Episode Transcript
[00:00:02] Speaker A: Welcome to Align for Impact. I'm your host, Matthew Naylor. I started this podcast because healthcare and leadership both come down to the same thing. Alignment. When people, purpose and performance connect, real impact happens.
On this show, we'll talk with entrepreneurs, brokers, and change makers who are challenging what is broken in healthcare and in business and find new ways to make a difference for companies, communities, and the people they serve.
Rich, welcome to the show. It's a pleasure to have you here. We've had an amazing relationship with you and Welldyne for many, many, many years. This show is about alignment and impact, and Welldyne does an amazing job of alignment and impact. It's about being transparent. You, as a pbm, are really trying to serve the community and customers properly where you're lowering costs, producing better outcomes, and creating better experiences for your members. I'm excited about having this conversation with you today. Well, Rich, where I really would love to start is just to get to know you. How did you start your career in the insurance business?
[00:01:12] Speaker B: Yeah, it's. You don't start in PBM somehow.
So a long time ago, I was actually a social worker. So I was a county social worker.
[00:01:21] Speaker A: I didn't know this.
[00:01:22] Speaker B: Yeah, yeah, county social worker. And I had a list of patients that I was responsible for, all of whom required medication, therapy. And so one of the biggest challenges I had as a social worker was keeping them adherent to their medication. They'd feel better and they'd go off their meds, and then they would have episodes and we would end up in the hospital. And so I spent an awful lot of my time trying to figure out whether my people were being adherent.
So I had an ally, and that ally was a county pharmacist who worked for one of the local hospitals. And so this person and I developed a brown bag program for these patients. And so I'd bring them in, they'd bring in their bags of medication, we'd dump them on the table, and the pharmacist would go through them and say, and realize, oh, you've got two medications that are doing the same thing. We have these medications that are contraindicated. You don't need to take those. And we would leave with this relatively clean list of medications that were appropriate for the patient to take and where they needed to have refills done. We talked to a doctor live and try to get that taken care of. But my first exposure to pharmacy management was in these brown bag sessions with pharmacists that were delivering real value.
So fast forward, I End up in managed care. I was recruited to join a very large insurance company and do behavioral health work building.
[00:02:44] Speaker A: Which one, Rich?
[00:02:45] Speaker B: UnitedHealthcare.
[00:02:47] Speaker A: They're not the bad guys, everybody. It's funny, Rich, I.
You know, PBMs and insurance companies, they all serve a purpose. Sure. In the healthcare marketplace. And you know, I think they like get bad raps. Yeah. And you know, the market is changing, it is dynamic. You know, people are trying to do things to make it less messy.
[00:03:07] Speaker B: Yeah.
[00:03:07] Speaker A: You know, but I love hearing your story about United and what you learned there.
[00:03:11] Speaker B: Right. And I think ultimately from United, where I was recruited to do network development around behavioral health, I saw the pharmacy, the pbm, which, which was relatively.
It had been around for a while, but it was new to me and so I was recruited to join them ultimately. And so I went over there and, and ran networks, did a other things and ultimately began to kind of move towards sales. And so, long story short, I ended up running sales and client services at UnitedHealthcare's first PBM.
[00:03:42] Speaker A: Really? How many years were you there for?
[00:03:45] Speaker B: I was there for quite a few years and ultimately we were acquired by a pharmaceutical manufacturer, then another pbm. Long story short, I ended up kind of back and forth within Optum and UnitedHealthcare for about 25 years.
[00:03:57] Speaker A: 25 years, yeah, yeah. And you know, moving from an organization like that.
[00:04:03] Speaker B: Right.
[00:04:04] Speaker A: And moving to an organization like, well, dying.
[00:04:07] Speaker B: Right.
[00:04:07] Speaker A: Why was that?
Because this gets to alignment, it gets to impact. Why was that important to you personally?
[00:04:13] Speaker B: So I think your alignment and impact statement are so relevant. I think one of the things I loved about UnitedHealthcare and Optum was there were so many resources and smart people that were available to me. The challenges sometimes was building that alignment within the organization. How do I get something to a plan sponsor or a client that I know is valuable that I can get from another one of my partners Internally, it was really hard to do and so it became a real issue for me. And ultimately I left Optum numerous times to go to small startups that were ultimately reacquired. But I left because that alignment was important to me. I needed to be able to offer them or at least service them in a way that delivered an impact. And I think that's why I'm at Welldyne. We have a real opportunity to do what's right in the pharmacy benefit landscape and that is take care of people clinically, making sure that they are able to live their best lives, navigate their benefits successfully, and ultimately, you know, save money and Afford, you know, afford the lifestyles they want. I mean, it is. It's really important that people get value from their benefit.
[00:05:24] Speaker A: You know, PBMs are getting a lot of bad press.
Um, you know, I have been for years. And, you know, I don't think people really, truly understand where the PBMs sit within healthcare.
[00:05:38] Speaker B: Yeah.
[00:05:38] Speaker A: And I think what Welldyne's doing is pretty unique. It's pretty differentiated. Your. Your organization is very nimble and flexible.
Your leadership is very innovative and creative, and you want to be disruptive. And you're doing things with Crumbdale Specialty and have been for years that I think are really lowering cost and producing better outcomes and really creating better experience for members. But you're doing things with Mark Cuban, you're doing things with lots of people in the healthcare community to truly bring something that is transparent. Rich.
What really, truly differentiates, well, Dyne from everybody else?
[00:06:16] Speaker B: I think you hit the nail on the head, and that is there's an awful lot of noise around pharmacy benefits and around pharmacy generally. New entrants like Trump Rx and Mark Cuban, Cost plus, there are numerous others, create real confusion for consumers.
And so what differentiates our organization is. Our objective is to try to create more clarity around the benefit and what's available and where there is opportunity to add new services, we want to be nimble in making those available, and we want to make sure that when we make them available, consumers understand how they can use them.
So I think what you often hear in the PBM landscape about the PBM landscape is we all sound the same. Everyone suddenly had access to these new innovative solutions. And the reality is that these innovative solutions are not well integrated yet. And so being thoughtful about how you pull all of this together and align all of these opportunities is really important. And I think what makes Welldyne different is we apply technology to the opportunity, creating a seamless experience, or as close to seamless as possible for consumers, for patients, and ultimately for plan sponsors, so that we can get them the right drug at the right amount of money and get the right outcome.
[00:07:29] Speaker A: You know, I'm so impressed with our partnership at Crumbdale Specialty and our partnership between Weldyne and Crumbdale Specialty.
We sit in an intersection where there's risk financing, which is the volatility and severity, the reinsurance component of things. There's the administrative services, the tpa, PBM services, there's the cost containment, and then there's technology.
Chromedale's built an amazing business to sit at the hub of that. But Optimization and integration and alignment of interest is really important.
What has made our partnership so unique and special from Welldyne's perspective?
[00:08:05] Speaker B: Yeah, I think when you consider what's right about pharmacy and some of the things that people don't know about when they think about pharmacy benefit management is really the application of clinical kind of clinical regimen with integrity. And I think that's at the core of our relationship. Ultimately.
Some of the challenges PBMs have had historically is that prior authorizations can be disruptive. They can create some challenges.
Friction, one of the words that we use a lot recently in a meeting. And so ultimately that friction is something that organizations don't want to have to deal with. PBMs don't want to have to deal with. And so they can often approve medication that maybe requires more rigor around the authorization process.
What we have built with Crumbdale, I think is a phenomenal program that ensures that patients get the right medication, that there's strong analysis that's clinically based on to ensure that the patient has met all of the requirements associated with getting that medication and then ultimately getting that medication to the patient rapidly, correctly, and ultimately, you know, helping the patient again navigate the benefit effectively. I think we have done a great job of applying this clinical rigor with consistency and it's resulted in better outcomes and lower cost. And that's ultimately what it's all about. Using clinical rigor and lowering cost and doing the right thing.
[00:09:31] Speaker A: You know, Rich, we've created a frictionalist relationship. I wouldn't say friction because both Welldyne and Cromdale really care about the consumer, care about the member, creating an experience so you know, the member can show up and you know, get the appropriate prescription at the appropriate time at the appropriate cost. You know, the PBM spaces very opaque, you know, and you know, we've done a great job in our partnership of truly what are the contracts, what are the terms and conditions? You know, people talk about rebates and discounts, but also just the structure of it. The, you know, the formulary and the flexibility and meeting the patient where they are and where what they need at that moment in time. There's a way to get to low cost, produce better outcomes and create a better experience for a member. And I think our partnership has been able to achieve that. But it really speaks to the well dined business. It speaks to well dine and your willingness to be nimble and flexible and innovative and creative. Can you just talk about your company and your culture and your leadership and your Philosophy?
[00:10:42] Speaker B: Yeah, I definitely believe in kind of agile leadership. And I think that our objective in building our organization is to find people that understand the market, understand the pharmacy space. But more importantly, I have a real passion for disruption, healthy disruption, evolution. And I think that's where we're at, regulatory activity. And some of the things that are occurring in our pharmacy space are really shining a light on kind of how our industry works. And I think being nimble is probably one of the most important attributes right now. Ultimately, from a cultural perspective, our first objective is to put the patient at the center of everything we do to ensure that a person can get the medication they need and live their best lives.
Secondarily, from a plan sponsor perspective, we want to make sure we're optimizing the benefit and so optimizing the dollars they spend on healthcare and protecting them in environments that are challenging, particularly now that there's real focus on fiduciary responsibility.
So from a culture perspective and what we're trying to achieve. What we're trying to achieve is an organization that rolls up its sleeves, that thinks creatively, that supports one another, that ultimately does the right thing and does the right thing again with the patient and the plan sponsor in mind. We want to be aligned with the plan sponsor and the patient because we know that lowering total cost and getting people the right medication will not only sustain the benefit for the employer, it'll sustain our industry. And I think it's important to act with integrity, particularly at a time when we're so heavily regulated and regulation is a big theme.
[00:12:23] Speaker A: Not just now, it always has been, but it's becoming much, much, much, much larger as the public has put a bird's eye. Like the tip of the spear is the PBM space.
Where is the market going?
Where are things headed? What do you see evolving? What are some of the innovative and creative things that Welldyne is doing?
[00:12:45] Speaker B: Transparency is an interesting thing. It doesn't resolve anything. It literally just shines a light on the process. And so I think it's going to be interesting to watch the pharmacy benefit management industry, as well as all of the ancillary folks that operate around that industry, sort of identify what their fee structures look like and what sort of bona fide services they offer in exchange for those fees. And so I think where we're headed is, I think there's going to be some more chaos for a while, I think with the individual state regulations that are coming out, some of which are I'm highly supportive of and excited about. You know, I think Some amount of disclosure is terrific.
Other amounts, other kinds of disclosure can be incredibly challenging and administratively burdensome and not value add. And so I think separating the wheat from the chaff is going to be kind of what we do over the next few months.
But I think importantly, being able to kind of transition to models that include pass through and point of sale rebates, which by the way, we're already doing, we've already thought of that. We're way ahead of the game. But then also opportunities for products that are PMPM based. So essentially, net cost guarantees that are essentially housed in a PMPM model I think are a terrific way to address the market opportunity and lead by example. And so I think that's one of the ways we're, we're thinking about moving and certainly we're already in discussions to think through how we might do that together. So I think we're headed for, I don't think we're through with all of this regulatory attention, but certainly I think creating more information for everyone about what PBMs do, how we add value, I think hopefully creates a more sane regulatory response that ultimately allows us to do what we do well, which is lower total cost.
[00:14:43] Speaker A: What are you most excited about? When you look out 3 years, 5 years, 10 years from now?
What excites you?
[00:14:52] Speaker B: It is a great time to be doing the right thing.
So I think right now, by putting the patient first, by moving to models that justify the fees that we're charging, by measuring total cost instead of rebates and discounts and dispensing fees, I think this migration to this new model sets up really well for us. I think it also sets up really well for our partnership. So what I'm really excited about, candidly, is somebody who is a go to market leader and I'm rewarded by wins. I'm excited about taking a whole bunch of share by doing the right thing. And I can't think of anything that aligns better than that. So I'm excited about growing and evolving and responding to the consumer opportunities that exist.
So I'm just, I'm really optimistic about the future of pharmacy benefit management.
[00:15:46] Speaker A: Rich, what have I not asked you? What would you have liked me to ask you?
[00:15:51] Speaker B: You know, your questions were great. I think that, you know, I guess that the thing that perhaps would be worth the discussion is where do we, how do we ensure that the rest of the country, candidly, the government, the state and federal agencies, how do we help them understand what we do? How do we give them a good, clear understanding of the value we add.
Recently we spoke with John brooks, who is Dr. Oz's number two, an incredibly bright person, and he provided me with an overview of what PBMs offer. And his point of view was discounts and dispensing fees and rebates and talked about the value that we can offer by allowing discounted products to be delivered. But we didn't talk much about clinical strategy or prior authorization.
And I think that that is core to what we do well. And I also think it's core to what creates real savings opportunities and generates positive net cost outcomes.
So I think we need to do a better job of communicating externally our value proposition.
We have done an excellent job of reducing total cost for Chromedale accounts, Crumbdale clients.
That exposure of that information, exposure of those success stories is something that we really need to lean into as we talk, as we kind of expose what we're doing to the market, because those kinds of stories will be impactful as we kind of head into a really busy 2020.
[00:17:24] Speaker A: Yeah. So like, how do you really measure ROI?
[00:17:27] Speaker B: That's right.
[00:17:27] Speaker A: And how do you measure ROI where you're, you're not really comparing an apple and an orange.
[00:17:32] Speaker B: That's right.
[00:17:33] Speaker A: You know, so at Cromdale Specialty, we're very focused on transparency. And people use that word, but they don't really mean it.
[00:17:39] Speaker B: Right.
[00:17:40] Speaker A: And we're very focused on optimization and integration around healthcare.
[00:17:45] Speaker B: Yep.
[00:17:45] Speaker A: And do it in a way that really serves the client and the customer properly. You can get to a lower cost, you can produce a better outcome, and you can create a better experience for a member when you really believe that you're going to show up in a transparent way and deliver something that is very unique and distinctive. And we've done that through our partnership and we've done it in a way where we're not compromising the consumer.
The consumer is not forced into some pre authorization, they're not forced into some very narrow network formulary. They're not forced into some alternative sourcing and special thing.
We have developed and designed programs through our partnership that are driving to these outcomes. It's just interesting to me, Rich, that there's so much of a focus on the PBM space around rebates and discounts and guarantees and all this stuff. But there's really no focus on the hospitals and health systems.
[00:18:49] Speaker B: No.
[00:18:49] Speaker A: And there's no transparency in our partnership that we do is just one of many, many, many, many examples. Because of the optimization and integration we have, a hospital can dispense an infusion through the network contract, whether that's United Aetna, Sega Blue Cross or whoever.
Or we can take that same infusion.
[00:19:12] Speaker B: Right.
[00:19:13] Speaker A: We can pull that individual out. No, just actually, not only. No disruption to the member.
[00:19:18] Speaker B: Convenience.
[00:19:19] Speaker A: It's a convenience.
[00:19:20] Speaker B: Right.
[00:19:20] Speaker A: Because we can sometimes do it at their home, sometimes we can do it at a facility that's right down the street for them. And we can do it at like 200% less.
[00:19:28] Speaker B: Right.
[00:19:28] Speaker A: So it's all these little things that are going on within health care where it's, you know, people look at the PBM as the bad guy.
[00:19:37] Speaker B: Right.
[00:19:38] Speaker A: You know, they look at the PBM as the one that's doing the wrong thing. And it's a much bigger issue than that. And when you think about the communication that you're talking about, when we think about our politicians.
[00:19:49] Speaker B: Right.
[00:19:49] Speaker A: You know, the people that are setting policy, you know, I agree with you completely. We as an industry need to do a better job of trying to figure out how do we communicate with them. But there's this massive, massive universe that's working against us.
[00:20:02] Speaker B: Right, Right.
[00:20:02] Speaker A: I mean, there's like these lobbyists in this marketplace that wants things to stay the way they are.
[00:20:08] Speaker B: Yeah.
[00:20:08] Speaker A: You know, and I think there's just this wonderful opportunity for us to, you know, go around the edges and, you know, you don't have to take on the whole market. You can take on parts of the
[00:20:20] Speaker B: market, the market that's addressable.
[00:20:21] Speaker A: Markets addressable. And do a wonderful thing. What's your. What are your thoughts on all that?
[00:20:25] Speaker B: So really important points and excellent points. I think. I think one of the things that we've begun to recognize, and certainly I've recognized, is the role that everybody in the ecosystem plays in making sure that people understand the value that we're delivering to plan sponsors and patients.
Brokers, for instance, they're in a difficult spot. They have to assess all of these different strategies, all of these different models, and sort of make heads or tails out of apples and oranges and try to present that to a client in a way that makes sense, helping the client make the best possible decision. And yet the broker is really in a difficult spot because they're being asked to do assessments that are really challenging. And so I think part of what we can do and part of what needs to happen is there needs to be this opportunity to understand, yes, what are the discounts, dispensing fees and rebates that drive value, but what is the other value that's delivered? How do we lower total net cost by Delivering clinical strategies that ultimately get people on the right medication at the right time for the right amount, and then take advantage of opportunities like distribution options. Is there another alternative besides the PBM's mail order that delivers a better outcome from a pricing perspective or even clinical perspective? And so I think taking advantage of all of that, being able to model that effectively means that we've got to help. We've got to find those people in the industry that can model with consistency who can actually measure this information and take apples and oranges and create something that looks understandable, that can be communicated to a plan sponsor and ultimately help them get to the best decision. And so I think that's another thing that we're doing relatively well together and that is identifying how we deliver value, measuring it for brokers and giving them something that they can use with their clients so the clients can make good decisions about their care and their partners. And I think that if I could do one thing, if I could repeat one part of our relationship, I would repeat the part that allows us to apply all of this clinical activity and turn it into value and then use that value to help people understand how we can lower total cost and ultimately get to the best outcome.
[00:22:40] Speaker A: Yeah. Well, Rich, I'm a little bit of a geek when it comes to numbers.
I love looking at statistics and math and I see our ROI on what our composite cost is for PBM services compared to where the market is. And it's astounding to me that because you want to serve the customer right, because you care about alignment, because you care about impact and you want to do the right thing and you have good partners that believe in the same things, you can deliver lower cost.
Our cost compared to the marketplace, when you just think on a per employee basis, is dynamically different. We are way, way, way, way, way below the market and we're not doing things that are invasive to the consumer, which is what I love so much about what our organizations do together.
[00:23:36] Speaker B: Yeah, I think a couple of interesting stories of organizations that decided they had a change in broker. So they were with us. They had a change in broker. The change in broker resulted in an RFP and ultimately an election of an organization. A P been aligned in a similar fashion and immediately saw cost increases, 20, 30% year over year cost increases. After one cycle, one contract cycle, they have come back. This has happened in two instances. Large employer groups. One's a hospital health system, one is a manufacturer, and in Both instances, immediate 30% reduction in cost by doing nothing special other than the things that we've always focused on clinical strategies with integrity.
You know, fair, you know, great contracts, great service.
[00:24:23] Speaker A: Rich, I've enjoyed our conversation. I love our partnership and I'm looking forward to it.
[00:24:27] Speaker B: Me too. Thanks, Matt. I really appreciate the partnership.
[00:24:32] Speaker A: This is Matthew Naylor. You've been listening to Aligned for Impact.
