the tenor of the conversation was definitely positive and one of curiosity. Christopher Kerns: So assuming a positive intent had to have been important in talking about that central tension that you and I talked about a little bit earlier, which is this tension of looking at value from the perspective of an individual versus value to the entire population... And let's be honest, that central tension is the central tension of any reasonably-free democracy in just about any context, right? Healthcare, tech, energy, politics, you name it. What is it about today's healthcare environment that made this conversation feel especially timely? Katie Schmalkuche: Yeah, I couldn't agree with you more. I think this tension is not unique to healthcare, nor is it new, but I think if you look at the mission statements, for example, or the strategic plans of different kinds of organizations that work in the healthcare space, you often see written down terms like patient centricity, putting the patient at the center, or terms like population health which, in a way, are just a different way of describing the idea of value for an individual or value for a population. So, in a lot of ways, these are worthy aims that we're all striving for, but I don't actually think that a lot of people acknowledge and talk about and grapple with the fact that those two very worthy ambitions are sometimes at odds with one another. So that's part of it. Katie Schmalkuche: And then I think beyond that, obviously the industry is very focused on figuring out how to pay for value, trying to set up value-based arrangements, and outcomes-based contracts for specific medical treatments. And it's probably fair to say that we're not making as much progress as quickly as we'd like to on those aims. And I think a lot of it really does come down to the fact that these two goals are intention, and there's not a right answer necessarily, let alone an easy answer. Christopher Kerns: You've referenced this tension as a contributing factor to a lot of the challenges that we face as an ecosystem with respect to progress against deploying value-based care. And we love a good root cause analysis here at Advisory Board. So I'm curious as to what you, as a team, identified as the reasons why that tension's so difficult to navigate. Katie Schmalkuche: Through our research, we boiled it down of four big drivers of the tension, four reasons that make it really difficult. First and foremost is this idea that value is typically assessed through one lens but then applied in another. The vast majority of the value frameworks and assessment tools that we have operate at the population level, but then that creates uncertainty for how to translate that to the individual level. The result of that is that, in many cases, we end up treating to the mean or treating to what the average patient looks like, which results in equality but not equity. Treating patients equitably, at a massive scale, is a really difficult challenge to undertake. Katie Schmalkuche: The third big piece is the idea that medical value itself is not static, but actually evolves over time because the data and evidence that we have evolves over time, the patients you treat with a given treatment evolve over time, and the overall system of care delivery evolves over time as well. And then the fourth, and potentially one of the biggest ones, is just the fact that, in the US, we don't have a singular entity deciding what is and is not valuable. Instead, we have many deciders scattered all across the industry and frontline clinicians and payers and purchasers, et cetera, who each have their own unique circumstances and, therefore, their own unique conceptions of what value means and looks like. Christopher Kerns: So with those tensions in mind, I know that you applied a lot of those hypotheses to the various innovations we're seeing in the industry today. And the very first discussion was led by you, Solomon, talking about clinical trials and the big revolution that we're seeing in clinical trials. And you and I have had, Stay Up To Date, the webcast that we do, a lot of conversations about equity, specifically as it relates to clinical trials. So let's start with the second point that Katie referenced about treating to the mean. What did you learn there? Solomon Banjo: Yeah. And it's fascinating because one thing everyone can agree on seems to be that we should deliver evidence-based care, but really, a lot of that evidence is on clinical trials. That forms the foundation, and when you look at clinical trials, there are a few things you realize. First, the thing they're best at is getting regulatory approval, not necessarily providing evidence to do a lot of what Katie was just talking about. And when you look at the traditional patient populations, they tend to be white college-educated men, which makes it really hard to say, "Oh, given these epigenetics and social determinants of health, is Katie going to have the same outcomes as we saw in the clinical trial? Am I going to have the same outcome, as a black man, based on that?" And so we wanted to have a conversation of, if we're going to move to value, what do we need to do differently in how we partner and think about how we generate evidence to make it easier to do a lot of those things Katie said are so hard, including actually being able to provide more tailored care to people because we actually studied how the drugs, the devices would impact them? Christopher Kerns: So translating care to specific patients, that's increasingly touted as the future of care. And I can imagine that the challenges that you're raising are even more important for things, such as precision diagnostics, where the associated price tag is exorbitantly high. Katie, I know you've done a lot here, and I'm wondering which of the root causes you would connect to for this? Katie Schmalkuche: I think precision diagnostics is a perfect example of that first driver that I mentioned, around how value is typically assessed through one lens but then applied in another, because when you talk to folks who work in and around the precision diagnostics space, you realize that the framework that they're using for talking about whether or not a given precision diagnostic is valuable is really about cost effectiveness. And cost effectiveness, inherently, is a population-based assessment, whereas precision diagnostics, inherently, is designed to have impact at the level of an individual. So if you think about, for the one patient who had this test, they had a clinically significant biomarker, it changed the course of their treatment and saved a ton of money. It's cost effective for that individual patient. But for the 9 out of 10 patients who they didn't find a clinically-significant biomarker, all you really did, was pay for a really expensive test for nine patients. So that's really challenging, in part, because it creates this chicken and egg situation, where payers don't want to cover these expensive tests because there's no evidence that they're cost effective. And then that makes provider institutions and clinicians hesitant to offer it to patients. And then that, in turn, makes it difficult to have enough data points to run studies and actually prove that it's cost effective. Solomon Banjo: Yet, oftentimes, the treatment that Katie was referencing is covered by insurers. They'll pay for it, but they won't pay for the test to actually determine if, "Oh man, for Christopher, this is going to be an absolute home run." And so you can see these weird tensions playing out where- Christopher Kerns: These things usually are. Solomon Banjo: Yeah. But where it's "Oh, wow, we'll pay for the treatment, but we won't pay for the thing to tell us if the treatment's really going to have an outsized impact." Well, then, how are we going to make sure that the people are going to get the most benefit, the patients are going to get the most benefit from this treatment? Christopher Kerns: I know we also talked about this notion of everywhere care. That was one of the conversations that you all led. It's that rapid adoption of mobile ambulatory home-based care services. We've talked about that on the podcast lots in the past. Now, in theory, this holds the promise of much greater convenience and comfort for patients, while delivering lower costs for everybody. But it also risks increasing fragmentation, which rarely has the effect of decreasing costs. Usually, that leads to increases here. So what was the big consensus that seemed to come out of that conversation when you convened these cross-industry stakeholders? Solomon Banjo: Yeah, so one of the things that really emerged from this is really how people aren't necessarily grappling with the ripple effect here, where you have disruptors focus on, "Oh, let's move this into the home-based setting" or trying to use remote patient monitoring. But no one's thinking holistically about the patient experience. So what we did, in this session, is say, "Hey, let's actually map out a patient journey, thinking about all the disruptions happening in everywhere care. What breaks down? What are the things that we actually exacerbate, even again, thinking about disparities? And having gone through this mental exercise, what are some of the things we can start doing today to hopefully avoid those pitfalls?" Katie Schmalkuche: For a lot of these new everywhere care innovations, there's typically a clear value proposition, right? Some of the things out there on the market maybe there's not so much, but let's assume that each of them in their own right is valuable, is going to make an impact. That's all good and well, but there's not really anybody who's focused on understanding what the aggregate impact of all of those new innovations together is going to have. I think about it as, in physics, when you talk about waves hitting each other, sometimes there's constructive interference, sometimes there's destructive interference. I don't think that there's anyone necessarily thinking about whether the aggregate of all of these new innovations is going to be a net positive or a net negative. There's no one really accountable to thinking about that. Christopher Kerns: And that militates in favor of the need for a quarterback to help make a lot of these decisions, does it not? Katie Schmalkuche: Yeah, absolutely. It was fun, actually. We had someone from ChenMed participating in this session, and it was just really fun to get to hear him talk about how that's exactly some of the problems that his organization is trying to solve here. Absolutely. Christopher Kerns: Now, that need for a quarterback or caregivers, in general, is one of the most limiting factors to achieving anything resembling scale in healthcare. By and large, healthcare is still very much a hands-on profession, limited by the number of people who labor in it. But AI, artificial intelligence that is, has the potential to change all of that. Now, in this podcast previously, Ray has talked a whole lot about how AI has the potential to not only automate processes but actually make evidence-based clinical decisions, achieving real scale for the first time outside of areas, such as imaging and diagnostics. So when we think about the implications for what this means for the industry and embracing this innovation, what were some of the big challenges that came out of that discussion and some of the big insights that that group coalesced around? Solomon Banjo: Yeah. And this is one where we had to define a lot of terms, as you might imagine, but we focused on AI and algorithms that are specifically focused on clinical care so, in some way, are impacting how the patient is going to experience care, not so much operational. And this is an example where I think the tension that we focused on is most clearly seen because the way these algorithms work is by gobbling up all of this data, and they work at a population level. We spoke to one researcher who mentioned, "Oh, I actually live in one of the locations where our algorithm is being applied. I know how much cost savings it's able to drive. However, I've also tried to get a sense for who the AI algorithm thinks I am personally, and it's totally wrong. It thinks I'm a college-aged man with a couple roommates and it's like, 'I'm married and I have two daughters,' but it thinks I'm my roommate. So, again, it doesn't understand me." Solomon Banjo: And if we're thinking of, "Oh, do we get to a future where a clinician is augmented by AI to pick the right thing for Katie, for Christopher? That is something that could be really challenging given a lot of the algorithms we have, the data that it's built upon, and the issues there. And so we had a lot of just great discussion about, should we give up the patient aspiration and just say, "Hey, AI is best done at the population level, and that's really where we should focus on reaping the benefits"? Christopher Kerns: I think there's 100% chance that an AI would think that I'm a 12-year-old tween girl, so I think I can understand that. Christopher Kerns: With all of these challenges, that really raises the question of is the industry prepared to address this? So I know this summit was mostly focused on coming to agreement around particular terms and challenges that can be faced by the industry. But the question that I've got is, does the healthcare ecosystem have the infrastructure in place to grapple with these challenges? I'm thinking about all the research that we've covered on interoperability, coordination, and the massive challenges that lay ahead. Did your audience come away optimistic that they could actually address a lot of these cross-industry challenges? Katie Schmalkuche: I would say, generally, they came out of the conversation optimistic, though I think one important distinction that we talked a lot about at the summit, in particular, in the context of some of these really high-cost, next-generation therapies, think cell and gene therapies, is the difference between confronting a lot of the operational and infrastructure-related barriers that exist versus confronting the fact that we don't even agree on what we should be measuring, what we should have the operations and infrastructure set up to measure, because we still oftentimes don't actually agree on what value is, what it looks like in different contexts. Again, I think next-generation therapies is a great example of this, because if you're talking about cell and gene therapies, which are designed to be durable, if not curative, the value of those therapies can be realized over the course of a lifetime. How do we account for that? How do the value frameworks and the metrics that we measure need to change to account for value in those contexts? I think those are the types of questions that there's acknowledgement that we need to answer them. And there's a little bit of optimism, but I think that's definitely the harder conversation to have compared to the conversation about operations. Solomon Banjo: And I'll build on what Katie said, and it even goes to your earlier point, Christopher, about how a lot of the challenges also just manifest in culture and society writ large. And there's a James Baldwin quote, I've come to a lot, which is basically, to paraphrase, that not everything that is faced can be changed, but you can't change it until you face it. And I think that is what attendees and what we, as a firm, are trying to do is say, "Hey, let's go at those elephants in the room. Let's actually confront what makes this hard because that is our only opportunity for actually making change." Christopher Kerns: Well, let's talk about those elephants. Were there any elephants in the room that were surfaced during these conversations that really resonated with you all? Katie Schmalkuche: So I can share my favorite elephant in the room. Someone said that "Whatever is best for the patient is something that sounds really nice in theory but, in reality, it is overly simplified, it's not always easy to assess, and it's not how decisions are made." And that one really resonated with me because, at this point, I've probably spoken with 100-plus executives about this topic and asked them how they think about value. And that's a line that I've heard a lot, but I think it really obscures the realities of what makes this really hard. Solomon Banjo: And my favorite one was someone who acknowledged the elephant in the business that "We may all come from different sectors, but by and large, what unifies us is not actually the patient. It's the fact that we're all coming from businesses, and so a lot of healthcare is really dependent on quarterly earnings or overall financial performance to be able to sustain the entire enterprise. And that's also what's going to make it hard because what may be a win for you may actually potentially hit me in my bottom line. And so you're always going to get a reaction from me." And I think that's something we don't talk about enough as an industry, though I know we've had that conversation a few times on Radio Advisory. Christopher Kerns: That's an idea that is really close to my own heart, so I'm really glad that you brought that up, Solomon. Over the course of the summit, there had to have been some conclusions that you knew the audience was going to come to. I mean, it's part of the facilitation exercise. Of those conclusions that they came to, which really resonated with the audience the most, which were the ones that came across as the most important to them? Katie Schmalkuche: I think, from my perspective, there was just a ton of excitement and conversation around how AI fits into this and how, in some ways, it exemplifies the risks of trying to translate back and forth between the population-level perspective and the individual perspective. So this is something that Solomon touched on a little bit already, but a lot of the algorithms that we have nowadays are really effective for the purposes that they were designed for, which frequently is some sort of population level metric, but they get misapplied and misused for different purposes at the individual level, which can result in sometimes the algorithm just failing or, worse, leading to poor outcomes or to disparities. And again, I think this is another situation where there's no clear owner who is accountable for making sure that the AIs are applied in the right way. Solomon Banjo: My favorite takeaway is, one, I saw the inside coming, but one of the attendees said it far pithier than I could. And what they said is "You don't need a randomized controlled trial for parachutes." And as soon as you say, it's like, "Of course, we know that parachutes work, and no one's going to sign up for that placebo." But, in healthcare, it's always, "Oh, RCTs are the gold standard. That has to be our evidence-based." So with all the advancements in the data we're able to collect, in the applications of real-world evidence, and just running clinical trials differently, can we think about what our evidence needs are that meet the purpose that aren't just the RCT that was developed in 1940 alongside the Polaroid Camera and like the LP record. Christopher Kerns: I'm just imagining what it would've been like to have been the very first soldier who had to jump out of an airplane saying, "We've got this new thing. Don't worry. It's going to be fine. It's going to be fine." Solomon Banjo: What's that on their back? Don't worry about it. Christopher Kerns: This looks like a knapsack. As someone who's facilitated a lot of these sorts of discussions, there are always tangents. There are always things that surprise you. As much as you might expect a certain type of discussion, there are always things that are going to throw you for a loop. What surprised you? Katie Schmalkuche: I was pleasantly surprised by how seriously a lot of folks in the room took the idea of accounting for the emotional elements when making healthcare decisions. I think I expected a lot of people to want to take a data-driven approach or a really logical approach in how they described what is the "right way" to approach making decisions about value. But people really did acknowledge not only that emotions are an integral part of how people react to different kinds of situations with their health but also validated that emotions are a valid component in decision making. Christopher Kerns: I think it's a really good point. I mean, our brains do not evolve to be rational. They evolved to keep us alive, and there are many, many different inputs that go into that. I've got one last question for both of you. How did these sessions change your mind about any given topic that you discussed? How are you going to be approaching the research that you both lead differently going forward? Katie Schmalkuche: So, for me, and this might sound a bit obvious, but I think the conversation really reinforced the idea that there is value, pun intended, in taking the time to better understand the problem and to really articulate what it is that we're all after, what it is that we're all solving for before just jumping to solutioning. That was something that was reinforced for me a number of times, and several folks in the audience also called out as well. Solomon Banjo: For me, the thing that really jumped out is the need to consider and grapple with healthcare in the broader context of society, because something that did not surprise me that came up but people really latched onto and wanted to grapple with more, was just what's happening with social media and how that is changing how we think about evidence, misinformation. How do you communicate differently when it's not just in symposia presenting really dense clinical evidence? And just acknowledging that healthcare is not immune from the broader social context within which it lies, even though, oftentimes, we like to think of it because it is such a quirky industry, to say the least. Christopher Kerns: When I think about all of these conclusions that you all have come to in this summit, I'm really struck by the fact that there is an increasing interest in drawing bright lines around how we define value and to create very specific definitions of what value is and very specific incentives on that. And that tells me that, after a very long time, the industry is really starting to take the notion of value seriously because they are putting bright lines around it. Katie Schmalkuche: Yeah, absolutely. And I think, for a long time, we've tossed around the term value, and it's been pretty vague. And I think that often means that the ambition itself of driving toward value itself is vague. But I do feel optimistic that because there seems to be appetite to really zoom in and really pick this apart and peel back the layers of the onion, that does indicate that folks are really serious about making progress and making progress in really specific and tangible ways. Christopher Kerns: Well, Katie, Solomon, thank you both for joining me so much. I really wished that I could have been there in person for the summit, but it sounds like it was an unqualified home run here. Katie Schmalkuche: Thanks for having us on. This was really fun. Solomon Banjo: Always a pleasure, Christopher. Christopher Kerns: If you're looking for a summary of our thoughts on the 2021 Cross-Industry Summit, please go to advisory.com. We have written this up and made available to all of our listeners. And if you're interested in participating in a future summit, please feel free to let us know. We're always looking for innovative, new ideas to share. You can expect a lot more research like this in 2022. Advisory Board is broadening its efforts and research focusing on seemingly intractable cross-industry challenges, so stay tuned for a lot more work from us on this.