[00:00:01.290] Announcer: Welcome to APG on American Healthcare, the official podcast of America’s Physician Groups where we discuss current issues in the healthcare value movement. APG members are at the forefront of national healthcare reform, practicing in risk-based prospective payment and other population-based payment models, the very models described by federal legislation for the entire nation. And now, for an inspiring and educational look at the transformation of America’s healthcare delivery system, here’s your host, APG President and CEO Don Crane.
[00:00:36.690] Don Crane: My guest today is Dr. John Jenrette, the CEO of CedarsSinai Medical Group and the physician network associated with it. Since this is our first podcast, I was particularly interested in securing a real expert, a highly articulate, seasoned, intelligent CEO of one of our member groups who could address the issues our members are facing in the face of the pandemic COVID-19 pandemic. But then, perhaps more importantly, to talk about his and their adaptations to these challenges.
[00:01:13.680] And so with that, with all of that, I got that and more from my friend John
Jenerette here, as you’ll soon hear. There has been recently a number—perhaps a ‘flurry’ is the better word—of reports based on studies addressing the question as to whether the acquisition of physician groups by hospitals is a good thing or not. Frankly, the results have been mixed. As you look at some of these reports, you see that there are indeed examples of excellent examples of efficiency and excellence with some of these combinations.
[00:01:51.000] But quite frankly, some of these combinations have increased costs without improving quality.
[00:01:57.810] I didn’t intentionally seek to probe that particular subject in this podcast, but the question just seemed to reveal itself. And having listened to it, I now challenge you to ask the question, the following question as you listened to John talk, and that is this: Has the population, the community surrounding Cedars-Sinai, been better served or less well served by reason of the integration of John’s medical group with the hospital?
[00:02:29.280] That’s the question. And so with that, let’s get started. John, as I welcome you on to the show why don’t you go ahead and tell us a bit about your journey, what may have inspired you, and how it is you’ve gotten to where you are?
[00:02:44.690] Dr. Jenrette: Great, great. Well, Don, first of all, it’s a pleasure to talk today with you. It’s a great opportunity to just kind of share ideas and what’s happening across Cedars-Sinai as well as our state, and even nationally. My background is as a physician in family medicine and geriatrics, and medicine as I went into as a career and taking care of patients, which I actually took care of patients for 18 years. It was interesting, my sweet spot still seemed to be around leadership and working in organizations.
[00:03:18.650] So even as chief resident and then department chair, when I was running a residency back in Ohio, it just was a role I kind of stepped into and got some additional education around leadership and organizational development. And then I had a wonderful opportunity to move out to San Diego from Ohio and begin a new family medicine residency program for Sharp HealthCare. So, again, as a program director, it just was really inspiring. I was really taken by the residents and the medical students and seeing young doctors develop and really interested and brought in the new faculty and developed a new curriculum, which is really quite innovative and a lot around managed care at the time.
[00:04:05.180] And then, you know, I think life takes a path that sometimes you can’t predict. I talk with young people and say, if you can tell me clearly where you’re going to be in five and 10 years, you’re probably not going to strike that particular note and you may find yourself in a different direction. So, I got very interested then in the business of medicine and transitioned into when California, of course, with the delegated model, Don, as you know, a very different place in medicine back in the 90s here in California.
[00:04:40.700] So I got very interested in managed care and got more involved, became chief medical officer of the Sharp Community Medical Group in San Diego and eventually became CEO of that company with over a thousand physicians, you know, throughout San Diego. And as you said, APG has offered a wonderful opportunity to continue to grow as well. And being chairman of the board for the two years, doing some work with Bill Barcelona up in Sacramento and then some work with you and others in Washington, was really a highlight of my career.
[00:05:14.030] So I, you know, I feel very lucky and fortunate. Cedars-Sinai became a larger playing field, as you described. The medical network is, you know, the foundation model here in California, also the wraparound IPA. And then in addition, we do the services and contracting and billing and so forth for the huge faculty that’s at CedarsSinai. So the academic division. So even when we’re developing our networks and our products, we’re looking at well over a thousand physicians that the network is working with developing relationships, product design, taking care of patients together.
[00:05:55.700] So that’s kind of kind of the journey in the history that I’ve had.
[00:05:59.960] Don Crane: Pretty, pretty darn impressive, I must say, John. Pretty amazing. So good to hear that. And then congratulations basically as well.
[00:06:09.350] So here we are in August 2020 and we’re, what is it, six months into the COVID pandemic? So we’re going to be talking COVID during this conversation, John, hope that’s OK with you.
[00:06:22.490] So running Cedars-Sinai Medical Network and medical group, all of a sudden, kaboom, February happens and there’s these weird dark clouds looming up in Washington state with a case or two. And it isn’t long before we’re into March and there’s shutdowns and stay-at-home orders, et cetera, et cetera. Tell me how you guys reacted generally, John. How did you adapt? And then more specifically, I’m sure we’re going to be talking about telehealth. But tell me how you guys react, what you saw. Were you ready? How do you react? How’s it going? Let me hear you talk to that. [00:06:54.320] Dr. Jenrette: Absolutely, I do have to tell kind of a funny story in regards to that. So I have an annual big—what we call an all-hands—meeting, where we bring together two thousand of our network staff physicians—everyone. We actually close the offices for a half day to do this, kind of bringing the organization together.
[00:07:21.650] So on March 3rd and 4th, we had a meeting of two thousand people and we were watching COVID, you know, as it was spreading up in Seattle. And I think you’re getting some early reports on the East Coast. And so, boom, I remember the dates, the third, the fourth and then the ninth, everything shut down. So I might be the organization who has had the largest gathering pre-COVID, and maybe the largest gathering we’re ever going to see for a long time.
[00:07:51.710] So it’s just kind of interesting how it played out. But to your question, yeah, absolutely. I mean, as the stay-at-home orders and the state and local guidelines came out from L.A. County, you know, we were watching very closely and we jumped in, as Cedars-Sinai does, to really focus on the work in front of us. I think like many organizations, you know, some of the first response was how do we keep people safe?
[00:08:19.850] And so there was a request, you know, to really close down the exposure. So it happened in a couple of ways at the medical center as we were gearing up. And we can talk a little bit about what that journey was like. All the elective and the surgeries were canceled, I think, as most organizations did, in order to prepare for a surge on the outpatient side, we immediately closed down our ambulatory surgery centers. And we also what we have is over 80-some locations throughout L.A. We drop that down to 22 within one week.
[00:08:57.175] Don Crane: Wow. Wow.
[00:08:59.485] Dr. Jenrette: Yeah. And basically, you know, we’re having the necessary visits. We had the physicians—we’ll talk more about telehealth—but we had the physicians working from home with telephone calls and telehealth and video visits to stay in touch with their patients.
[00:09:16.130] But it was a remarkable effort by an amazing team. You know, the month of March was nonstop, you know, getting together as a group. How are we going to do things? What does it mean? What do we do with staffing? What are the setting people up for telecommuting at home, keeping our case managers engaged with our patients?
[00:09:38.210] So all of the move to how we communicated all the face-to-face had to be changed. It was a monumental undertaking. The other piece I think many dealt with, and I think you’re familiar with, Don, is, you know, there was a real issue with personal protective equipment, PPE.
[00:10:00.020] And it was a big driver of what we could do, because we were making sure that we had it at the acute care facility right in our intensive care units, in admissions and EDs. And so as an organization, we were coming together on a daily basis, you know, looking at our supply chains, reviewing what could we allocate and how would we be able to protect our patients and our team members and our physicians with the appropriate PPE so that in itself was a big issue.
[00:10:30.540] And to that point, an interesting piece was even the disinfectants, you know, running out of Sani wipes and other types of things, so that we were starting to mix our own buckets of Virex and creating our own solutions. We had some of our team members in our accelerator program beginning to produce face masks with, you know, some of their equipment and what was available. So it was definitely an all-hands-ondeck, and other work that would normally be the kind of the routine was halted, you know, while we geared up.
[00:11:07.680] Don Crane: So you closed all the sites and I guess in the process concentrated basically the work that remained to be done into the remaining, whatever, 20 sites, I think you said, roughly. Have you returned to any semblance of normalcy now reopening any of those sites? Are you still in that kind of ‘siege mode’?
[00:11:28.860] Dr. Jenrette: No, we began again actually to reopen, probably going back about six weeks ago, six or eight weeks ago, once we understood a bit more of what was going to happen with surge. You know, so we were kind of seeing the number of cases we were seeing in our urgent care emergency departments, the number of admissions, the number of ICU and ventilator cases. And we started to get a comfort level. And the county, again, kind of following guidelines, was really beginning to open the door.
[00:11:59.280] Let’s get those patients back in that need to be seen. So currently we’re running probably 90 percent of where we were pre-COVID. We’ve opened the majority of our sites. But it also gave us an opportunity to actually consolidate some areas that we hadn’t been able to before. So now we were able to consolidate some of the cardiology offices where we had excessive space or some of the other medical specialties, a couple of the surgical specialties. So we’ve actually found a bit of efficiency in being able to consolidate space.
[00:12:34.020] Don Crane: So talk to me about telehealth and televisits. I mean, that’s, I think, the biggest single thing you hear as you talk to APG members. They, almost overnight, you know, eliminated a huge percentage of their in-person visits or they were eliminated on their own because the patients weren’t coming in and they went to telehealth in a big way. So tell me what that experience is like and what it looks like and what you did.
[00:13:00.150] Dr. Jenrette: Yeah, it’s really an interesting kind of journey. So immediately when things were closed down, we asked the physicians and the staff to begin to reach out to patients that were scheduled and also taking calls kind of on acute visits. So if you look our statistics, the first week or two, the face-to-face visits went to telephonic overnight and physicians and staff were calling out to make sure patients were OK, making sure those that did need to come in still would come in and trying to manage things.
[00:13:35.130] Within two weeks, the video visits were up and running. We’d already had some experience with that. We had video visit on-demand, so we had already launched the technology in some areas, which was very fortunate.
[00:13:49.320] Don Crane: Is that the name of the vendor, John, that you just mentioned?
[00:13:51.682] Dr. Jenrette: No, that’s actually our own. So we call it a video-ondemand at Cedars-Sinai and it had just been open to all patients who had ever accessed Cedars-Sinai. And so it was a service that was available for acute and questions. And it was so kind of ironic…we had just launched that two weeks before. And so we had a whole cohort of primaries and NP’s that had been using the technology.
[00:14:19:481] Don Crane: Prior to the shutdown? Prior to COVID? Oh my gosh, very good.
[00:14:18.870] Dr. Jenrette: Yeah, prior to the shutdown. That had been a strategy of ours for a while, that was to be able to open up video visits both for our established patients and then for the larger population. So we had been on that journey already. So the technology was there. Our IT teams were absolutely amazing. All the resources were converted to what both the hospital and the ambulatory settings needed in the way of technology.
[00:14:51.330] So there were boots on the ground immediately training physicians, there were teaching aids. All of that happened within two weeks of the close-down. And then you could see our data change. Suddenly, you know, the telephone visits were dropping to about 10 percent and the video visits were picking up to like 80 percent of the work that we were doing. And then there were still a few face-to-face visits. The physicians were, you know, again trained, working from home.
[00:15:21.340] The staff were trained, the NPs.
[00:15:23.980] It was an amazing effort and quite successful.
[00:15:29.260] Don Crane: Sounds like you didn’t miss a beat. Do you think that you didn’t miss a beat? Or in fact, perhaps the, oh, let’s just say, the health profile of your population declined a bit or did it not?
[00:15:44.560] Dr. Jenrette: That’s a great question, Don. You know, we’ve been evaluating that as we look at it. And to share with you, I don’t think we missed a beat in taking care of our patients, you know, for the needs that they might have. And many of the doctors were actually reaching out. They were actually grooming and looking at their schedules. And if they hadn’t seen patients, they were making a call to check in on them, which was amazing.
[00:16:10.930] You know, the feedback that we got from patients that their physician was actually calling, so I don’t think we missed a beat there. Where we did a miss a beat and our data is starting to show, it might be interesting to others, they may be experiencing the same thing. We had a lot of systems set up on our population health and our coordinated care efforts of how we close gaps in care, you know, our Paps and our colonoscopy and a breast cancer screening, our diabetes checks, et cetera, that dropped off markedly.
[00:16:40.660] And again, because of the all-hands-on-deck trying to make sure we’re dealing with the acute nature of things, our normal processes, our standard work, because our standard work, we do it at the time the patient comes in from the PSR to the MA to the doctor closing gaps throughout the visit, that stopped. So we were running about 80 percent gap closure prior to COVID. We just got our data back at the end of June. We’re probably at about thirty-five or 40 percent.
[00:17:14.170] So it dropped off. It dropped off and our numbers show that it dropped off. And so we’re working towards catching up with that. One interesting thing that some of our members and others might find interesting as we redesign our video visits going forward—and we can talk about how we’re doing that in the structure, if you’d like— we’re actually trying to design the video visits to continue gap closures. So we’re looking at how can we do video-visit blood pressure readings, you know, how can we do videovisit chronic care and maybe have a procedure or diagnostic center where patients can then go in for their blood work and EKG or anything else that they might need.
[00:17:58.720] So we’re redesigning our work around video visits as we continue.
[00:18:05.110] Don Crane: So give me an estimate, as of today, what percentage of your encounters are video versus in-person?
[00:18:11.350] Dr. Jenrette: Yeah, so I think right now it’s about twenty percent video visits. And it does vary by specialty area and we are in the middle of a lean management project. It’s again, amazing effort developing critical pathways for what continues in video visits. So every specialty is in the middle, right now, of developing their new standard templates and determining what kind of visits can be done by video visit. And so they’re designing it, you know, intentionally.
[00:18:45.190] So, you know, is surgery going to have 10 percent video visits because that’s what we think the right spot is? Is primary care going to be twenty-five percent video visits? We’re looking at every specialty area and designing it and also designing then how it works, how it gets set up, how it gets launched. So we’re looking at how do we use our staff. And so rather than a one-on-one, we’re thinking about like a central resource pool that actually sets up, gets the patient lined up in queue and sends the video visit off to the doctors that’s on their schedules. So we’re digging in really deep. Yeah, well, that’s a part of our future.
[00:19:24.843] Don Crane: Yeah. You’ve got targets, I’m hearing you say, both by specialty and you know, you’ve got what you think is the optimum mix of in-person versus televisit. Where do you think…no…here we’re getting into some prognostication job. Five years out, let’s say, you know, the COVID pandemic is in our rearview mirror.
Where do you think we’ll be in terms—where do you think you will be—in terms of your mix of in-person versus still televisits at that time? More, less, same? You going to hit your targets or what?
[00:19:58.7350] Dr. Jenrette: I think we will. I mean, we’re being very intentional about this and we want to design for the long-term future. I mean, I’ve had some conversations—obviously we have some internal conversations—gee, are we designing for something that could be problematic in the future based on reimbursement and how that goes both for public and private payers? But we’re looking at this for our entire population.
[00:20:25.640] So this isn’t just our capitated managed care. We’re looking if we redesign, it’s going to be for all populations. I think the way we’re going about it in four or five years, you’re going to see the same percentage. It may go up and down as they refine it and they look at the quality and, gee, which ones really needed to be face-toface or which ones can we go. But we’re not letting it go. To me, it’s a missed opportunity. If you’re not digging in right now, my prediction would be that a year from now, a year and a half, when people really felt comfortable with face-to-face visits, it would start to unwind itself and people would go back to that kind of the same patterns. So we’re being very intent about the direction.
[00:21:15.290] Don Crane: Yeah, very good. And you already answered my question in terms of any on the sort of care management side, any differential between HMO and PPO. And here you say there’s none. But that then leads me to ask about basically the financial impact, so, as you well know, and many in the audience do, there’s been a lot made of the problems associated with primary, particularly independent primary care across the country. The visits have dried up and with it, the revenue, we’re talking feefor-service now.
[00:21:46.700] So basically fee-for-service is suffering hugely, failing mightily, really, I think is the way to characterize it while prospectively-paid groups, those that are capitated or another kind of, you know, prospective payment models are doing, you know, relatively—emphasis on the word ‘relatively’—well. So talk to us about your experience on this on that very subject, John.
[00:22:13.370] Dr. Jenrette: Yeah, no, it’s great…it’s a great question and one that everybody is deliberating on currently. So, looking through the Cedars-Sinai view, again, we do have capitated, you know, HMO, MA, Medicare Advantage populations, and we also have a large portion still at Cedars that are fee-for-service. To give you some additional numbers, so currently with back to about 90 to 95 percent of our previous volume, if you just counted visits, including video and some telephonic, we’re getting back there on a revenue stream because of the fee-for-service.
[00:22:52.220] We’re running at about 70 percent. So that’s the gap. And it is that telehealth reimbursement. There is also some additional services that come from faceto-face visits. And again, we’re all grappling with what’s the right thing, the right quality, the right frequency. But, you know, when you’re in the office, you have that opportunity for that EKG or that additional study that needs to be done. So we have a gap both in the level of coding, so the E&M codes are different, that curve has shifted more to level twos and threes instead of threes and fours. And then we have the gap in some of the ancillary services, so there is that reimbursement. We’re trying to design—one of our critical pathways is our finance department—keeping track of what the reimbursement rates are, what’s happening, and trying to design “Can we do six telehealth visits as an example in an hour versus two to three patient visits”?
[00:23:53.420] And does that start to pencil out for us? You know, obviously in surgical post-op is if you can do it by video visit, so much the better, you know, because of your global payment. And as you said in the capitated business, yes, our revenue stream continued to stay strong for that portion.
[00:24:11.480] But we’re maybe taking a little bit of a risk as we design it. But we think it’s the right thing. It’s the right long-term thing. And we think it’s the right value proposition for the consumer, our patients, because we think that people will expect this now. And we want to be kind of in the front of making sure that we offer it. So a little bit of risk here, you know, as to how that will impact our reimbursement.
[00:24:40.820] Watching really closely, I really appreciate, you know, APG advocacy, you know, both in Washington and with our payor relationships just about appropriate reimbursement because I think it’s the right thing to do.
[00:24:53.600] Don Crane: Well, I’ll tell you, it is interesting. As you know, there’s the debate going on in Congress now about parity. Right? So we’re talking Medicare fee schedule…are, you know, televisits going to be paid at the same rate as an in-person visit, right, and that’s not yet been determined. So as I ponder that picture and I, again, think about capitated patients and groups and so forth versus fee-for-service, I ask you a hypothetical.
[00:25:19.140] Let’s just suppose that this is not so much a question of as to what Cedars and what you will do, but what the physicians and what America will do. What if we, John, have a payment program both, I guess, private payers, but particularly Medicare?
[00:25:36.060] And let’s say telehealth visits are paid at half of what in-person visits are paid in a fee-for-service world.
[00:25:45.990] So how do you think that might affect the rate of televisits, capitated versus fee-for-service? Might it shrink the amount of televisits going on in PPO fee-forservice while it remains constant in a capitated world where, you know, we don’t care in a way when you’re not getting paid per visit, you’re getting paid per population. How do you see that playing out?
[00:26:12.850] Dr. Jenrette: Yeah, Don, it’s a great question. Again, you know, health care is local, we always know that, so it does depend upon the payment models that each organization is under. So obviously an organization that has 90 percent under capitation is probably going to manage it slightly differently than an organization that might still be half or three quarters fee-for-service.
[00:26:35.310] It’s a little bit to the point of trying to sort out your time and revenue. I mentioned, you know, can you do six video visits and so will that half-payment rate you talk about cover, you know, kind of the cost of doing business.
[00:26:53.680] I do think it’s a little bit disingenuous—and I’ll just be out there on this— others may not agree with me—when we as organizations are saying it should be the exact payment rate because there’s a different resource spend. It’s very different, you know, for my space and my staff and my rooming and kind of what it means to a faceto-face visit versus the amount of resource I use for a telehealth video visit. So I think we have to come to kind of an agreement—both the payers, CMS and the provider organizations—to say, what is that right sweet spot. And my hopes are that, again, the payers and CMS will value these and want to continue to support them. It is one of my concerns.
[00:27:43.470] Don Crane: So are your physicians, some of them doing these televisits from home or are they in the office?
[00:27:50.760] Dr. Jenrette: It’s a combination. It is a combination now. Originally, the majority of them were done from home, though we did allow physicians to come in appropriately socially distanced that would want to work. But I’m telling you, it was like a skeleton, right? There’s so few people in the building, but they wanted to work from the office and where we had those places set up to do video visits. But the majority were being done from home.
[00:28:15.570] We’re now looking at as people are coming back actually doing the video visits from the office. But I think we need to continue to allow physicians to do them from home. There’s so many use cases, Don. So there’s a part of the video visits that fit into a schedule and so do I want them to do a half a day of face-to-face patient care and a half a day of video visits? Do I want them to do those video visits blocked together from home?
[00:28:46.710] Do I want them to be in the office? Are they peppered throughout their day? So one moment they’re face-to-face, the next they’re doing a video visit is all to be determined. But I also…I want the video visits…because we’re already starting this… extended our hours. And so if physicians are doing, you know, early mornings and evenings and it’s going to be video visits, I want them to have the comfort of working from home and not having to sit in the office.
[00:29:14.730] So we need to do both.
[00:29:16.530] Don Crane: So you sound, John, you’ve done such a good job preparing basically for the moment, but also for the future, which causes me to want to ask you some ‘pie in the sky’ questions about the future.
[00:29:29.220] I don’t know how much better your crystal ball is than mine, but, you know, as you look at the landscape right now, vaccines in development, maybe even we’ll look also at the success or failure of our current sort of suppression efforts.
[00:29:46.890] I mean, what do you see that gives you optimism?
[00:29:51.090] And then my follow-up question—so you know it’s coming— is what you see that gives you, say, pessimism because you’re operating a business that’s going to make a lot of difference whether this is a…you know, the vaccine’ a knockout punch and this thing’s gone in six months and we can all have a party, but it’s also around for four years simmering or whatever, that’s going to affect how you run your operation.
[00:30:13.200] So predict the future for me, John…tell me what you like, what you’re looking at that gives you some optimism…what gives you pessimism? [00:30:20.030] Dr. Jenrette: OK, great. Yeah, Don, I believe…again, crystal ball, right?… we’ll see if our crystal ball predictions turn out to be true.
[00:30:30.110] I think in early twenty-one, we’re going to see some successful vaccinations hit the market. I think there’s going to be a time frame, obviously, to get enough people immunized, you know, to make a difference. So if I looked at our current state, I see it probably the next year and a half, so I’m predicting well into twenty-one. By the fall of twenty-one, I’m predicting that we’ll start to see some loosening up and people feeling comfortable coming back together.
[00:31:08.030] Our vaccination rates will be up. The question that many are asking right now across the groups, across the country, maybe you’re hearing some of it, too: Is this our new standard of care? So even if, you know, we have the vaccine for COVID, are we going to continue kind of this same safety precautions, the same PPE for people coming into the office visits, the social distancing? I think given an optimistic view that we’ve—because I’ve just now said that we’ve got COVID under control—I think some of those things will begin to drop away, God forbid another, you know, new virus, you know, that comes into the world or the community.
[00:31:57.290] So I think we’ll start loosening up again by the end of twenty-one, and I’m predicting that twenty-two will be business as usual but business redesign going forward. What gives me pause, of course, is if all those predictions aren’t true and we’re living in a COVID world for the next two to three years, it’s going to be just what we’re seeing right now in the way we take care of patients and how we manage our offices. The other thing that I think could happen, so let’s say we do by twenty-two we’re sitting in a good place and then we get another international warning of something new happening in another part of the world, I predict that we will be far better prepared and that we will jump in. I think our public health service, our national health service, is going to change markedly and we’ll be looking at it…I don’t think you’re going to find the United States with this world view of us at this point being the same in the future. I don’t think we’ll let that happen.
[00:33:02.270] Don Crane: No, no, I agree completely. I mean, how educational this has been and is currently being painful education, I can’t imagine we wouldn’t be better prepared in the future. And, you know, I mean, all of us I mean, who among us, speaking for myself, ever even heard the words ‘herd immunity’, you know, six months ago, right? Now, we all are chatting about herd immunity and the vaccine and how many…what percentage of skeptics won’t…
[00:33:29.900] You know, we’re all prognosticating because, you know, just as you run your business, we’re trying to figure out what to do with our conferences in the future and so forth, so we’re definitely all in it together.
[00:33:44.690] So, John, any further thoughts, questions of me? Anything I can answer?
[00:33:50.720] Dr. Jenrette: Well, I’m just curious, I mean, you know, the membership now for APG is broad and vast and national. And, you know, with your ear to the ground of what’s happening across the country, I just was curious if there’s some innovation, some things happening around COVID in our delivery model going forward that you might share or that we could talk a bit about.
[00:34:14.510] Don Crane: So I think it has basically kind of put our model on steroids is the answer. I mean, you know, organized groups, particularly those that are prospectively paid, have reacted the fastest and the best across the country. We’ve seen that everywhere. And that observation has spawned a conversation about, gee, we need to really accelerate this movement to value, to risk-based groups, to capitation. And so I’d say, John, that, you know, tragic as all of this is, if there is a silver lining, at least for APG, it’s really, really amplified and illuminated the accuracy of our…
[00:34:58.630] …advocacy that our model is frankly superior. PPO fee-for-service is failing fast all around us, it seems to be in a continuing basis, is into the question kind of we’re asking ourselves, privately, you know, is this the disruptive moment that is really going to cause, you know, US Congress and the rest of the country basically, to, you know, undertake big changes like a big movement away from fee-for-service and a big move in moving into values.
[00:35:35.050] So, you know, in a sense, while we’re beyond sad and I don’t even know what words to use about the status of our country, we’re, you know, can’t help but be excited at the prospects of improving our American health care system. So that’s part of the answer to the question. I think the other part, John, is they’re all…everybody…APG members…it’s a little different story from place to place because, you know, health care is regional, but it’s remarkably similar to yours.
[00:36:07.080] I mean, groups with smart CEOs and strong staffs are jumped to the fore and are adapting fast and that’s really the story of it. It’s very, very heartening, frankly.
[00:36:18.670] Dr. Jenrette: Yeah. Yeah, I agree that I think there’s huge opportunities. I mean, the ones that I watch closely and they talk about is, you know, our large you know, again, our public like CMS and perhaps our state exchanges and how those products get set up. I do get curious and will keep my ear to the ground on how our commercial payers will look at the impact of COVID and how, or if, they will continue to advance risk-based contracts, how they’re viewing the world will be kind of interesting to see.
[00:37:00.520] Yeah. And I just…I don’t I don’t think they’ve declared yet, to be honest. And I also wonder, Don, about the change in employment. And I still think we have a very long financial journey and those that are losing work. And eventually I think we will see all organizations see a decline in, quote, membership or patients because of the loss of COBRA and insurance and so forth.
[00:37:28.900] It would be interesting, too, you remember, we—you and I have been at this way too long—and we remember the ups and downs that occurred dependent on the economy as to what employers wanted to purchase, right? And so the HMO, you know, became more popular at certain times. So I just wonder, again, with the cost shift that goes to patients under the PPO products again, will the commercial payers look for more complete coverage?
[00:37:55.000] That could change the landscape, too, I think.
[00:37:57.430] Don Crane: Oh, indeed it could, and the costs continue to rise. Yes, I think we actuarially know what the impact of COVID is going to be in the future. So, you know, we continue to read about, you know, kind of residual effects. I think there was a study out of Spain here recently where something like half of those that had recovered from COVID still experienced an array of problems, most…many of them neurological. So, I mean, are we looking at, OK, so maybe we get to herd immunity and, you know, we’re sort of happy with that.
[00:38:32.830] But what if we have deep residual problems in a sicker population? How is that going to affect costs, capitation, you know, actuarial rates and so forth? I think the jury is out on a lot of this, no question.
[00:38:49.020] Dr. Jenrette: Right. Right, right. I agree. I agree. There’s still a lot of unknown. It’s going to be an interesting next couple of years, isn’t it?
[00:38:59.620] Don Crane: It will be…fasten your seatbelt. Interesting. I hope, good. I hope, good.
[00:39:01.330] I think with the good work you’re doing, John, this is so impressive to listen to you talk, we could do it for hours. They’re waving at me over in the corner saying that we’re running out of tape. We’re using tape?
[00:39:11.920] I think digital, I think. So, at last we must bring it to an end, I think, with John. Thank you so, so much. Really appreciate it. We’ll do it again soon and look forward to seeing you and talking with you.
[00:39:23.033] Dr. Jenrette: Absolutely. My pleasure. And again, thanks for the opportunity, Don. Will definitely be in constant communication. Thanks so much.
[00:39:31.346] Don Crane: And to our audience and members, thank you very much for tuning in and supporting us. Please stay tuned, because as you know, this is the first in a series of podcasts we are doing and so there will be more coming your way shortly. So with that, I say thank you very much and please stay well.
[00:39:49.360] Announcer: We invite you to continue the conversation at the APG Virtual Colloquium, November 17th through 19th. Visit APG.org for more information.
Thanks for listening to APG on American Healthcare with your host, APG president and CEO Don Crane. For more information about APG and transcripts of this show, visit the APG website at APG.org.