<v Jordan Cooper>Week Health Podcast founder of health lyrics and former CIO of Saint Joseph Health. Bill, thanks so much for joining us today.</v>

<v Bill Russell>Jordan, thank you. It's it's fun to be on the other side of the microphone.</v>

<v Jordan Cooper>So for our listeners who don't know, Bill has been in this space in the provider space for a while. And then for the last few years has been hosting his own podcast as a journalist. So he's had exposure to a broad swath of different player key players in the healthcare, health it space across the United States over the past few years. So what I'd like to cover today is generally what he's been seeing and hearing over the past few years, maybe how it's changed since he was.</v>

<v Jordan Cooper>In the provider space himself, he's been elbow deep in health IT for a long time, so the synopsis of change over time might be interesting to kick us off. One change that we've seen over the last decade or so has been a shift from fee for service to more risk based sharing. Now fee for service and various permutations continues to dominate American healthcare despite an abundance of successful integrated care models like Kaiser Permanente, Intermountain UPMC that are all less encumbered by pricing.</v>

<v Jordan Cooper>Transparency upcoding and rate setting. So build like to ask what's holding America back from moving more quickly towards the pay vider model.</v>

<v Bill Russell>Uh, you. You know what's interesting? It's made no progress, but so on that. I'm gonna disagree a little bit because it was the same app side of Inter mountains made some significant gains, but UPMC was doing this a long time ago. Kaiser was doing this a long time ago. Kaiser was our largest competitor in Southern California, and their model has been pretty consistent. They haven't been able to scale it, but they've been pretty consistent for a long time. Sharp HealthCare is another one that does a good job with risk based contracts, we.</v>

<v Bill Russell>At the Saint Joe's and to get this to data pretty quickly, we entered into risk based contracts for I think half million lives. While I was CIO at Saint Joes and it was, it was really that experience for me that sort of set the foundation for how I feel about data in healthcare. And it was, I'm sitting there, it was Blue Shield at the time and our clinically integrated network. And if you know anything about California, we don't employ the physician groups.</v>

<v Bill Russell>And so they're all splitters, splitters, meaning they practice at our hospital, they practice at other hospitals. They're EHR's, are independent, and we have to figure out how to share. And so we had a clinically integrated network and integrated would be a misnomer, but they were independent practices on independent Ehrs. And we were doing this deal to keep people healthy. And they came to me as the CIO and said, alright, here's what we need. We need a a common messaging framework that we can message across this entire.</v>

<v Bill Russell>Clinically integrated network and no less than 58 hours by the way.</v>

<v Bill Russell>A messaging platform. We need to be able to share the data and the records across all 50 of these UHRS and oh, by the way, we need to create a set of metrics.</v>

<v Bill Russell>Across across all these disparate physicians and practices and specialties that they're measured on health because that's in fee for service, we don't really measure health, we measure.</v>

<v Bill Russell>Uh, I mean not to be too pessimistic, but we we we measure money for.</v>

<v Jordan Cooper>For the vision of healthcare, maybe.</v>

<v Bill Russell>Yeah, I mean, it's for, for lack of a better term, we we measure outcomes for sure. But but we don't measure health per se. Are we keeping people healthy? Are we keeping them out? And when you enter into those risk based contracts, that's what you're measured on. But in order to do that, you have to go beyond the 20% of data that impacts health, right? So the healthcare data, the medical record only impacts 20% of health. We know this social determinants of health impact. The other 80% of health.</v>

<v Bill Russell>And unless you're bringing all that data together, and so my experience, let's see. What was that eight years ago was setting up that clinically integrated network and it was virtually impossible. Now we did it on the health share platform as an aside, but it was virtually impossible. It was so difficult to do, and I'm not sure it's any less difficult today.</v>

<v Jordan Cooper>So I mean a few points on that one, there are European countries that do have EHR that account for social determinants of health. That's been covered on a previous episode of Healthy Data Podcast. But on the other hand, I do wanna go back to we listed at least four different sharp KP, Inter Mountain and UPMC integrated networks that are in the United States that have been functioning. So the question is I guess how have they been successful and why hasn't it spread?</v>

<v Jordan Cooper>Even if they're only able to control 20% of of what we referred to as total well-being and health.</v>

<v Bill Russell>It's important to note that they they struggle to spread, right. So Kaiser, one of the things that said about Kaiser is it doesn't scale. They've been unable to take it into new markets. And there's a good examples of that. I mean, they tried to go into the Texas market and we're completely shut out. There's still trying to go into the Arizona market and they've been able to do it. They're wildly successful in California.</v>

<v Bill Russell>But part of that could be the contracts that they have and then some other marks. I think DC, they do pretty well and others so they've been unable to scale that model across the country for whatever reason, UPMC is regional and they've been able to do it regionally. And Intermountain it's been able to do it regionally as well. Same with sharp. Nobody's been able to to really break out and do it on a national level. And part of the reason for that is the incentives, right. So the incentives don't line up.</v>

<v Bill Russell>You have you have a multi billion dollar industry, no trillion but you have multibillion dollar health systems that essentially.</v>

<v Bill Russell>Rely on fee for service and so they've it's been described to me this way and everyone's heard this analogy. They have 1 foot in this boat and then the other boat is OK we know that we need to transition. We need to go to more of a value based care model. But if we do that, we're going to get paid to keep people healthy, which essentially takes money away from this boat.</v>

<v Bill Russell>And so we have to transition from this boat to this boat. We have a foot in each boat and those boats are slowly drifting apart and this could explain somewhat of what's going on in industry from a financial standpoint right now is.</v>

<v Bill Russell>You know, people, are they? It's it's not that there's been a mass exit of Exodus from healthcare. It's been that slowly but surely these other movements outside of healthcare have been chipping away at this fee for service model because we all know it's broken, including the people who work in it. They don't like it.</v>

<v Bill Russell>We we wonder why there's burnout and that kind of stuff. One of the reasons there's burnout is people operate in this fee for service model and they sit there. Go. I don't like this. I don't like this for my family. I don't like this for my community. It drives up, costs it.</v>

<v Bill Russell>It's highly redundant the the coding and and all that stuff is way too complex for what we're trying to do and at the end of the day we caused more bankruptcies from healthcare costs than anything else. So we know that that model's broken, but we're not able to make the transition because in order to do it, you have to do create what has been termed creative destruction of a business model and that creative destruction of a business model.</v>

<v Bill Russell>This doesn't really support the underlying investments we have made in the larger healthcare ecosystem. We've built huge campuses, we've bought really expensive equipment and in order to keep paying the sours we're paying.</v>

<v Bill Russell>Yeah, you know, you you have to keep this model going, so I'm not sure the change of health care is gonna come from within healthcare. It's probably gonna be more and more pressure from the outside.</v>

<v Jordan Cooper>And when you see pressure from the outside, just I wanna contextualize United American healthcare and I think around after World War Two, I think around 1948 you had Britain go to the national, the single payer National Health Service around 1994 you had Canada go to single payer.</v>

<v Jordan Cooper>You've had in the latter part of the 20th century multiple major Western nations transition from a more hodgepodge approach to kind of universal coverage and shifting away.</v>

<v Jordan Cooper>I I don't know as much towards value based payments, but but the idea is at least on small scales.</v>

<v Jordan Cooper>What can I say?</v>

<v Jordan Cooper>Why do you suppose Kaiser?</v>

<v Jordan Cooper>UM and and has difficulty scaling. Let's start there more concretely.</v>

<v Bill Russell>Why does Kaiser have? There's probably several reasons, but.</v>

<v Bill Russell>The first is they come in with an insurance product that doesn't partner with other health systems, right? So they have to immediately go to scale and it's very expensive for them to go to scale. They don't stand up acute hospitals right away. So again, they have to partner with the local health systems and the local health systems. I've seen what they've done in California and other locations, and they're not prone to help them. Right. It's like, I don't want to do a deal with Kaiser knowing full well what they're going to do is.</v>

<v Bill Russell>They're gonna continue to chip away at my business and then eventually they're going to plop down a very efficient and well run hospital and really start to impact our our market. It's interesting when Kaiser, when we were competing with Kaiser at Saint Joe's, our quality scores and everything was way above Kaiser early on. And we sort of used to look down our nose at them and derision like they can't deliver quality care and then slowly but surely, their quality of care kept going up and up and up and up and up.</v>

<v Jordan Cooper>So.</v>

<v Bill Russell>And then it was better than ours and and part of that was they they managed the quality of care in a way from one end to the other. And the the variability of care from one end to the other, much better than we did as a health system because they were completely integrated and we were not integrated. Why haven't they been able to scale? It's it's it's a tough, it's a tough model to go into a new market with the way they've they've designed it. They're probably other ways they could scale, but they haven't tried.</v>

<v Jordan Cooper>So I heard you mention one of the reasons why it's difficulty why Kaiser experiences difficulty scaling is because there are huge capital expenses associated with doing so, acquiring standing up acute hospitals, going to market immediately without partnerships. And you would think, well, the way to do that is very capital intensive process is there capital and then you're looking throughout healthcare, there are a ton of M&A's. First of all you had maven or sorry Haven.</v>

<v Jordan Cooper>Which was the endeavor between Amazon, Berkshire Hathaway and believe Walmart. Oh, no, no. JP Morgan.</v>

<v Bill Russell>JP Morgan. Yeah. JP Morgan, Berkshire and Amazon.</v>

<v Jordan Cooper>Yeah. Yeah, so that failed. So the the question is, why did that fail? And then you also have M&A's all over healthcare, you have Walgreens taking over summit, you have Amazon taking over one medical. So there is there are other players getting in there is traditional finance getting into healthcare? Why did we find?</v>

<v Bill Russell>There there's there's. There's a battle for primary care right now and.</v>

<v Jordan Cooper>So why doesn't? Why doesn't big money? Why doesn't private equity venture capital, traditional finance, start investing in the integrated care delivery model that would support scaling up at Kaiser like model?</v>

<v Bill Russell>Well, by the way, I mean there's a ton of VC and and private equity backed roll up strategies for primary care right now. I mean that's where the battle is being run. One because essentially if you can get in between the consumer and the health system and you can direct care, that's a winning strategy. Optum's proved that United Healthcare optimists proved that you're seeing CVS run after that. You're seeing Amazon run after that. Everyone's sees that as sort of the, you know get in between start to direct care.</v>

<v Bill Russell>Because one of the things that's going to happen is it used to be all Healthcare is local. You know that was the big phrase. All Healthcare is local. I remember hearing that when I first came into healthcare and it made sense cuz we had 30% market share. They couldn't go anywhere else. They came to us. Well, now you have deals like for employers doing deals where they contract with Mayo and they contract with City of Hope and they contract with you know and so on certain diagnosis they actually put their, their employees eat these can be minimum wage employees. They're putting them on a plane.</v>

<v Bill Russell>And sending them to California or they're sending them to Rochester and other places. So they're they're fundamentally changing that game before we go too far off of this. I'm not a fan of socialized medicine either. I just want to be real clear. I think the answer is in the free market system, I think it's transparent. I think it's data, right. I think it's transparency. I think it's data and I think it's choice.</v>

<v Bill Russell>I I live, I live in an area that's loaded with Canadians and they come down here and they have procedures done and I'm like, why are you having procedures done? I mean you're.</v>

<v Jordan Cooper>But in Florida, for our listeners who don't know where you would.</v>

<v Bill Russell>Yeah, yeah. In Florida and like 10% of the people who live in, like, actually 15% of the people who live in my community are from Florida. And I'm like, why don't you get your healthcare in Canada? And they're like, well, cuz I have to wait for nine months. I'm like, wait for nine months. That's like, we wouldn't even understand that in the United States. And so if you go to that kind of model, you end up with rationing of healthcare because you can't possibly pay for and have the kind of investments that you have in the United States.</v>

<v Bill Russell>And so I don't think it's a complete swing to socialized medicine and that's what it is. It's socialized medicine.</v>

<v Jordan Cooper>It will hold on. Just turn to to define terms. Here the four examples of integrated delivery models is that are those examples of socialized medicine.</v>

<v Bill Russell>No, I'm talking about single payer. I'm talking about government run single payer Medicare for all, all that kind of stuff.</v>

<v Jordan Cooper>All right, but OK, so back to the original question, why isn't traditional big finance and large retailers investing in the proven integrated care delivery models?</v>

<v Bill Russell>Oh, why aren't they investing in that?</v>

<v Bill Russell>It it's a bad business model. Healthcare makes money. Hospitals make money from essentially only three lines of business, 3 or 4 lines of business and you know it's it's it's tests and imaging, it's oncology and it's surgery right primarily.</v>

<v Bill Russell>Uh, you know.</v>

<v Bill Russell>Cardiac surgery and and other specialties. But it's primarily surgery, so they make money there and they lose money everywhere else. Nobody looks at that business model and says boy can't wait. Capital intensive, nobody looks at that business model says I gotta run into it. Now the question the real question here is how do we transition because there is a transition and we're seeing it. Intermountain is doing it.</v>

<v Bill Russell>But extremely well and they're doing it on multiple fronts.</v>

<v Bill Russell>First of all, they have the health plan, which is now up to, you know, over over a million covered lives. And so that health plan which they launched, I don't know how many years ago, but it's at least five years ago they launched it and it's been wildly successful and they're going to scale that.</v>

<v Bill Russell>And they're going to grow through acquisition and other things, but they're going scale that model. But there are also doing a lot of great work in the social determinants area and all that. And they're partnering with the United Way. They're partnering with local communities because they understand it. If you cover these lives, you have to engage the local community, the United Way, the the.</v>

<v Bill Russell>You know the the the, quite frankly, the religious institutions, the people who are there at the social institutions, people who are there on a day-to-day basis, if 80% of health is outside of healthcare, you have to partner and they're doing that extremely well and they're going to scale it. The question is?</v>

<v Bill Russell>How many others are going to be able to scale it and what is that going to look like? And I think you're going to see specialties specialists like the academic medical centers primarily who are gonna live on brand and they are going to be the highest end acute care delivery that you can find and they're going to, they're going to thrive because they do research, they're advanced and that's where you want to go. If you have cancer and other things that's going to happen, the Idns.</v>

<v Bill Russell>Are gonna get squeezed from both ends. They're gonna get squeezed on the primary care side and and people starting to move around and do things, and they're gonna have to really reduce their cost structure or they're gonna have to figure out how to get into the player game and to start taking on risk and manage care lives like Intermountain has done, or they're going to be acquired or they're just gonna run out of money and really have to scale back. And we're seeing all of this happen right now.</v>

<v Jordan Cooper>How do you see payers responding to the Inter Mountains to the core wells of the of the country uh, creating their own payer models? How is how are the Blues plans responding to hospitals setting up their own insurance groups?</v>

<v Jordan Cooper>Umm.</v>

<v Bill Russell>It's it's coopertition, right? So they, they united has to partner with Intermountain because they have, what, 40 percent, 30% market share in most of the markets that they serve. So they they can't just say they're a competitor unless they figure out a way to deliver care outside of them. So they have to partner with them just like Intermountain has to partner with the United because there's a. So you're gonna have this sort of coming together of.</v>

<v Bill Russell>Of models.</v>

<v Bill Russell>Uh, which is gonna continue to happen. And the other thing on the data side is we used to sit sit across from the payers and they had so much more better data than we did on our on our patients like they knew things that we didn't know.</v>

<v Jordan Cooper>So.</v>

<v Bill Russell>And I think in these more sophisticated health systems that data and that that playing field is starting to get leveled. So the conversations are starting to get very they're just on even terms. And so that's changing the game.</v>

<v Jordan Cooper>Dude in pop culture in the United States, there's a story that's gone around where we've heard about how a father somewhere in the United States found out that his teenage daughter was pregnant because Target started sending diaper ads or something to the house based on their big predictive data models. As you see, provider organizations starting their own payers or at least or potentially sharing more data and get ingesting more data from payers.</v>

<v Jordan Cooper>Do you see how how do you see the care of patients evolving with greater access to predictive analytics and based on large datasets?</v>

<v Bill Russell>Uh, I'm trying to figure out the analogy you gave me with the question.</v>

<v Jordan Cooper>Yeah. Well, it's like, OK, so if you have more data from payers.</v>

<v Bill Russell>Yep.</v>

<v Jordan Cooper>Uh, will healthcare be able to find more insights about patients that will lead to better outcomes as target was able to come up with an insight about that teenage daughter that she didn't even know herself?</v>

<v Bill Russell>Yeah, uh, I think what's going to it it the look the claims data, the claims data is the claims data and it tells you more about that 20%, the health care line of business. I think what health systems are getting more attuned to is they need to be better at the things that consumer companies are good at, which is figuring out what your preferences are, figuring out what your decisions are as an individual. And so they look at the community and say.</v>

<v Bill Russell>We have 1.5 million patients in our community, but there's 3,000,000 patients, potential patients in our Community. We need to know all three million and and those people we need to start growing out of that 20% of just healthcare data into what are their preferences, do they exercise, how do they make decisions, psychographic data.</v>

<v Bill Russell>You know, how do they make decisions? Because we want them to be well. And how do we keep them out of line at, you know, Burger King and McDonald's? No offense to either of those. I love them, but but they, you know, going there repeatedly does not make you healthy. And the health system needs to establish itself as the partner for health in the Community. Otherwise someone else will.</v>

<v Jordan Cooper>We're approaching the end of this podcast episode bill, so I'd like to give you the opportunity to speak to our community of CIO's Health IT leaders in large health systems across the United States.</v>

<v Jordan Cooper>Umm, about risk and where we how we see risk sharing and and basically what's the next step in this conversation, what are we going to see in the next year or two?</v>

<v Jordan Cooper>OK.</v>

<v Bill Russell>What are we gonna see in the next year or two? Well, actually, you you gave me two different prompts. I'm gonna take the prompt. I want, which is. What would I say to CIOs right now? And I would say.</v>

<v Jordan Cooper>Yeah.</v>

<v Bill Russell>First of all, know your consumer, as many of them as you possibly can. As many data points as you possibly can. Bring it together in insights and then the other thing I would say is embrace 21st century cures and all it represents and what it represents is patient empowerment with data, patient centric interoperability, patient empowerment with data, giving the patient data and then becoming that guide we all know and I know if you give me my patient data.</v>

<v Bill Russell>I don't know what to do with it.</v>

<v Bill Russell>But once you give it to me, I'm gonna be looking for a guide and I want the health system where I have my trusted providers and they're the trusted brand in the marketplace to come alongside me and provide a service that says, hey, we gave you all this information. We want to help you to collect even more information from your Apple Watch and all this other stuff. And outside of delivering your medical care, we're gonna become your guide, your almost a concierge type service that is totally digitally driven.</v>

<v Bill Russell>Data-driven and.</v>

<v Bill Russell>You know and gives me access 7 by 24 to somebody to talk to. I think that's. I think that's the future. I think that's a strong path for health systems to take to establish that consumer centric patient centric, community centric approach to care.</v>

<v Jordan Cooper>Well, thank you. This has been Bill Russell, founder of this week health have you haven't lessened, you can go take a lesson. I think it's this week. Health.com bill is also President of health lyrics and former CIO at Saint Joseph Health. Bill, thank you for joining us today.</v>

<v Bill Russell>Thank you. Really appreciate the time.</v>