David 0:00

What's being done by some of the larger players to align and realign incentives in this crazy current ecosystem that we've got? We'll find out on part two of our two-part episode of Shift Shapers.

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Change either paralyzes or energizes. The choice is yours. You're listening to the Shift Shapers podcast. You're about to learn firsthand from businesses and entrepreneurs who have successfully shaped the shifts in their industries. Get ready to become the change you want to see. This episode is brought to you by Shift Shaper Strategies. In sales, if you confuse, you lose. Clarify your message so you win more clients. Crus your sales goal now and build your host. At Shift Shaper Strategies, David Saltzman.

David 1:05

And last week, as you may remember, we spoke to Megan Cassidy from the Cleveland Clinic. This week we are privileged and pleased to be joined by David Zimmerman. David is vice president at Mount Sinai Solutions, and we'll get kind of his perspective on those things. Welcome, David. Thanks for joining us.

SPEAKER_02 1:21

Thanks, David. Great to be here.

David 1:23

So what's your professional journey been like? How do you get to be doing what you're doing?

SPEAKER_02 1:27

Yeah, it's a great question. The somewhat short answer is, you know, I graduated college during the financial collapse in 2008 and had always studied finance, planned to go into financial markets. Boy, am I glad I didn't do that given where the market went in 2008, 2009. But I got an opportunity to go work for one of the large TPAs right out of college and started, you know, really at the bottom floor, understanding the finances of healthcare, doing large group underwriting and risk management. And gee, two years in, I learned pretty quickly how the industry works. So how companies are making money, especially the TPAs, you know, largely off the backs of large employers and Medicare Advantage plans, but also realized how broken the system was for the 155 million Americans who get their benefits through their employer. And so from there, you know, I was just a couple years out of college, still revolutionary in the way I thought, and really wanted to be at the tip of the spear of change in the industry, you know, as I went further in my career. So I spent, you know, five to seven years at that TPA doing some more innovative work for them, working with large employers, trying to come up with new strategies to drive better engagement, better outcomes through their plan, through their health plan. Got an opportunity a little later in my career to go to one of the other TPAs and see more of the provider side of the house. So did some large joint ventures where hospital systems and health plans actually were going into business together, trying to realign, you know, normally the relationship that is butting of heads between the TPAs and the providers. And again, to your earlier comment, try to align the incentives between the two to deliver better outcomes. And then got a great opportunity in 2018 to come to Mount Sinai where I still am today, to build out the types of models that I think are kind of where the industry is headed and where I really see the opportunity to bring all key constituents together to deliver kind of new and better care models that can drive better affordability, better outcomes, and importantly in healthcare, a better patient experience. So that's what I've been up to now, Mount Sinai, for the last five years.

David 3:25

Great. It sounds fascinating. So from where you sit, define the problem for me. What is it that you guys are looking at that you see as the problem to be solved?

SPEAKER_02 3:34

I see trillions of dollars in an industry and really entrenched parties that, yes, say a lot of the right things publicly, that they're all looking to change and deliver better, better outcomes for the constituents they serve, but they're all typically doing it in silos from my perspective. So you have the TPAs, you have a lot of new entrants, including some of the big tech companies that have gotten into healthcare, and you have hundred-plus-year-old health system organizations like Mount Sinai, to be fair, who have done business a certain way for decades or over a century. And so while they say a lot of the right things about what they're looking to do to deliver better patient experience, better cost and quality outcomes, we don't see a lot of models that are actually taking all of those constituents' perspective into consideration and trying to deliver a new and different model that can deliver on all those outcomes for all those key constituents. And so one of the reasons that I went to Cyanai was I had spent so much time getting closer to the purchaser, to large employers and the challenges they faced getting better outcomes out of their health plans. But I didn't really understand the provider side of the equation until I came to Mount Sinai and understood, you know, how does a primary care doctor think when a patient walks through their door? Do they think about an Aetna patient differently than a Blue Cross Blue Shield patient? And the answer is no. But if you're on the outside, not on the inside, having those conversations and thinking through the challenges that then are created when you try and change the care delivery model, it's really hard to see how you're going to develop something that has stickiness with purchasers and with their employees and their families, but actually can change the way care is delivered and paid for to get us to a better model in the future. So I think there's a lot of great things happening in the industry. I think we're seeing a lot about a lot of it in the press right now, but there is still a dramatic need to have more alignment of the key constituents, you know, across the value chain, across the consultant houses and brokers, the employers themselves, the TPAs, the vendors, and then importantly the last mile, the providers of care. I think until we get to a model that all of those folks are kind of swimming in the same direction, it's going to be really hard to see how we develop a better model than what we have today.

David 5:44

How did we get here? What caused this just crazy mixed-up alphabet soup of misaligned incentives?

SPEAKER_02 5:52

I think it's a great question. I think the challenge we face right now is a legacy of the fee for service model. I think, you know, it's funny in New York, if you say HMO, that's actually a four-letter word in New York, but in California, it works fantastically. People love Kaiser Permanente and some of the other HMOs that are in that market, they have decades of success. And so they can showcase high net promoter scores, great clinical and quality outcomes, and their cost is significantly below the traditional TPA's, you know, PPO plans or other broad access plans. Most of the rest of the country, that's not the case. And so, especially in a market like New York, the fee for service chassis that really is what drives the market, it just doesn't align the incentives to keep going back to that approach across the value chain. So you have providers who are incentivized to see more patients, which means see them as quickly as they can and get on to the next. You know, the TPAs, yes, they are trying to keep costs down, but largely employers, especially in a 3.5% unemployment environment, are still really using benefits to attract and retain talent. And so I think there's decades of reasons why we're we're where we are. But I think the fee for service chassis that we've all been operating under for at least 95% of the country for the last few decades, it really just doesn't serve the purpose of delivering better outcomes and better cost because it doesn't bring together all the key constituents in an aligned incentive model.

David 7:20

You touched on it a little bit too. We we talk a lot, a lot, a lot, a lot about cost. Where does quality fit into that and how do you meld those so that you get the best of both worlds? What initiatives are you guys working on?

SPEAKER_02 7:35

That it's a great question. So we're, I would say, lucky um and fortunate at Mount Sinai that we have, we're the 14th ranked medical school in the country, one of the preeminent healthcare organizations around the globe, to be fair. Yet we know that we actually cost slightly less than some of our peers in the market. There are great hospitals across New York. I think four or five of the top academic medical centers in the country all are in New York. But we know that our cost for a variety of reasons is anywhere between 10 to 20% cheaper on average than some of our peers. Our quality metrics are on par or better depending on the conditions that you're you're looking at. And so we can really deliver on value for employers and for large purchases in the market because we can combine that cost and quality equation to deliver the value. That said, we know that there are community hospitals and other local providers who are lower costs than us, but they may not be the 14th-ranked medical school in the country. They may not have the research and expertise that we have. And so I think in healthcare, certainly borne out by some of the recent studies from Mercer and Towers Watson and some of the others, there is a willingness and an interest to pay more for better outcomes, better experience, and better quality. But I think as large, you know, large purchasers that I sit at the table with and talk all the time about that comparison of cost and quality and where do you really deliver value? There are organizations out there like Mount Sinai, and there are others. You mentioned a great one in the Cleveland Clinic where you can get that quality, that great brand and experience and excellence, but at a lower price than a lot of the other organizations in those respective markets. So they're out there. There are plenty of health systems and provider groups across the country that I think do a great job of blending cost and quality, but you have to look for it. And I think that's another point that we could probably spend much more than 20 minutes on of how do you measure and where is the data to really help individuals and employers identify what quality truly is.

David 9:29

Do you attribute that savings at looking at patients and cost and treatment longitudinally rather than looking at them episodically?

SPEAKER_02 9:37

There's a lot that goes into that. But yes, you know, part of our cost equation is we are an academic medical center that through an acquisition and an integration also has community hospitals. So if you operate community hospitals for decades, you have to learn how to do more with less. When your core business is an academic medical center and your fee-for-service rates are higher than the market, again, back to incentives, you're you're not necessarily incentivized to figure out how to better manage the cost of your patient population. So there's some of it is the organization of the Mount Sinai Health System and how we've had to learn how to manage to a budget maybe better than some of our peers. The other part is we've gone deep on population health, to your point. We have over 500,000 lives and at-risk contracts across Medicare, Medicaid, and commercial. And so we're taking those learnings to figure out how can we drive better engagement, how can we take that better engagement and then steer our patients, whether it's an at-risk Medicare, Medicaid member or one of our commercial patients that we have through our employer relationships and be more proactive, focus more on prevention. But when they do need care, get them to the right care setting that's going to be at a lower cost than if they walked into an ER, an urgent care, or one of the other high-priced providers in the market.

David 10:51

So you see that kind of ACO writ large model as being something that's being going to continue to grow?

SPEAKER_02 10:57

I do. I don't think it'll look like the ACO models of today. I think there's a lot of research that's showing that some of some of those are working in certain markets, but largely in general, they are not in the commercial space, maybe not as well as they may be working in in Medicare or in Medicaid. But what we have done at Mount Sinai is we're trying to really build relationships with large purchasers. As I said earlier in New York, access and experience right now seems to be more of the interest and the focus for most large purchasers than just the cost part of the equation. And so what we've tried to do is build relationships, understand their needs, and then build products and services through that direct one-on-one relationship that meets their needs of today, with a belief, and now proven out over our six years, time and time again, that once we build that initial relationship and serve that initial need, they're turning to us time and time again to say, gee, now we're looking about our cancer spend or access to great high-quality cancer care, oncology care. Could we work with you to figure out how to build a program that steers our patients to Mount Sinai, delivers better access, better experience, better outcomes? So we're starting with the relationship versus starting with a product or starting with an HMO that we believe over time builds trust, builds credibility, and allows us to earn more of that patient share of wallet, if you will, over time versus a more restrictive model that in New York has not worked historically.

David 12:20

Well, and I think that's in large measure, wouldn't you say, because the relationships are long-term and the episodes of care are ephemeral. And so if you want to take a look at the long-term cost of a particular condition with a particular individual, the relationship has to be there first.

SPEAKER_02 12:38

Completely agree. And for us, you know, a lot of us ask, well, you're working with employers, the churn rate for, you know, turnover rate for a lot of these large employers, especially right now, through the roof. And so you build these programs and you build that relationship. But then if the individual leaves the employer, well, how do they continue everything that you've already built with them? Well, we're a 400 outpatient clinic, you know, eight hospital thousands of doctor health system. And so again, back to my earlier comment, building that relationship, earning their trust, focusing on customer service. You know, our net promoter scores are over 90 across all of our products and services. Gee, in healthcare, I would say we're we're in the teens in general as an industry. And so when you can have a great experience, you make access easier, and you can deliver good outcomes from a cost and quality standpoint, we're building that relationship, as you said, longitudinally, yes, with the employer, but also with the patient. So when they leave the particular bank or media services company that they're at today, yet they're still in the greater New York market, we've earned their trust, we've earned them as a patient, we have the ability to continue that relationship even with another employer that they move to.

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SPEAKER_02 14:54

I think there are other systems out there that and actually that we're having conversations with that would say yes today. I think for for me and for my business, I think we would say we think so. And so today we work with all of the TPAs. We work with the major TPAs and some of the local ones as well. But there is an interesting debate to be had about over time who is best to really manage the network, the doctors and the organizations that actually deliver the care, or some other third party to do it from, you know, Bourbon A, Illinois, or wherever they're they're doing their network management from. So today it's largely still through partnerships with the TPAs. I think it is a very hot topic, not just at Mount Sinai, I know from some of the other organizations that we talk to around the country about building all those network management functions that then the TPAs can get access to, but that we're closest to the doctors, we're closest to the doctor patient, are we better served to be managing the network than some other third party? So I think jury is still out on that, but I wouldn't be surprised if if you hear some movement in that direction over the next few years.

David 15:56

Would it be fair to say that at some points in the equation you're looking at yourselves as a product?

SPEAKER_02 16:03

I think that's exactly right. Yes. I think first I would say as a health system, we're trying to be more consumer-centric. And that's a buzzword, it's been used for decades, but really trying to think about the consumer journey and the consumer experience. We're doing that through my business unit in direct relationships with employers and with purchasers and then the consumers that they serve, their employees, but we're also doing that more broadly as a health system, thinking about how we engage with the over 1 million patients that walk through our doors each year. And so in my business unit, absolutely, we have relationships that turn into products and services. And we think writ large, Mount Sinai, especially as a network manager, could really turn into a clinical product that any consumer off the street, any employer, or as you earlier brought up, any TPA could purchase. I think work to do on that, we're not quite there yet, but that is where we see the market evolving.

David 16:54

And yet there's a challenge for you and for the folks that like when I spoke to Megan, the folks at Cleveland Clinic, there's a challenge because you're regionalized. Yes. And you're not, you're not national in scope. Is there a way to get the best of both worlds? Is there a way to move from A to B? And if so, what is it?

SPEAKER_02 17:09

Yeah, that is such a good question. And honestly, it is the question of the now. So, you know, I know Megan personally, I think great organization. Megan and I sit on a few executive committee boards, and one in particular has a lot of health systems on it from around the country. I won't name any specifically, but we are all in conversations trying to figure out exactly that. How do we take the learnings from what Mount Sinai has done in New York, what Cleveland Clinic has done in their markets, and many of our peers have done in their markets, and bring the best of all those organizations together in a really seamless way for large purchasers. Now, the TPAs would say, well, that's what we do, right? We bring that all together for our customers. There are other organizations out there, like some of the kind of navigation companies, there are some of the big tech companies that are looking to do this as well, and other venture-backed new entrants in this space. But I will tell you from firsthand knowledge, there are many different conversations happening across the large health systems in this country to figure out what is the right way to bring this whole concept together to better serve the purchasing community. And there's a healthy debate about whether it's through some third party or whether we could all work together almost like a blue card type model, if you will, to make it really seamless for purchasers to get access to these programs in all of the geographies where they have people.

David 18:24

Well, and that also helps the issue that you raised earlier of patients going off an employer plan and moving someplace else and then losing that continuity of care.

SPEAKER_02 18:32

Exactly. That's exactly right. And that's look, this is not simple. I think, you know, I mentioned earlier, certainly in college, certainly getting out of college, I was revolutionary, I believed in revolution. Thought we needed to revolutionize the financial markets. As I've gotten into healthcare, I still believe we need to revolutionize healthcare. I guess maybe I'm a little older and a little wiser now. What I've realized is healthcare is going to require evolution. But what excites me and what I tell my team all the time is let's make it evolutionary, but disguise it as revolution. So let's really think about different models and really redesign the way healthcare is delivered and paid for. But it's going to have to be evolutionary. And so I think, I think you're exactly right. Figuring out how we do this to make it really easy and seamless for the patients, for the consumer, and for the employer, there's a lot of work left to do there. But there are a lot of great organizations having those conversations, which is something that you just you wouldn't have heard five, even you know, ten years ago.

David 19:25

Well, because there's strategy and there's tactics. And for the last years, we've focused on tactics almost exclusively. And we haven't really thought about strategy, and all of a sudden we've got a bunch of islands, and as they say in Maine, you can't get there from here. And it's putting a big burden on cost and on patients and on employers and everybody. Yeah. So I think that it's great that those conversations are being held. David, we got about a minute, minute left. What do you see the future is looking at near-term, midterm? What are you guys envisioning?

SPEAKER_02 19:54

It's a great question. I should also say I love the reference to my home state, grew up in Maine, so I love that. I think you know the next few years are going to be pretty interesting. I think the you know pending recession, let's hope it doesn't happen, but looking more likely that it will, is probably gonna lead to a slight pause, some of the movement that we've seen in healthcare over the last three to five years. I think the next few years, it's really in question of what's gonna happen. I think you're gonna see more organizations like Mount Sinai trying to move into the space they were in, building these direct relationships. I think unfortunately, many of the venture-backed companies that have been in this space over the last few years will likely be acquired or fail. And I think the TPAs probably gain power. I think through acquisition and just consolidation, they probably gain a little bit more of a stranglehold than they've had even in the last couple of years. That said, that's very short term. And if I look out a decade, I don't know who will really be the one that creates the new and better model of the future. I have some theories on that. But I do think the healthcare model that most people access to get their benefits and get their care 10 years out looks very different than it does today. Mount Sinai and many other systems around the country want to be invested in figuring out what that solution is. Five years out, I think we'll be closer, but I would think 10 years out is where we really start to see a new and different and better model for consumers and certainly for employers who can't take the cost that they continue to pay more and more for each year.

David 21:16

Well, we hope you'll come back and we can chat about that sooner than 10 years. David Zimmerman, Vice President at Mount Sinai Solutions. David, thanks for sharing your expertise and what you guys are doing at Mount Sinai with our audience.

SPEAKER_02 21:27

Great. Thanks so much for having me, David.

Announcer 21:29

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