U.S. Healthcare Solutions Magazine

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Transparency

FREE MARKET PIONEER

THE VALUE OF INDEPENDENT FACILITIES

Priority Medical Partners: Challenges & Successes of a Hybrid Practice

DPCs: DPC ACTION! A NEW ADVOCACY ORGANIZATION

TAKING BACK THE AMERICAN DREAM DAVID CONTORNO BURNS HIS SHIPS WELCOME FMMA’S NEW EXECUTIVE DIRECTOR

PRESIDENT TRUMP SIGNS TRANSPARENCY ACT

A BETTER WAY FOR SELF-INSURED EMPLOYERS TO PAY

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SOLUTIONS FREE MARKET

HEALTHCARE

VOLUME 2, ISSUE 2

CO N T E N TS A premier educational asset and tool designed for employers and patients as Buyers of healthcare in the free market movement.

4 Free Market Minute

”FMMA Annual Conference” • Megan Freedman

5 Welcome New Executive Director James Dunavant 6 The Value of the Free Market to Self-funded Employers 9 Building a True Market in Healthcare James Dunavant

Jay Kempton, Jr. Dr. Keith Smith

When they met, the founders of the FMMA had something in common; a crisis of faith in the U.S. healthcare system and, within it, their ability to provide not just greater value in benefits, but better health care for patients. Our Mission: To promote, educate and support the Healthcare Revolution, which will bring about true healthcare reform, based upon Buyers and Sellers working together in a mutually beneficial way, without the interference of the government or valueless third parties.

ON THE COVER:

David Contorno was a featured speaker at the 2019 FMMA Conference in Dallas. Conference attendees were a blend of doctors, surgery center representatives, and self-funded employers.

10 Free Market Orthopedics and Spine Surgery Dr. Richard Kube

12 COVER - Taking Back the American Dream

David Contorno’s Address at 2019 FMMA Conference • Emma Passé

16 A Positive Step to Lowering Cost

President Trump Calls for Price Transparency in Health Care

20 Free Market Pioneer • Priority Medical Partners Challenges and Success of a Hybrid Practice

23 DPC: DPC Action!

The Newest Direct Primary Care Advocacy Organization • Dr. Lee Gross

Way for Self-Insured Companies 24 AtoBetter Pay Providers Gordon Matthews

26 Senate Finance Committee Tackles Prescription Drug Prices Erin M. Hussey, Esq.

33 FMMA Local Chapters

Local Chapter Directory • Why Be Involved Online at www.USHealthMedia.com

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SOLUTIONS FREE MARKET

HEALTHCARE

BETTER BENEFITS LOWER COSTS

PUBLISHER Cathy Payne cpayne@ushealthmedia.com EDITORIAL MANAGER Megan Freedman megan@FMMA.org GRAPHICS / PRODUCTION / WRITING Ann Marie Kennon aludlow@ushealthmedia.com SENIOR MARKETING DIRECTOR Ben Daniel wbendaniel@ushealthmedia.com ADMINISTRATION / ACCOUNTS RECEIVABLE Debbie Tolliver dtolliver@ushealthmedia.com CIRCULATION Tom Higgs circulation@ushealthmedia.com CONTRIBUTING WRITERS James Dunavant, Dr. Richard A. Kube II, Gordon Matthews, Emma Passe, Erin M. Hussey, Esq., Dr. Lee Gross Free Market Healthcare Solutions welcomes FMMA members to submit articles, information, opinions, or ideas that enhance the mission of this publication. Please submit contributions to info@USHealthMedia.com or megan@FMMA.org. For information about becoming a member of the Free Market Medical Association, visit: FMMA.org. FREE MARKET HEALTHCARE SOLUTIONS © 2018 Published bi-monthly by Fidelis Publishing Group, LLC P.O. Box 217 • Jarrell, TX 76537 No part of this publication may be reproduced, translated, stored in a database or retrieval system or transmitted in any form by electronic, mechanical, photocopying, recording or other means, except as expressly permitted by the publisher. For permission contact Publisher@USHealthMedia.com. POSTMASTER: Send address changes to: Free Market Healthcare Solutions Subscriptions. P.O. Box 217, Jarrell, TX 76537

free market

MINUTE

BY MEGAN FREEDMAN

THE GOAL OF THIS PUBLICATION AND THE FREE MARKET MEDICAL ASSOCIATION IS TO EXPOSE THE CORRUPTION, EDUCATE YOU ON WHAT YOU CAN DO TO PROTECT YOUR PLAN, AND INTRODUCE YOU TO THE GOOD GUYS IN HEALTHCARE.

2019 FMMA Annual Conference Recap & New Executive Director In our last edition, we invited you to attend the 5th FMMA Annual Conference Burn the Ships: The Healthcare Free Market New World. This event was informative and motivating, bringing together long-time advocates with those who are new to the movement, creating a catalyst for a renewed sense of purpose. In addition to the other fantastic speakers, David Contorno, Founder of E Powered Benefits, a consulting firm at the forefront of connecting the buyers and sellers of healthcare, presented a powerful presentation. This session was an eye-opening experience for not only the self-funded employers in the room, but also the other attendees, outing the ethical dilemmas of a system designed to reward those who do the wrong thing for an employer. Outlining his own ethical dilemma a few years ago, Contorno shared how he noticed that while costs were increasing and employers were continuously taking big hits, his revenue got better and better. It was this realization that led him to overhaul

his compensation structure and his approach to helping employers manage their plans. Navigating the competing interests of the third parties who have inserted themselves into the delivery of care transaction is a struggle for all self-funded employers. Many consultants and brokers, PBMs, PPO networks, and a host of other vendors bring little to no true value, cost savings, or ROI to a self-funded employer; often just increasing the cost and complexity of an employer’s Plan. Just like most employers, your goal is to have happy and healthy employees in the most cost-effective way possible. Embracing the solutions promoted by the FMMA and Free Market Healthcare Solutions can help you achieve that goal. If you were unable to attend the conference, all is not lost! Videos and slides of many of the sessions are available on the FMMA website in the Events tab. Don’t forget to check them out!

Articles and written content are the property of Fidelis Publishing Group, LLC, or are used with permission of the contributing authors as noted in the publication. Photos and graphics not otherwise credited are property of Fidelis Publishing Group, LLC. The information in this publication cannot and does not constitute medical or legal advice. Information herein is provided for general information and educational purposes only and is not a substitute for physician or attorney advice. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of Fidelis Publishing Group, LLC.

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Megan Freedman has worked with self-funded benefit plans since 2005. For the past 12 years, she has worked with The Kempton Group serving as the Vice President of Corporate Communications. Ms. Freedman has extensive experience not only in employee benefits, but also marketing, sales, account management, executive support, and member services. Ms. Freedman has been featured on Kevin Price’s Pricing in Business Radio show and writes and co-authors many articles, white papers, and educational materials. She is licensed in Life, Health, and AD&D in Oklahoma and Texas.

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Introducing James Dunavant

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JAMES DUNAVANT ■

This spring, the Free Market Medical Association announced the appointment of James Dunavant as Executive Director. Mr. Dunavant joins the FMMA team from the Mises Institute, where he still serves as the Director of Development. Mr. Dunavant has been a student and advocate of the free market economic principles that are the foundation of the FMMA Pillars. He brings valuable experience to the FMMA, including a background in business development, marketing, and fundraising. For more than 20 years, Mr. Dunavant has been a relationship builder, connecting clients and donors with multiple business and nonprofit organizations. “I am excited to have the opportunity to advance the mission of the FMMA, connecting the buyers and sellers of healthcare goods and services. This movement is more important than ever in restoring low-cost, high-quality healthcare choices,” Dunavant said. Co-founder Dr. Keith Smith stated, “The association has grown considerably in both size and influence since its inception, and we felt it was time for the FMMA to bring on a full-time employed Executive Director. James will bring a wealth of knowledge and experience to the FMMA that will help further the growth of the association and the movement.”

E X E C U T I V E D I R E C TO R

Exciting things are happening at the Free Market Medical Association this year. The FMMA has named a new Executive Director, James Dunavant. Mr. Dunavant joins the FMMA team from the Mises Institute, where he still serves as Director of Development. He has been a student and advocate of the free market economic principles that are the foundation of the FMMA Pillars. Mr. Dunavant brings valuable experience to the FMMA, including a background in business development, marketing, and fundraising. He is excited to share his ideas on how to grow the association and bring even more value to the membership. We encourage you to reach out to him and discuss your vision for the future of the FMMA!

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“James possesses the skill set and experience that the FMMA needs to continue to grow and expand,” agreed Co-founder Jay Kempton, “We are eager to see James help us move forward.” Mr. Dunavant holds a Bachelor of Arts degree in management and human relations from Trevecca Nazarene University, and a Master of Business Administration with a focus on leadership and organizational development from Oklahoma Christian University. Contact Information: James Dunavant (866) 901- FMMA (toll-free) (405) 788-1532 (mobile) james@fmma.org

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the

VALUE

OF THE FREE MARKET

to Self-funded EMPLOYERS THE VALUE OF THE FREE MARKET

6 The free market movement in healthcare is vital to fixing the problems with our country’s current care delivery system. The Free Market Medical Association was founded based on three pillars: Price, Value, and Equality. These pillars are essential to the long-term success of self-funded health plans. Healthcare transparency provides you and your employees with the information and the incentive to choose health care providers based on value. Value is not just about price; but rather price and quality. Your employees are inundated with media, advertising, and hype that incorrectly informs them that valuable healthcare has to be expensive; the highest quality will cost more. However, the quality of healthcare is not related to the price in the way consumers are taught to shop for other goods and services. Better quality care is almost always a lower price. High quality and low complication rates combined with efficiency enables these providers to charge far less than a low value choice.

Why is the Free Market important to you? For a self-funded employer, being part of the free market movement is very important to the long term success of your Plan. • Competition in health care delivery is the key to sustaining affordable, quality benefits for your employees. • As a Plan Fiduciary under ERISA, it is important for you to be part of the free market movement. ◦◦ Transparency in healthcare is crucial to fulfilling the fiduciary responsibility of being self-funded and using health plan dollars to only pay for reasonable costs. ◦◦ Complying with the fiduciary responsibilities outlined in ERISA is becoming a hot topic for the DOL. Plan Administrators must pay special attention to how Plan assets are being spent. • The FMMA connects you with free market physicians and facilities who have embraced bundled, cash based pricing and understand that your Plan’s success is an essential part of keeping the local community strong. • The FMMA helps you find brokers/consultants and other vendor services who believe transparency is important to your Plan and understand that transparency is important in their business as well. • Finding the right facilitators or vendors can greatly impact your plan. The FMMA educates employers on how to find vendors that can have a good impact. ◦◦ For example, what value do your current vendors provide? In what way, and how much, do they get paid? Have they embraced the free market and advise you to use plan assets in the most prudent way? Do they understand that network/PPO discounts have no real world value? These questions are important and circle back to being a responsible fiduciary of your Plan.

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Building a True Market in Healthcare

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hospital and insurance insiders. This is a result of years of government intervention in the direct relationship between buyers and sellers of healthcare goods and services. These interventions have effectively forced central economic planning in healthcare, driving up costs while reducing quality. The great 20th century economist Ludwig von Mises said, “Thoughts and ideas are not phantoms. They are real things. Although intangible and immaterial, they are factors in bringing about changes in the realm of tangible and material things.” Mises viewed economics as a discipline in which every individual needed to be educated. It is not just for academics and government statisticians who fill the ranks of most mainstream economics departments. Free market ideas must ultimately prevail over the failed ideas of socialism and other forms of interventionism for any public policy to be significantly different. Those of us who believe free markets are the most efficient means to achieve human prosperity are frequently disappointed that our educational efforts are slow to take root in the minds of the public. This can lead us to focus on all the things that are

JAMES DUNAVANT

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he “market” is simply the voluntary exchange of individuals making choices to improve their lives. As such, even the force of government is not able to stop it, although government intervention can and does distort the choices people make and creates incentives that are often detrimental to society. Even in a fully socialized economy like the Soviet Union, the market continues to operate since it is ultimately based on human action. Under the force of total state control of the economy, black markets emerge that can provide essential services that the state strictly forbids. Fortunately, we have yet to reach this point in the United States, although there are a growing number of voices calling for more socialism to rectify the supposed “failures” of the free market and capitalism. Ironically, the areas where these people call for the most government intervention or outright socialism are the economic sectors where the voluntary choices or individuals are most regulated and controlled by the State—most notably—education and healthcare. It would be far-fetched to characterize the current crony arrangement in the health industry as “free market”. The Free Market Medical Association is a growing movement of independent physicians, surgeons, specialists, surgery centers, and other medical service providers who are effectively building a market-based healthcare system operating alongside and outside the current system. The American health system is highly regulated in the interest of crony

wrong with the current system. The good news is that in addition to great educational efforts by organizations like the Mises Institute, there is a rising tide of free market sellers of medical services who are creating a true market. They are providing real value to consumers who have been driven back to the marketplace through rising premiums and deductibles in their current health plans. This may sound crazy, but one does not have to ultimately believe in the principles of the free market in order to help bring it to bear in society. Just as the person claiming to be a “socialist” will spread his ideas on an iPhone and take an Uber to Starbucks, every individual or business owner looking for value in healthcare will naturally gravitate to the best the market can provide when those markets are free to innovate and purchase decisions are personal and local rather than homogeneous and centralized. We believe this movement is on the verge of a revolution in how healthcare is provided and purchased. With a critical mass of free market sellers now available, self-funded employers represent the ultimate game-changing group of “buyers” to drive the cost of healthcare down. Self-funded employers who adopt the free market model can effectively provide more value to their employees. We invite all buyers and sellers of healthcare to join this movement to bring honest price transparency and value back to healthcare. Members of the FMMA are building a successful market alternative in medicine. The force of this market combined with even a small fraction of the number of value-seeking consumers in self-funded health plans will make this movement unstoppable.

B U I L D I N G A T R U E M A R K E T I N H E A LT H C A R E

T

BY JAMES DUNAVANT

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PA R T 5

APPLYING FREE MARKET VALUES TO SPINE AND ORTHOPEDICS

FREE MARKET ORTHOPEDICS AND SPINE SURGERY:

10 DR. RICHARD KUBE

Bringing It All Together by dr. richard kube

FREE MARKET ORTHOPEDICS AND SPINE SURGERY

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Those of you who have been following our series have now been presented with extensive information regarding principles of free market medicine. We described bundles, the importance of transparency, and knowing what should be included within bundles. We extended the transparency concept to include outcomes and how they affect the full-burden cost of medical treatment. In the previous issue, we elaborated upon where one might be able to find and access these transparent providers. Now, we will bring everything together so you can hopefully enter the world of free market medicine with greater confidence.

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That confidence begins with transparency. Although healthcare, especially specialty care, is a very technical and complex topic, it should still be treated like every other product or service. Consider that most of us could not build the car in our garage or the refrigerator in our kitchen, yet we effectively shop for value when we buy these products every day. In healthcare, you should shop similarly. You want to know what is included in a bundle; i.e. what you are buying, such as itemized lists of providers, facility and disposable products. Be certain there are no additional bills coming from anyone related to the episode of care you are purchasing.

Also discuss outcomes including success and complication rates. The success will translate directly into patient satisfaction, and the complications will do the opposite, in addition to driving cost much higher. When assessing outcomes, do not be afraid of the overwhelming medical jargon. Keep things simple. Most medical professions have standard benchmarks. Ask the provider what those are and how they stack up. If they cannot readily provide an answer, proceed with caution. Someone not tracking outcomes is not likely concerned with them. Ask targeted questions like rates of infection, transfer and readmission. These numbers should be extremely small; i.e., lower than 1% and approaching zero. Likewise, be careful of someone claiming zero

Richard A. Kube II, MD, FACSS, FAAOS, CIME is a fellowship trained spine surgeon and Founder/Owner of Prairie Spine & Pain Institute, in Peoria, Illinois. He also founded and owns Prairie Surgicare, an AAAHC certified surgical facility. He holds Board Certifications from the American Board of Spine Surgery, American Board of Orthopaedic Surgery and American Board of Independent Medical Examiners. His practice is dedicated to providing comprehensive operative and non-operative treatment for spinal ailments with a special interest in minimally invasive surgical techniques. Dr. Kube is also engaged in active research and education projects. His interests extend into strategic planning and entrepreneurship as he is Advisor to Twisted Sun Innovations, a Hydrogen energy company currently working on renewable energy solutions for the U.S. Department of Defense. Dr. Kube currently serves as clinical faculty at University of Illinois College of Medicine at Peoria.

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A small, private surgical facility with steady traffic and a track record of several years must be doing things well. DR. RICHARD KUBE

Free markets are, in my opinion, the only way to empower the consumer; certainly, they empower the consumer far more than the current monopolies held by big insurance and hospital systems. So, try the “red pill”, unplug yourself from the matrix, and perhaps we will meet on the other side.

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Think about choosing a place to dine out. McDonald’s is likely one of the most pervasive and universally recognized names in your area. Is it the best value meal? My kids play travel soccer, and this past weekend we went to a diner in the town where we played. It was an inconspicuous place, but the lot had several cars. As one might expect, the food and selection were great, and I paid less than I would have to feed us at McDonald’s. Healthcare is similar. A small, private surgical facility with steady traffic and a track record

Therefore, I encourage you to go and explore all your options. If you are like many businesses, the rising cost of healthcare is not sustainable. Long-term survivorship requires a new way of thinking and adoption of a new model for purchasing health services. While change can be difficult, remaining on a path to extinction, because it is perceived as easier, is not prudent. Hopefully, this series of articles has provided enough information for you to have a foundation for discussions within the free market medical arena.

Consider what may seem unconventional places for these high-quality providers and facilities. It is tempting to go to the giant regional healthcare system because that is likely the name you know. They may provide excellent care, but often do not provide high value because the market does not demand value from them. They can rely upon name recognition alone allowing them to compete in a different way than a smaller business might.

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of several years must be doing things well. It survives solely upon its value and reputation because it cannot rely upon a multi-million-dollar advertising budget and billion-dollar brand to draw customers. It competes using its record, not some other manufactured perception or mythology.

FREE MARKET ORTHOPEDICS AND SPINE SURGERY

complications; you need to question their volume and honesty. Statistically, even the best provider will have some complications if he or she is actively practicing.

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ON THE COVER

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BY EMMA PASSÉ

TA K I N G B A C K T H E A M E R I C A N D R E A M • D A V I D C O N TO R N O

Taking Back the AMERICAN DREAM DAVID CONTORNO WAS A FEATURED SPEAKER AT THE 2019 FMMA CONFERENCE IN DALLAS. ATTENDEES WERE A STANDOUT BLEND OF DOCTORS, SURGERY CENTER REPRESENTATIVES & SELF-FUNDED EMPLOYERS.

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AVID CONTORNO took casual strides onto the stage in a room full of curious watchers while his first slide, emboldened on each screen beside him, read “Restoring the American Dream”. He began with a light-hearted reference to his own personal challenges and immediately drove home the idea that change is an integral part of restoration. He introduced the idea that employers around the country, from all industries, are engaging in the healthcare business whether they know it or intend it. In this hour-and-a-half presentation, he moved from cause to effect with startling statistics that brought to light the real reason employers are struggling to keep their business financials in check...healthcare. While most employers are well intended when the time comes to choose their deductibles, networks, and consultants, we now know this “same old” strategy is contributing to the nationwide damage our healthcare system is inflicting upon employers, and the people they’ve been tasked to represent; the employees.

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Contorno highlighted a grim metric—most personal bankruptcies are due to medical debt, and even more disturbing is 75 percent of those medical bankruptcies are filed by consumers who held and maintained health insurance. So, we must ask, how is having a standard health insurance plan really protecting consumers? Further, he explained the rate of rising deductibles and out-of-pocket exposure far outweigh the wage growth for the average American and, as healthcare costs continue to rise, we do nothing to help our populations afford coverage, both in payroll contributions and cost share liability at the point of service. Contorno went on to share that he and his colleagues are part of the problem. Consultants in the insurance industry are handsomely compensated by the same insurance carriers we are all intimately familiar with, but he swiftly points out the looming conflict; if a consultant is paid by the seller to represent the buyer, how can the consultant really represent anyone but the seller? In a recent article published in ProPublica, Contorno outlined the many ways in which consultants get paid by the very entities that work to drive up the cost of healthcare to line their own pockets with profit, and it starts with the finger pointed directly at himself.

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GM is a health and benefits company with an auto company attached. ~ Warren Buffet

Brokers and consultants can account for up to 10 percent of the financial waste within the healthcare value chain—is that value at all? When consultants are financially incentivized to sell the same products from the same carrier, and their bonuses increase as the volume of sales do, what do you think they’ll sell the most? He submitted his own revenue model to the crowd, which showed he gets paid directly by his client to represent his client and, as if by magic, he does a better job at achieving their goals once his paycheck is attached to that effort. As we began to unveil the competing interests we moved on to the preferred provider organizations (PPOs) where, once upon a time, a network provided a narrow pathway into a deeper service discount but, as Contorno pointed out, our networks have become so broad with the demand from employers to expand that the efficacy of these networks, touting 95 percent of all providers participating, has become massively diluted.

Then we get into quality… How are we able to measure the quality of the healthcare we receive and relate it back to cost? Contorno showed examples of the correlation between the two and, somewhat surprisingly, the trend is that lower cost care is most often of better substance.

In almost all cases, a facility that is efficiently run and structured around delivering performance healthcare to its patients is far less expensive than your average hospital system. Ambulatory surgical centers, outpatient settings, and pre-arranged elective procedures all contribute to improved experiences and outcomes for patients. Contrary to popular opinion, our big insurance carrier giants are not credited with this anomaly of lowering costs for better care; quite the opposite, in fact. Contorno dove into how the medical loss ratio provision of the Affordable Care Act contributes to the carrier’s profit model: as costs rise, so does their profit; he showed exactly what those margins look like and how the carriers perpetuate this broken and unaffordable system. The intakes of breath from the audience broke a stunning silence as we began to understand what was really transpiring in front of us, but it didn’t stop there. We were barely through the sensational exposé of healthcare injustice when we pivoted to the drug industry’s play in all this. Hold on to your complimentary coffee beverages—it is about to get real.

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TA K I N G B A C K T H E A M E R I C A N D R E A M • D A V I D C O N TO R N O

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TA K I N G B A C K T H E A M E R I C A N D R E A M • D A V I D C O N TO R N O

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The audience was met with a slide that only told a portion of the story; pharmacy benefit managers (PBMs) have more than 80 revenue streams tied to the management of drug approvals. We peeled back the layers of a few well-known catches; spread pricing, claw backs, rebates… the list went on. We moved into a couple of comedic examples of the cost overages in the pharmaceutical world, starting with a commonly dispensed anti-inflammatory; Duexis. Contorno smiled as he started in on the explanation for this formulary money-maker. Duexis is a combination of ibuprofen and Pepcid®; two over-the-counter drugs available together for less than a ten-dollar bill, but likely being prescribed and paid for by an employer health plan to the tune of $2,600 for a 90-day supply. But of course, we then discovered there is a rebate attached to the drug and it all comes together. Contorno issued another caution—Auvi-Q ®; the talking epi-pen marketed as a musthave for the low price of $5,000 per two pens. Just as we were getting ready to ditch our coffee for something much stronger in order to cope with these truth-bombs coming from the stage, we saw the word ‘solutions’ on the screen alongside this industry pioneer with the New York City accent...thank goodness.

he provides his client’s employees with the option to remain in the static environment where deductibles and out-of-pockets rise, and healthcare continues to lack substance or healing. Or, if they choose an E Powered Performance Plan, they have access to door number two; a path in which he develops the road to elective, pre-negotiated, high-quality care with providers like Surgery Center of Oklahoma or Pearl Health Partners, to name just a few. Contorno creates an environment that eliminates the PPOs and their broad networks entirely, in exchange for high-value care that is pre-arranged between employers and the provider community directly, removing all the excess noise from the process. E Powered Performance Plans boast such significant cost savings for employers that Contorno and his team can structure health plans that waive the employee’s out-of-pocket costs altogether and nearly guarantee an improved health outcome for each consumer that chooses to participate.

E Powered Benefits We must reach the employers and the employees, and it starts with the consultants. Contorno presented the solution as his two ‘doorways’ into the healthcare system. At his benefits consulting firm, E Powered Benefits, 14

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As Contorno closed what is sure to be a pivotal career point for many in the audience, we saw some evidence of the success of this free-market model in the case studies from his own clients in the crowd. While most of us were still reeling from the fiction-to-fact deliverance we received, we heard the closing statement and it left us all awe-inspired—Share the message; share the hope. This isn’t his; it’s ours. These levers are here to be moved and Contorno encouraged us to take this education, use it for ourselves and for the betterment of those we represent. No catches, no revenue share, just push this new wave of hope into our respective communities. Further, build a better practice of purchasing and experiencing healthcare by becoming familiar with exactly where it is failing us all right now.

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D A V I D C O N TO R N O

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A POSITIVE STEP TO LOWERING COST PRESIDENT TRUMP’S CALL FOR HEALTH CARE PRICE TRANSPARENCY

T R U M P ’ S C A L L F O R H E A LT H C A R E P R I C E T R A N S PA R E N C Y

JAMES DUNAVANT

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I

JAMES DUNAVANT

t took many years of economic interventions, political blunders, and crony regulations to bring the U.S. health care system to almost a breaking point. The present-day system has very little remaining of a free market, as numerous intermediaries have a vested financial interest in perpetual cost increases. The most blatant economic distortion in the market today could easily be the lack of price transparency. Restoring transparent market prices for medical services may be the best strategy to lower the costs of health care, and the lack of transparency is the glue that holds the quasi-monopolies of hospitals and insurance carriers together to the detriment of patients and their relationship with their doctors. On June 24, 2019, President Trump signed an executive order that could send shock waves through the health care industry. It has the potential to restore some necessary market competition and lower the cost of health care in the United States. The President certainly deserves credit for finally shifting the narrative to the actual “cost” of health care and away from the same old debates over “coverage” both political parties have historically engaged in over the past few decades. The order directs agencies like Health and Human Services to write rules requiring hospitals and insurers to make their negotiated prices public. They would also have to give patients estimates on out-of-pocket costs before nonemergency procedures. Hospital and insurance executives are predictably upset about this. Some are even trying to make the case that requiring transparency in “negotiated discount rates” may increase costs. But this logic assumes that a “discounted price” is a competitive “product” when, in fact, it is simply the mechanism to create many different prices for different payers. There is ultimately only one price in a free market exchange, and

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that is the cash price a seller is willing to receive from a willing buyer who is paying 100 percent of the cost. The government and other third-party payers distort the market price, creating incentives for hospitals and an entire industry of middlemen (basically “discount” dealers) to hide the market price so they can be compensated or subsidized based on a discount no one but the hospital and insurance carrier is supposed to know about. Of course the “discounted price” is still often three to five times the price of a fully transparent cash provider in the free market. Thus, hospitals can operate as “nonprofit” institutions in large part by accounting for their “losses” based on these negotiated discounts.

Out-of-pocket v. Actual Cost Many politicians and industry insiders claim market prices are irrelevant because patients only care about “out-of-pocket” costs. Therefore, one possible “solution” to conform to this executive order will be simply to do a better job estimating what the patient will pay. Hospitals and insurance companies rely on the disconnect in consumers’ minds between “out-of-pocket” and the actual cost of health care. This disconnect leads individuals, particularly those in self-funded employer health plans, to not shop for the best price. Consequently, the patient may actually pay much more out-of-pocket with their “coverage” than they would have with a market-based cash provider. Employers USHealthMedia.com | Vol. 2 | Issue 2


The current system has been so distorted...

“The time has come for doctors to declare their worth and fees and let market competition do the rest.” ~Dr Keith Smith, Co-founder and Medical Director, Surgery Center of Oklahoma

Being Your Own Best Advocate The market of cash payers has grown as more patients and employers feel the “sticker shock” of health care costs through high deductible plans being forced on them by Obamacare and the increasing cost of “coverage” in traditional health plans. Perhaps one of the better outcomes from Trump’s executive order will be more USHealthMedia.com | Vol. 2 | Issue 2

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JAMES DUNAVANT

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options for Health Savings Accounts and Health Reimbursement Accounts, which will put more dollars and financial decisions directly into the hands of consumers. This could benefit individuals as well as smaller employers who provide health plans for their employees. A growing number of self-funded employers may also see the “negotiated discounts” they have been sold by their brokers are not the “value” they thought. Cash prices and direct contracts with Direct Primary Care doctors and facilities like the Surgery Center of Oklahoma (SurgeryCenterOK.com) can actually save employers thousands of dollars in their self-funded plans. This is even more likely when advised by an independent third-party administrator or an independent broker who is paid to save the employer money instead of receiving bonuses from carriers as costs increase. The Free Market Medical Association has members post cash prices for thousands of procedures and services online at ShopHealth.org for individuals and employers to find the best price from free market providers. One executive order will not reverse 50+ years of government intervention and cronyism in American health care. It will certainly not restore a “free market” in health care in the near future. The free market is advancing as a result of the growing movement of independent physicians, direct primary care practices, surgery centers, imaging centers, independent third-party administrators, and brokers who are genuinely offering transparent pricing models that facilitate a more direct relationship between buyers and sellers of health care services. Patients are already benefiting from this consumer-driven model. Americans need hospitals and insurers to restore transparency in their pricing, and if they do, they will begin pricing their services like every other business, making cash pricing transparent and available to all consumers. With transparent cash pricing as the starting point, costs will go down through genuine competition and entrepreneurship.

T R U M P ’ S C A L L F O R H E A LT H C A R E P R I C E T R A N S PA R E N C Y

that incentivize their employees to be aware of actual cost of care are frequently able to pay 100 percent of medical procedures due to the wide range of prices between facilities for the same procedures. Real and effective price transparency includes actual cost, not just “out-of-pocket” estimates. The current system has been so distorted that even doctors often do not know what their services cost. The Surgery Center of Oklahoma introduced true price transparency for out-patient surgery when they started posting all-inclusive bundled cash prices online more than 15 years ago. Dr. Keith Smith, Co-founder and Medical Director said, “The first step in posting our online surgical pricing was to ask the surgeons what fee they thought was appropriate for their professional service. No one had any idea, as pricing for physician services has been imposed on our profession for the majority if not entirety of our careers. The time has come for doctors to declare their worth and fees and let market competition do the rest.” Larry Van Horn, a health care economist at Vanderbilt University, said this executive order will “put healthcare information in the hands of the American consumer.” He has also done extensive research in the economics of health care where there is a market of cash-paying consumers. “My analysis suggests that when cash prices are transparent, up-front, in the market, on average they’re 39 percent cheaper than the amounts that third-party payers pay for like services. Even when insurance covers the cost, there is on average a 300 percent price variation within a market for the exact same services”, Van Horn said.


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USHealthMedia.com | Vol. 2 | Issue 2

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PRIORITY MEDICAL PARTNERS HEALTH CARE IS NOT ONE-SIZE-FITS-ALL

P R I O R I T Y M E D I C A L PA R T N E R S

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After several starts, over ten years and implementing varying degrees of free market principles, the Erdmanns converted PMP to a hybrid practice that brings back the doctor-patient relationship, provides high quality care for direct pay clients, but will accept insurance if it turns out to be in the best interest of the patient.

FREE MARKET PIONEER

We want to be in control of our own practice. We are the administrators, and no one tells us when to quit or go see another patient.

BY ANN MARIE KENNON

Slow growth is smart. I believe the Free Market will help provide affordable care for everyone. ~Dr. Brian Erdmann

D

rs. Brian and Kim Erdmann opened Priority Medical Partners (PMP) in 2016 to get back to why they became doctors—put patients first, charge them less, and spend more time with them. They are strong advocates of the revolution, but the story and evolution of their practice reads a little like they were waiting for free market medicine to catch up to them. Having worked for and within corporate health groups, urgent care centers and independent clinics since 2000, they were well-equipped to make a determination of what model would work best for the kind of medicine they wanted to practice in the place they wanted to be. 20

The Erdmanns agree that there are special challenges to being “pioneers” in a small town, where there are few self-funded employers or groups. However, accepting DPC membership, direct pay-per-visit and insurance means all 7,700 residents are potential clients. “We knew people would come with us from our previous clinics and independent practices. We realized that DPC may not work for all patients, but they can be cash patients, so, again, we provide services that work best for them.” All too often, brokers dictate to employers what they will be getting from year to year and employers have no control over the costs. So, he regularly markets his practice to local businesses and assures employers they don’t have to wait for the federal government to create policies that help reduce costs for them or for insurance brokers to tell them how to provide their health care benefits. He recently demonstrated to Oneida County the benefits of incentivizing county employees to come see them. “I love the free market medicine concept and I want to give credit to people like Lisa Charbarneau who believed in trying it and embracing it.” Lisa is working to promote the employee access to free market medical services and the Erdmanns are thankful that there are people willing to take those risks for employee patients. Not everyone jumps on board but they have found the ones who do are happy. “Lisa looked at PMP pricing and pay-per-visit rates, which were 40-50 percent less than what they were paying previously so it is a win for the County. For our part, we don’t have to spend hours coding or doing insurance paperwork, so it’s a win for us. Plus, their employees see a doctor who knows them, paying nothing out of pocket; USHealthMedia.com | Vol. 2 | Issue 2


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USHealthMedia.com | Vol. 2 | Issue 2

I think this model is a slam-dunk. ~ Lisa Charbarneau

FREE MARKET PIONEER

a win for them. We send a monthly invoice, and the county sends us a check. Everyone involved has greater control over their own part of the health care process and it is to all of our mutual benefit. “When patients and employers know the price of care up front, and they can build that cost into their personal and corporate budgets; neither is disincentivized to schedule a visit here. It’s more important to me that the patients are happy and, if we can provide good prices that will allow them to purchase even more care, then we have been good doctors. It’s also a selling point for the employer who chooses DPC; we can see the direct care patient at no cost, provide labs at wholesale so, for instance, a strep throat can be treated in a few days before it becomes a week of lost work or productivity due to a peritonsillar [bacterial-infected] abscess.” PMP does some work with local insurers, and even Medicare when necessary, but as an independent practice, the Erdmanns are free to case manage each patient. Their knowledge of and experience in many health care models enable them to make recommendations for the best care for individuals and employers, whether it is DPC, health care ministry or direct pay. Brian adds, “I had one patient who was fortunate enough to have a $200 deductible with his current company plan. Our $79 membership had great value, of course, but it made sense for him to use his insurance and I was satisfied to do the extra work required to see him using his insurance to save him a lot of money.” The kind of hard work required to operate this hybrid practice is not new to the Erdmanns. Their children were born during med school and residency, they worked oncall and urgent care in networks and independently for several years for corporate medical groups, often commuting hundreds of miles during non-compete periods. Kim moved out of the corporate space when she realized seeing a patient every eight minutes and working under ►

P R I O R I T Y M E D I C A L PA R T N E R S

We chose this name because we are prioritizing the Doctor-Patient relationship. The mission is simple; spend more time with patients, charge a fair price, and minimize bureaucracy.

Lisa Charbarneau says when Dr. Erdmann called her two years ago, he was just making cold calls. But his great reputation preceded him, and his presentation made so much sense to her. “We had a self-funded trust in place with the State of Wisconsin that enabled us to do some of the things he offered, within our own benefit plan, right away.” She says when she first approached other state plan members, they were familiar but cautious, so she invited Dr. Erdmann to present to them as well. “It blew their minds; they were amazed to learn how much money is tied up in administration in insurance and the resulting loss of quality care.” In line with the Erdmann’s desire to maintain their practice in a small-town area, Lisa says a practice like this is critical because rural employees are rarely able see an M.D. but rather a nurse practitioner or a physician’s assistant. “Now we see Drs. Kim and Brian Erdmann; they provide annual general wellness, diagnoses, stitches, bloodwork and more. Our employees were tentative at first but once they started using direct pay and got to know them by their reputations, it made a huge difference. We are also working on the best ways to implement the expensive things; hip replacement, appendectomy, etc. With their continued support I think we will get there. Working with them and their proactive measures has already decreased our wellness claims by 50 percent in just two years and, as well, their passion and ability to explain things is paramount to our success.” 21


too much oversight was the quickest path to burnout and not what was best for her patients; “When doctors have to rush, mistakes can be made,” Brian says. What this means for the people in their town of about 7,700 people, is that with a little creativity and flexibility, no one is turned away and the Erdmanns are able to “keep the lights on” while they educate clients about and grow their direct pay side of the house. Ideally, they are working toward an insurance-free practice with small overhead; operations they can control without layers of cost. “The hybrid model is a lot of work, but we are not in a big city, which is a lower-risk scenario. Our priority is Direct Primary Care but if we provide multiple options for payment, we are truly meeting the needs of the people who live here and, even better, businesses have another tool to recruit new employees to the small towns they want to live in. This is what will enable us to make it a success where we are and where we want to live.”

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Priority Medical Partners Direct, SC 580 Shepard Street Rhinelander, WI 54501 715-420-1831 • Fax: 715-420-1829 PriorityMedicalPartners.com WHAT THEIR PATIENTS ARE SAYING... “I absolutely love the DPC model. I feel like the doctor/patient relationship is much stronger and personal and by cutting out insurance from the equation there is far less money going to waste. I always can get in right away and again feel like the relationship with my doctor is much more personal, I’m not just a number.” ~ Justin H., Rhinelander, WI

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DPCs: DPC ACTION! BY LEE S. GROSS, M.D. • FOUNDER & SR. VP, EPIPHANY HEALTH • PRESIDENT, DOCS4PATIENTCARE FOUNDATION

A New Direct Primary Care Advocacy Organization is Born

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As I stood on that precipice, I refused to give up everything I aspired to be without a fight. It has been nearly a decade since the “epiphany” that has forever changed my path in medicine. With one simple question, “Doc, why am I paying an insurance company to pay you to see me?”, my life has forever changed. That day, I began a journey with some of the bravest professionals that I have ever met.

DPC ACTION!

L

ike most physicians, I persevered through my professional training, knowing when I completed that journey, I would be able to use my skills to help others. It was immediately obvious upon entering practice that everything I worked to attain in my professional life was slipping out of grasp, just as it was within reach. I watched corporate entities co-opt my skills for their financial gain. I watched government policies disrupt innovation. I watched politicians give away my professional services for their political gain. I watched third parties treat doctors and patients as commodities to be interchanged, bought and sold.

The power of self-determination by physicians has never had more transformative potential than it does in health care today with the Direct Primary Care movement. Our patients and our nation need physicians to stand up and be the healers of our profession. DPC is a once-in-a-generation opportunity for physicians and patients to reclaim the healing powers of a sacred, unencumbered relationship. DPC has grown to be a formidable force in fixing health care. One does not disrupt a $3 trillion industry without that industry adapting to maintain its control. We are seeing an emergence of an entirely new crop of third parties, corporate interests and political threats to the DPC movement. These existential threats are growing rapidly. For these reasons, we need an organization that will stand strong for the interests of doctors and patients of the DPC movement in the face of these growing threats. We need a nimble and savvy organization that will not just debate, but act swiftly to this evolving risk. We need an organization that will be proactive and lobby for the interests of DPC.

DR. LEE GROSS

We need a nimble and savvy organization that will not just debate, but act swiftly to this evolving risk. ~Dr. Lee Gross

We need an organization that will promote the social welfare of the DPC movement. While Docs 4 Patient Care Foundation has been a national leader in the DPC movement since the beginning, these growing needs exceed the boundaries of the organizational structure of D4PCF. A new 501c4 non-profit organization has been created that is dedicated solely to this cause, led by practicing DPC physicians and national leaders in DPC advocacy. The disruptive potential of DPC is clear. The time for DPC is now.

The organization to lead this charge is DPC Action! Every journey begins with a first step. The path to a healthier future is here. www.dpcaction.com

LEE S. GROSS, MD IS THE FOUNDER OF EPIPHANY HEALTH, A PIONEER DIRECT PRIMARY CARE PRACTICE IN FLORIDA. HE IS THE PRESIDENT OF DOCS 4 PATIENT CARE FOUNDATION AND THE CHAIRMAN OF DPC ACTION. USHealthMedia.com | Vol. 2 | Issue 2

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A B E T T E R W AY F O R S E L F - I N S U R E D C O M PA N I E S TO PAY P R O V I D E R S

S E L F - I N S U R E D P R O V I D E R PAY M E N T S

G O R D O N M AT T H E W S

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by G O R D O N M AT T H E W S

H

ealthcare niches, like patient-provider communication, electronic health records, and prescription delivery, have become incredibly efficient in the last couple years, yet healthcare payments between businesses remain trapped in an outdated system that is slow, contextless, and expensive. In addition to these ongoing problems, the free market medical community has to deal with an inordinate amount of control by the big traditional payers, which allows them to protect their higher fees. If you’ve been keeping tabs on the free market medical movement, you know the movement aims to bring transparency in pricing to all parties, value to patients, value to employers and to lower the overall cost of delivering care. The fact of the matter is that most free market employers want to pay more quickly for the value received by them and their employees. This cluster of employers acknowledge that they are getting great value, and they want to pay more quickly (which is also what the providers want). This is not easy, and many free market payers are resorting to expensive and antiquated methods—wires and overnight mail—to achieve this goal. Like many things in our economy and life, disruptive technology is providing a solution.

Current Payment B2B Options in Healthcare If yours is like most companies, payments between your TPA or employer and provider will be made through one of the following methods. • Traditional Check: The most traditional of the methods being utilized today. Requires a huge amount of management and racks up printing, mailing and handling costs. Speed of payment is slow and the provider needs to enter, reconcile, manage, and deposit checks too. • ACH: The Automated Clearing House (ACH) system was started in 1972 and is the most widely used electronic payments method in the USA. This is relatively fast compared to snail mail but, because of data limitations, payments need to be reconciled to remittance files. • Wire Transfer: Invented before the internal combustion engine; it has been around since 1872. There are several kinds of wire, and they are fast and “final” (irrevocable) payment systems that can execute very large transactions domestically and internationally. Because these transactions are bankto-bank, they are cumbersome for daily use and expensive for smaller transactions. They also have limited data capabilities, which necessitates reconciliation and management on the provider side. • Virtual Card: This option has become popular in the last few years as a way to receive payments because it solves the speed issue in a secure way.

GORDON MATTHEWS has an extensive background in healthcare business strategy which includes a history of working with healthcare organizations. He also has experience in Operations Management, Hospitality, Strategic Sourcing, Strategic Planning, and Supply Chain Management. With this knowledge under his belt, Gordon founded Ampla-X consulting at which he is currently a principal. If you would like to inquire about this piece, Gordon is available at gordon@ampla-x.com.

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• Speed: Same day payment. • Security: Bank grade and HIPAA level security for the payment and the data (claim). • Cost: Flexible payment structures that are lower than the current methods. • Data: Payments that include unlimited data (i.e., the full adjudicated claim) with the payments. Because the claims can now come with the payment, the burden of reconciliation, which for some providers is a vexing ongoing issue, is largely solved. • Interoperable: Able to interoperate with a wide variety of EMR systems, Patient Accounting Systems and Revenue Cycle management platforms.

Summing up...

The final catalyst to adoption was user-friendliness and the advent of SaaS-based platforms like AmplaPay has cleared that hurdle. The cloud-based solution provides full visibility and familiar tools such as UPS-like tracking for everyone involved in the healthcare transaction. Free market healthcare claim processing and payment should not be complicated. It should be secure, quick and inexpensive and, given the developments outlined above, it is just a matter of time before these developments in digital payments become the standard. Payments in healthcare are finally going to catch up with the healthtech revolution that is transforming all aspects of healthcare. We look forward to that future.

G O R D O N M AT T H E W S

Over the next few years, these four methods will increasingly be displaced by a more modern approach being driven by a Fintech revolution in the broader economy. Beginning early in the next decade, digital financial technologies started to emerge that are able to solve the 25 critical concerns of healthcare payments:

Under current protocols, all of the above options are controlled by the banks and/or entrenched processors like credit card companies. So, my bank must speak to your bank and each player along the continuum charges a fee. Wouldn’t it be better if the employer could just make the payment directly to the provider? Quickly, securely, and irrespective of which bank you use? It would be just like what we have grown accustomed to in our personal lives with PayPal, ApplePay, and Zelle.

A Better Way to Pay - the Fintech Disruption

S E L F - I N S U R E D P R O V I D E R PAY M E N T S

A virtual credit card is a unique 16-digit computer generated number used to settle a specific payment transaction issued for a specific dollar amount. Designed as a more secure alternative to ACH and check payments, virtual cards are essentially “card-less” credit card payments. However, they come at a cost. The cost ranges from a 3% minimum up to 5%.

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S E N AT E F I N A N C E TA C K L E S P R E S C R I P T I O N D R U G P R I C E S

E R I N M . H U S S E Y, E S Q .

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Senate Finance Committee Tackles Prescription Drug Prices BY ERIN M. HUSSEY, ESQ.

F

High Drug Prices in the United States

ew issues gain bipartisan support, but the high cost of prescription drug prices is one of them. This was evident throughout the three-part Senate Finance Committee Hearings titled “Drug Pricing in America: A Prescription for Change”. The second hearing held on February 26, 2019, involved the questioning of executives from seven pharmaceutical companies, including AbbVie, Inc., Bristol-Myers Squibb Co., Johnson & Johnson (Janssen Pharmaceuticals), Merck & Co., Pfizer Inc., and Sanofi. The third hearing held on April 9, 2019, involved the questioning of representatives from five pharmacy benefit managers (PBMs), including Cigna, CVS Caremark, UnitedHealthcare’s OptumRx, Humana and Prime Therapeutics. The goal of these hearings was to get at the root causes keeping the United States’ prescription drug prices so high. Both hearings shed light on this issue, but for the purposes of this article, the following is an overview of the problems addressed at the second hearing held February 26th. At this particular hearing, many senators expressed frustration at their inability to explain the high cost of drugs to their constituents, since the prescription drug industry is so complex. The senators attempted to break down a convoluted system of list prices, net prices, patents, rebates, and discounts, as well as the many actors at play including manufacturers, wholesalers, retailers, PBMs, health plans, and most importantly, the consumers.

Sen. Debbie Stabenow (D-Michigan) directed the following statement at the seven executives: “I think that you charge more [in the United States] because you can, and American taxpayers are subsidizing all of you to be able to have incredibly high profits, the fastest growing part of the healthcare system, and I think the people in Michigan and across the country deserve better, they need to be able to afford their medicine and not have to go to another country to get it.” Sen. Ron Wyden (D-Oregon) also noted drug prices are 40 percent higher, on average, than in other developed countries. For example, Wyden detailed that AbbVie makes billions in profit outside the United States, where they sell their prescription drugs at a lower cost, so they should be able to sell them at similar prices in the United States and still make a profit. The CEO of AbbVie, Richard Gonzalez, insisted that the fundamental issue is with the current system, which supports their research and development (“R & D”) model. He argued that if the United States were to collapse to the lower end of that pricing model, then AbbVie would not be able to invest in the level of R & D it does today. Wyden was quick to counter that response by noting that AbbVie’s R & D costs were less than AbbVie’s revenue in the United States, and “that’s why people are so angry.”

ERIN JOINED THE PHIA GROUP, LLC AS AN ATTORNEY IN 2017. SHE FOCUSES ON A VARIETY OF HEALTHCARE ISSUES FACING EMPLOYEE BENEFIT PLANS AND THEIR ADMINISTRATORS. SHE PROVIDES GENERAL CONSULTATIVE ADVICE ON MATTERS INVOLVING ERISA, ACA, HIPAA, COBRA, FMLA AND OTHER REGULATORY MATTERS. PRIOR TO WORKING AT THE PHIA GROUP, SHE WORKED AS AN ATTORNEY PRACTICING IN THE AREA OF WORKERS’ COMPENSATION WHERE SHE REPRESENTED INSURANCE COMPANIES AT THE DEPARTMENT OF INDUSTRIAL ACCIDENTS. ERIN EARNED HER B.A. FROM THE UNIVERSITY OF NEW HAMPSHIRE, GRADUATING MAGNA CUM LAUDE, AND HER J.D. FROM SUFFOLK UNIVERSITY LAW SCHOOL, GRADUATING CUM LAUDE. WHILE ATTENDING SUFFOLK LAW, ERIN INTERNED AT THE BOSTON MUNICIPAL COURT (DORCHESTER DIVISION) AND THE UNITED NATIONS IN NEW YORK CITY. SHE ALSO WORKED AS A LAW CLERK FOR A PERSONAL INJURY LAW FIRM AND VOLUNTEERED AT A COURT SERVICE CENTER.

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Where is the Money Going?

Problems and Solutions The senators’ major concerns were with list prices of drugs, but the executives insisted that in order for list prices to come down, it would first involve a solution to the rebate system. The CEO of Sanofi, Olivier Brandicourt, M.D., noted that list prices cannot be lowered “independently of major reform,” because Sanofi would lose formulary placement if they were lowering list prices “in isolation.” Sen. Wyden persisted about lowering list prices. He asked if rebates go away, would these companies respond within ten days as to whether they would support a black-letter law requiring them to reduce list prices by the amount of the rebate. REBATES ARE PAYMENTS FROM THE MANUFACTURER TO THE HEALTH PLAN IN ORDER TO RECEIVE PREFERENCE ON THEIR FORMULARY. AS A RESULT, THE CONSUMER BENEFITS FROM LOWER PREMIUMS.

USHealthMedia.com | Vol. 2 | Issue 2

E R I N M . H U S S E Y, E S Q . ■

The executives suggested that while the rebate system keeps them from lowering their list price, the blame rests with PBMs. PBMs negotiate rebates on behalf of insurers and employers and keep a portion. The Jansen Pharmaceuticals executive, Jennifer Taubert, emphasized that PBMs have strong negotiating power. Besides rebates, the executives agreed there is an issue with high out-of-pocket (OOP) costs for prescription drugs. Gonzalez, explained that even if the list price is reduced, the OOP cost still remains too high for commercial and Medicare Part D consumers. For example, Frazier detailed that even when they cut a list price dramatically, the OOP cost is still unaffordable. As such, the CEO from AstraZeneca, Pascal Soriot, noted that if the current system cannot be changed then, at the very least, there should be a cap on OOP costs for Medicare patients. Lastly, the executives expressed a need for value-based agreements and bio-similars. Soriot, Dr. Giovanni Caforio (CEO of Bristol-Myers Squibb), and Dr. Albert Bourla (CEO of Pfizer) all detailed their support for value-based agreements in their opening remarks. For example, Dr. Bourla detailed that Pfizer should get paid based on the number of heart attacks prevented rather than the number of medications sold. He also detailed the need to knock down barriers for bio-similar programs. He explained that insurance companies decline bio-similars in their formularies because they risk losing their rebates. Frazier also detailed the importance of educating physicians and health care providers about the value of bio-similars. ►

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S E N AT E F I N A N C E TA C K L E S P R E S C R I P T I O N D R U G P R I C E S

All of the pharmaceutical executives discussed their large investments in R&D. In Sen. Chuck Grassley’s (R-Iowa) opening statement, he noted there needs to be a balance between incentivizing innovation and R&D, while keeping drug prices affordable. However, the CEO of Merck & Co., Inc., Kenneth Frazier, explained his company was making strides in innovation toward a new Alzheimer’s therapy, but development ended because it was not successful. His example revealed that even when a measurable investment goes into R&D, such as this project for a beneficial therapy, that project may not go as planned. Therefore, money needs to be left over for the R&D that will prove successful. Most of the senators agreed with the importance of investing in R&D in order to make strides in innovation. Still, the problem the senators have is that even when the innovation is successful, it will make no difference if consumers cannot afford it.

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E R I N M . H U S S E Y, E S Q .

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What’s next? These hearings appear to be aimed at reforming the prescription drug industry through legislation. For example, Sen. Wyden has introduced a few relevant bills, including the following: • The Stopping the Pharmaceutical Industry from Keeping Drugs Expensive (SPIKE) Act would require Health and Human Services (HHS) to notify drug manufacturers when a drug’s price goes beyond certain benchmarks and require the manufacturer to provide justification to HHS for those price increases.

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• The Creating Transparency to Have Drug Rebates Unlocked (C-THRU) Act would require PBMs to make certain information available to the public, such as rebates and discounts and the proportion of what is passed on to the health plan. • The Reducing Existing Costs Associated with Pharmaceuticals for Seniors (RxCAP) Act would eliminate cost-sharing above the Medicare Part D OOP threshold. The issue of prescription drug prices has gained a lot of traction this year, and given recent events, it is not slowing down any time soon.

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USHealthMedia.com | Vol. 2 | Issue 2

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Y O U R S IM P L E SO L UT I O N T O

AFFORDABLE HEALTHCARE

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IS HERE. JOIN THE MOVEMENT. • $5,000,000 Lifetime Maximum per policy • Customize your plan to fit your healthcare and budget needs • Use any Doctor or Hospital you choose without penalty • PHCS network is available at no additional cost • TelaDoc provides a convenient alternative to Urgent Care or ER visits Philadelphia American Life is committed to transforming healthcare in America through innovative and consumercentric products that are affordable and rich in benefits. Philadelphia American is a New Era Life Insurance Company

www.PhiladelphiaAmericanLife.com


PILLARS PRICE

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OF THE FMMA

• PRICE is NOT a product. CARE is the product. • Selling access to pricing is anti-free-market. • Vendors and third parties whose compensation is based on selling “savings” or “access” are not the solution.

FMMA PILLARS

Percentage-based payment models incentivize price gouging and pricing games. Compensation based on a percentage of savings, claims or premiums where the third party WINS when the cost is high, puts the vendor at odds with the best interest of their clients. • VALUE is established when the buyer and seller agree on a FULLY DISCLOSED, mutually beneficial price for care. • If a vendor adds or changes that price in ANY WAY, those amounts should be truthfully disclosed. • Vendors and third parties whose compensation is based on selling “savings” or “access” are not the solution. Value is based on Price and Quality. A consumer cannot determine the VALUE of the purchasing choices they make without price HONESTY. In an open free market, consumers would be able to readily access the information to choose healthcare providers based on Value.

VALUE

EQUALITY

• PRICE EQUALITY is the basis of a free market. • Cash is king. • Any willing buyer should be offered the same price regardless of any factor.

In an open and honest free market, cash is always king. Enhanced discounts for guaranteed bodies through the door, increases costs for patients based on factors they cannot control; such as one insurance v. another, these are all symptoms of a broken system. In a free market system, a competitive price can be knowable, publishable and complete regardless of the patient, the health plan, the employer, or any other factor.

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free market medical association

CHAPTER DIRECTORY

To learn more about FMMA Local Chapters, visit FMMA.org/ Local-chapters

F M M A C H A P T E R D I R E C TO R Y

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CALIFORNIA

SAN FRANCISCO BAY AREA CHAPTER Dr. Richard Fox Dr. Beth Haynes sanfrancisco@fmma.org

NEBRASKA

MASSACHUSETTS

MASSACHUSETTS CHAPTER Dr. Jeffrey Gold CAROLINAS Matthew Painten NORTH AND SOUTH CHAPTER massachusetts@fmma.org Dr. Shane Purcell massachusettsFMMA carolinas@fmma.org

COLORADO

COLORADO CHAPTER Brian Perry colorado@fmma.org

FLORIDA

FLORIDA CHAPTER Chris Markford florida@fmma.org FLORIDA SW CHAPTER Dr. Raymond Kordonowy Dr. Sunil Lalla floridasw@fmma.org flswFMMA

GEORGIA

MICHIGAN

MICHIGAN CHAPTER Theresa McIntosh Dr. Roland Tindle michigan@fmma.org michigan fmma

MINNESOTA

MINNESOTA CHAPTER Merlin Brown, MD Tyler Lowthian minnesota@fmma.org mnFMMA

MISSISSIPPI

GEORGIA CHAPTER Dr. Robert Nelson georgia@fmma.org georgiaFMMA

MISSISSIPPI CHAPTER Micah Walker, M.D. Becky Russell mississippi@fmma.org

ILLINOIS

MISSOURI

ILLINOIS CHAPTER Colleen Ingraham illinois@fmma.org illinoisFMMA

MISSOURI CHAPTER Dr. Joseph Costello missouri@fmma.org missouriFMMA

USHealthMedia.com | Vol. 2 | Issue 2

NEBRASKA CHAPTER Pete Larson nebraska@fmma.org nebraskaFMMA

OKLAHOMA

OKLAHOMA CITY (FOUNDING) CHAPTER Sharon Hodnett okc@fmma.org oklahoma fmma

TEXAS

AUSTIN CHAPTER Sean Kelley austin@fmma.org Austin.FMMA DALLAS CHAPTER Bret Brummitt dallas@fmma.org

TULSA CHAPTER Paul Mackey tulsa@fmma.org tulsaFMMA

HOUSTON CHAPTER Dr. Bhavana Rao houston@fmma.org houFMMA

OHIO

SAN ANTONIO CHAPTER Dr. Roger Moczygemba Shankar Poncelet sanantonio@fmma.org

OHIO CHAPTER

Dr. Louis Flaspohler ohio@fmma.org

OREGON

OREGON CHAPTER Jack Brown oregon@fmma.org oregonFMMA

PENNSYLVANIA

PENNSYLVANIA CHAPTER Dr. Nicholas Pandelidis pennsylvania@fmma.org

VIRGINIA

VIRGINIA CHAPTER Dr. Jordan Hackworth virginia@fmma.orgÂ

WISCONSIN

WISCONSIN CHAPTER Dr. Brian Erdmann wisconsin@fmma.org

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WHY BE INVOLVED IN A LOCAL FMMA CHAPTER?

W H Y B E I N V O LV E D

34

Local chapters of the Free Market Medical Association connect you with like-minded employers, physicians, facilities, industry experts, and experts in your own community. Local chapter groups help facilitate and implement strategies, ideals, and goals important to you. Bringing buyers and sellers of health care goods and services together to strategize, identify, and implement solutions is ground-breaking and paradigm shifting. For too long, third party vendors have kept two of the biggest stakeholders in our healthcare system apart—the providers, and the employers. Both sides recognize that the only way for providers to provide the highest value, and employers to offer comprehensive benefits without runaway healthcare costs, is to work together to advocate for change. Your local chapter connects you with free marketfriendly providers who have embraced transparent pricing and quality. FMMA member physicians and facilities understand helping your business succeed is an essential part of keeping the local community strong, and helps them succeed!

34

What should you expect? Amazing conversation, new friends, expanded resources, and maybe some answers and solutions. Your chapter may meet monthly over lunch at a local business, or may choose to meet regularly by video chat or conference call, and only meet in person every quarter. Each local chapter has its own schedule and topics based on what is best for the participating members, but the relationships formed are beneficial across the board. Don’t have a local chapter in your area? You can start one! Starting a local chapter is easier than you think— simply talk to the FMMA staff, fill out some paperwork, then invite anyone you know to sit down and have a conversation. Chapters grow steadily over time as attendees invite someone they know to the next meeting. The FMMA currently has 24 local chapters, and more than 300 members in 33 states. You may have free market warriors in your own back yard! Join the FMMA and support or start a local chapter.

FMMA.org/local-chapters/

USHealthMedia.com | Vol. 2 | Issue 2


ISSUE DATE

CLOSE DATE

SOLUTIONS

October 2019

Sept 1, 2019

Why advertise?

December 2019

November 1, 2019

February 2020

January 8, 2020

April 2020

March 1, 2020

June 2020

May 1, 2020

2019-2020 PUBLICATION SCHEDULE

FREE MARKET

HEALTHCARE

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100% C-Level Focused Key information resources from the Free Market Medical Association and Free Market Healthcare Media have combined strength and market knowledge to create the first fully focused and integrated message vehicle for the corner office— Free Market Healthcare Solutions. We target the challenges and opportunities faced by employers in healthcare plans and benefits. Such a full-scale, high-level media focus hasn’t existed until now.

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Free Market Healthcare Solutions is available online at USHealthMedia.com and you can follow news and key players on YouTube at USHealthMedia.