Ep #460: Healthcare is Stealing the American Dream - with Dave Chase

David Saltzman: 0:01

If the best way to predict the future is to create it. What are the folks who are on the cutting edge of our industry's sea coming in the future? We'll find out on this episode of Shift Shapers.

Host: 0:13

This is the Shift Shapers podcast, connecting benefits advisors with thought leaders and entrepreneurs who are shaping the shifts in the industry. And now here's your host, david Saltzman.

David Saltzman: 0:27

And to help us answer that question, we have invited the venerable Dave Chase, creator and co-founder of Health Rosetta, interesting. If you go back in the archives you'll find his TEDx talk, which I love the title of It's called Health Care Has Stolen the American Dream. Here's how we take it back. That seems like a great place to jump off for our conversation. Welcome, dave, great to be on here. Thanks for having me Our pleasure. So just a little bit about your journey, because we always find it interesting to see kind of how people got to be doing what they're doing.

Dave Chase: 1:00

Well, i mean, i had a background in health IT, so I was broadly in health care. But the story of why I am where I am now was really catalyzed by an unfortunate situation where I had a good friend that had a similar career trajectory to mine and done a lot of the right things but unfortunately she got sick. That led her to a cancer diagnosis. Unfortunately it was the wrong diagnosis And that's more common than you think about one out of four, one out of five times that happens And of course that leads to the wrong treatment plan And, at the end of the day, left her ruined physically, financially, emotionally, ultimately leaving behind a 10-year-old daughter as a single mom.

Dave Chase: 1:56

And that really put me on a journey to understand what was going on and realizing that it wasn't about bad doctors or bad nurses, it was a system failure And I'd been a part of that system. Of course, none of us intend to do that type of thing And, as I understood that in the way I was raised, if you see a wrong and don't do something about it, you're complicit. So it put me on this quest And I sort of tongue-in-cheek call myself an archeologist, because I just went digging, digging, digging, like somebody has solved this problem, and first of all, i had to understand the problem and then solve it, and so that ultimately led me to my life's work and really my calling and why I'm doing what I'm doing.

David Saltzman: 2:43

And that was the founding of HealthRosetta. So when HealthRosetta first got founded, what did you set out to do? Was the mission always to try to educate advisors?

Dave Chase: 2:55

Yeah, actually, before I founded or really conceived HealthRosetta, i was writing for Forbes and I wrote an article, as I was. In a sense, it kind of chronicled my journey of learning And I wrote this article This Job Could Save America, referring to benefits brokers, benefits advisors, and I came to the conclusion that was the most underestimated role in the entire health care system, probably, by extension, the entire US economy, and they can either do incredible things and do all what we would hope health benefits would do, or they could lead to a situation like my friends and like and unfortunately she's not in a unique situation preventable medical mistakes of the third leading cause of death in America, and that's all paid for by our benefit plans or health plans, and that's an avoidable situation in the vast, vast, vast majority of the time.

David Saltzman: 3:53

They even have a fancy word for the ones where they don't know what the cause is. They call them iatrogenic complications, and it's annually over 100,000. So it's a huge problem. Now, what year was that back when you started, rosetta?

Dave Chase: 4:06

Yeah, i mean we officially started 2016. We launched in 2017 with the launch of a book I wrote in this space called The CEO's Guide to Restoring the American Dream, and so that's, i think, with a lot of people think of as the start of health. Rosetta is when we launched that Labor Day 2017. But kind of was somewhat So. You were post-ACA, yeah, post-aca I mean. Actually the ACA kind of started the journey because I had detoured away from healthcare for a while and kind of got me back interested and was like, wow, whether you agree or disagree with all the different facets, it looked to me like it was going to bring a lot of change. And healthcare has been very scurrotic and change is good, you know, and if you want to transform things. And so that kind of started me on this journey And it happened to coincide with my friend's journey.

Dave Chase: 5:04

And really the other crystallizing moment was when I woke up to the news March 9th 2016, that Bernie and Trump had won the Michigan primary And I was like, hmm, this is not normal, something's going on here. And when I unpacked that, i was like you know, i started hearing terms like populism and I'm like what is that? You know, i kind of knew what it was. And when does it rise? Well, it rises when economic depression comes about. What exactly is, you know? I kind of knew what economic depression was, but not the exact definition. And one of the definitions is two or more years of wage stagnation, decline.

Dave Chase: 5:46

By that point I was like, oh my gosh, right For the working and middle class. they've had 30 years of that. You know, they'd gotten raises, but they'd all been eaten up by premium increases, by healthcare. So essentially you had more than half the workforce in a 30 year long economic depression, like that's more than twice as long as 1930s Germany or our Great Depression. You're going to have some crazy stuff happen. Doesn't make it right, but it makes it understandable. And that was really a crystallizing moment like, oh man, this is a fixable problem. By that point I found people who really you know, as I kind of joke, you know they found the Rosetta Stone, thus the Health Rosetta, the name of the organization I started, because they kind of cracked this indecipherable code, sort of like Egyptian hieroglyphics. So that was really a catalytic moment for me as well.

David Saltzman: 6:38

Well, and there's no question for a lot of us I mean, that's when we started the podcast, because they're again to your point whether you agree with or disagree with, or like or don't like ACA. It really kicked the industry in a butt and the industry started looking for new things. But unfortunately, if I recall correctly and you'll correct me if I if I don't by that time we had run deductibles up through the ceiling, we had run copays through the ceiling and use them for the wrong reasons And we had created a whole class of people who were functionally uninsured, exacerbated by the poor state of the economy. If that's your starting point, where do you go from there? How do you create a framework? Or what kind of framework do you create to say, hey, we're going to build a ladder and climb out of this?

Dave Chase: 7:23

Yeah, i mean, that was the first piece that I wrote about healthcare when I came back was almost, you know, a time where we're recording this almost exactly 13 years ago, june 4th 2010, i wrote a piece that ultimately was published in both Huffington Post and Forbes called Health Insurance's Bunker Buster, and it predicted that rates would go up at least 50%, which I did, and then some, and the other piece of it was talking about direct primary care, which I looked at as kind of a microcosm of the way you climb out of it, and what I did was start studying social movements and new product category introductions and revolutions, and probably the analogy that I drew on the most that I thought was useful No analogy is perfect, of course, but is there's this LEED standards? LEED that is for buildings, you know, kind of the built environment? I thought of the built environments kind of like healthcare. Right, it's this really local thing, it's really entrenched. Yet over the last 25 years, the way we build buildings is radically different. A new blueprint arose And what happened was professionals like architects got accredited and then they certified buildings.

Dave Chase: 8:50

So you go to a building oh, this is a LEED certified gold building. Well, that's much better, you know more efficient, you know the error is better, it's better for the surroundings. And I was like, oh, you know, we could do something like that. We could accredit, you know the architects, you know, and air quotes of health plans. Right, that's the health. You know the benefits brokers, they're the architects of the health plans. We could accredit them And then we could certify health plans.

Dave Chase: 9:20

And we haven't quite done that yet, but we've made a major step in that direction recently, where it was just weird, you know, when I really delved into this space, i was like where is the review of quality of a health plan? We're spending trillions of dollars Other than Medicare Advantage Star ratings. There's really no rating. And you know, i just like kind of made a flip it comment Like I can get reviews for toenail clippers on Amazon And and I went and actually looked and there was a pair of toenail clippers that are set to toenail clippers that got 5600 reviews And we've got no reviews on trillions of dollars to spend.

Dave Chase: 10:01

And so that's one of the big things that we've worked on is how do you objectively mark value in health plans and get out of this mode that we're in today where we're driving down the healthcare road by looking in the rearview mirror, you know, otherwise known as claims. You know it's kind of interesting, but if you know anything about the distribution of spend, it's the outlier claims any year that drive the big spending And it's almost always different people. So looking in the rearview mirrors it's not that useful. So we're like, okay, can we have a leading indicator? and essentially it was a five year journey to get to where we are now, to where we actually are confident. We call it a plan grader basically, where we can objectively mark value of health plans And when you have a low grade you have a very volatile plan. When you have a high grade, you have a low volatility plan And it's far better for everybody involved for the member, for the employer And it's got to be better for the clinicians too. They've been on the short end of the stick of a lot of this as well. So it's been a journey.

Dave Chase: 11:10

This is not an easy thing to fix But just like you can rate buildings And you know if you look at what happened in the built environment, the old waned over time, the new rose over time and there were particular locales. You know places like Austin and Boulder and Portland that were early adopters and that, but now it's everywhere. You know, the largest developer in the world is the federal government of the US. They use lead standards. Most states for public buildings have lead standards. It's just, even if you don't get the standards, it's just the way things are built now. And so that's what we're really working on, kind of following that blueprint. And you know, again, not all the analogies are perfect, but it's informed, a lot of what we're doing.

David Saltzman: 11:54

Well, and you know, unlike the toenail clippers on Amazon. on Amazon, if one sees toenail clippers that are $7 and toenail clippers that are $35, one might assume that the $35 clippers are better. That's not the case in healthcare And it's so contraintuitive for the way we've all been brought up and think about things these days. How do you get past that? I know we talk about I hate the word, but we talk about transparency until the cows come home. But we're talking largely about price, not quality. Yeah, how do you either get past that or meld the two so that there's some index or set of indices where a Patient can find out both without having to go get a degree from MIT?

Dave Chase: 12:37

Yeah, yeah, i mean it is such a paradox that you know the best way to slash healthcare spending is improved benefits and improved quality. And You know we talked a few minutes ago about how the third leading cause of of death in in America's preventable medical mistakes. And you know what the? the follow-on book that I wrote After the CEO's guide was called the opioid crisis wake-up call. It looked at the healthcare system through the prism of The opioid crisis and really kind of answers that question. Because once you understand what works and And in it's frankly not a state secret that there's no well-functioning healthcare system in the world not built on proper primary care, you know, i remember interviewing some of the pioneers in Direct primary care is like gosh. How is it that you have 50% fewer ER visits and 50% fewer surgeries and these sort of things like? well, if you actually talk to people and give them time, they will almost always choose the least invasive option.

Dave Chase: 13:45

And in that opioid crisis You know related book, lower back pain was an example that I gave because it's a second most common reason people go to the doctor after cold and flu, and we absolutely botched it. You know the number one driver of Disability in America is lower back pain. The number one driver of opioid prescriptions is lower back pain. Even though there's no evidence that that's the most effective treatment, it's high margin. It's a way to short-term mask pain while the underlying problem persists. Again, there's plenty of evidence that the most effective way of treating lower back pain Well, first of all try to prevent it. You can work on that. But once it's happened, you know PT, things like that, and so there's catastrophic levels of prescriptions and Surgeries that are inappropriate even to this day. After all the awareness, we're about four or five percent of the the world's population in the US and we prescribe 80% of the opioids even today.

Dave Chase: 14:54

Yet when you find, like some of the early employers I found Not. When I was thinking about the opioid crisis, i went back to them and go gosh, you know, you've been doing this for 30 years. In the case of Rosen hotels, you've cumulatively saved over 500 million dollars. It's not some flash in the pan. What are you doing around opioids? You know what are your, your prescription levels, and I like well, well, we don't know, we'll go look. And they never put in an anti opioid program. They just had great primary care. Well, turns out, they had prescription levels at 1, 6th of the level of a typical us employer. And Again, they weren't trying to stop opioids, they were just following the evidence. And They have people with jobs that are very physically demanding. So, if anything, they should have above average. You know issues around lower back pain with maids and maintenance workers and so on. So If you just dig hard enough, you find the people who crack the code. And then, really, the puzzle is how do you get the word out? You know, i kind of go from you know archaeologists to Johnny Appleseed, right, i just want to spread the word like I didn't climb to the top of some mountain and cross my legs and dream this stuff up. It's out there and You know, when I wrote that book I had to dig really hard to find Proven examples.

Dave Chase: 16:15

Today, you know, kind of the sequel to the CEO's guide was a book we published about a year ago Called health plan heroes the CEOs who restored the American dream. And we had to stop at a hundred pages of case studies. We had an every imaginable industry, geography, large and small, employers, public and private sector and in rural, urban settings. Of course it's not, you know, the majority of the market yet. But it's just, it's out there and and there's Nothing better than word of mouth to overcome that, that obstacle, because it does sound too good to be true. You know, i've the subtitle the CEO's guide almost sounds like a goofy Infomercial. You know how to deliver world-class health care at half the cost? Well, people are actually doing it and you can see it with your own eyes.

David Saltzman: 17:02

Well, i mean, i guess, kind of rhetorical or semi-rhetorical question, because you and I and all of our listeners know the answer is if that's the case, why haven't the major carriers that we all know, why haven't they adopted this stuff? And we all know that it's because the incentives are completely and totally misaligned. So if the goal is to get more primary care, whether it's direct primary care or some other mode we haven't thought of and, as you know, dpc isn't new The American Academy of, i think, pediatricians thought of a medical home model years before there were even HMOs. It just didn't go any place. So they understood that care continuum and what values it could reap. Are we going to be stuck at the point of marrying direct primary care to a self-funded plan and some of the direct pay options that I'm starting to hear about to get people to understand that maybe using their insurance plan all the time isn't the best option for them?

Dave Chase: 18:00

Yeah, I mean, one of the chapters that I wrote in the CEO's guide to restoring the American Dream was you're in the healthcare business whether you like it or not, and I will and kind of the corollary is you're already the insurer, even in a so-called fully insured plan. I guarantee you, if you have a bad claims year, they're going to claw back that money. So you're already carrying the risk. And so what are you going to do about it? And we've got decades of evidence, as you said in that rhetorical question, the status quo has no interest in solving this problem. They're doing well.

Dave Chase: 18:42

Since the ACA passed, the big carriers collectively have their market cap has increased nearly a trillion dollars. They have done really well, and so it's always the case that a new model has to replace the old model. It's not let's try to fix around the edges this catastrophically broken system. I mean it's broken if you want great outcomes. It's not broken if you want great financial returns from a Wall Street perspective And we didn't get smartphones by putting icon stickers on rotary phones You have to do a reset.

David Saltzman: 19:28

Yeah, it's interesting. We talked about this offline, but you and I hear all the time well, healthcare in America is broken. And I smile because it's not broken, it's working perfectly. It just wasn't designed to work perfectly for patients. It was designed to work perfectly for almost all of the other interests that send your plan, whatever kind of plan it is a bill. So where do we go from here? What do you see in the near term happening? And then we'll spend our last few minutes talking about what do you see, maybe a little bit longer term, because your vantage point is a little bit different than most folks.

Dave Chase: 20:03

Yeah, i mean they kind of relate to each other in that, as we were talking about with lead, there's certain locales that are early adopters And so it's already happening And what we really believe in or see in an action. We've got some communities, like in the Midwest, where it's not necessarily the major metro but you draw a circle 45 minutes to 90 minutes outside of major metros. That's one of the areas that's quite hot And within those locales you find that there's this kind of rule of threes in fact even a little better than this where a given advisor that we accredited comes up to speed, cuts their teeth, maybe do three of these three employer plans. Nobody notices. But you're building knowledge, capacity, track record and understanding the local landscape in this context And then you get three squared nine right. Some of the providers are actually. They're not put off by this card that doesn't have some expensive fancy national logo. They love it. They've done some direct contract, they pay timely, we can solve problems for them. You're getting a case study or two. Some little buzz is generating And then the real tipping point is three cubed 27.

Dave Chase: 21:24

In fact, we found it's even before that where you can like any industry if you want to free status quo. You use fear, uncertainty and doubt, and the industry is very good at doing that to free status quo. It just stops working when people can see it with their own eyes And when what we see there in places like that is. It often starts with the private sector And that case you had a manufacturer, chemical company, services company, and then the county did it, and then the school district did it, and then the city did it And, what's interesting, a lot of the people in the private sector tend to think of themselves as more nimble and sharper than the public sector and they're like, wait a second. The school district did this And we've had examples where in less than a year They'd saved more money than the entire school of you that had failed in a vote, and It really saved the schools, and so that really generates a word of mouth. And so that's what's happening today. But I think it also sets the stage for what happens in the future, that that particular Model and we really believe in not singular things becoming Massive like what venture capital likes, it's more of replicating and adapting, so that that particular model with that particular benefits advisor has already spawned four new Geographies after that because people heard about it, you know, maybe they were on one of our, you know, it came to one of our, you know, annual gatherings and heard about, like man, we want some of that And we're.

Dave Chase: 23:03

The other thing that's exciting That's, you know, that's emerging is, even though there's been a lot of consolidation on the health care delivery side, There still are independent, you know, surgery centers. You know we talked about drug primary care And if they're still independent, they're independent for a reason, right, they want, they don't want to be so, you know, sold out to a giant health system or private equity and We are really aligned with them. And what's interesting, there is their employers too, right, you know, you know medical group or employers, and so it's a really powerful story to then go out and say, wouldn't you like the health plan? you know, mr, mrs, you know business person or mayor or city manager have the same health plan that your doctor and their family gets. That's kind of what we see now emerging and sort of it's still early days, so there's a lot of, you know, replication of that to have, you know, fully reach everybody in the country. But that's really what's what's happening now.

David Saltzman: 24:06

Well, you know it's. The pioneers are always the ones with the arrows stuck in them. I remember talking to my friend Keith Smith years ago And we've just interviewed Keith again to kind of get an update. Yeah and boy, when he started the Oklahoma Surgery Center He had more arrows than he could count and he took flak from almost every constituency. Yeah, yet he's still there and his organization, the Free Market Medical Association, grew. I think their first annual meeting was like in Keith's Parlor or someplace, Yeah, and now they've got hundreds and thousands of people. So it is spreading, but it's taking its own sweet time to do it. I hope you know that you'll come back in another couple of years and talk to us again about kind of what you've seen and And where you think the industry is going. But we really appreciate your insights and thank you so much for spending some time Talking.

Dave Chase: 24:54

Yeah it's been great to chat with you and, and you know, i think by the time we chat next time, the generational shift that's also catalyzed and that will be even more In the mainstream. You know, the, the millennials and Gen Z are really in decision-making roles now And that's also having a big impact into the future.

David Saltzman: 25:14

Yeah, it's an awesome time to be in the business. There's so much change coming that I just I'm trying to try to live better so I can get to stay around and see. It Sounds like a good anyway, dave. Chase create, creator and Co-founder of health. Rosetta Dave, thanks again for your time.

Dave Chase: 25:32

Well, thanks for having me on, really appreciate it.

Host: 25:38

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