Rae Woods: From Advisory Board, we are bringing you a Radio Advisory, your weekly download on how to untangle healthcare's most pressing challenges. My name is Rachel Woods. You can call me Rae. At the end of June, around 300 health leaders gathered at Advisory Board's Value Based Care Summit. And together, we had one goal: To make sure the next 10 years of value based care is more impactful than the last. And as part of that event, the Radio Advisory team organized a live podcast recording. I brought together 3 renowned leaders all at the helm of very different organizations, but all with a shared goal: To build a value based enterprise. We talked about how different organizations define success in that goal, what capabilities or assets organizations have to have or own in order to succeed, and why ownership and steerage are not actually the same thing. If you didn't catch that conversation live, don't worry. We, of course, recorded it and we are releasing it on the Radio Advisory feed today. So here is my conversation with Rob Mayer, senior vice president and GM of Optum Insight Clinical Solutions; Laurie Sicaeros, Chief Strategy Officer at Memorial Care Health System; and Rushika Fernandopulle, Co-Founder and Former CEO of Iora Health. Rae Woods: Welcome to Radio Advisory. Rob Mayer: Thank you for having us. Laurie Sicaeros, MHA: Thank you. Rushika Fernandopulle, MD: Thanks. Rae Woods: I want to let our audience and our attendees, our listeners at home in on a couple of secrets. So secret number one is we've been planning the session for a long time, and it's actually evolved quite a bit. So if you signed up for the Value-Based Care Summit several months ago, you may have seen that we had a different title for this session. We were still focused on this idea of consolidation value-based enterprises, but at the time, we were really talking about the buy build partner decision. Well, we started getting into the details. I started talking with my panelists and they said, Rae, it is not that easy because all of you are buying and building and partnering. So here's my goal for our time together. First, I want us to get a little bit deeper. I want us to actually talk about strategy. I want us to talk about operations, but I'm going to do my best to thread the needle of getting to that detail for a question that's actually a lot more philosophical, which is what does it take to build a value-based enterprise? So that's secret number one. Secret number two is how this process normally works when I'm recording Radio Advisory episodes. So the vast majority of the episodes that I record are done at home. I'm not wearing this either in my sweatpants, in a pillow fort that I build once a week so that there's good audio quality. But the one thing that I do every time and that I'm going to do today is we start off with an icebreaker. And there's two reasons for that. Reason number one is very technical. We need to do a sound check. We need to make sure that everyone's audio is coming in appropriately so that it works well for the podcast feed later. But the other reason is for me, me as the facilitator, I don't want this to feel like an interview. I want my guests to feel comfortable, and I use that icebreaker to get us in a place of kind of calm and comfort. I often say I want Radio Advisory episodes to feel like we're sitting on the floor of my living room. There are a lot more people in my living room today, but we're still going to try to make that happen. So my panelists don't know what I'm going to ask them. It's not about healthcare. I want us to get to a place of honesty, transparency, vulnerability. So I want you to admit for us- Laurie Sicaeros, MHA: Oh God. Rae Woods: ... what movie might you be embarrassed to share that you have never seen? Or maybe you're actually proud of this, proud to say that "Oh, everyone's seen that movie. Never seen it. Never going to see it." Laurie Sicaeros, MHA: I've never seen any of the Harry Potters. I know. Rae Woods: They're making a new series. Are you going to see the new one? Laurie Sicaeros, MHA: Probably not. Rae Woods: So that question Daniel asked yesterday, just whew, right over your head. Laurie Sicaeros, MHA: Pretty much. That was me. Rob Mayer: I think mine's the Godfather series, even though I love [inaudible]. And I've already lost the audience. Already lost- Rae Woods: Rob. I've also never seen The Godfather, and Rob Mayer: I've seen every other mafia mob related movie, but I've never seen The Godfather. Rae Woods: I know, I know. I've seen seen the important clips. I know the references. Rob Mayer: Great. Rae Woods: But yeah. Rob Mayer: I'll watch on the way home. I promise. Rushika Fernandopulle, MD: We were recently in Seneca Falls, New York, and I realized I'd never seen, it's a Wonderful Life. Rae Woods: Oh, wow. Rushika Fernandopulle, MD: They had a little It's a wonderful life museum. And I think we walked by. I was like, "Wow, I've actually never seen this movie." Rae Woods: Oh my. So you have homework too. Rushika Fernandopulle, MD: Yeah, absolutely. Rae Woods: All right, well hopefully we're all feeling willing to share the details of our organizations and our thoughts and opinions here. But I do want to actually get into the content, although we can maybe do another podcast where we're just talking about movies. So there's a lot of buzzwords in healthcare and value-based care is absolutely one of them. I am positive that you have experienced a moment with a colleague, with a competitor, with someone at a conference where they have said the following statement, "I do value." We all know that that doesn't mean anything. So I want to make sure that when we have this conversation, we're using a shared language. And I already use this phrase, value-based enterprise. So when it comes to each of your organizations, Iora, Memorial Care, Optum or the larger UHG enterprise, what does it mean to build a value-based enterprise? Rob, let's start with you. Rob Mayer: I think you're spot on. First of all, the use of the term. It's been a buzzword, but it feels like it's back and better than ever and maybe an exciting time to keep working in value-based care. I see a deck or a slide or a presentation almost every week where someone uses it, they want more of it, they need it, they're doing it. They're the best at it. They don't have problems with- Rae Woods: It's in the sales pitch. Rob Mayer: It's on everyone's website. And I always love to have the follow up question of "What do you mean by that? What do you need more of? What are you doing well of? What are you think you're not good at?" Because the answer is almost always different. The fundamental theme is the same, but what they're actually trying to take credit for or get done is different. And so I think very simply, and this won't be hopefully news to anyone in this room because we're in a room of experts. I think it's a payment model between payers and providers tied to outcomes, managing total cost of care and the revenue side of risk adjustment or quality. And I think it's centered around having quality metrics to make sure it's quality of care, not denial of care. And I think fundamentally how you do that and the different variations are all the different flavors you start to see. But that's my simple definition. Laurie Sicaeros, MHA: So we have a mantra at Memorial Care, it's right care, right time and right place. And so that's easy to execute with the thousands of people across the system. But it also, for us, it means having a high value clinically astute network and putting that network together that has the incentives that are aligned. Otherwise you get into those conversations about why am I not getting all the knee surgeries in the hospital and why am I not getting... And so we've been doing it for a long time and we're an odd organization. I've been told by many because we leave money on the table every day because we choose to deliver a value to our members and it's important to us. Rushika Fernandopulle, MD: So I think it's actually very profound. And I think that it's hard when you try and fuss around the edges that it really is about what you think your job is when you walk in the morning. And I think unfortunately, despite what mission statements say for too many people in healthcare that you think your job is do more stuff to people. So more visits, more hospital beds filled, more MRIs, more drugs sold, et cetera. And by the way, that's not the job that I want to do. It's not why I went into this. It's not why I think we all went into this. The only way to actually add value in healthcare, the thing that our customers who are the patients by the way, no one else is they want to be healthier and lead better lives. So value-based care is all about your job to be done is to improve people's health, to take a population of people to know who they are and improve their health and keep them out of trouble and give them the right care when they need it and not the care they don't need or want. And unfortunately, that's not very common in our US healthcare system. Rob Mayer: It's a humbling conversation for me every time I try to talk to friends or family members that don't work in healthcare. And when I talk about working in value-based care and you explain it, I'm sure other people in this room have had this moment the realization on their face of "That's not what you do already?" Rushika Fernandopulle, MD: Yeah, exactly. Rob Mayer: And that's what they thought they were paying for. And it's like, "Well, oh no." And then you try to backpedal like, "Well, we are, but we're trying." But it is the passion I think for me of driving towards just what the average consumer expects from this industry. But yet we know we are so far away from in certain ways, certainly resonates when you talk to someone that doesn't sit in this industry and you talk about this topic. Rushika Fernandopulle, MD: We had a VFO, Jim Nolan from Atlantic Care he worked with, and what he says in very profound, he said, "I no longer want to be in a business where my interests and those of my customers are opposed to each other." I want to be a business where my interests and those of my customers are aligned. And that has to be value-based care. Rae Woods: And you're getting to how complicated things are and how complicated the incentives often are at getting this right. And I will say that Rob and Laurie, you're kind of burdened by working for an organization that's existed for a long time and has been on this path for a long time. You have a unique kind of space here because you decided "I'm building from scratch." What was your kind of one sentence strategy that you held sacred in getting to that vision of what value-based care is? What did how kind of mean for you in building Iora? Rushika Fernandopulle, MD: So again, I'll start with the why actually, because Simon Sinek would say, "We have to always start with the why." And this is the way I want to practice care. I don't want to be doing more stuff to people. I want to actually improve people's health and keep them out of trouble. And so we said, "What does it look like if we built a system where this is all we do?" And it starts, I think you mentioned Rob, by getting the right payment. I think if you don't have the right payment model, it is a waste of time. And we see all these people trying to do value-based care but with a fee for service payment model and they lose their shirts. It's a really bad idea. So the first thing you got to do is insist on... And so we only take value-based payments. We can talk a lot about what that means, but only do that. Second is we then say "We have to build a delivery model, a clinical model that's geared toward doing this." And by the way, that's not a little different than the current fee for service model. It's completely different. So by the way, the only fools errand is what many of you are doing probably, which is trying to do both in the same place at the same time. That is really hard. And then the third maybe was coming into the conversation about technology. You have to ask, what's the technology platform I need in order to enable that? And unfortunately, no offense, I met someone at Epic at breakfast. It's not Epic or not the current version of Epic. Because it's built as a transactional engine to optimize fee for service billing, not managed populations and managed teams and outcomes and the like. And then it's a culture thing. If you think the four layers, it's you need a culture that's aligned to this. And we had the luxury of saying, "What if we built all that from scratch?" And that's what we did. Rae Woods: So the payment model, the clinical model, the technology, the culture, my question for then Laurie and Rob is how would you know if your organization or someone else's has made it. Has actually built a value-based enterprise? Laurie Sicaeros, MHA: For us, it would be the patient getting what they need when they need it. And really nothing more, nothing less getting that. No bounce backs, no none of that, but in a timely manner. They're navigated through their care. Rob Mayer: I'll answer it in two ways. I think when it's repeatable, scalable, both sides see value in it. You can forecast around it. And I like to think there's a member element to that, right? I would like to think members starting to see cost sharing from it and most importantly starting to see the health plan, the provider work in conjunction to enable better care for them. And so I think in theory, looking at all those elements, I think for Optum and UHG is a large organization, I can't speak for everyone, but our strategy and our thinking on this is evolving of what we maybe have historically done and now what we need to go do to meet what the industry is kind of putting in front of us, which is there is not one way of doing value-based care. There are many ways of value-based care. And so our one sentence to answer the question you asked Rushika would be meet the provider where they are. And I think saying that's one thing, but then creating the set of solutions and services to do that is what the journey we're on. Rae Woods: I want to keep going down this path of the things that you need in order to be successful. Rushika started us off by talking about four different categories and over the course of the summit we've talked about a lot of things, right? We've talked about home-based care, we've talked about Medicare Advantage, we've talked about behavioral health, we talked a lot about primary care. And I'm going to ask this question to my panelists in a moment. But first, I actually want to get our audience involved. So I want everyone to take out their phones. We are going to launch a word cloud. And I want you to respond to this question. What are the essential assets or capabilities that organizations need to succeed in value-based care to succeed in meaningful downside risk? Rae Woods: Clare's going to read out some of the things that she can see on the app. Clare: I've got grit, trust, visionaries, data, technology, commitment, collaboration, data interoperability. There's a lot of data, data analytics, analytics. Rae Woods: So some technical things and some personality traits. I don't know. Do you all think that you have grit, confidence, vulnerability? What were some of them? Clare: How about guts? Rae Woods: Guts? Yeah? Laurie Sicaeros, MHA: Guts. Rae Woods: What do you think of those responses? Rob Mayer: I'll say a, I don't disagree with any of them. I think it's interesting how many people brought in the personal aspects of it. Because I think that is- Rae Woods: Yeah, that's surprising. Rob Mayer: ... extremely important. And yet maybe not how I would've answered your question if it come to me directly. We sat down- Rae Woods: Yeah. How would you have answered the question? What things do you need? What assets are capable? Rob Mayer: We sat down as an organization enterprise probably about six months ago and had the same debate. We didn't have a fancy word cloud or anyone putting stuff in apps, so we can't take as much credit as you all. But we had the same kind of debate across looking with a sister company that's a health insurance carrier with a sister company that does a lot of care delivery. And again, knowing the term value-based care is broad mean many things. And we thought for sure this is going to take multiple days, multiple slides. It will not become the simple conversation to have of what do you ultimately need based on really the axes of what value-based care can be line of business centric, type of provider centric, level of risk centric. You need something for each of those. And how do you meet the provider there? A gentleman on my team is actually in the audience, had kind of leading into that meeting, created a single slide version with some four real categories. And we ultimately left the room with saying these kind of fit every model no matter what you do. And I'll cover them in a second and anyone wants to see it, we're happy to share it. It's not rocket science. But ultimately what we debated then was it's more about how do you do it, the depth of it, and then who's doing the things on the slide? And the four big categories were around network management and contracting, financial management and operational planning. And then on really the population health programs and risk adjustment and the fourth being around data analytics, AI, ML and workflow. And we couldn't come up with an argument in theory where you didn't need any of that. Even in a model where I'm fishing for the provider, the provider's fishing on their own or we're helping them to fish, you kind of needed all of those things and how you do it is very different for each model. But ultimately those were kind of the core areas that we thought no matter what kind of value-based care enterprise you're trying to deliver, you needed those elements and there's subcategories under them all. So I won't bore you all with that, but that was kind of what we came up with, which includes that I can now see the word cloud a lot of what's on there. Rae Woods: Yeah, it's interesting that again, folks are responding and I think this is actually important with a lot of the personal, you need the grit, the leadership. I'm seeing the word trust folks are responding with exactly what Rushika said is that you need the payment model. I see capitation as one of the biggest words. Data interoperability, data, commitment. Laurie, Rushika, what do you think of these responses? Laurie Sicaeros, MHA: I would just add to what Rob said. I would add medical management, care management and utilization management and that team in there because that's a key to your execution. And getting that village that surrounds the primary care doctor or the specialist in getting the patient navigated to where they need to go and augmenting their abilities, their capabilities. Rushika Fernandopulle, MD: So one of the things we are doing differently that think most people are, what most people do this sort of leave the doctor and the patient alone and they create all this external stuff, whether it's some external medical management function or whatever, and we just said maybe that's not the right way to do it. Maybe what we need to do is start actually with the patient and the doctor. We're making medical decisions and make sure that they understand what we're trying to do and are with the program. And then what happens is you don't need all this other crap from the outside. You don't need utilization management because the people making the decision are doing the right thing without having some other may I in the background. And by the way, all the data that shows that they sort of external things, they don't really work. It's disease management, case management, they're not that effective if you actually look at them rigorously. So the bet we're making, and I think it's working is it's about making everyone understand we're going to do things differently. This is why. And I think a lot of people underestimate the patient side that there's this deep-seated more is better attitude in healthcare. And you need to really get people to understand that's not true. That doing things that are unnecessary and maybe you don't want is actually potentially harmful to you. And then on the doctor's side is how do I practice in a way that's actually congruent with this? And if you can get those two people on board and the people around them helping them, then that actually makes it work. Rae Woods: You just said that people often overlook the patient. And I just want to pause on that for a moment because I think that's a really, really important part of this discussion and our discussion about value-based care in general. Are there other things that you think organizations tend to overlook or maybe even undervalue, right, when it comes to the things that you need to be successful here? Rushika Fernandopulle, MD: And again, I keep going back to this why we started with the let's not worry, have our teams worry little put little heads about this and we'll just take care of it up here at the corporate level. And that was exactly wrong. We needed every single person in the organization understand what we're doing and actually about what the economics look like and why risk adjustment matters and why it matters to send people to the right side of service and why it matters that we do these quality metrics. And by the way, if there are quality metrics we disagree with, we say we disagree with those and we're going to ignore them. So it's a conversation about getting the organization pulling in the same direction and it has to go with why we're doing it. So you could walk to, and I do this, I walk to almost anyone in the organization ask them questions about how the business works. And the right answer is they need to be able to tell you that. Rae Woods: Oh yeah, that's always my first red flag. No, that's my second red flag when I travel to physician groups. My first red flag as I say, "Where do you work?" And if they don't name the medical group or the larger health system, my first red flag. Rob Mayer: I think to add on to Rushika's point in your question, the saying you've seen one provider's office, you've seen one provider's office. And so I think coming from an organization where we like to build large, scalable tools and technologies and services that we think can be adopted by the masses and realizing maybe to solve this problem, it isn't that simple. You need to be able to do that for sure. And you need to be able to have different models to work with doctors, to work with members, to work with IPAs, to work with specialists, to work with urgent care centers, and how do you adapt your technology and your tools and your services and your thinking and even your member engagement applications for all those models. We undervalue that I think initially and have pivoted greatly now to be more flexible. Rae Woods: I want to move the conversation to one that's focused on ownership. It's kind of the elephant in the room that I don't want to ignore. And I started off this conversation by saying that one of the big changes that's happened in the last couple of years, last couple of weeks, the last few days is an industry that's increasingly consolidating. There are more and more vertical enterprises, all of which include your organizations peer. And so I want to kind of lean heavily into this idea of ownership. Rob. Rob Mayer: Not me. Laurie Sicaeros, MHA: He owns them all. Rae Woods: There is one entity on the stage that owns a lot of things in healthcare, right? Okay, so let's go down the line. So let's think about Memorial Care is a health system that also has a health plan, right? Iora, if you're not familiar with their kind of story from their creation in 2011 was then acquired by One Medical and now both of them are part of Amazon. So you've got the benefit of Amazon's pharmacy also an entity that could probably buy everything if they wanted to. I'm not sure what HG doesn't own at this point. So let's name them the, The Health Plan, the Physician Group, OptumCare that has 60,000 physicians nationwide, the PBM, OptumRx, Optum Insight, which is of course what you're representing. My question for you as the kind of infamous person on the stage, what do you actually need to own? What parts of the industry do you need to own in order to be successful? Rob Mayer: So it's a good question. I understand the question why you'd ask me that. I think ultimately, if you go back to my one sentence answer of meet the provider where they are, I think there are providers that are looking to be acquired and sold and are ready for risk enablement. And so we need to be able to respond to that. I think it's been a strategy for us and remain a strategy for us. I think outside of that though, there's a lot of opportunity with other types of providers that maybe want to stay independent or want to be assisted in getting into value-based care and moving up the curve of value-based care. And so how do we help them? Actually, this might surprise most folks. I don't think you need to own all of it. I do think ownership gives you certain controls and alignment on outcomes and let's be clear, aligned goals, aligned MBOs of a term you use is this key success factor of value-based care. And I think ownership gives you some of that, but you don't have to have that model I think to truly have success in value-based care. And I think we've proven that in some non ownership models as well with partners and with pilots and with some of the folks in this room, some of the organizations here where we've gotten to outcomes and we've not owned everything. We've had out external partners, we've had payer and provider partners and we're all working together to try to get the outcomes. And I think that's been just successful for us. And I think to actually do what we're all trying to do in this industry, we're going to need just as much of that as we do a vertical integration. Rae Woods: And I will say that the three of us started talking about this as we were planning this session. And Rushika you said something to me when we were first planning, do you remember what you said? Rushika Fernandopulle, MD: I don't. Rae Woods: Well, I will tell you, you said very confidently to me, "Rae, you need two things. Loyalty of consumer and physician hearts and minds." Rushika Fernandopulle, MD: Yeah. Rae Woods: I don't disagree, but you also can't buy those things, right? And we're in this moment where we're talking about ownership and trying to get more kind of control through purchasing of different parts of the system. Rushika Fernandopulle, MD: So again, I think there are a lot of people, particularly the physician part and the consumer part is simply buying them doesn't get their loyalty. And there are lots of people, I think Walgreens and Village MD is a great example. They spend billions of dollars on an organization who I don't think really works for them. Rae Woods $9 billion. Rushika Fernandopulle, MD: Yeah whatever the number is. But it's huge. So simply buying things doesn't do that. And you can, yes, it can help if you've got a common ownership, but you don't necessarily need it. But what you need is the patients, the currency and value-based care isn't number of practices or number of markets, it's lives. And the key to value-based care, as I think we talked about yesterday, you need to have those lives loyal to you over time because the dirty little secret about value-based care is the first year or two that you get people, you lose your shirt because of the way the coding works and because you're trying to do catch-up care and all sorts of things. So these models are all about consumer retention. The short answer is you can retain people from multiple years, this is a great business. If you have a high churn, it's an awful business and so you can't buy that, right? The great thing about value-based care is patients can vote with their feet if they don't like it. So you need to have those two things. Ownership might be helpful, but it's not necessary. Rae Woods: And I'm not sure that ownership is actually the right word that we should be using. I think the word that we should be using is control. And I think there are a couple of levers to getting to that control. Ownership is one that doesn't necessarily hurt, but the other industry term is steerage, right? Steerage is important in all lines of business, but it's particularly important in value-based care because your goal, like you said, is to impact the trajectory of the patient journey. And you want to make sure that that trajectory gets to better outcomes and lower cost. You might again have guessed that I'm a pessimist here. The steerage is really, really hard and no wonder more and more folks are trying to own more parts of the system, own more physicians where there's this arms race over physicians right now to impact that steerage, that patient journey. My question, Laurie for you is how much steerage is really possible, especially in a world where you're in a multi-payer environment, you don't have all the assets, you don't have all the control. How does this actually work in practice? What are the barriers along the way? Laurie Sicaeros, MHA: I just want to know why you guys don't own hospitals. What's wrong with that? Rae Woods: You are the one person on this stage that is burdened by a hospital. That's... Laurie Sicaeros, MHA: Yes. So I agree that, so we call it network integrity and keeping people within the network. It is we've spent plenty of time, the denominator needs to be the same. Our denominator is the same regardless of network, regardless of plan. Because you've got 10% here, 12% there, 20% over here. And so rather than opening it up to the entire plan network, we have our single denominator. So we have one network that we've deemed as high value and everybody is aligned. So we do our best to keep everybody within that. I know that what Rushika said, but our physicians like working with the team who navigates the patient. So they handhold the patient through their journey to ensure that they get to the right place and that reduces our leakage or improves our network entirely. Rae Woods: And that's part of the memorial care care system. That is something that again, if I come back to the idea of control, you have control over and are trying to handhold this process so you can influence the patient journey. Laurie Sicaeros, MHA: Absolutely. And we've gone out of our way to make sure it's not all licensed so we can hit the total cost of care and we can bring the value and not sending to, oh this breast center is on license and this radiology units on license. We don't do that. Rae Woods: But you are not the only ones that are trying to steer patients. And when I say you, I don't mean just your kinds of organizations that are even have the same ultimate goal of value-based care. There're all these other players, all these other health plans, all these other health systems, medical groups, employers, there's all these other folks that have their own goal to try to impact again the trajectory of the patient. When do they get in the way of the goal that you have to influence that trajectory? Rushika Fernandopulle, MD: So they get in the way all the time. So our whole theory of the case is, so again, I think we've seen evidence that we've been doing ACOs, accountable care organizations for a long time and I think top-down ACOs have largely not worked. So our bet is really building bottom up ACOs. So start with the consumer or the patient or the person and get their loyalty and build that relationship. And that's why we are a primary care group by and large because it's the right lever point to then allow us to get the permission to then help navigate people to the right place. But often, so we have no offense health plans, disease management companies have these nurses from Idaho calling our patients at night trying to do stuff. And we try our best to get those people to stand down because the dirty secrets, the poor patient gets six different calls from six different nurses, a disease management nurse from the diabetes company and then Livongo and like you name it.. Rae Woods: Even well-intentioned, right? Well-intentioned [inaudible] staff. Rushika Fernandopulle, MD: No these people are largely well intentioned, but it's actually, it doesn't allow you... We have fragmented healthcare by our little stupid silos. So we've got the chatbot companies and the telemedicine companies and the primary care groups and the whatever. And then we fragment it by disease, the diabetes and the hypertension and the CHF and the journalist secret is it's the same person getting all of this. So we say we need to organize around the consumer and be their trusted source and really once you do that, they will tell all these other people to stand down. "I don't need your help." Rob Mayer: I think, sorry, I think a missing comment or just to add to this conversation is the data. Do we know- Rushika Fernandopulle, MD: Who there? Rob Mayer: Does everyone know what is the best site of care and the path for that patient or for that doctor? And are we talking to the PCP and informing him and educating and the member about that? If I assume positive intent at all the phone calls and I think we all agree of all the voices that come out in it, but if I assume positive intent is because I think they believe they're doing something that might have a better outcome for that member or to impact their cost of care or just their health. But if we don't know the actual answers of who is the best oncologist in the area for their version of cancer and how they can go down that care pathway, then ultimately, and you can't tell the PCP that, educate the member, it's hard to also complain when they're getting those phone calls or tell them to do something differently. So I think sometimes it goes back to do we have the right information to educate our doctors, to educate our members on what really is the best course for them and the best cost of care, the best quality? Or do we expect them to figure it out on their own and otherwise they're getting all those phone calls and they'll make their own decisions. I think that's what happens. Rae Woods: I'm coming to this insight as we're having this conversation and it's really, really important. So I want to make sure I articulate it clearly. No one entity can actually own all parts of the healthcare system. Not Amazon, not UHG. And even if they could, you can't control 100% of the total cost of care. Not unless you're going to dramatically limit and create a closed system. And even then it's only going to be for the people in that system. That's the Kaiser model. So what I'm hearing you all say is that like it or not, you actually have to work together. You actually have to partner. And I said I wasn't going to use buzzwords, but I just used a big one, which is partnership. And if I'm honest, I think most folks use the term partnership as a cover. They use it because it feels a lot nicer than what they're actually talking about, which is a transaction and a transaction that requires compromise at best, but probably more likely requires some sacrifice. So as you are working with these entities, whether you're assuming positive intent or otherwise, I want you to name for us a time in which you or they have had to give something up in order to meet this shared industry goal of better outcomes, lower cost. Rob Mayer: I was going to say I had a similar conversation unrelated yesterday with someone out outside at the happy hour and it was like, I don't know if I've ever done a partnership that didn't have compromise. I think it's unfortunately it's a key part of it. And I think if both sides don't walk away with a little bit of like, "Oh, I gave something up here for the greater good of what we're trying to get done." Did you actually have a partnership versus you've did somebody and you have a subcontractor. So I think every good partnership there is compromise. I think it starts with understanding what are we good at in this instance and what do I need from that other third party or several third parties. And do we agree that the sum together is better than anything we can do on our own or faster than anything we can do on our own or cheaper or more appealing to the clients? Cause not everybody wants everything from one vendor or one company, but I think every partnership that we've done that's actually been successful and maintained has had compromise. And there are tradeoffs on sides, every single sides time. Rae Woods: On both sides. Rob Mayer: On both sides. And there's tons of litigation within our organization of should we do it? Could we build it ourselves? Should we buy it? Could we do this? Why partner? Which Rae Woods: Is interesting because again, you probably could. Rob Mayer: Not everybody wants to be sold, but we'd at least like to think we could at times. And ultimately there's reasons to partner because of maybe speed to market or things they bring that maybe we don't. Sometimes outside innovation is faster than inside innovation. And I think we are realizing, listen, we've grown obviously a huge successful company in many ways, but to really achieve the bend and this trend of this spin that we need to do here and especially in value-based care, it's not going to happen only within the walls of UHG. It's going to take us partnering I think with everyone in this room and folks not in this room to do it. And there's going to be all sorts of compromise I think, in those to make it work. Rushika Fernandopulle, MD: So what's really important that we've learned is you've the only thing that works in this space, because again, in the end, the only way to actually bend the cost curve is long-term management of patients. This is over years is to create long-term partnerships. The thing that doesn't work is we're going to RFP this, treat you like a vendor, and every year we're going to spin this around and take the lowest bidder. That's an utter waste of time. We on the Iora side, refuse to answer RFPs because it's the wrong mindset. We're going to find a partnership. We signed 10 year partnership with Humana, 10 year, not two, not three. Agilon signs, 20 year partnership with medical groups. We now are the lowest number we would do is a five year partnership because that's how long it takes if we're locked in to get, so we had our first value-based contracts were these primary care contracts and our first two were with a group called the Freelancers Union in New York and with the casino workers in Las Vegas. And it turns out we had no idea what we're doing. So what's the number, the right numbers. We picked a number and we said "We're going to be pretty transparent about how we're doing on this and we're going to pick up in six months and figure out did we get it right and we'll adjust it." And in the Las Vegas case, we picked a number that was too low, we were actually losing our shirts and we negotiated it up and we got a higher rate. But in the freelancers union, we've got picked a number that's way too high. We're making way too much money. And we said "No, in the long-term partnership, this won't work for us to be sort of screwing you over. So we're going to lower the rates and actually agree to get paid less." And in the long run they were both exactly the right thing to pay. Rae Woods: What was that conversation like? We're going to, I just want to repeat what you just said. We're going to agree to get paid less. Rushika Fernandopulle, MD: Yes, we're going to cut our rates because again, we were in this for the long term and if this is not beneficial to both sides, this is not going to last for the long term. And this is about building strong personal relationships about an alignment of values. And the nice thing about both these entities, which made it easier is they had long term clients. So these people, when there's an underlying churn is why if you look at the employees we work with the Boeing Company colleges, state employees in Massachusetts, these people don't go anywhere. Lowe's Home Improvement Home Depot are problematic because when they're underlying employee based churns, this makes it very hard. Rae Woods: We also have a podcast episode on that featuring one Daniel Kuzmanovich, if you wanted to listen. I want to keep talking about this idea of partnership and I want to talk about folks that we haven't mentioned. So Rushika, you just quickly mentioned employers and I actually think that they're an important one, but I want to think about the partners or potential partners who aren't represented on this stage. The first kind of blunt question I want to ask here is, is partnership possible with an organization that is much smaller? I'm talking about the health system that does not have the benefit of a health plan, the small medical group, the regional health plan, is partnership possible there and is there something that they can bring to the table actually for a larger organization that we're not thinking of that we need to make sure that we name. Rob Mayer: Absolutely from my point of view, I've done a lot of that in the last few years. I think their focus is a lot more concentrated and so their ability to get things done and stay on point on that has been hugely valuable. And I think they usually have innovated something that is unique and differentiated and their ability to add that to maybe the rest of the scale and capital and market we can allows us to hopefully have a win-win partnership. And so I think we are always on the lookout for innovative, smaller companies or partners that maybe bring something new that maybe we could build or find elsewhere, but they're focused on it and their ability to customize it and just solve that for any of the type of provider or any type of payer is unique to their organization versus our organization where maybe it's too hard to scale down that low. Rae Woods: Where is partnership actually the right default option? We talked a lot about ownership. I think the market has answered the question that the default option for ownership is the docs, right? That's why we're facing this huge arms race over physicians. That's why CVS paid $10.6 billion for Oak Street Health. Suddenly One Medical Iora is looking like a cheap deal here at what? 4 billion? 4.6 billion? Rob Mayer: Four. Yeah. Rushika Fernandopulle, MD: Is there an area where the asset, the capability where you want to push organizations to actually think partnership first? Laurie Sicaeros, MHA: We've done it exclusively on the ancillary side. We think use the playing to win strategy on that and if they're the best at something and it's better to partner and like-minded people bring them together and they're going to deliver the best that they can because they do it better. And rather than us coming up and inventing lab services or something like that. So that's been critical for us and it's been a good partnership and together we've been able to grow faster and scale better. Rae Woods: I wonder if this is also an area where life sciences can get involved, where the digital health companies, the drug makers, the device makers can get involved. The folks that we don't necessarily think of as being intimately involved in the day to day of value-based care. But certainly if we're thinking about the total cost of care, we have to be thinking about the drugs, the devices, the diagnostics, the things that we're ultimately going to be using as clinicians or as patients. Where do you see them in this kind of partnership equation? Rushika Fernandopulle, MD: So I think there's two places where you need to partner, one is things that need to be done at scale that you just can't get. Again, United can do whatever they want, but in general, most of the rest of us, if things need to be done at huge scale, then you should be partnering and then things that are sort of narrow, you should not be doing yourself. So some rare diseases are a great example, which are very high cost, but ridiculous for you to build that capability up. So then partnering for people who know what they're doing and can spread that over multiple clients, that makes a lot of sense. So you've got to always keep asking the question, "What is it we need to build ourselves because we need to control it or it's very common and what are the things that just need to be done at scale or a very narrow and expensive?" Rob Mayer: It starts a lot of, I think looking at yourself in the mirror as an organization and being honest. The number of times we talk to health plans or providers and they want to sell a service or scale a service and maybe partner, they might have an innovation idea and yet the first question, are they good at it? Are you actually good at what the part is you think you bring to the partnership or the part of the solution you're trying to do? And I don't know if everyone from past experience is always aware of what they truly are good at and then what do I need from a partner? And if you start from a price of inaccuracy, you're going to end up in failure. I think if, but so looking in that mirror and truly knowing what do I do well and then what do I need a partner to do? Maybe your answer, their example of being that I think is a key. And some of these, whether it's life sciences, device companies, the drug manufacturers, if that's not something that's in your wheelhouse, then absolutely figuring out how they fit into this and bringing it down. Rushika Fernandopulle, MD: So when we talk to a lot of health systems to try to partner. We get this sort of, I think a little bit of hubris either that we already do this- Laurie Sicaeros, MHA: Oh, I get that we already do- Rushika Fernandopulle, MD: We already do this. Laurie Sicaeros, MHA: ... this comment, oh my God, drives me crazy. Rushika Fernandopulle, MD: No, you don't. And then my favorite one is, "Oh, we could do this." And my rejoin to that is I could be in Olympic athlete. That's that's not a false statement. It's not a true statement. It's not a false, like no, I couldn't be an Olympic athlete." Yes, in theory I could. So just saying, "Oh, we could do that. These things are really hard and they require focus and they require years to actually build these things. So it took us 11 years to go from when we started Iora to when we ended up getting to what we thought to be scale and getting things working. These things take a long time. So don't underestimate how hard it is to do some of these things and that somehow you can magically do it. Rae Woods: And there's one other thing that makes this hard that we haven't talked about yet. So we've talked about ownership and the advantage that it gets you, but that it can't get you everything, right? We talked about the different players that you need to get involved in order to do that meaningful patient steerage. And Rushika you started to go down this path a little bit when you talked about the culture, but there's this other problem of integration, which is actually getting all of your staff, all of your physicians, all of your assets moving in the same direction towards the same goal. And the industry has spent a lot of time and a lot of energy. Frankly, Advisory Board has done a lot of research on physician integration. That's also research that we are still doing. So there's some worksheets at your table if you would like to fill them out and help our research team figure out what the next generation of physician integration actually looks like. But I want to take a step back because I'm guessing that integration is a hell of a lot harder when you start adding more things. And I don't think that any of you have actually figured this out yet. So my question is, when it comes to integration moving in that same direction, what are some of the barriers you come across and how do you solve them? Rushika already said one of asking the question and making sure that everyone has the same answer as to the why. What are some other kind of challenges that you're trying to overcome when it comes to this integration piece? Rob Mayer: There's three things that pop in my mind. Data's number one of the biggest ones. Saying it doesn't surprise me in this room, but understanding how people, ETL data, store data process data and assuming that their data's going to match ours, we bring them in and it can all of a sudden just work together is just a fallacy. And so I think it doesn't always show up in a synergy case or a partnership case, and then you get to the actual results and you realize you're in two different worlds. I think the second is the tools. There's always this assumption you're going to combine tools and yet you end up with maybe multiple products for quite a long time, which keeps you on separate data, which keeps you on separate tools, which means you're probably not sharing information. And then really what is a good tool even assessing, is our tool better? Is that tool better? Is this tool better? That process? And I honestly think the third, which is important and Rushika said earlier is the culture. Change management is such an undervalued part of it that doesn't show up in a synergy case or acquisition case or a CBA or a partnership case. All the numbers are there, this is what we're going to go do and this is how it's going to work. And then actually not having folks that are actual change management experts help drive that through the organization is often one of the last things we do. But probably one of the most important parts of doing it that I think continues to be an almost important part of every partnership or acquisition we do. Laurie Sicaeros, MHA: I put culture number one, I'd reverse your order. The data piece is if it's not all coming together the doctors are not going to go find it, they're not going to click out of one system and go into another system. Rae Woods: Never. Laurie Sicaeros, MHA: So it's a waste of time. So integration of your data is key so they can do the best and guide and direct. Rushika Fernandopulle, MD: It came up in the word cloud, which I was intrigued. Trust. Trust is such an important thing and it's very hard when you're combining organizations to make sure that you have trust and you need to get over the us and them thing, which is really hard. Rae Woods: Especially organizations that may have been competitors, whether they're eating in the same business lane or different business lane. I think in value-based care it's really easy to just point fingers and go, that one has to figure it out. If only the payers would do this, if only the government would do that. It's very easy to point those fingers. It suddenly becomes difficult when they're all working for the same organization. I'm sure there was a moment in which you blamed Amazon for something Rushika. Now we're getting towards the end of our time and I want to make sure that I end this conversation with a call to action. I do this on every Radio Advisory episode, and I'm cognizant of the fact that we have talked about a lot of stuff and I don't want our audience, our listeners, to feel lost or to feel kind of helpless in what they do next in their value-based care journey. So I want to give each of you a moment to kind of speak directly to the health leaders who are listening to this when it comes to value-based care, whether they're at the beginning of their journey or they're kind of drastically trying to hit the gas and accelerate things, what is the one thing that you want health leaders to do differently as a result of the conversation that we've had here today? Rob Mayer: Thinking, I think one of the things we've worked hard on is redefining the word failure. I think historically it happened or it didn't happen to a success or it didn't, we weren't successful and therefore we were judged in the merits of that. We either judged ourselves or we judged the provider or vice versa. And I think now we're switching to a mindset of what did we learn and how do we experiment? How do we change and how do we go try again in a different way, but with what we learned the last time and how do you take those lessons and just continue to evolve our thinking and trying to figure it out. And therefore teaching leadership that that's what this is about. It's about evolving, learning and changing our story and trying to get towards success versus we got this many members in an ACO or we got these results from an ACO and it showed up in a P*R. It's almost a startup mindset in some ways and trying to adopt that as we're trying to actually in this industry make change in value-based care. It's one of the big things we're not done, but we have work to do is redefine failure and what it means in value-based care. Laurie Sicaeros, MHA: Build a great network. I think the network is going to take you through and carry you through the day. If you have a great network, build something that you would use that you're proud of, that you would literally send your parents to. The network is honestly going to be key. And your trust and your navigation and all of that then is you don't have to be frustrated or stress about and can, if you've got that high performing network, it's easier to add things too. So focus, pause, get everything put together and then build off your chassis. But it's a great ecosystem once you have it. Rushika Fernandopulle, MD: So I do two things. One is a little bit, Rob, take the long view. This is a long journey. It's not going to be quick. I think you see so many people the first six months aren't working, pull the plug in the whole thing. No, you've got to keep going. I love this idea of not thinking it's a failure. We learned the 99,000 ways not to build able to light bulb from yesterday. And the second one is, I actually think value-based care is a red herring. It's actually the wrong framing for all of this. It's a means to an end. And the end is we provide better care for consumers and it allows us to do that. And so we just keep remembering that that's what we're doing it. So what value-based care allows us to do is double down on primary care. It's a little unfair. We go to markets and we tell people, "Leave your doctor and come to us," but we're spending twice as much of the primary care as they are and we have much nicer practices and we spend more time with you and get a health coach. We send an Uber to pick you up and it's unfair. But the value-based care allows us to do that, right? And in the end, that's what will change the market is actually consumers voting with their feet. And that's why by the way, people like Amazon and CVS are making huge investments and this sort of value-based care platform because they see that. Rae Woods: Absolutely. I love that. Well, thank you all for coming on Radio Advisory. My biggest takeaway from that episode is that there's not one path to value based care. In fact, the moment that's been ringing in my head over and over again is something that Rushika said at the very end there. Our goal isn't actually value based care. Our goal is to make care better for patients. The path to get there is value based payment, and I for one, find that mindset shift incredibly liberating. And remember, as always, we're here to help. If you like Radio Advisory, please share it with your networks. Subscribe wherever you get your podcasts and leave a rating and a review. Radio Advisory is a production of Advisory Board. This episode was produced by me, Rae Woods, as well as Katy Anderson, Kristin Myers, Atticus Raasch, and Eliza Dailey. The episode was edited by Dan Tayag, with technical support by Chris Phelps and Joe Shrum. Additional support was provided by Carson Sisk, Leanne Elston, and Erin Collins. Thanks for listening.