Podcast interview with MEDecision CEO and founder David St. Clair: Transcript (Part II)

This is the second half of the transcript of my recent podcast interview with MEDecision CEO and founder David St. Clair. Part I is here.

David Williams: There’s been quite a demonization of the health insurance industry as part of the debate about health care reform and in particular challenging whether health plans actually add value or whether they’re just focused on making money in a way that doesn’t help people.  I’m curious about what your view is on the right role between the private and public payers and how MEDecision helps those health plans add value.

David St. Clair: I think that the word demonization is a very apt one in terms of the debate. I have to admit publicly that I am a staunch Democrat, but I’ve been tremendously disappointed by the language that’s being used in the health care reform by both sides, but by the Democrats in particular.  If you think about the nuance that President Obama used in talking about issues of race and in his speech in Cairo, his outreach to the Muslim community around the world.  He understood issues of nuance.  He was very, very clear that those are very complicated issues and things aren’t simply good and evil and black and white.

Unfortunately as soon as we came back domestically and started talking about health care, all of a sudden there was good and evil and all that sort of stuff.  My experience over the last 21 years has been that the insurance companies have clinical staffs who are absolutely committed to trying to improve the quality and affordability of care for their folks.  They were doctors out in the community.  They’ve been nurses in hospitals.  These aren’t people who are bean counters that our good friends in politics like to point to.  These are caring clinical folks who are trying to figure out what’s best.

There are many, many instances where there is a very viable debate going on between the treating physicians and the clinicians at the health plan and I actually think that’s a very healthy thing today.  What we’re really focused on is trying to make sure that those people are acting on the same basic information.  That’s why we’re so adamant about sharing what the health plan knows about a particular patient with the physician and with the care managers, so then at least we can have conversations about what is in that patient’s best interest.

When I think about the role of public payers versus private, it’s a very complicated issue, but my view is that virtually all of the innovation in health care has come out of the private insurance sector, not the public one.  Look at Medicare and Medicaid, with the possible exception of the Medicare use of DRG’s for paying hospitals.  Everything around disease management, everything around quality assurance, everything around case management came out of the private sector.

So if we set up an environment where there are going to be significant incentives for people to shift to a public payer because the public payer has the opportunity to use the force of law around pricing,  I think that’s going to diminish the amount of innovation that we will see in a time when we need it most.  So I think there has to be the balance.

Obviously there are a lot of private insurers out there who are dealing with the Medicaid population. There were a bunch of private insurers who were dealing with Medicare, Medicare Advantage, but once again we’ve sort of gutted their reimbursement model so it remains to be seen how many of those stay in business.  There seems to be a back and forth argument with government depending on who is in charge.  In my experience –and it’s a pretty broad set of experience now with very senior people in the health insurance companies– they all want health reform. The only argument these days is what are the specific elements of that reform?  But unfortunately a lot of the discussion is: ‘Well if you’re not for my form of reform, whatever that might be, even if I’ve chosen not to define it clearly, then you must be against reform,’ and that’s simply not true. I’m hoping as we go forward we can get away from that demonization and realize there are people of very good will, people with great amount of experience on all sides of those issues that really do have a common goal, which is to improve the quality and affordability of care and accessibility to that care for everyone in this country.

Williams: One of the things that the health plans had been big on in recent years was disease management.  Yet some of the leading companies like Healthways and LifeMasters have fallen on hard times recently.  Does that mean that the health plans aren’t interested in disease management or that these companies just haven’t met the needs?  How should we interpret that?

St. Clair: There are a couple of different ways to look at that.  Some of the disease management companies tried to disintermediate the health plans by going directly to their big customers. That’s a difficult role to play for a long time when you’re essentially then competing with people who have far more resources at their disposal.  So some of that you can think of as competitive retribution, where if you’re one of those disease management companies that has been goring me and changing the relationship between me and my big customers, I might be out to get you.

But I think the bigger issue in the long term is actually very analogous to the discussions around the electronic health record and the fact that in order for us to improve the quality of care, we have to ultimately integrate information from a multiplicity of sources about an individual patient so that you end up with one central record.  Most of the DM companies, in order to protect their business, felt they needed to create yet another silo of clinical information about the health plan’s members rather than being fully integrated with the care management or health management process that a big player like a Blue Cross Blue Shield plan is using and then periodically, maybe we’ll send you a data update that tells you what’s going on.

That put these big health plans in a bad position.  If somebody is admitted to the hospital tonight who was talking to a health plan’s DM vendor that afternoon, they have no clue what that conversation was about because there is no real time integration of that information.  Also if they’re trying to generate reports for their employers and really understand what’s going on, they’ve only got bits and pieces of the information rather than all of it.  So we’ve been advocating to the DM companies for quite some time that they use us, because we have such a large footprint particularly in the Blue Cross Blue Shield world, that they use us as that integration point so that we can fully integrate the work that they are doing with the systems and the databases that our customers use to manage care. We can integrate it not only from a data perspective but also a work flow perspective so that we can route cases back and forth across enterprises. Unfortunately in some cases for business model purposes they were very reluctant to do that.

Now to a certain extent the chickens are coming home to roost because these large Blue Cross Blue Shield plans are using our tools and our clinical content and our workflow engine to bring all those services back, because they don’t feel that they can get properly provide service if in fact they end up with this dislocated system.  Going forward, I still firmly believe that no health plan, disease management vendor, hospital or physician is going to ever be best of breed themselves at everything.  There’s going to always be a rather robust market as new ideas come to the forefront and people are trying things of one sort or another, there is going to be a robust market for people to be able to integrate a particular set of services on a fully integrated basis from data and work flow into their capabilities.

There is no employer out there that says to a payer, ‘I need you to do it all yourself.’ But employers are asking, ‘Why aren’t you integrated?’  If you’re doing diabetes and asthma management on this individual you might have two vendors that are doing that and they’re not coordinated.  What’s going on?  That to us is the biggest issue.  The ecosystem out there of all the vendors, all the new ideas integrated together that I think payers and consumers will have a better shot at improving the quality and affordability of care.

Williams: I’ve been speaking today with David St. Clair, CEO and Founder of MEDecision.  David, thanks again.

St. Clair: Thank you very much.  I enjoyed it.

September 25, 2009

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