Dec 9, 2021
The discussion to follow is probably a 400-level class in payviders. If I just said the word payvider and you’re scratching your head wondering where you may have heard that term before, this show is probably not the best place for you to start. I’d go back and get some context by listening first to the episodes with Steve Blumberg from GuideWell (EP304) and/or the one with John Moore from Chilmark (EP172); and for a really retrospective lookback, check out the one episode with Dr. Kris Smith from Northwell (EP127) from back when they were still trying to become an insurance carrier. It’s like a time capsule into their ambitions.
OK, if you’re still with me, in this episode I’m looking forward to digging into payviders with Jeb Dunkelberger, who is the CEO of Sutter Health | Aetna. Sutter Health | Aetna is the payvider joint venture between, you guessed it, Sutter Health and Aetna. Not only is Jeb one who would obviously know a whole lot about payviders and how they operate given his role, but he’s also super articulate and thoughtful in terms of the potential impacts that this type of entity can have on patients and the surrounding healthcare ecosystem.
I started to get really curious about payviders and what they’re up to because the term keeps coming up in conversations, number one. And the more it came up, the more it started to become really obvious that payvider is one of those terms that everybody tosses around and may or may not define it the same way. Jeb refers to a payvider as an entity that delivers care but also writes insurance products and takes risk for them—not just taking capitated payments or doing direct contracting. While it’s the employer who actually takes the risk, this is the definition of payvider that we explore in this healthcare podcast.
Two kinds of interesting points that Jeb makes, which I’ll just underscore here: One is “demand destruction.” I like the idea of the term because it brings a really obvious point into stark focus. Bottom line, taking on risk or value-based programs is easier if you are a smaller percentage of the healthcare spend. The bigger a percentage of the healthcare spend that gets cha-chinged into your cash register, the more you destroy your own demand by creating value-based programs that minimize downstream costs. Those downstream costs are your revenue, after all. Value-based care is all about demand destruction at its core.
In the last question of this interview (so, this is the second thing I’m underscoring here), I ask Jeb if he thinks payviders will ultimately lower healthcare costs; and he comes back with a reframe of my question. He says if we take costs out of the system, will hospitals close? And if the hospitals close, then people get laid off. Fair point, since in many places the health system is one of the biggest employers in town if not the biggest—and also a political tour de force. So, there’s more nuances here; but you’ll have to either get to or skip to almost the end of the episode to hear them.
Jeb Dunkelberger began his career as a health economist and consultant. He became the CEO of Sutter Health | Aetna to focus on alternative reimbursement models and value-based care. Jeb also wrote a book called Rich & Dying.
You can learn more at sutterhealthaetna.com.
You can also connect with Jeb on LinkedIn and follow him on Twitter.
Jeb Dunkelberger, MSc, MHCI, currently
serves as CEO of Sutter Health | Aetna (SH|A), a commercial
insurance plan serving Northern California. The health plan aims to
combine the value of retail, provider, and payer via its
partnerships with CVS, Sutter Health, and Aetna. Prior to SH|A, Jeb
led growth for two bay-area healthcare start-ups: Cricket Health
and Notable Health. Jeb has also held executive roles at Highmark,
McKesson, and EY. Jeb holds healthcare-related degrees from
Virginia Tech, The London School of Economics, Cornell University,
and University of Pennsylvania.
03:58 What all does Sutter Health | Aetna entail?
04:31 What does it mean to be a “performance network”?
04:48 What does it mean to be a payvider?
06:35 How common are payviders?
07:31 “We are writing direct risk.”
09:21 How does the fully insured product work?
12:30 “You want to hold their feet to the fire, from a value-based
perspective.”
12:42 What’s the incentive for providers to partner with
payers?
15:25 “It’s just math. It’s the amount of lives times the amount of
utilization multiplied by your unit costs.”
20:58 “You have to have a day of reckoning, and that only comes
from financial incentives creating that gateway out.”
24:55 How do we think about reform and taking money out of the
healthcare system?
26:58 “We also have to talk about repurposing the workforce.”
27:27 “We need to upskill our workforce.”
30:14 “Can a health system survive as the largest employer, year
over year, if they give unit cost concessions, year over year? …
The answer is no.”
You can learn more at sutterhealthaetna.com.
You can also connect with Jeb on LinkedIn and follow him on Twitter.
@Jeb_Dunk discusses #payviders on our #healthcarepodcast. #healthcare #podcast #digitalhealth
What all does Sutter Health | Aetna entail? @Jeb_Dunk discusses #payviders on our #healthcarepodcast. #healthcare #podcast #digitalhealth
What does it mean to be a “performance network”? @Jeb_Dunk discusses #payviders on our #healthcarepodcast. #healthcare #podcast #digitalhealth
What does it mean to be a payvider? @Jeb_Dunk discusses #payviders on our #healthcarepodcast. #healthcare #podcast #digitalhealth
How common are payviders? @Jeb_Dunk discusses #payviders on our #healthcarepodcast. #healthcare #podcast #digitalhealth
“We are writing direct risk.” @Jeb_Dunk discusses #payviders on our #healthcarepodcast. #healthcare #podcast #digitalhealth
How does the fully insured product work? @Jeb_Dunk discusses #payviders on our #healthcarepodcast. #healthcare #podcast #digitalhealth
“You want to hold their feet to the fire, from a value-based perspective.” @Jeb_Dunk discusses #payviders on our #healthcarepodcast. #healthcare #podcast #digitalhealth
What’s the incentive for providers to partner with payers? @Jeb_Dunk discusses #payviders on our #healthcarepodcast. #healthcare #podcast #digitalhealth
“It’s just math. It’s the amount of lives times the amount of utilization multiplied by your unit costs.” @Jeb_Dunk discusses #payviders on our #healthcarepodcast. #healthcare #podcast #digitalhealth
“You have to have a day of reckoning, and that only comes from financial incentives creating that gateway out.” @Jeb_Dunk discusses #payviders on our #healthcarepodcast. #healthcare #podcast #digitalhealth
“We also have to talk about repurposing the workforce.” @Jeb_Dunk discusses #payviders on our #healthcarepodcast. #healthcare #podcast #digitalhealth
“We need to upskill our workforce.” @Jeb_Dunk discusses #payviders on our #healthcarepodcast. #healthcare #podcast #digitalhealth
“Can a health system survive as the largest employer, year over year, if they give unit cost concessions, year over year? … The answer is no.” @Jeb_Dunk discusses #payviders on our #healthcarepodcast. #healthcare #podcast #digitalhealth
Recent past interviews:
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Dr Ian Tong, Mike Schneider, Peter Hayes, Paul Simms, Dr Steven Quimby, Dr David Carmouche (EP343), Christin Deacon, Gary Campbell, Kristin Begley, David Contorno (AEE17), David Contorno (EP339), Nikki King, Olivia Webb, Brandon Weber, Stacey Richter (INBW30), Brian Klepper (AEE16), Brian Klepper (EP335), Sunita Desai, Care Plans vs Real World (EP333), Dr Tony DiGioia, Al Lewis, John Marchica, Joe Connolly, Marshall Allen, Andrew Eye, Naomi Fried, Dr Rishi Wadhera, Dr Mai Pham