How Jumbo Employers are Solving Healthcare - Lee Lewis - Health Transformation Alliance - Episode 49

This video features an in-depth conversation with Lee Lewis, Chief Strategy Officer of the Health Transformation Alliance (HTA), a co-op owned by approximately 65 jumbo employers (5,000+ lives on their health plan) dedicated to achieving superior health outcomes and compelling savings. The discussion centers on the unique challenges and opportunities faced by these massive organizations in optimizing their self-funded health plans, emphasizing the power of aggregated scale and advanced data utilization. Lewis, drawing on his extensive background in the self-funded space, including his role in the origins of Health Rosetta and the innovations lab at Gallagher, outlines the "self-insured science" necessary to drive meaningful change in healthcare costs.

A core theme explored is the dichotomy between power and agility in benefits innovation. Jumbo employers possess immense purchasing power but often lack the agility of smaller, mid-market companies, making certain innovations (like widespread Direct Primary Care or Reference-Based Pricing) difficult to deploy across hundreds of locations and thousands of employees. Conversely, the HTA leverages its aggregated strength to tackle systemic issues, particularly around data access and standardization. Lewis details the HTA’s pioneering efforts to move beyond standard medical claims data to secure richer datasets, including eligibility status and prior authorization workflows from carriers. This granular data allows employers to potentially predict high-cost events, such as oncology visits, six months before a claim is filed, offering opportunities for proactive intervention.

The conversation also delves into specific, high-ROI strategies for managing the five major cost categories that account for nearly half of all healthcare spend: orthopedic, cardiometabolic, maternity/fertility, cancer, and behavioral health. Lewis highlights a particularly impactful, yet underutilized, strategy concerning cardiometabolic disease. He notes research indicating that 92% of heart attack and stroke survivors are not on the correct, inexpensive generic medication cocktail to prevent recurrence, which dramatically increases their risk (one in five chance annually). By using data analytics to identify these individuals and facilitate outreach, employers can achieve significant savings and superior outcomes. Furthermore, the video discusses the historical difficulty of implementing cutting-edge strategies, citing the exhaustion and resistance encountered even after successfully executing the first specialty drug carve-out in the U.S. in 2017, underscoring the high effort required for true innovation.

Finally, Lewis shares a vision for the future of healthcare, contrasting a "Hotel California" dystopian scenario—where vertically integrated corporations control all access and drive costs higher—with a hopeful future. The positive vision is one where every person has a relationship of trust with a physician who practices at the top of their license, making judicious, data-driven referrals to high-quality, fairly priced providers. This conversion of "dumb money" (money lacking accountability and transparency) into "smart money" (value-driven spending) is posited as the critical mechanism for incentivizing systemic change and improving overall healthcare value.

Key Takeaways:

• Jumbo Employer Data Strategy: The HTA is pioneering the acquisition of non-claims data from carriers, including eligibility checks and prior authorization workflows. This allows employers to predict high-cost events (e.g., oncology visits) months in advance, enabling proactive intervention and care navigation.
• Data Security and Utility: To manage the "radioactive" nature of granular health data, the HTA advocates for storing data in highly secure, cloud-based servers (NSA/NASA level security) with strict walls and permissions. Data should be permanently encrypted (at rest and in motion) and only the minimum necessary information should be shared with vendors.
• Standardizing Data Truth: A major challenge is the lack of comparability across carrier data due to differing coding and interpretation methods. The HTA focuses on creating standardized algorithms that work across various data types to produce reliable, source-truth metrics, essential for accurate business intelligence.
• High-Impact Cost Categories: Approximately 46% to 51% of all healthcare spend falls into five major categories: orthopedic, cardiometabolic (heart attacks/strokes), maternity/fertility, cancer, and behavioral health. Strategies must be developed specifically for each of these areas to control costs.
• Cardiometabolic Intervention ROI: A significant opportunity exists in managing heart attack and stroke survivors, 92% of whom are not on the correct, inexpensive generic drug cocktail to prevent recurrence. Identifying and intervening with these individuals can dramatically reduce the risk of subsequent, high-cost acute events.
• Innovation vs. Agility: Large employers struggle with high-agility innovations (like widespread DPC or Reference-Based Pricing) due to communication challenges across massive, dispersed employee populations, whereas small employers can deploy these more easily.
• Leveraging Scale for Systemic Change: The HTA uses its aggregated buying power to negotiate favored nations pricing and secure better contracts, often saving members 2-5% or more on healthcare spend just by adopting one or two major solutions.
• Specialty Drug Management: Early innovation included pioneering specialty drug carve-outs and managing orphan drugs on an exception basis, strategies that, while highly effective, require significant effort and negotiation with PBMs and carriers.
• The Power of Trust in Healing: The speaker emphasizes that trust and belief (analogous to the placebo effect) account for about one-third of all healing. Building a relationship of trust between the patient and a primary care physician is critical for better outcomes.
• Converting to Smart Money: The ideal future involves converting healthcare spending from "dumb money" (no accountability, no transparency) to "smart money" (value-driven, quality-focused decisions). This shift will incentivize the entire healthcare system to improve quality and reduce unnecessary costs.

Tools/Resources Mentioned:

• Health Transformation Alliance (HTA)
• Health Rosetta
• Validation Institute
• Substack of Dr. Bill Besterman (for cardiometabolic research)

Key Concepts:

• Self-Funded Science: The systematic, data-driven approach to managing a self-funded health plan, focusing on deep analysis and innovative benefit design.
• Jumbo Employer: An employer group typically defined by the HTA as having over 5,000 total lives on their health plan.
• Co-op (C Corp with No Profit Intent): The HTA's organizational structure, where member employers own equal equity stakes and the mission is focused purely on member outcomes and savings.
• Specialty Drug Carve-Out: A strategy where the management and procurement of high-cost specialty pharmaceuticals are separated from the primary Pharmacy Benefit Manager (PBM) contract, often leading to significant savings.
• Reference-Based Pricing (RBP): A strategy where payment for certain medical services is set based on a benchmark (often a multiple of Medicare rates), rather than relying on negotiated network rates. The video notes this is easier for smaller, more agile employers.

Examples/Case Studies:

• Specialty Drug Carve-Out Success: Lewis recounts being part of the first consulting team in the U.S. to execute a specialty drug carve-out in 2017 for a client, resulting in $2.2 million in annual savings (nearly 10% of their total annual spend).
• Cardiometabolic Strategy: Research by Dr. Bill Besterman suggests that 92% of heart attack and stroke survivors are not on the optimal five-drug generic regimen (e.g., aspirin, metformin, ACE inhibitor) to prevent recurrence, a clear opportunity for data-driven intervention.
• The Biggest Loser Experiment: Used as an analogy for the difficulty of sustaining behavioral change, the show demonstrated that despite extreme intervention, most participants regained weight, and their metabolisms were permanently damaged, highlighting the limitations of acute wellness programs.