Name: Brainstorm Health 2024: Reimagining Partnership and Building a Stronger Healthcare System
Uploaded: 2024-05-21
Duration: 18 min 27 s
Description: Neil Lindsay, Senior Vice President, Amazon Health Services, Amazon Paul Markovich, President and CEO, Blue Shield of California Moderator: Chrissy Farr, Owner and Editorial Lead, Second Opinion Media; Co-chair, Fortune Brainstorm Health

Neil Lindsay, Senior Vice President, Amazon Health Services, Amazon Paul Markovich, President and CEO, Blue Shield of California Moderator: Chrissy Farr, Owner and Editorial Lead, Second Opinion Media; Co-chair, Fortune Brainstorm Health  

Brainstorm Health 2024: Reimagining Partnership and Building a Stronger Healthcare System

Conferences

Neil Lindsay, Amazon Health Services, Amazon, Paul Markovich, Blue Shield of California, Chrissy Farr, Second Opinion Media; Co-chair, Fortune Brainstorm Health  

Good morning, everybody. It's so nice to see you all again. So I'm gonna dive in with just making a comment that I think is, is just classic. Continues to be true today, which is that nobody ever got fired for buying IBM. And here we are today speaking with two people that formed a partnership. But I think, you know, when you read about it in the press, it was, it was big news. This is a big moment, hadn't been done before. So we would love to hear from both of you actually on how this all came together. Give us some of the light insider gossip. Well, well, for us, we, we really just uh we are all driven by our nonprofit mission. We wanna create a health care system that's worthy of our family and friends and sustainably affordable. And the system is just so far away from that particular to the pharmacy system. I call it a forest of opaqueness and profitability. Um When I was describing it that we just said, you know what you need to start over and re invent it and reimagine it. So we spent a lot of time actually just pre COVID designing this thing. And then we had to figure out, well, uh how do you, if you, if you start from scratch and do what we decided to do, which is go directly to the manufacturers do a contract, then you have to figure out how to do the administration that you are currently doing through a pharmacy benefit manager. So you break it down into its pieces and one of the pieces was, well, you have to get the drugs from point A to point B like, well, who does that better than anybody else in the world? Uh And it really triggered a conversation with Neil and his team. Well, and, and our mission is to make some things that should be easier, easy in health care. And uh uh clearly that requires partnerships. You know, we don't have it all and obviously to deliver health solutions, healthcare solutions to people, you need different pieces of the puzzle. And so Paul and I actually met at a conference or something like this uh Not so long ago. And I think we both sort of, I felt that frustration that this is too damn hard, excuse my language, but it is, it's just too, too difficult and that it's going to require some invention and reinvention. And uh we've been inspired by Paul's motivation and uh and excited to help him. One of the books we mentioned uh backstage is of course, the innovators dilemma, which I think is, is very relevant to some of the work you're doing. So, so when you initially announced this, you said Paul, that you could save $500 million annually off of a program like this you've seen now some traction. It's been going for a little bit. Do you think you're gonna meet those numbers? Yes, we're, I mean, we, um, you, it would take us, uh, two or three years to scale up to that number in total. But right now we're tracking to that number and, and that's what we expect. I, I think there might be more, more savings over the long term because we're, we're not just changing the pharmacy benefit management model and the players in the middle, we're also changing the incentive structure for oncologists and hospitals and others. So that really none of the players in the system have an incentive to prescribe or administer more expensive drugs. And I think when we, that happens, like phenomenon, you see today, like how in the world does Humira go off patent and keep a 90% market share? It's because all of the incentives are lined up for these rebates. I mean, everyone's sort of addicted to these, to these rebates. But when you take those incentives out of the system, then all of a sudden you don't have that you're looking for the most cost effective drug and you would get a much bigger swing towards biosimilars faster. So I think that, um, we haven't really factored that in fully to the long term savings. So I'm, I think we're tracking well to the 500 million and I think longer term it could look better. And Neil Pharmacy is a space that I think we've seen just a graveyard of failures in the start up world. It is a very, very tough area to innovate for all the reasons that Paul just said. So if you're Amazon, you've got all the resources in the world, you've got great people on the team and you know that you can do something Greenfield in health care. Why, why, why pharmacy? Well, firstly, uh obviously it's best to build on something you're already good at, right? And at its core, at our core, it's about selection value and convenience. You know, when you think about Amazon more generally, particularly in a retail environment, it's about making available the things you need, doing so at an affordable price and being as convenient as possible. And in many ways, that's what's needed in pharmacy. You need the selection, you need to make it affordable. So things like Rx Pass now, $5 subscription that gives you unlimited access to the generics on the list, including delivery to door. And of course, we're reasonably good at the convenience of delivery to the door. So, uh, well, it's very different and clearly there's some things that make pharmacy uh or healthcare specifically more difficult than perhaps just general merchandise. Uh, those are things that we're willing to invest in and event. So it's not really a stretch to imagine why pharmacy makes sense for Amazon. And as somebody who's kind of moved into health care to take on this work, curious if you, if there are any specific things that have just surprised you about the pharmacy space and kind of moving through this partnership. Uh, well, it makes my head hurt, the economics, make my head hurt seriously. I mean, honestly, the, you know, clearly this is far too complicated, it's far too complicated. We need a simplification. I'm again, inspired by Paul's energy and motivation to uh to find different ways to achieve uh you know, help with medication adherence, help people get the medications they need. Uh and uh you know, we need to work, we, we have a, a very broad customer base clearly. And so obviously, we want to support the system that exists but also be very supportive of the innovation that's possible. Uh But yeah, you know, this is, this is the, perhaps the there's no other part of our business. I think that is as complicated as pharmacy. And uh and that's a shame because it's not in the customer's interest, it's not in the patient's interest and it, it's not helping people get well. In fact, it's probably doing the opposite in some cases. So I, I am uh encouraged by the fact that I think everyone knows that. And so people in the industry do want change and people are looking for ways to simplify this experience for customers and patients. And we've just got to encourage that energy. And Paul to that point, you, when you announced this, you were replacing something which was CVS Caremark and you know, reading between the lines and kind of seeing some of the comments that were made. I think the insinuation was, you know, this is still very early. We'll see how it goes, maybe they'll come back. So would be curious to just hear your thoughts on that. And then how do you, as you kind of meet with other ceos in the blues universe, how have they reacted to what you're doing? Is everybody saying, can I do that too or are they going to watch and wait? Well, first of all, I don't, I don't see us going back and because this model is just so you, you, there's no way you're gonna get to the outcome that I talked about care worthy of our family and friends and sustainably affordable in a model that is built to profit to, to maximize the profit of the players in the middle as opposed to put it really maximize the experience of the patient, the quality and the cost effectiveness. So we're committed to this model. Uh And we're confident we can figure figure out how to make it work and uh I don't see us going back, there's a lot of interest from other blue plans. Um, that I've spoken to. I think they really want us to de risk the implementation by working it through and making it. I don't think any of them wanna be alpha or beta testing this. So I think they wanna see us get it up and running and have it work and in the deep end we'll see how it goes. Yeah, exactly. You, you, you, you figure out how to swim and then we'll know that there aren't, these aren't shark infested waters and we can jump into. So I do think that there's gonna be a substantial movement towards this model once it's successful and it will be, and I, I just think it's gonna be fundamentally almost. I think everyone's gonna have to move to something like this because uh there's just the current system is structurally built for inflation and we can't afford it. So, just a reminder to the audience that if you have questions, I'm gonna be coming to you next. Um But before we do that, I'll, I'll ask one more of my own, which is on the topic of the consumerization of health care. And we've been talking about this ad nauseam for years. You know, are they patients? Are they consumers if we have this system of health insurance? Why do we need to be thinking about things like cash pay and treating this as if it's, it's something that a consumer can just buy on a marketplace which is sometimes true, but oftentimes not true. And so we would love, well, actually both of your thoughts on this, of how much we should be thinking about health care as a consumer problem. And then once we do that, can we start to think in new ways about consumer, the consumer experience, convenience, all of these sorts of things Neil? Yeah. Well, I often use the word customer and patient together. And the reason I do that is intentional because customers have agency and I think patients too often don't feel like they do have agency. And you know, I I often have to clarify that. I'm not suggesting that in healthcare, the customer is always right. And actually if you take that full quote that it's always, it's actually the customer is right in matters of taste. So thinking of patients as customers doesn't necessarily mean that you have to give them exactly what they want, you need to give them what they need. But thinking of this environment as customers encourages us to think about their convenience more to think and we know if things are more convenient, they'll engage in it and if they engage in their healthcare, they're going to get better outcomes. And so I intentionally talk about customers and patients in the same breath often because they want us to think about the high bar of how we treat customers in every other industry and try to strive for that same level of convenience. Well, and I think this is what one of the big things that binds us philosophically. And we found this early on Neil and I did in our two organizations is that we are both just obsessed with trying to figure out how to make the consumer experience or the customers experience better. Um And I, I do think about it. I don't think we should shy away from those terms and talking about people. And one of the reasons is that uh we're interested in the health of everyone, whether they are technically a patient or not, you may not be needing to see a physician or use the medical system. But how are you sleeping? Right. How's your nutrition? Uh Those things all matter to the quality of life and health, they matter to us. But I don't know that they, anyone who's in that situation would consider themselves a patient and see themselves as a patient. So, but I think what really binds us is this notion of this system is not set up for the consumer, for the end customer and the user and we can make it so much better and so much more centered around them. And I think both of our organizations have uh a bit of an obsession with that. It's great to hear. Um I'm gonna throw it out to the audience for any questions, seeing a few hands go up on our way to you. Hello, I'm Naveen Jen from YM, Life Sciences. Um, and the question I have both for you, Paul and Neil, is that in terms of prevention? How does the consumer really focuses on prevention rather than really sick care where the health care incentives are aligned to keep you sick? Because you, everybody makes money when you're sick and no one makes money when you're healthy. So, how do you fundamentally change that? And how do you make this consumer the CEO of their own house? They feel that they are responsible for themselves. Yeah, I, I tell people all the time, it's like I, I'm, I, the biggest lesson that I have learned in my more than two decades in health care is you cannot fight financial self interest. That's why we're going to this new pharmacy model. Like no, I'm not going back to it because I, that I know how the financial self interest is lined up and it's not lined up to get to the outcomes that we're looking for. And so you have to figure out how to pay primary care physicians, specialist hospitals in a way that says you maximize your revenue and your profit when you do the right thing. So we do, I won't walk through all of them, but we have payment models that we think will work. We're putting scaling them up. I think we'll have more than 80% of our primary care physicians on a really good payment model that pays them on a per member basis. And then they get bonuses for quality, for cost effectiveness and for patient satisfaction, all the things that you would want. So you wanna pay the folks in the system that way. And then really we want to be able to have the experience for the consumer, be positive enough that um we're helping them with whatever what's going on in your life. Like, how are you thinking about your health? Because people don't walk around like I, I exercise every day and I, you know, try to eat right and get some sleep, but I don't think about it as prevention. Like I don't walk around thinking I'm gonna try to prevent some illness today. And I think most people don't think about it that way. So being able to then also engage the consumer in that way is important. Yeah, a long form of our mission is how do we make it dramatically easier for customers, patients members to find, choose, afford and engage with everything they need to get and stay well and getting well is an important part of staying well and preventing illness is central to that. And clearly, as Amazon, you know, selection, being able to provide access to whatever you need, whether it's a treatment for an illness or preventative service is part of what we want to do. And we have a long way to go. It's early days. It's day one, we need to simplify that for customers and patients so that they can find those resources more easily, so very motivated to help with the preventative care. So this has been a bit of a month for telehealth. Um We saw definitely some news about um Optum, shutting down the telehealth business. Additionally, news about, about Walmart and telehealth. And now you're seeing a lot of news where people are saying, well, maybe we just overly hyped this during the pandemic and we're going to move into essentially what we had before we're going to slip back into the status quo. As you think about those sorts of opinions that I'm sure you're, you're also seeing that are out there in the ether. How do you think about that? Right? Balance between telehealth in the home, seeing somebody in person. And you mentioned just now the financial incentives, clearly, there are financial incentives to get us back into clinic. Look, I, I think that uh I don't see telehealth disappearing. Um I, I do think it went through quite a craze during COVID, um which was never gonna be a normal model once we got out of COVID, but in terms of the, the mix between virtual and in, in person. But I absolutely think that uh there's gonna be different preferences in terms of how the con the consumer or the patient wants to engage in these situations. And that's gonna be an option that people are gonna take up. I actually think, um, improving access, it's gonna help with improving access. And in particular, I think about behavioral health. I think that is a place where, um, there's a lot of opportunity to use telehealth so, I don't see it disappearing. I do think what you're seeing is that there are companies that are struggling with the business model and, and how to make it profitable. That's what we're seeing, but I don't think telehealth will disappear. Yeah, I think we have to work back from what's convenient for customers and patients. Right. Again, if we're truly going to have a positive impact on human health, you have to make it very accessible. And so if the way to make that accessible is telehealth or in the home or whatever it might be, then we should make that possible and then fight for the economics to work. Uh It's not the other way around. It's not does the economics work? Oh, as a result, we shouldn't do this, it should be, this is what's needed and let's make that work. So that's why we have Amazon Clinic which is a cash pay. Uh You can uh do text based asynchronous care or uh telehealth care at low cost. It's obviously for low acuity conditions or you know, you can have a medical relationship and have that ongoing care for primary care, which also has we have 220 clinics. So and, and I get very excited about what might be possible in the home. Um So while we might have bumps in the road that make things more or less difficult, the trajectory should be the same and telehealth is clearly part of that trajectory. Um, totally agree. And I always say that I think tech and S MS is one of the most underrated ways to receive care. We just don't do it because the business model is so tough. OK, we have two minutes left. So I'm gonna put you both on the spot with a 12th answer. We've got a lot of start ups in the room watching this. Um Tell us, you know, how do they even reach you if they are interested in a partnership, which is the topic for today. Go ahead, Neil. The only way we're going to be successful in health care is by making it easy to access the products and services and professionals that people need. We're not going to create all those that's going to be the services that are in this room that we need to make available. Uh Judging by the number of emails I get, I think everybody already has my email address. So yeah, but uh but what I actually, I think what people miss all the time is they, they, they wanna talk to the CEO and 90 plus percent of the time. I am not the one deciding your face, right? There's somebody else on the team that's assessing it. And so with the people that are real successful are the ones that actually do their research on the company, they understand what the company is doing. They understand who the decision maker is and they actually go to the decision maker because if I took 15 minutes for a cup of coffee for everyone who invited me, that is all I would be doing for the rest of my life and, and clearly I can't. So most of the time those, those emails just get ignored. So I would just encourage you to, you know, dig, do a little homework, find out what's going on with the company, find out what's going on um, with the who the decision maker is in the company and get to them plus one. Well, thank you so much for a candid discussion to both of you. It's a pleasure. Thanks for having me.