E20: Medicare Advantage and Delegated Medical Group Deep Dive with Alex Mohseni
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[00:00:00] Welcome to the Mastering Medicare Podcast, where we demystify healthcare and Medicare for senior serving professionals and providers. With your co-host, Dr. Alex Mohseni and Dr. Amy Schiffman, visit mastering medicare.net for show notes, additional episodes and valuable resources.

Alex: Okay. Oh my God. Are we back? We're back. Back from 

Amy: hibernation. Yeah, it's like a post covid. We're like the post public health emergency first episode back. 

Alex: Yeah. So Amy, how about you tell folks why we were gone for two years? 

Amy: I might even tell them why we were gone for almost three years. So we were gone because.

I'm gonna just say Covid and both of us had real jobs and we went out into the world and discovered things and I don't know, I don't think we ran outta stuff to talk about. I don't know. Maybe we were just lazy. Why do you think we were gone for two [00:01:00] years? 

Alex: Well, I took a big corporate job that didn't let me.

That's it. We took a 

Amy: W2 job. Yeah, I did too. So we've been gone for a little bit of time. But I think we're back to kind of re-explore where we were and now where we are in the world of Medicare. And I think a lot has changed since we have made a podcast. Alex, I don't know if I can describe to you how much I've learned, how much you've learned, how much the world has changed in front of us.

It's like you blink and everything changed 

Alex: massively, massively. I mean, we, covid happened and I worked at Optum in a, at a national level. I learned a massive amount about how value-based care actually works and happens. And and a AI hit us a couple months ago, so it feels like everything is changing really rapidly.

And so, you know, Amy and I have been talking a bunch throughout these last few years and we continue to get lots of [00:02:00] fan mail from everybody. So thank you for all that. Thanks, super fans, but we are super excited. To get this podcast going again. Yeah. And yeah, so let's take it 

Amy: away. Let's take it away.

And I, and I'll just add that in the past two years I have had the, the lucky opportunity to be the chief medical officer of an agency that oversees a lot of things within the S D O H world post-Acute World Hospice, specifically home care, specifically in the private duty world. And it's been a real, it's been a real eye-opening experience and I've learned a lot sort of exploring down the part a space which had not been my usual cup of tea, but now I'm a little bit more familiar with that.

So I think we should jump into our topic Dejour, Alex? Yeah. What do you think it is? What should we talk about? Should we talk about like, I don't know what everybody's talking about, which is not chat G p T, but maybe value-based [00:03:00] care. 

Alex: Yeah, I, I gotta say like before working at Optum, I didn't really truly understand what value-based care was.

I thought it was I dunno, BS of some sort. But it turns out that I, I think value-based care. Is the care model for the future of the US healthcare system. And what I didn't fully appreciate before working at a company at the epicenter value-based care is that the value-based care model especially the model through Medicare Advantage, with delegated risk to medical groups, I is probably the one model where incentives.

Are aligned the best as far as I've seen in the US healthcare system because that's where a lot of waste happens, right? When, when incentive vectors are like pointing in opposite [00:04:00] directions, right? Where like the patient wants to get healthier, but the healthier you get the more money the hospital loses, right?

So that's not like, right? It's like not making sense, right? Doesn't make sense, right? So what is the model in which. The incentives are better aligned. And what I saw working at Optum is where the incentives for the patient, the provider, and the health plan were all aligned really, really well in a way that made a lot of sense.

And I was actually blown away by. How, what an amazing job. A lot of the leaders and executives and operational people within an organization like Optum are doing to really provide better care, more effective care at lower cost. It was, it was like the antithesis of what I had [00:05:00] seen in my work as an emergency medicine doctor.

Pure fee for service within a pure fee for service hospital setting. Right. Yeah. This was, this was really eye-opening and it was very, very different from not what I hear people say about just regular health plans or insurance companies. Right. So you know, we probably be a good idea to give our audience a refresher on how.

Medicare Advantage works and how these delegated medical groups like Optum operate. Yeah. And how it's different from a regular right. Insurance plan. Right. Well, 

Amy: I wanna, well, what I wanna do is, because you have the benefit of having lived in that world for two years, and I almost think there's a tremendous amount of vocabulary and, and nuanced.

Words that suggest things, but I wanna get some clarity for our listeners actually. So I'm gonna go back [00:06:00] almost to the beginning of what you were saying. You used the words value-based care. I thought we would just actually dissect just those terms for just a second. When something is value-based, it means that there is something that is better about one thing than another thing.

What is the value that a lot of these companies are looking for? It's, are you doing a good job, right? And then you basically get paid for doing a better job? How are organizations that are considered to be value-based companies? How are they creating value? Where's the value? 

Alex: Mm-hmm. Yeah. So the value is the value, the financial value that's generated is by reducing unnecessary waste, essentially, and mm-hmm.

Reducing comp, medical complications that [00:07:00] generate the unnecessary waste and providing care in a more efficient and effective manner. So, It only works in a model where the, the system which is the providers and the care managers and everybody where they have a financial stake in the outcome, right?

They, they can either make more or less money depending on how good of a job they do in taking care of the patient. 

Amy: So everybody has to be aligned, which means that the current structure for people under original Medicare, which is we've spent enormous amount of time talking about that in our earlier episodes.

This is so distinctly different from that in that type of environment you go in to, a patient comes in, you do things with them, to them talk to them. You get paid for what you do. In some ways, you're gonna get paid. In this model for what you don't do, so you actually [00:08:00] save money by doing less. Is that basically what's happening here is that people are challenged to find the incentive to not perform a lot of tests.

Or I, I 

Alex: think that's actually a, a, just a really small piece of it, cuz that's more just the regular insurance model. Right. Got it. So I think it's a really good question. How is a delegated medical group like Optum actually different from just a health plan where I, I would say a regular health plan? Yes.

Their incentive is generally do less, right? Fewer tests, fewer medications. What I saw at Optum is actually quite different, is doing a ton more. But doing it in a coordinated matter. Manner With a specific coordination? Yes, with a specific goal of actually, like, does this keep the patient healthier?

Does this, is this the better treatment? Is this the better protocol? Is this the better? Is this the better [00:09:00] outcome? Like I, I 

Amy: cannot collaboration deciling. That is seems to be what you're saying. It's, yeah, collaboration and 

Alex: desiloing connecting the dots. Right. In the fee for service world, the PCP is doing his or her own thing.

The hospital. 

Amy: Every ologist, all theologists have their own like little sphere and they don't interconnect and there's not really many systems. In which to do that. So in some ways, in a value-based model, when there's an incentive to delo collaborate, can everybody's operating in the same continuum?

There's communication. Yeah. Yeah. There's better communication. How, I mean, what, what have you seen in all of this that is better communication? Like how do they communicate with each other better? 

Alex: Yeah, so like, let me just give you an example. I, you know, my job at Optum was to. Help develop models for reducing unnecessary utilization of our members.

In the hospital, right? Mm-hmm. So unnecessary [00:10:00] hospitalizations. Mm-hmm. Unnecessary inpatient stays unnecessary long stays, unnecessary ED visits or low quality visits, right? Where like, sure, they need, they need a hospital type level of care, but even when they stay in the hospital, they're not getting the, the actual treatments they need.

Right? So one of the things that we, you know, we implemented was. A system by which when our members arrive in the ed, we we would actually get real-time notifications that, you know, patient Mary just arrived in the ED with chest pain and we created teams that were sitting in the background monitoring this.

And then they would pull out the relevant medical history of that patient, the recent EKG results stress echo test, all that stuff. Package it together and call the ED doctor and say that's our patient. And here's her [00:11:00] most recent medical history, and here's her who her cardiologist is, and if you need us to help you, we can arrange for X, Y, and Z a next day stress test of this or this or that.

And. Can you imagine the reaction from the ed docs and the patient? Normally they have no connectivity with like the outpatient ecosystem, and now they're getting direct phone calls saying, Hey here's everything you need to know. Here's the resources. How can we make this easier for you to provide high, high value care?

Amy: Okay. I, I'm, I'm freaking out only because it sounds. Like idyllic. I mean, this is the I think we all want this, and there's so much learned helplessness in the non-value based system where you're like, well, I guess I'm never gonna know and I'm never gonna get in touch with that cardiologist. I'm never going to, you know, be able to collaborate in the way that maybe be optimized.

Why is this not everywhere currently? Or where is it? Yeah, because I don't see it in my [00:12:00] day to day. 

Alex: So what is the incentive? It all, A lot of this comes down to incentives. What is the incentive for the regular fee for service, primary care doctor to build out all of the infrastructure and pay his staff or her staff to do all this?

There isn't. Right. So, so, so how does that get 

Amy: jump started? I mean, I, I, I, because you've been living in it so much, it's almost like I see where we sit here and I see what you just described, and I'm thinking, how do you transform a system, even just like one little town from being a. Completely fee-for-service world into being more of a value-based environment.

How does that happen? Yeah. 

Alex: Well, so I think what you see out there is you see two things going on. You see. Medicare and c m s slowly start to move everybody along the value-based like trajectory. You know, they had they had like upside gain, share [00:13:00] upside models, then up and downside risk models, ACOs.

Mm-hmm. And it's like, it's like this trajectory of getting people to the full risk. But meanwhile the MA model with delegated medical groups has been full risk for a while now, and that's where you see, I think the, the best evidence that getting everybody incentivized the right way to provide high quality care actually really works cuz these kind of the step-wise functions that everybody else is going through.

I'll tell you my view on all, all this things. Yeah. Give gimme 

Amy: your view because I'm gonna, I'm gonna ask you a really basic, I'm gonna keep asking really basic questions. Yeah. Cuz if like, I have them, I always think, oh, other people have them too. But give me your, gimme your, okay here, here's 

Alex: my view.

View all this. Okay. Let's take ourselves out of this whole context of, of Medicare and just imagine we're running a business. Right. You used to run your [00:14:00] own like house calls business, right? Yep. And, and so you have to think about like, how am I gonna pay my employees? Right? And there's two, like, there's a couple general models.

There's. A pure like hourly rate where they can just sit there and do nothing and they get paid. Right? Yeah. And on the other end of the spectrum is like an eat what you kill, where they only make money per if they actually perform. Right. Per, we 

Amy: call that per click. I call. I call that per click, right?

Alex: Yeah. And so, and then there's everything in between where you're like, ah, you know, it's a little I can't put them on a pure per click model, so I'm gonna create an incentive plan for them. Right. Low base with incentives. Yeah. Yeah. So if they do the X, Y, and Z, they get fails bonuses. Right. And so that's how this has all played out in the, in the US healthcare system.

Where the MA side with their delegated medical groups is on a pure, they're, they're taking global risk. They're taking full risk for pretty mu almost with, except for some carve [00:15:00] outs for the whole total medical spend of the patient, right? So they have to think about everything, transportation to your doctor's office and prescription prices.

And they have to really take in the whole picture and solve the whole thing cuz they're taking the full risk. On, on all of that expense for the patient. And that works. I saw it. It's amazing, right? And but what's happening on the fee for service side with all of these intermediary models, you know, all the.

ACOs and MIPS and macro and all these other things where there's a little bit of dollars in play. Here's what I've noticed is that these intermediary programs are so complicated with because they're trying to like, you know, they're, they're kind of in between with a lot of potential for gamesmanship.

They've become so complicated that a lot of players can't even figure out the rules of the game. So they'd either don't play it or they, they just throw 

Amy: up their hands. They just, they just throw up their hands and Yeah. Say whatever. [00:16:00] I'll take the 4% hit the 2% hit. Yeah. And some people will. Okay, so let me, let me, yeah, go ahead.

Yeah, go ahead. Well, I just, I wanna keep going back to well first of all, your impressions are, are kind of profound because. It's funny, I remember when you started at Optum, you were like, I want to learn and understand the data, the analytics, the mentality, the philosophy. There was a whole slew of details that you wanted to fully understand and I think.

Let, let me, let me reflect back for just a second. You talk about something called delegated medical groups. Are you saying that MA plans lots of different MA plans that might be offered, like, Hey, this one or a B, c medical ad, Medicare Advantage and X Y, Z Medicare Advantage, they actually sell a product and that you, that Optum actually implements that product?

Alex: Yeah, so that's exactly right. So the 

Amy: health plan, it's white labeled, it's a white labeled healthcare plan that's value-based. Yeah, 

Alex: so, [00:17:00] oh my God. So half half the US Medicare population is now in an MA plan instead of a fee for service. Right. I think we crossed that threshold this year. Yeah, the 50 50. Yep.

Back to 60 40. So those health plans, imagine. So an MA health plan is just the same as, almost the same as any other insurance company except. The the, the, the payment for the member is coming from the federal government, right? So CMS is saying, okay, this used to be a fee for service Medicare patient.

Now it's ma. So and they've signed up, let's say, with Aetna, okay? Mm-hmm. Aetna's MA plan. Mm-hmm. So now they're gonna pay Aetna $900, you know, per member, per month. To take full global risk on that patient for all of their professional. So, 

Amy: a, B and D. It's an A, B, D plan? 

Alex: Yep. Yeah. A and B. Plus or minus D.

Plus or minus D. Yeah. I would say usually it's, it's, it's included. Okay. And they're getting a [00:18:00] certain capitated payment every month. So now put yourself in the shoes of that now. Okay. So now you're getting 900 bucks a month. Mm-hmm. To take care of patient, Mary and you, you are at risk for all of her medical expenses, including hospital stays, prescriptions, doctor visits, specialty imaging, radiology.

You're like, okay, huh, I'm taking a lot of risk here. What, how am I going to manage that risk? And the old way that health plans would do is just denials, right? I'm just gonna, gonna deny care That's. That's expensive, right? But the new model is say, okay, why Mary lives in, let's say Lexington, Kentucky. Let me find a medical group that's high quality there.

Plus I have like 10,000 other MA members in that same region. And I'm gonna tell Mary, now that you've joined my MA plan, here are the doctors. You can choose to be your primary care doctor. Okay? It's this one medical group that I just bought. And, and I'm gonna buy that medical group in Lex, [00:19:00] Lexington, Kentucky.

I'm gonna buy them. Or oh, I'm either gonna buy them or I'll do, go into some sort of partnership with them. But let's say I buy them cuz that's what Optum does. They buy medical groups. Okay. And then I'm gonna tell the doctors there, listen, you keep seeing your fee for service patients, but I'm also gonna assign you certain Medicare advantage members and.

I'm getting 900 bucks a month for patient Mary. I'm gonna hold on to a hundred dollars of that and there's an 800 left and I'm gonna give you Dr. Smith, that $800 and now tag your it. I'm delegating my risk to you and now you are fully responsible for all of the total medical spend of that member. So if you, through your care coordination team and nurses and everybody can together keep Mary's costs at $700 per per month, then that a hundred dollars delta is [00:20:00] yours to put in your pocket, right?

So now these doctors and their teams are basically incented. To keep Mary healthy, the healthier they keep her 

Amy: and they're getting a, a nice chunk of change in some ways so that they can go out and get the care managers can go out and get a dietician Yes. Can then go buy these, sort of, these services that they can keep close to them.

That they used to have to be like, yeah. I don't know. I mean, all right, well maybe there's like a dietician down the street. Yeah. And I don't, oh, maybe I forgot to offer you a dietician. So they're, they, you're basically getting a chunk of change. To bring in the services that we all know should be in the care collaborative.

Yes. With that patient. But we had so much learned helplessness before we couldn't really see through the forest. And we could, we couldn't see to the end because it was just too complicated. But in some ways, if you say money buys these types of services, then it, it's brought to you. 

Alex: Yeah, so basically, [00:21:00] so all of a sudden everything starts to make sense, right?

So, so now let's say the patient patient calls at 4:30 PM the office is getting ready to close and the patient calls the office and says, I'm having this issue, right? In a normal world, the doc, the office says, sorry, we're closing up for the day. Like, and so what does the patient do? They go to the er, right?

Yeah. Here the doctor's like, oh, wait a second. No, no, no, no, no. Get me on the phone with her. Let me see if I can solve the problem of the phone, and it doesn't even matter anymore. Like, Is there a billing code for me to bill? No, he's the doctor's getting, the doctor's getting the 800 bucks a month. Right. Or the package, 

Amy: regardless of their 17 C p t codes.

And then like all, okay, so I'm gonna repeat back to you because I love to do that cuz usually do that to me and I'm gonna do it to you. Anybody who's heard our other podcast know we play this little game. Yes. So what you're saying is that, Any company that wants to start an MA plan could do that. [00:22:00] And what they're gonna do is they're gonna get.

Members, people are gonna sign up and say, yes, I absolutely want to be in your Medicare Advantage plan. And that Medicare Advantage plan's gonna be like Rut ro. We don't actually necessarily have all the providers or the smooth sort of the smoothness of, of how to provide that care. So we're gonna contract to a company like Optum, and then Optum's gonna say, Ooh, well I'm gonna take a fraction of the dollars that Medicare is going to.

Pay that new MA plan, they're gonna take a fraction of those dollars and then, Go out and make it happen. Yeah. And that they're gonna incentivize all these different people along the way. Well, specifically, it sounds like the primary care doctor in this case, and I'm sure there's some sort of carve outs for other different types of things, but that the doctor then gets a chunk of money in order to provide the services that they might need to provide extra value, and then they get to keep the difference between sort of a [00:23:00] little bit of a carve out that came from the.

The, the delegated practice, and then they get to keep the, the part that they don't spend. But what happens if it's a super sick patient, Alex, I mean, 800 bucks we know is not everybody's amount of money that they get from Medicare Plus. Aren't there people paying money to be part of that insurance plan?

So like, how does that all work where there's somebody who's really sick and also you have the, the, the members themselves are paying money to be part of this insurance plan? Correct? Yeah. 

Alex: So Okay. So several questions there. Yeah. Let me first tackle. The question of aren't different members, different costs, and that's absolutely true.

So, so the way that's handled is through what's called risk adjustment, right? And what that means is every year the, the primary care doctor needs to do the annual wellness visit with the patient and document. All of the different [00:24:00] conditions that the patient has and these different conditions through something called H C C scoring add up to a certain risk adjustment score.

And that score then translates into a potential. Increase in that monthly payment that gets paid by CMS to the health plan, and then it, you know, trickles down, then 

Amy: trickles down through the delegated, 

Alex: okay. Where a, the average MA patient may have a risk adjustment score of one, and that could translate into about $900 pm.

Pm a relatively sick patient with. Let's say end stage renal disease and a few other conditions might get a risk adjustment score of about 2.0. And that it's, it's, it's roughly just multiplied. Now there's a lot more detail into it, which we, we, I'm not an expert in actually, but, but I know there's a lot more details into it.

But roughly if [00:25:00] your risk adjustment score is double, so it's two instead of one, that typically translates into about double the monthly. Payment coming in a lot of, 

Amy: a lot, a lot, a lot of, a lot of details, and I think it's important for anybody who's listening because this is where like a little knowledge might actually help somebody who's listening to this.

And I'm gonna, this is kind of like a little bit of a q and a, so if you don't know the answer, I'm totally good with it because I think that there's a lot that we can offer the listener maybe in our show notes about this. But if somebody is a 65 year old, otherwise healthy person, is there H c C score like one?

I believe so. And then every time they have a different chronic disease, it's sort of an additive risk and that that adds a dollar value to the amount that c m s then pays. The health plan that then trickles down through. Yeah, 

Alex: and I do wanna say like when we say it gets paid to the doctor and these delegated agreements, it really gets paid to the medical group.

The medical [00:26:00] group then decides how to actually compensate their doctors. Right, right. And so, yes, some doctors are still on an hourly rate, and so just realize Yeah. We're really talking about the medical group. Right, 

Amy: right. And I, and I like to translate a little bit of these scores into into into sort of dollar value.

So for every HCC score of one, it's about $10,000 to the group per 

Alex: year. Yeah. Yeah, so call it about $900 pm PM about, yeah, roughly. 

Video-20230526_160247-Meeting Recording: I 

Amy: think that's a great, so you envelope, right? So then when you double an HCC score, the health plan is getting about $20,000 and then when they get an HCC score of three, the health plan is getting $30,000.

So I think the, it's really interesting how the h CCC scores are so impactful in multiples of thousands of dollars. Correct. Yeah. And, and that very sick patients who have multiple chronic diseases, you actually can do. A lot with $30,000, but you have to do it well if the [00:27:00] patient has C H F C O P D and diabetes, which may be what's happening there.

Alex: Yeah, and keep in mind, so like, like this is what the MA world has been in the news for in the last couple months, which is. The impact of documenting all these additional conditions has so, is so huge on the revenue side. Mm-hmm. That, that's been the major focus of a lot of these MA plans over the last, you know, five to 10 years.

It has been mostly focused on risk adjustment, right? Let's make sure we document every single, 

Amy: every single problem. 

Alex: Correct. And so then the federal government's like, wait a second, I thought Mary was only gonna cost me $1,200 a month, but now every MA patient's costing me like 20% more than what I thought it would be.

Right? And, and, and I think. So 

Amy: my, there's some GA and people are worried that this is a, that they're gaming the system. Yeah. That there may be fraud and [00:28:00] abuse, all of those types of things. Because if you go from like, and I think of the world and this is a very strange way of thinking about it. Cause I look at lists of ICD 10 codes all the time.

Yeah. And then I look at them and I see what all they all mean. And I feel like it tells a patient's story like, oh, this is a. Older person who has C H F, who's had, you know, poorly controlled diabetes and now has C k D, and sort of tells a little bit of a story. But imagine that there was no incentive for doing proper ICD 10 coding.

You find yourself in a value-based world and you're like, oh, oh my God, I gotta like, Get myself together here and now I'm gonna do a much better job with my ICD 10 coding because those, those ICD 10 codes translate into a higher HCC score, so then I'm gonna get more money. I can see how like there may even be like a woodwork effect where there had never been great coding and now suddenly everybody's paying attention to those things.

Yeah. So I, I can sort of see why. Regulators and those who pay attention to these things would be like, wow, like last week she was this, but now somebody came in and did like a [00:29:00] head to toe and like really cared, and now they have an HCC score that's way 

Alex: higher. I always find it amusing when the government creates a game and then they're surprised that people play the game.

What did you wait? What? Yeah. What did you think people were gonna do? Yeah, I mean, 

Amy: it's. It's a, it, it is actually amazing. And, and I I'm sorry for always going down to ground level because I, I have some experience in all of this. Like when I started my house calls practice the HCC scoring thing was, was a, was a big deal and there were very few people that could go out into homebound people's homes to do this H C C scoring for MA members that were in my general geographic area.

And there were always contracts to be had because I had nurse practitioners that knew how to be in people's homes. And so they were looking for ways to, to say, well, this is a skillset, you know how to go to somebody's home, but could you also go out and maybe go and do essentially what was this annual wellness visit, this annual sort of HCC scoring event, which would then pre predicate [00:30:00] what the next year's payments would look like for mm-hmm.

That particular MA plan. And it was really interesting to me. They would Th there was a lot of reasons why I, I didn't end up doing this, but I learned a tremendous amount about it. And in doing so, realized when somebody goes from a fee for service environment into this MA world, there is an enormous incentive to keep track of stuff.

Yeah. You have to keep track because if you don't keep track, it flies away. Like feathers in the wind. Yeah. So HCC scoring, so it's, it's complex. So let me ask another question. Cuz I think HCC scoring is really important. Clearly decides how sick a patient is going into the next year. And, and then, but let me ask this question because if that's the only thing that a MA plan gets when a Medicare beneficiary decides they wanna opt into MA and they pay money.

Wh where is that money going? Like, you know, part B costs, you know, 150, 200 bucks per month. It goes to the federal government, comes outta someone's social security, whatever. Where [00:31:00] does the money that you would pay for an MA plan go to? 

Alex: Yeah, that goes to the health plan. So it goes to the health plan. If there's a premium, then it goes to the health plan.

Yeah. And there's a whole complicated bidding process to, to win these MA contracts. And there's actually a few good webinars on it that are coming up. I believe there's one in June that I can try to put into. So there's a lot more that goes into all of this, kind of the, the bidding and the pricing and all that.

So yeah, this is su super kind of superficial view of it. But I, I wanna get to what I think is actually really interesting. So, so government created the risk adjustment game. People played it and now there is downward pressure against all the health plans and the delegated medical groups that this risk adjustment game has gotten a little out of hand and let's reign it in.

Okay. So I think the reason that's really interesting is what that means for all these delegated medical [00:32:00] groups and the health plans is. Now they're gonna have, they're gonna have caps on how much they can play, the risk adjustment gain to boost their bottom line. Right? And now they have to focus more on affordability, meaning, oh, interest and, and care and outcomes.

So in the past 90% of their focus was like, how do we do risk adjustment better? Right? Which doesn't really benefit the patient that much, but now they have to say, okay. Now that we can't make as much money through risk of transplant, we really do have to focus even more. They were doing a, like I would say Optum was doing an amazing job on like the care coordination and, and all that, but now there's even more reason for them to invest heavily in that, right?

Because now if they wanna maintain their profit margins it's gonna have to do, come through better outcomes. On the actual like health outcomes and coordination and reducing unnecessary utilization and waste and all of that. [00:33:00] So I think with the downward pressure of risk adjustment, there's gonna be 10 x if not more, focus on doing what's right for the patient, providing better care.

And I, I think that. Is going to be a major instigator of, for massive amount of innovation and startups and all sorts of like great solutions for patients. So I think this is gonna be really exciting next 10 years. 

Amy: That's. That, that is really interesting. Now I am, I'm gonna ask this random question. This is definitely an opinion question to some degree, but of all these sort of like better outcomes and reducing utilization, what percentage of that thinking is actually just reduced ED visits and reduced hospitalizations?

Like we talk so much about like, yeah, reducing utilization, but like, I feel like 99% of it in, in my mind is really just keep them outta the ed, keep them outta the hospital, keep them out of the ed, keep them outta the hospital. Like that becomes this mantra where like, keep your 30 [00:34:00] day readmissions down.

However you can figure out how to do that, whatever you can wrap around that. Patient services, new tech, you know lots of touchpoints. Whatever you can do addressing social determinants of health, whatever it might be. It's really about ED and hospitals. Are there other types of. Big spends that a health plan can look to to reduce that sort of Yeah.

You know that. Yeah. So tell me about that. What's 

Alex: the value prop and all that? The two big buckets that come to mind are pharmacy. I. And surgeries, especially like outpatient surgeries. So on the pharmacy side, there's a massive amount of waste where you know, you have the, the doctors are pushing certain brand name drugs that are a hundred times more expensive.

When a similar generic could work, work would work perfectly fine, right? Yeah. Yeah. So that's one huge category of waste. And then the other big bucket, I would say there's [00:35:00] a lot of both unnecessary surgeries. And there's more and more evidence coming out how a lot of these surgeries, whether they're laminectomies or others you know, there's Dr.

Ken Cohen at at Optum who does a lot, a lot, lot of this kind of I would say, Research and investigation for this sort of waste. There, there are so many unnecessary surgeries and and tests that we do in healthcare. And then even when you get the, let's say you do need the surgery, there's a lot of waste in, in terms of the site the site of the surgeries.

So are you getting in a hospital or an ambulatory surgery center? Which d which hardware are you using? Like that could have a 10 x. Impact on the cost of the surgery if you're doing it with this orthopedist who only uses this hardware in the hospital versus using a you know, a different orthopedist in an ambulatory surgery center and, and, and the, [00:36:00] and with potentially even better outcomes in the ambulatory surgery center.

Right. But like, how do you guide the patient towards the better option? Right. How do you, how do you actually do 

Amy: that? So let me ask a question. Is that is in the value-based system, clearly you are making choices. Fiduciary responsibility of the Delegated Health group is to maximize good outcomes and reduce the cost of those good outcomes.

But is that a, is that where the word bundled payment comes in, or is it a d, is that a different word? Because you know, I think people hear that word bundled payment come up all the time. Or is that outside of the MA world? 

Alex: Yeah, that as far as my understanding is that's outside, that was along this trajectory of getting towards values, like Got it.

All the types of value 

Amy: models. Yeah. Right, right, right, right. So the, the, that term gets very conflated in my little world, but I, I wanna go back to something that you said. So you were talking about medications. [00:37:00] So, I always think to myself and anybody who's heard me talk about hospice, I think of hospice in some sort of ways under the original Medicare model as the original value-based model.

Right? Yeah. Medicare pays a per diem. Yeah. And then you have to pay your staff, you have to pay for, you know, supplies and durable medical equipment and medications and. All the different things that is required to take care of that patient with a single dollar value per day, like a per diem rate. And I will tell you that medications is in and of itself one of the most difficult things to do.

Mm-hmm. In hospice we focus a lot on you know, medication reconciliation, but also deprescribing. And we are often blinded to the cost of some of these meds. And so I appreciate the fact that this is not just a problem in what we do, but in any value-based environment. So medications are considered to be a type of runaway cost.

Alex: Yeah, absolutely. Absolutely. Yeah. Yeah. So, so go ahead. You know, I, [00:38:00] I think you asked like where are the big buckets of like financial opportunity. I wanna add that like, In trying to achieve reduced unnecessary hospital stays. One of the big trends that I saw, and you and I have discussed a ton is that that doesn't mean patients don't need care, right?

It just means they don't necessarily need or benefit. From the LE type and level of care that's in the hospital, a lot of times that care can be better or less extensively given in the home, right? Yes. Right. And so yes, I, I think transitioning a lot of acute care and post-acute care to the home is probably one of the biggest trends in healthcare for the next 10 years.

Yeah, I 

Amy: mean, I, it's, I'm so glad you brought that up because of course, that's where my heart is, that's where my brain always [00:39:00] lives, is the, is this care in the home. And just to sort of go through a, a general sense for the listeners out there, this is not an insignificant amount of bene Medicare beneficiaries.

I think the data is that between five and 15% of all Medicare beneficiaries meet some version of home bound criteria. Which means they actually never leave their home or they only sort of leave their home and maybe just for doctor's visits and you know, things that might be considered to be essential.

That is an enormous number of people. It's billions and billions of spend, and that the average cost of somebody who's home bound is significantly higher. Their HCC scores are always much higher. And I think that that's where, you know, you and I sit in a space where we have a lot of people approach us with ideas.

Hey, what about this? What about this? I'd say 95% of folks coming to me right now with these great startup ideas who wanna understand what it looks like are approaching it from a home-based mentality. How do [00:40:00] we address the needs of these home-based folks in a way that Assists, family caregivers, assists you know, agencies that go into provide private duty help.

And it's all about everybody's trying to solve this problem of collaboration, which interestingly enough, the value-based marketplace is sort of like looking at, but I think sometimes it doesn't extend. Past some of the post-acute care. It's like hospital nursing, home assist, maybe a little assisted living, but the home is like this great unknown and so people are trying to wrap their head around it and then trying to figure out how to feed back into the value-based market.

Like how do I get the family caregiver to be a data collector so that I can feed it back through so that the doctor can get some information so that the doctor can then say, I'm doing a really good job. So then, so then, so then, so then, so then, so it's. There's a lot of complexities in this cuz I can see right now there's like eight layers between by the time the, the health system has the delegated group.

Like imagine that the family giver becomes part of [00:41:00] that value prop. Yeah, I mean it's a, it's a really interesting there's a lot of really interesting opportunities out there in that, especially if you think of what the home is. 

Alex: Yeah. So I think, I think if you combine the two massive trends then of care in the home plus.

Connecting the dots. Mm-hmm. In a way, in a way that there's a financial incentive now. Right. I mean, you put those two things together. It's a really interesting time, I would say for Innovatives in, in healthcare. 

Amy: I, I don't disagree with you. I mean, I, it's funny because it's not that I think that everybody's trying to solve the same problem, but they're all looking at a similar problem through very different lenses.

A lot of people who have been in tech space for other things have had a fa like honestly, a lot of this is anecdotal. They'll be in a situation where they're like, oh my gosh. Like, I can't even believe that X, Y, and Z happened to my mom. And then this doctor didn't talk to that doctor, who didn't talk to this doctor who [00:42:00] didn't talk, and then they build an entire platform around that one thing.

So I think people are all trying to solve similar problems. And I, I, I, you know, I think there will be a great bunch of widgets out there that people can use. And, you know, I will also say this, that there is You know, I'm found, I'm finding myself in interesting places as being part of hospice, and one of them is also in the death care industry which is even going farther past folks who have actually died, which is an, you know, people do die and they, they die on hospice.

But understanding how even sort of the funeral home and the death care industry can actually provide assistance to upstream things as well. It's, it's, it's all part of a, a whole continuum of care. I mean, yeah, care, care doesn't end at the time of discharge of a hospital and I think people are trying to tackle that as well.

So let me feed back to you cuz I, I, again, I It is, yeah. This is not I entirely intuitive and has not always been entirely intuitive to [00:43:00] me, just how this works. So basically you start an MA program, you find a bunch of. Docs or a group that already knows how to do this, they take a capitated payment from.

From Medicare based on an H c C score, and then the program basically runs itself in order to create a value for itself and then takes a bit off the top. 

Alex: Yeah. Yeah. So that's exactly right. I think I. Let, let's tell the audience about kind of our, our, the new thing that we're launching this week.

Oh my 

Amy: gosh. I'm so excited. Okay, so I think it's important to sort of introduce the topic, but I'll just say it up front. It's called aginghere.com. Yeah. Alex and I spend an awful lot of time trying to figure out how to aggregate. Ideas and people and, and, and, and creating an environment that actually has an intellectual component to it so people can share experiences and become I, I essentially [00:44:00] immediate colleagues with each other is, is that sort of what we do?

We're connectors. Yeah. We like to get people to connect about ideas and connect about information and knowledge that can move, move the system forward. Essentially, 

Alex: yeah. So Aging here is a newsletter that we're starting specifically focused on the aging in place and aging in the home space.

So people, companies, stories products and conversations around that. And we're hoping that this is not just. A unidirectional newsletter from us to you, but also making it a community where we can both receive and share stories that are generated by you guys about this phenomenon, which we think is just going to grow massively over the next 10 years.

And, and we want to [00:45:00] be a part of it and we wanna help facilitate it. And, and, and so. Visit aginghere.com. Sign up for the newsletter. Everyone's welcome. We're gonna be making it better every week, so give us your ideas. You can email us at info@aginghere.com and you can always also reach us@masteringmedicare.net.

Amy: This is great, Alex. I'm so excited to bring together all the different people who might be interested in this. Awesome. It's gonna be a unique space. Yeah. Thanks. Awesome. All right. See you next podcast. All right, bye. 

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