David: 0:02

Hi friends, David Saltzman here. As we slide into the end of the year, we're serving up a few encore episodes. These are conversations our listeners love the most, or at least didn't complain about, so they earned a replay. It's a great chance to revisit some big ideas, get a spark of inspiration, or finally catch that episode you meant to listen to before the fourth quarter turned into a holiday-themed obstacle course. We'll be back on January 6th with brand new interviews and insights. Until then, I hope you get a little time to rest, recharge, and please hang out with people who don't ask you for benefits advice over dessert. Thanks so much for being a part of the Shift Shapers community, and here's to a healthy, happy start to the new year. How can advisors help clients and plans deliver better health outcomes, outstanding member experiences, and healthier, happier lives? We'll find out on this episode of Shift Shapers.

Announcer: 0:58

Change either energizes or paralyzes. The choice is yours. This is the Shift Shapers Podcast, bringing the employee benefits industry interviews with individuals and companies who are shaping the industry's shifts. And now, here's your host, David Saltzman.

David: 1:19

And to help us answer that question, we've invited Kate Grohal, co-founder and vice president at Halista. Welcome, Kate. Thank you. Good morning. Good morning. Thanks for being here. We appreciate your time. We always like to start with the question of how your journey began and how you ended up doing what you're doing, because everybody's story is interesting. So will you share some of that with us, please?

Kate: 1:41

Sure, I'd love to. Thanks for asking. My journey, let's see here. Um, I would say my healthcare journey as a career started when I was doing my undergrad uh at a state university here in Wisconsin. And I was fortunate enough to land a student position in this very large teaching hospital, UW Madison Hospital and Clinics. And students sort of roamed around and went from department to department, being helping hands in whatever way those departments needed. We were cheap labor at that point, and it was on campus, so I could get there on the bus and they paid really well. And I could, you know, eat in the cafeteria. It was a good deal. And I was exposed to just a plethora of uh different specialties, uh, and most importantly, exposed to the patient experience. A lot of times I was escorting patients here and there in this huge hospital. Um, they were nervous, they were, they were um feeling a little lost, and that hit home with me. Um fast forward, I took that sentiment into additional career stepping stones of mine. I got my undergrad actually in in um industrial psychology, which is basically uh corporate culture. Um that's not even a degree anymore. I now hold my master's in quality theory. And um as I was going through healthcare in different career positions, quality became um a huge area of interest for me. And as I got my master's degree um in quality, that was due to what I saw patients experiencing along the way, either from the complexities of their insurance, the complexity of receiving care, um, wanting to be able to trust and um understand quality, but having no idea how to identify it. And so what I learned is very simply this quality is reducing variation and making something of value more predictable. Lots of other definitions out there in the highways and byways. I think everybody wants to put their spin on it. But that's the true definition of quality. And you can apply that to variation in cost. We know the US healthcare system, the variation in cost is 15 standard deviations from the mean. It's huge, um, it's un which makes it unpredictable. And the same thing with quality. Uh, I have worked with physicians through my entire career, and I have come to understand, um, and this was told to me by an orthopedic surgeon, that C still equals MD. Meaning that um there's huge variation, and the consumer has no clue uh whether their provider is the C student or the A student.

David: 5:06

It's like, you know, the old story about what do you call the person who graduates last in their class at medical school?

Kate: 5:12

Yes, I've heard that one too. That holds true. So over the years, I've taken my observations and my learnings and my the skill set that I acquired from my education, and I've applied it to healthcare. And I've been blessed to take all of that and bring it forward into Holista as a co-founder. So uh it's all built on reducing variation of cost, reducing variation of clinical outcomes, and reducing variation of that that patient experience. Um the that package comes together and bring brings forward not just high quality, but immense value at your fingertips.

David: 6:04

When you talk about reducing variation, it seems that this entire industry, and remember, I've been, as we discussed offline, I I've been on the TPA side of this as well. So this entire industry is one giant pot of variation. What's the problem you set out to tackle first? How do you how do you even do you just eat that the same way you eat an elephant one bite at a time? And and if so, how do you figure out what the first bite ought to be?

Kate: 6:32

Yeah. Um, well, I not to use uh, you know, uh a cliche here, but I really I do approach it as a three-legged stool. Um I I couldn't choose, is my answer, David. I couldn't choose where to start because to me, the patient experience, the provider experience and quality, and the cost of health care are all equally important and interdependent. And so I chose all three at the same time. And I'm so glad I did because of the interdependencies. If we're reducing the variation in the quality of care and we're reducing risk associated with clinical outcomes, then we're inherently going to affect patient experience and the cost of care. So if I had to say where did I focus first, um, keeping the other two um at my shoulders, was providers. Uh providers have become disenfranchised, providers have uh been commoditized, and that has affected the cost of care and the impact on patients and their experience. So remember one at one point in time, folks were talking about the value of the provider-patient relationship, and then we eroded it. And um, I think that's a travesty. So we set out to pull that back together, looking at quality metrics for providers that go well beyond NCQA standards. Most folks, NCQA is an insurance requirement, right? Uh and and it's a check the box. And when we check boxes, uh we check boxes, we really don't impact anything further than that. Uh so according to NCQA, uh, you need to credential a provider in order to bring them into your network. And if you looked at the NCQA criteria, if I were to sum it up, um, you haven't killed someone in the last 90 days and you have an active license, you're in, you're good. Holista as a licensed TPA. We are held to the NCQA standard. So we do, we go through and we check those boxes, but then we say, okay, that's not good enough. And we dig further into how providers follow best clinical practice. And we have all kinds of quality metrics that we have available to us. And about 15% of the time that we are pursuing a provider to participate in our network, they don't make it into the network because of missing the quality metrics, but they would have gotten into our network if we stopped at NCQA.

David: 9:42

So what are some of those additional quality metrics that you're looking at that NCQA isn't focused on?

Kate: 9:47

Yeah. So folks will say, oh, okay, Kate. So you look at things like Medicare and what Medicare puts in place for quality metrics. And the answer to that is yes, that's a piece of our scorecard. Simple things like infection rates, readmission to the hospital after a procedure, all of those things that are already being measured. But again, I said, but that's still not good enough. So NCQA, Medicare, and now Kate's proprietary formula pulls all that in and says, but you know what else? Quality matters when it comes to how providers work as a team or co-manage patients. Quality matters and how providers schedule patients. Quality matters where that provider is willing to engage their team, their nursing team, in with the Holista team to shepherd patients along best clinical practice. We can have all the clinical protocols in the world, but if we don't help patients do their part to reduce their risk of getting an infection, reduce their risk of falling in their kitchen after they've had their rotator fixed, then we're missing out. We need to bring the provider and patient experience together as a team to drive down risk and drive down variation. And so I have devised uh a system for measuring that stuff too. Now we have a set of metrics that really capture reduced variation and improved member experience, reduced risk, risk of a poor outcome, and reduced cost.

David: 11:48

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Kate: 13:41

Well, you know what? Um yes, it sounds like common sense, but it's a lot of work. And folks in this industry are not interested in doing that hands-on work, to be quite frank with you. We have an entire call center of nurses and MAs that are working directly with patients. We've invested in an app because everybody has this thing in their hand. It's the best communication tool for real-time care. And so if you think about the experience outside of what I'm describing to you that we do here in our episodes of care at Holista, well, sure, you can talk to your provider about, geez, my pain is significantly increased. I can send a my chart message, or I can call and go into voicemail and then maybe hear back from the nurse at 7 p.m. because that nurse has been rooming patients all day long. Or I can answer a pain question on my app that was sent to me in the morning time and say, ooh, it's increased now, and get an immediate feedback. We are a soundbite society looking for immediate feedback. And if we don't get that, we're gonna end up in the ER. And then when the nurse calls us at 7 o'clock at night, I'm gonna say, oh, well, thanks for getting back to me, but I already got my prescription for narcotics and I'm laying, I'm resting comfortably on my couch now. So it's real-time communication, and that's that's hard work and it's an investment.

David: 15:22

Well it's also it's also changing behavior, isn't it? Because a lot of folks, I've said on this podcast before, uh a very wise physician back in the old old days when I was still selling said something to me that I've never forgotten. And he he said, David, doctors will get off their pedestals when patients get off their knees. We're so patients, we're so accustomed to the getting a call back at seven o'clock because the nurse has been rooming patients all day long. How do you go about helping to change the behavior at the employee level?

Kate: 15:57

Yeah, that's a difficult one. Yeah, it is. Uh folks are, you know, really upset by how expensive healthcare is, how many dollars they see coming off of their paycheck, and still when they go to receive care, having to pay even more money. But wait, I paid my premium. Well, that's it's just to get you access to go to the provider. Not necessarily the provider of your choice, the provider where you're being told you have to go without any quality backing, so on and so forth. Um, and so still today, money talks. Um, working with folks that are um benefit consultants, helping them put plan design in place, uh, removing co-pays and deductibles for accessing high-value care, such as what we offer, um, reducing premiums. Uh we're we're coming full circle, David, right? It this is starting to feel a little HMO-y, right?

David: 17:08

Sure, sure, then that's where we got in trouble in the first place.

Kate: 17:11

Exactly. So we need to be careful about that slippery slope. Um, we want patients to be engaged and to change behavior, but not make it so arduous and scary that they slip into old habits. So I call that shepherding and educating and being at someone's fingertips when you they need you. Uh so it's quick access, it's education and helping them get where they need to go, um, and save money. I will tell you the the most effective incentive today beyond um forgiving copay and deductible is if they participate in the value-based plan or the value-based option, that the money coming off of their check as in premium dollars goes down. They see that as an immediate raise. And it is. It's it's it's putting dollars back onto their kitchen table, right? Um but there are things they need to do to receive those premium concessions. So we work with with brokers and our TPA and PPO partners to make that happen.

David: 18:32

HMOs weren't inherently evil. The whole notion of having a medical home is something we're still talking about. It was really, wasn't it, when the when the quants got involved and the accountants got involved and started saying, okay, well, we can make more money if we deny the care if we don't give authorizations for referrals, et cetera. Is that kind of where that erosion that you talked about earlier started?

Kate: 18:55

Yes. It took the care experience away from the patient and the provider. And then, as you said, put it in the hands of those that had a vested interest in stakeholders. I'll I'll call them.

David: 19:12

So give us an example of how a value-based network like what you you folks are doing helps kind of reverse that trend. How does how does that maybe start to mend that relationship a little bit?

Kate: 19:24

Yeah, from a financial standpoint, one differentiator is I am no longer a believer in the financial mechanism called a PEPM, which means folks in the ecosystem, a stakeholder, maybe it's a PPO who you know who holds the network, maybe it's the TPA. Um, but that PEPM means they're getting paid regardless of producing any work product. Right? That is a number one slippery slope. It also muddies the water of being able to measure work product and the quality of that work product and the value of that work product. Because now it's just this is this is what you're gonna get paid. Everything else is kind of loosey-goosey underneath, and you're incentivized to do less work so that you get more headroom between your payment and your cost.

David: 20:29

Which makes it actually in a way worse than what we usually point to, which is capitation being the the fulcrum on which this seesaw started going downhill. It sounds like you you believe the PEPMs are even worse.

Kate: 20:43

I do. We do not charge a PEPM, which has been a huge differentiator for us. So the the employer will say, so in order to get access to better care at a reasonable price, we are not we are not a race to the bottom, but better care at a reasonable price and happy employees because it was a great experience. We only pay for that when we use it. True statement. Um where do we sign? Um actually you don't have to sign anything. Um so it's really realigning incentives according to, as you mentioned, David, behavior change.

David: 21:26

That's really the the key to all of this. And uh I suspect that some of it is going to be generational. Baby boomers like myself have a completely other than those of us who've been in the business that are jaded, um, baby boomers have a very different view of the system than some of the younger folks do. And they're especially when it comes to using technology. Um, you know, they were born with a mouse in their hand. They were born with a with a smartphone in their hand. Um, I saw a graphic the other day that if we had to carry around all the gear that a smartphone has replaced, we'd probably need trailers on our on our cars. It's it's really crazy. But they're used to it. It's their way of communicating. Um fast forward, you know, five years. What do you see when you when you look out over your horizon?

Kate: 22:16

Well, that's an interesting question. Um because everything is happening so quickly. Five years ago, I would have not imagined we are where we are today. And that's an that's a good thing. It's accelerated. Yay. Um so five years from now, as far as the healthcare landscape, you know, healthcare doesn't move quickly. Um we're able to move click quickly because um we've we've used technology, but the rest of the healthcare space, I mean, we still have providers using paper charts. Okay. We have value based folks um that are still asking providers who are participating in a bundle payment arrangement to submit a paper invoice. So while the concept of you know having a bundle payment arrangement is kind of new, it's been around for a long time, um, we're still not leveraging technology. So I would say my hope is that uh there's more integration with technology and there are some alignments of incentives. Um that's my hope. I think five years is a short trajectory for that. Um I also believe that employers are going to go from being in the back of the bus to the driver's seat, and that is going to force everything in between to change their behavior. Um, employers have been um on the receiving end of horrible renewals year after year after year, maybe getting a fee for service with lipstick sort of uh proposal that by year two looks the same as the previous plan they were on. Um, and that's not good enough. And employers are are finally voicing hey, this is not good enough. Employers are starting to do direct contracts with providers. Hmm. That's making a statement, it's also dangerous. There's been some not so good things happen with that because employers that are, let's say, a printing company, what do they know about holding a provider accountable to quality of care? They're really just trying to get a provider that will sign for something that they feel is affordable. So that's a slippery slope. But I understand why they're doing it. They're just so fed up. So hopefully we'll get some critical mass in the next five years of folks that are great partners in the value-based space, supporting employers' ability to be the decision maker and have folks like ourselves helping them make really wise decisions versus desperate decisions.

David: 25:13

Well, as somebody once said, power is never given, power is always taken. And hopefully we're coming to a confluence of events where that kind of change, that that different seat on the bus, to use your analogy, will actually happen because it's way past due. And if it doesn't, I wonder where the bus is going to end up.

Kate: 25:33

Yeah, it's concerning. Um, but I remain hopeful.

David: 25:37

And hopeful is a great place to end our conversation for today. Kate Grohalk, co-founder and vice president at Holistic. Kate, thank you so much for a really engaging conversation.

Kate: 25:47

Thank you, David. My pleasure.

David: 25:55

I want to give a quick shout out to our sponsor and our producer, Hatcher Media. Hey, if you need podcast production or professional graphic design, Josh Hatcher is the expert to contact. For more information, visit him at HatcherMedia.net. That's H A T C H E R Media.net.

Announcer: 26:12

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