Startup Pitfalls and Healthcare Horror Stories: Introduction to Value-Based Care

11/13/24 • 21 min

Value Based Care Advisory (VBCA) Podcast

This episode explores the rising tide of healthcare startups pursuing value-based care (VBC) with ambitious visions to improve patient outcomes and lower costs. However, without a robust patient acquisition strategy, many founders find themselves struggling to meet volume requirements, maintain contracts, and deliver quality care. Through candid dialogue and practical insights, host Alex Yarijanian addresses these pain points and offers actionable advice for navigating the competitive healthcare market.

Segment Highlights

Startup Realities in Value-Based Care

Analogy to Streaming Service Overload: Alex compares the influx of VBC startups to the crowded streaming industry, highlighting how many of these startups lack a practical strategy, assuming that contracts with big payers alone will drive patient volume.
Importance of Patient Acquisition: Building meaningful connections and community engagement is critical for driving patient volume—something often overlooked by startup founders. Alex discusses tactics like forming referral networks and partnering with local organizations to build a sustainable patient base.

Key Strategies for Healthcare Startups

Understanding Payer Volume Thresholds: Alex underscores the need for startups to grasp the minimum patient volumes required by payers to maintain contracts.
Patient Engagement & Marketing: Effective marketing and visibility are as essential as clinical quality. Engaging patients through tailored messaging and demonstrating value within local communities can solidify a startup's presence and relevance in the healthcare landscape.

New Segment: 'Tough Calls in Healthcare'

This episode introduces a new segment, where Alex addresses real-world negotiation dilemmas faced by healthcare professionals. In this installment, he discusses:
Negotiating Reimbursement Rates: Tips on understanding local market rates and using data to strengthen negotiation positions with payers.
Handling Contract Amendments: Strategies for managing unilateral changes imposed by payers and knowing when to push back or walk away.

Key Takeaways

Beyond Business Models: For startups, having a robust business model isn’t enough—securing patient volume is essential.
Value-Based Contracts: These can be highly advantageous, but they require a substantial patient base to fulfill the value equation.
Community Connection: Building credibility and visibility within the local healthcare ecosystem is crucial.
Balancing Act: Startups must balance patient volume and care quality to sustain payer relationships.
Negotiation Essentials: Effective contract negotiation includes knowing market benchmarks and maintaining flexibility.

Companies Discussed:

UnitedHealthcare
Cigna

Listeners can expect a blend of in-depth analysis, actionable advice, and fresh perspectives on how to navigate the complexities of launching and sustaining a healthcare startup focused on value-based care.

Segment Highlights

Startup Realities in Value-Based Care

Analogy to Streaming Service Overload: Alex compares the influx of VBC startups to the crowded streaming industry, highlighting how many of these startups lack a practical strategy, assuming that contracts with big payers alone will drive patient volume.
Importance of Patient Acquisition: Building meaningful connections and community engagement is critical for driving patient volume—something often overlooked by startup founders. Alex discusses tactics like forming referral networks and partnering with local organizations to build a sustainable patient base.

Key Strategies for Healthcare Startups

Understanding Payer Volume Thresholds: Alex underscores the need for startups to grasp the minimum patient volumes required by payers to maintain contracts.
Patient Engagement & Marketing: Effective marketing and visibility are as essential as clinical quality. Engaging patients through tailored messaging and demonstrating value within local communities can solidify a startup's presence and relevance in the healthcare landscape.

New Segment: 'Tough Calls in Healthcare'

This episode introduces a new segment, where Alex addresses real-world negotiation dilemmas faced by healthcare professionals. In this installment, he discusses:
Negotiating Reimbursement Rates: Tips on understanding local market rates and using data to strengthen negotiation positions with payers.
Handling Contract Amendments: Strategies for managing unilateral changes imposed by payers and knowing when to push back or walk away.

Key Takeaways

Beyond Business Models: For startups, having a robust business model isn’t enough—securing patient volume is essential.
Value-Based Contracts: These can be highly advantageous, but they require a substantial patient base to fulfill the value equation.
Community Connection: Building credibility and visibility within the local healthcare ecosystem is crucial.
Balancing Act: Startups must balance patient volume and care quality to sustain payer relationships.
Negotiation Essentials: Effective contract negotiation includes knowing market benchmarks and maintaining flexibility.

Companies Discussed:

UnitedHealthcare
Cigna

Previous Episode

Understanding the Mental Health Parity Act: A Guide for Providers (From Payer Executives)

This podcast episode dives deep into the complexities of mental health parity and the implications of the Mental Health Parity Act. The conversation emphasizes the necessity for behavioral health services to be treated with the same level of care and coverage as physical health services, addressing the ongoing disparities in treatment and reimbursement practices.

Alex Yarijanian and Dr. Chris Esguerra discuss the challenges providers face when navigating insurance plans and the barriers to accessing equitable care for patients.

Dr. Esguerra is board certified in both Psychiatry and Health Care and Quality Management and is a Fellow of the American Psychiatric Association and the American Board of Quality Assurance and Utilization Review Physicians.

Dr. Esguerra’s extensive payer-side executive experience includes:

Senior Medical Director, Blue Shield of California
Senior Medical Director, Magellan Health
Deputy Chief Medical Officer, Health Plan Of San Mateo

They highlight the critical role employers play in advocating for better mental health coverage and how they can leverage their purchasing power to ensure compliance with parity laws. Ultimately, the episode aims to empower providers with the knowledge and tools necessary to advocate effectively for their patients and promote a more integrated and equitable healthcare system.

A significant focus of the episode is on the role of providers in identifying and addressing parity violations. The speakers guide listeners through the necessary steps for raising concerns regarding unequal treatment, emphasizing the importance of gathering evidence and understanding insurance policies.

This segment is particularly valuable for behavioral health providers who may face obstacles in securing appropriate coverage for their patients. The discussion also touches upon the regulatory landscape, explaining how self-insured plans differ from traditional insurance plans and the implications this has for parity enforcement.

Additionally, the episode discusses the importance of employers in advocating for better mental health coverage, encouraging providers to leverage their relationships with these entities to push for systemic changes that prioritize mental health equity.

Takeaways:

The Mental Health Parity Act requires equal coverage for both physical and behavioral health services, ensuring that patients receive the same level of care.
Providers should gather evidence of parity violations and present it to state regulators to advocate for fair treatment.
Behavioral health is lagging behind primary care in integration and reimbursement models, highlighting the need for systemic reform.
Employers play a crucial role in advocating for mental health parity by demanding better coverage from their insurance plans.
Effective communication and partnerships between providers and health plans can lead to better patient outcomes and innovative care models.
Tracking outcomes and demonstrating quality of care is essential for providers to negotiate better contracts with health plans.

Companies mentioned in this episode:

Blue Shield of California
Magellan
Kaiser Permanente
Google
Apple
Anthem
Centene
United
Cigna
Aetna
Humana
CalPERS
Pacific Business Group on Health
National Business Group on Health

Chris Esguerra MD MBA

Next Episode

EXPOSED: The MultiPlan Healthcare Cartel Costing Providers and Patients Billions

Welcome to this eye-opening episode of the VBCA Podcast, where we tackle one of the most pressing yet underreported issues in healthcare: hidden fees, surprise bills, and the alleged cartel controlling out-of-network reimbursements.

In this episode, host Alex Yarijanian breaks down the allegations against MultiPlan, a third-party repricing company accused of working with major insurers like UnitedHealthcare, Cigna, and Aetna to suppress out-of-network payments. We explore:

How MultiPlan's practices impact patients, providers, and employers.
The AMA’s antitrust lawsuit accusing MultiPlan of operating a cartel.
Real stories, like that of Kelsey Toney, a behavioral therapist forced to turn away patients due to unsustainable payment rates.
The staggering $19 billion providers lose annually to these practices.

If you’ve ever wondered why your healthcare bills are so high or why your provider suddenly stopped taking your insurance, this is the episode for you.

Key Topics Discussed:

What are in-network vs. out-of-network providers?
How does MultiPlan determine reimbursement rates?
The human cost of suppressed reimbursements for providers and patients.
Legal implications of the AMA and ISMS lawsuit against MultiPlan.
The broader impact on value-based care and healthcare transparency.

Takeaways:

Hidden fees in healthcare create a sense of unpredictability and financial anxiety for patients.
MultiPlan's involvement in processing out-of-network claims often leads to underpayment for healthcare providers.
Out-of-network providers typically charge fees that reflect their true cost of delivering services.
Patients frequently find themselves responsible for covering the difference in reimbursement rates from insurers.
Real-life patient stories underscore the profound human impact of rising healthcare costs and surprise bills.
The current healthcare system often prioritizes profit margins over genuine patient care and outcomes.

Companies mentioned in this episode:

MultiPlan
UnitedHealthcare
Cigna
Aetna

Research Links:

Legal Complaint (PDF): AMA v. MultiPlan Full Complaint - Filed in the United States District Court for the Northern District of Illinois involves the American Medical Association (AMA) and the Illinois State Medical Society (ISMS) as plaintiffs, suing MultiPlan, Inc. for alleged antitrust violations.
Community Health Systems adds another antitrust lawsuit to MultiPlan's collection - Community Health Systems is the latest health system to allege that MultiPlan’s data-driven claims repricing business meets the bar for antitrust violation.
AMA lawsuit targets collusion in health care pricing
Insurers Reap Hidden Fees by Slashing Payments. You May Get the Bill. - A little-known data firm helps health insurers make more when less of an out-of-network claim gets paid.
New York Times Investigation: Health Insurers' Lucrative, Little-Known Alliance - How a private-equity-backed firm called MultiPlan has helped drive down payments to medical providers and drive up patients' bills, while earning billions.
AMA Press Release - The American Medical Association’s press release discussing the antitrust lawsuit against MultiPlan.

Value Based Care Advisory (VBCA) Podcast - Startup Pitfalls and Healthcare Horror Stories: Introduction to Value-Based Care

Transcript

00:00:00.359

Good evening. Welcome back to the VBCA where we dig into the latest in healthcare and greatest in value based care. In this episode, I wanted to share with you my thoughts on why starting a healthcare business might be a quicker path to frustration than sitting down with your extended family to have Thanksgiving dinner. Now, let's first talk about healthcare startups. You've seen them. They're popping up faster than new streaming shows that no one has asked for. And a