EP483 (Part 2): Reversing the Healthcare Flywheel to Contain Skyrocketing Healthcare Costs, With Jonathan Baran

Relentless Health Value

Okay, to review from Part 1 of this conversation, and if you didn’t listen to it because you think you know how this whole skyrocketing healthcare costs thing works, let me tell you, I myself had a few revelations. So, go back and listen.

For a full transcript of this episode, click here.

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But to be fair, if you didn’t already, sure, fine. Listen to Part 2 here first and then do it backwards. It probably won’t make that much difference, except you’ll need to contend with me totally ruining the Part 1 suspense because here’s the negative flywheel, starting with the axle.

Employers and other plan sponsors have been convinced to buy discounts, including discounts or discounts by their other aliases: rebates and probably shared savings, too, I would throw in this category.

This is the grease that keeps the flywheel spinning. What’s the “why” there? It’s a genius idea if you think about it. And if you’re not fully understanding what I’m about to say, go back, for sure, and listen to Part 1 of this episode because this is a very fundamental concept that has come up over and over and over again on this podcast.

Cora Opsahl (EP452) talked about it. Claire Brockbank (EP453); Eric Bricker, MD (EP472); Chris Crawford (EP465) for just four shows off the top of my head in the past, you know, eight months or so.

Here’s the concept: If you buy discounts, your costs will go up. Am I saying this theoretically? No, I’m not. Look at the last 20 years. Have costs gone up way higher than inflation? Yes, they have. What are we doing? We’re buying discounts. So, it’s hard to argue.

Renewals every single year will just keep going up the longer that we buy discounts. We talk about this, Jonathan Baran and I, in Part 1, how carriers have created a really very self-serving buying framework where employers are trained to buy discounts.

Discounts are the axle, and the buying of discounts becomes the top of our flywheel. And then some so inclined hospital system executives, there are certainly executives standing 10,000 feet from any bedside, so they really have zero idea how care or patients or even clinicians are impacted. But if plan sponsors buy discounts, those at health systems who are so inclined now have no real incentive to rein in prices or focus on appropriate care even.

And if you are so inclined, if you’re very margin focused as a healthcare executive, you know, first things first, go gut primary care. That is step one in every playbook, and we definitely talk about that in Part 1 of this episode. And also, again, in about 10 episodes from earlier this year.

Another thing that you’re gonna wanna do if your prime imperative is margin at a healthcare system is maximize the revenue off of every transaction. So, hey … hello, EHR systems. So now you have health system prices creeping up and up, unfettered, you know, just exacerbated by consolidation and a bunch of other different things.

But you’ve got healthcare prices creeping up, you have volume the same or higher because we’re not preventing chronic disease like you would with advanced primary care, for example. And now we’re back at the “Oh wow, let me sell you another discount. And renewal is only 9% or whatever.” Thus, the flywheel spins.

Alright, so let’s turn this wheel around, shall we? Flip it 180. What’s the fix?

This is what Jonathan Baran talks about in the episode that follows, but he says, Hey, how about this? Instead of putting “get bigger discounts” in the middle of the flywheel, why don’t we put “buy better member health”? That’s a good start.

Buy a health plan that delivers better member health at an affordable price. Buy the care, not buy a discount off of a price we can’t see for net price we can’t see. Is it insurance? I don’t know. Right? Like, just buy the healthcare.

Cutting to the chase, Jonathan Baran advocates for a paradigm shift where employers invest in primary care, adopt better benefit designs, more aligned to cost and quality so that members are incented toward better cost and quality, employee navigation services to guide employees to make more informed healthcare decisions.

So again, by changing the focus from buying discounts to buying actual healthcare, Jonathan says, we can reverse the negative cycle and improve overall health outcomes.

As I’ve said multiple times already, my guest today is Jonathan Baran. He has been, for a long time, a healthcare entrepreneur. Today he is co-founder and CEO of Self Fund Health in Wisconsin, committed to challenging the expensive healthcare system in Wisconsin. Self Fund Health, I am always so pleased to tell you, did make a really, really kind offer to help out RHV (Relentless Health Value) financially.

You and the tribe here are really great folks who I truly, truly appreciate. So, please do support Self Fund Health if you are in Wisconsin.

This podcast is sponsored by Self Fund Health today.

Also mentioned in this episode are Self Fund Health; Cora Opsahl; Claire Brockbank; Eric Bricker, MD; Chris Crawford; Cynthia Fisher; Scott Haas; Peter Hayes; Matt McQuide; RxSaveCard; Mark Cuban; Ramy Khalil, MD; Candace Shaffer; and Tom Nash.

You can learn more at Self Fund Health and follow Jonathan on LinkedIn.

Jonathan Baran is a serial healthcare IT entrepreneur and the co-founder and CEO of Self Fund Health, a fast-growing health plan redefining how employers buy and manage healthcare. With a mission to eliminate waste and realign incentives in the healthcare system, Self Fund Health empowers employers to take control of rising costs by giving employees access to high-value providers at no cost, while replacing traditional insurance with real-time technology, dedicated nurses, and an aligned ecosystem of care.

Prior to founding Self Fund Health, Jonathan was the co-founder and CEO of Healthfinch, one of the pioneering companies to build apps on top of electronic medical records. Healthfinch automated routine workflows for physicians using clinical data, significantly improving efficiency and patient care. Under Jonathan’s leadership, Healthfinch raised over $15 million in venture capital and scaled to more than 50 employees. The company received national recognition, including being named a “Cool Vendor” by Gartner, a “Top Emerging Vendor” by KLAS, and one of Modern Healthcare’s “Best Places to Work.” In 2020, Healthfinch was acquired by HealthCatalyst.

Jonathan holds both a bachelor’s and master’s degree in biomedical engineering from the University of Wisconsin–Madison.

He lives in Madison, Wisconsin, and continues to push the boundaries of innovation in employer-sponsored healthcare.

05:23 Where to start in reversing the flywheel.

06:57 Why investing in primary care is pivotal to containing healthcare costs.

10:02 EP453 with Claire Brockbank.

10:04 EP452 with Cora Opsahl.

10:07 EP457 with Cynthia Fisher.

10:12 EP365 with Scott Haas.

10:13 EP465 with Chris Crawford.

10:14 EP475 with Peter Hayes.

11:11 EP468 with Matt McQuide.

11:13 EP472 with Eric Bricker, MD.

12:14 “The most expensive thing in healthcare is the pen of the primary care doctor.”

13:04 How the role of the broker has to fundamentally change.

16:16 What will the single most challenging aspect of this restructuring become?

20:20 How self-funded employers can be amazing customers in containing the rising cost flywheel in healthcare.

22:56 How do EHRs and other medical record systems play into reversing the flywheel of rising healthcare costs?

23:57 Ramy Khalil, MD’s post on interoperability.

24:59 Why is it important for employers to drive volume differently?

25:38 How Self Fund Health is helping in this regard.

You can learn more at Self Fund Health and follow Jonathan on LinkedIn.

@JonathanBaran discusses how to contain increasing #healthcarecosts on our #healthcarepodcast. #healthcare #podcast #financialhealth #patientoutcomes #primarycare #digitalhealth #healthcareleadership #healthcaretransformation #healthcareinnovation

Recent past interviews:

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Jonathan Baran (Part 1), Jonathan Baran (Bonus Episode), Dr Stan Schwartz (Summer Shorts), Preston Alexander, Dr Tom X Lee (Take Two: EP445), Dr Tom X Lee (Bonus Episode), Dr Benjamin Schwartz, Dr John Lee (Take Two: EP438), Kimberly Carleson, Ann Lewandowski (Summer Shorts), Andreas Mang and Jon Camire (EP479), Justin Leader (Take Two: EP433)