Dr. Marion Mass rejoins the podcast this week, to give us an update on the situation impacting all Americans – The cost of healthcare, and how Insurance companies, along with their Pharmacy Benefit Manager organizations are not incentivized to provide the best care…only the best profits.
Please visit the Website: free2care.org and check out The Health System Tracker
The CE experience for this Podcast is powered by CMEfy – click here to reflect and earn credits: https://earnc.me/FAyEnW
MD Coaches, LLC provides leadership and executive coaching for physicians by physicians to overcome burnout, transition throughout your career, develop as a leader or meet your individual goals. Remember, you are not in this alone. Reach out to us today!
PHYSICIANS BY PHYSICIANS. It showcases unique physician talents, whether it be in the form of writing, painting, creating cookie masterpieces, or storming capital hill in the name of healthcare advocacy. Use promo code RxforSuccess to get three months free when selecting the monthly option. https://rxforsuccesspodcast.com/physicianoutlook
All The Tools You Need To Build and Scale A Integrative Health Business
Get a behind the scenes look at our playbook at Texas Center for Lifestyle Medicine to see the underpinnings of how they deliver health while keeping team members fulfilled.
Find out more at https://rxforsuccesspodcast.com/IPB
Dr. Marion Mass is a pediatrician who has practiced in suburban Philadelphia for 21 years. She is a founding member and Co-Chair of Practicing Physicians of America, an organization dedicated to protecting the physician’s ability to serve their patients and to confront unnecessary and overbearing regulations that limit their ability to advocate for those patients. Dr. Mass is also a writer with works being published in The Wall Street Journal The Hill and The Washington Times in addition to advising policy shapers at the state and national level. She serves on the editorial board of her county newspaper, on the board of The Bucks County Health Improvement Partnership, and as a delegate to the Pennsylvania Medical society. She guest blogs on various sites regarding teaching organic gardening to children.
Dr. Mass received her bachelor’s degree in biology from Pennsylvania State University and her M.D. from Duke University in North Carolina. She completed residency at Northwestern University Children’s Memorial Hospital in Chicago, IL.
Connect with Dr. Mass
Website: Practicing Physicians of America
Notable quotes from Dr. Mass’s interview:
We are spending more, and we are getting less all the time.
There’s fewer physicians that are employed who are willing to speak up about the system for risk of losing their job.
I woke up, and I was like “What happened to medicine?”
We’ve reached a point where physicians are spending 1/3 of their time with patient care, and 2/3 of their time with everything else.
85% of hospitals are ignoring the executive orders of two presidential administrations, and are not being transparent about their pricing.
You can’t fix the price of insulin or most drugs without reform of these Pharmacy Benefit managers.
Note: Links on this page may be linked to affiliate programs. These links help to ensure we can continue to deliver this content to you. If you are interested in purchasing any products listed on this page, your support helps us out greatly. Thank you.
Access the Show Transcript Here
[0:00] Hospital services have been growing more rapidly than any other goods and services that I’m aware of since 2000.
They’re outpacing college tuition, they’re outpacing child care, they’re outpacing medical care services overall, wages, housing, food and beverages.
Well, if this is more than a third of what our National Piggy Bank is paying and it’s growing in terms of what the prices are, Well then, shouldn’t this be where we start looking?
[1:04] Hello everyone and welcome to Prescription for Success. I’m Dr. Randy Cook, your host for the podcast, which is a production of MD Coaches, providing leadership and executive coaching for physicians by physicians.
[1:20] To overcome burnout, transition your career, develop as a leader, or whatever your goal might be, visit MD Coaches on the web at MyMDCoaches.com.
[1:32] You’re not in this alone. On today’s episode we’re revisiting an old friend.
[1:38] Dr. Marion Mass is a pediatric hospitalist, but equally important, she is, a passionate advocate for examining and improving the way we deliver health care, in the US. So let’s hear the conversation.
[1:58] I am really, really excited today to have Dr. Marion Mass back with us for another visit. Marion is up in the Philadelphia area and my goodness, it’s good to talk to you again Marion. Welcome back.
[2:13] Hey, go Eagles. Nice to talk to you. Oh, you guys are really flying high, aren’t you? Good for you. All right. Well, I was, I will go ahead and mention that, as I say, we have at least two prior episodes that feature Dr. Marion Mass, who is a pediatrician, but really quite an activist, particularly in the area of healthcare finance.
And we just wanted to have Dr. Mass back today, not to talk about her development in the training and establishment of herself in the medical world, but we want her to talk about her special expertise in this particular area of…
[3:01] Of healthcare finance and thank you again, Marianne, for being willing to come and do that with us.
So let’s get down to business. You know, we got burnout, we got access to care, we got the resident match, we’ve got all kinds of things that put a lot of pressure on physicians to do what they really would like to be doing. But in the end, it’s kind of all about the money.
So tell me if you can, do you remember when you began to concentrate your interests on healthcare finance?
[3:35] Hmm. I think we’re going back seven, eight, nine years now. It just occurred to me, like I was hearing again and again from patients, this is so expensive. This is so expensive. And it keeps growing more expensive. And look, you know, Americans know there was a Gallup poll done at the end of 2021 and affordability of healthcare is one of the most important topics. But when you start looking, you’re like looking for where the money is going and it’s so hard to see.
[4:06] And I would like to sort of begin with that preamble. Let’s hear Dr. Marion Mast talk about.
[4:13] The state of the healthcare finance world, right here on the heels of state of the union.
Let’s hear about healthcare finance. Where would you like to start?
[4:24] Well, I guess what I want to point out is that I don’t want to portray myself as someone who is, a financial analyst expert. I think my role is to try to look at what I can see and look at general trends and dive deep where I can see where the money is going and to explain things simply, like a water cooler, kitchen table, let’s have coffee kind of level.
And at a let’s have coffee kind of level, look, we’re spending more and we’re getting less all the time. I mean, any patient that I ask, they’ll tell me it keeps on going up what they’re spending.
[5:03] And their access is impeded. They can’t get in to see physicians. Like the hospitals are like.
[5:11] They’re lining up in the ERs. They can’t get access to medications. We have shortages of medications, we have medications that aren’t safe. We’re now spending 18.3% of our GDP is going towards healthcare. It’s 4.3 trillion. It keeps going up, and everyone says we’re going to do something about it. But when you try to see what the spend is, what we’re spending on, and the specifics of even some of the big expenditures, it’s hard to see. There’s little transparency. Yeah, because there’s a great big bucket in the budget labeled health care, but it has so many moving parts. And I’ve really been fascinated with conversations that we’ve had.
[5:57] Before. Your particular focus seems to be primarily on prescription drugs. You want to enlarge on that?
Is that a good place for us to start? Oh, sure. I guess we can do that. But I’d almost rather, Start with the fact that like, I think one of the places that as Americans we go wrong is, and I said I like to simplify, but sometimes we make it too simple and we start what I call a healthcare food fight and then instead of going to a place where we could all agree.
[6:31] We go on a place where there’s a lot of contention. So for instance, Americans like to either put a, bumper sticker on that says Medicare for all or don’t tread on me, get the government out of my, healthcare, right? And those two things start the healthcare food fight. But if you look at it, in a way, we really are almost at single payer. When you look at that 4.3 trillion that we spend and you think about that 4.3 trillion as one big piggy bank, who’s in that piggy bank paying the, 4.3 trillion on behalf of the American people? That 4.3 trillion is money that is really all, of ours, right? It’s all of ours in what we spend in buying our insurance, in putting money into Medicare, in paying our taxes that goes to Medicaid, in what our employers pay, etc.
And I mean, Medicare spending is 21% of that national health expenditure. Medicaid is 17%.
People that say let the government take over, well, that’s almost half of what we spend anyway, and we’re still spending too much. So if you let the government take over, is it really going to be decreasing? Is what we’re spending going to be decreasing if that happens? And it’s only going to start a food fight.
[7:50] So if you think of that whole piggy bank as one single payer with the American public, being the single payer, I think what we could all agree on instead of having the food fight, is well, we as the American people being the single payer, whether we’re paying Medicare, Medicaid, private health insurance, having our employers pay, VA or out of pocket spending, Where is all that money going?
[8:16] Because all of those entities are spending too much. So let’s get to something that we agree.
So the question is, once they get their money, once the government gets their money, the government or the insurance companies or whatever, once they get that money, our money into their hands.
What exactly are they doing with it? Is that what you’re talking about?
Right. I mean, I guess I would say that I think the government and the insurance companies are doing a really poor job of spending that money. Exactly. That’s all I wanted you to say. Yeah.
Yep. Okay. Take it from there. Bad show. And so then if you look at where the expenditure is going, it’s very hard to see. So we put out in September our second, free-to-care position paper on reforming America’s predatory health care system.
We put out the first paper in 2019 before the pandemic, and when we put out the paper as a group of experts, we tried to – it’s a very heavily annotated paper.
We back it up with as many facts as we can find.
And organically, the free-to-care coalition formed.
It’s a nonpartisan coalition of patients and physicians and pharmacists and others who who have the same concern we do.
Where’s the money going?
[9:29] I mean, let’s get to where we agree. Let’s not have the healthcare food fight.
And like these organizations kind of forged together, we’re not a group that meets regularly, but we have communication between our group leadership and we have reach to all of the coalition members, which now entail 34 groups, eight million citizens, 70,000 of those are physicians.
It’s a big reach.
[9:54] And so all that you needed to do to be part of the coalition was to read the paper and say, yeah, I agree with most of what’s in this paper, and this is the direction that I think we can go on.
So instead of starting a fight, we’re trying to find consensus on areas on which we agree.
Yeah, and that particular document, of course, is available on the Free2Care website.
And because it is important, I’m going give you an opportunity to tell everybody where they can find that. I’m astounded at the number of physicians that have never heard of free-to-care.
But well, in fact, why don’t you go ahead and tell us a little bit about how free-to-care came about and where people can really get the all the information from free-to-care that we all should know. Go ahead and give us that, that data if you will.
Sure, it really comes from, you know, the free exchange of ideas and how we can make, healthcare better done in a nonpartisan way.
As I said from that first paper in 2019, we forged together and then we started talking, because it just seems to all of us that everyone for whom the system is working, which is a, very small class of people, the people who are making dollar after dollar and it’s only going up and they’re having more and more control over the healthcare system, we’re They’re trying to speak free and unencumbered by having the conflicts of interest that all.
[11:24] Of those organizations that are making money.
[11:27] Are coming from. So, I mean, that’s how we formed. We really just wrote what we thought, would help the healthcare system. And then organically, people and groups and organizations came to us. And then we put out the second paper in September. You can find it at the website for Free2Care is freenonumber2care.org. And then if you look on the top of the website, there’s something that says report and you can open up the report. It’s written by a group, mostly physicians, but there’s some former hospital administrators that helped write it. There’s, some other advocates that helped write it, and the physicians that wrote it are… We come from.
[12:07] The surgical subspecialties, from general surgery, from pediatrics, from internal medicine, from emergency room. We come from different venues within healthcare. Unfortunately, sometimes the different specialties of healthcare band up and they advocate only for what helps them in their, their particular specialty, not that they shouldn’t. But I think looking across specialties really helps us. It’s going to harm my patients if surprise medical billing isn’t fixed responsibly.
It’s going to hurt the ER docs first and it won’t hurt the pediatricians particularly until later, but it’s going to hurt my patients. So I think that’s why we got a group of, a varied group of physicians and others that were speaking on this.
Hi, I’m Rhonda Crowe, founder and CEO for MD Coaches.
Here on Rx for Success, we interview a lot of great medical professionals on how they grew their careers, how they overcame challenges, and how they handle day-to-day work.
[13:08] I really hope you’re getting a lot of great information. But if you’re looking for an answer to a specific problem, management or administration challenge, or if you’re feeling just a bit burnt out, like maybe you chose the wrong career, well, then there’s a faster way to get the help you need.
No, it’s not counseling. It’s coaching.
Rx for Success is produced by MD Coaches, a team of physicians who have been where you, are. I know you’re used to going it alone, but you don’t have to.
[13:38] The support you need today, visit us at MyMDCoaches.com to schedule your complimentary consultation.
[13:46] Again, that’s MyMDCoaches.com because you’re not in this alone.
[13:55] We’ll get back to our interview in just a moment, but right now I want to tell you a little bit about Physician Outlook. If you haven’t discovered this remarkable magazine, do so very soon. It was created by physicians for physicians to showcase the intersection between clinical and non-clinical interests. Whether it’s writing, painting, cooking, politics, and dozens of other topics, Physician Outlook gives a physician perspective. It’s available online and in print. It’s really unique among physician lifestyle magazines. And like the prescription for success podcast, Physician Outlook amplifies the voice of any physician who has something to say. It also engages patients who still believe in physician-led, team-based care. And prescription for success listeners can get three months free when you enter our promo code, RxForSuccess, and select the monthly option at checkout.
That’s a really great deal on this stunning publication.
[14:58] And now let’s get back to today’s interview. I want to ask you something, and I wonder if this is merely my prejudice, but I have the feeling, that physicians are more in the dark than ever about healthcare finance. Of course.
[15:19] I began my practice literally almost a half century ago, and it was different, But I had the feeling that back then physicians were at least a little bit more conversant about exactly how the money moves.
But nowadays, I kind of have the feeling that physicians know very little.
And I’m wondering if you think I’m right or wrong about that.
And the other thing is I wonder if that comes from the phenomenon of the disappearance of, private practice. Any thoughts on that? Oh, sure.
So you say when the disappearance of private practice, even if you don’t like money, and, I actually- Who doesn’t like money?
Well, I mean, what I mean is if you don’t like managing money and- Well, I see. Yeah. If you’re not the guy that really likes to play in that.
Exactly. But if it’s your own money, it should be really interesting to you. You bet.
So if you’re in a private practice, you’re probably paying more attention because you’re getting the hit.
So I do think you’re right.
I think independent practitioners tend to be a little bit more on top of where the money is going and that’s not to put down those who are employed.
I’m actually employed myself and I always have to put out there that I don’t speak for my employer.
But I do think as more of us have become employed, there’s fewer people that are employed that are willing to speak up on the system because they’re concerned about their job.
[16:41] I mean, there’s physicians that have, you know, we saw it during the pandemic.
Like if you speak up over healthcare safety issues, there’s physicians, a very famous physician out in…
[16:51] The Pacific Northwest that was fired. So, you know, people see this and then they’re fearful.
And, you know, over time, more and more positions have been bought up and then, fewer speak out for that reason. But also, you know, the cost of college tuition and med school tuition has gone up, up, up. Having one just graduate college and then two currently in, I can attest to that one. Yeah, I bet.
But so you have people that are now employed that require their paycheck because they have to pay off the $250,000 average in medical school loans that they have on their plate, plus.
[17:27] Whatever they have from undergrad.
I think it used to be like $150,000. So you’re sort of tied to the fact that you need that in order to move on.
So I think it’s like two phenomenons, the cost of the education and then the fact that, we’ve had entities that are gobbling up independent practices, so fewer people speak up.
You mentioned like physicians are unaware of where money is going or the fact that you can’t even see where money is going.
But I would add there, it’s like I wouldn’t put that on as a blame.
I think it depends upon your own personal circumstances.
I finished residency and we started having children and we spit out three of them in a little four-year period.
And then I felt like Rip Van Winkle like when I woke up several years later after working and getting children out of diapers and that sort of thing. I woke up and I was like, wait a second, what happened to medicine? And then it was really hard for me to figure it out. I couldn’t figure it out. It’s like, where do we even go? Who do I trust on this? And so it’s been a lot of time. I’m not ashamed to say that when I first started all of this and I first started looking, I didn’t understand a lot and I’m still learning every day. So when you said I think physicians don’t understand where stuff is going and don’t understand parts of the system.
The system is so complicated you could drill down in any one segment.
[18:48] And it would be very complicated. And then when you’re trying to look at a big broad view, it’s complicated and you’re learning all the time. But I think it’s responsible of us. If we want a future for good quality medical care, we have to start paying attention as patients and as physicians.
But that’s a very astute observation on your part, as your observations always are. And that is that that we tend to be much more conscious of things for which we understand where the pressure is coming from.
And again, if you’re a private business person, it’s a lot easier for you to analyze your, revenue stream as opposed to if you’re an employee of a bigger organization that gives you a paycheck every month.
Meanwhile, you have this distraction of agonizing debt. So that explains a lot, I think, in terms of why physicians may have had the unfortunate experience of knowing less and less about healthcare finance.
Sure. And as we bring up in the paper, and it’s not where you and I maybe should focus, but.
[20:00] Over time, we’ve had more and more busy work thrust upon us, like here.
Now you have to figure out this electronic health record. Here, now you have to do this maintenance and certification.
Oh, by the way, you have to do this MIPS metric. You got to fill this out.
You got to do this for the hospital.
It’s like all this stuff is kind of coming at you. We reached a point where physicians are spending one-third of their time with actually patient care and two-thirds with everything else. It’s that everything else that one of the things I say is, we’ve got to cut the glut.
[20:33] And then, of course, besides the fact that maybe you’re hampered with debt and you’re hampered with an employer and you’re a little fearful, you also now have a huge burden of Thanks for watching!
Nonpatient work that you’ve got to take care of. So who has the time to go and take a look at a really convoluted system?
[20:51] But I think start with the big picture.
In our updated free to care paper at free, the number two in care.org underneath the report, we started with the big picture.
What is the American piggy bank, all the payers together, where is that money going?
When you look at the chart, like something jumps out at me, It’s the sources, the health system tracker.
It’s a, I hope you put it up on the podcast as to where the money is.
We absolutely will. Yes, yes. So if you look there, and this is from 2020 national health expenditures, but the trends are a little bit the same.
You will see a very dark blue and a medium blue that Carolina and Duke blue that pop up at you.
So those two blues pop up at you, and the hospitals are 31% of what our National Piggy Bank is spending.
[21:49] It’s huge. It’s absolutely huge. And it’s actually even more than 31% because you’ll see that there’s a 20% that’s physicians and clinics. And you mentioned independent practice.
Hospitals have bought up a substantial number of physicians and clinics.
So I couldn’t find a place to even put those two numbers together, but more than one-third of our spending is going to hospitals.
And then if you look at the next little graph, and you know, we put the graphs up there because we wanted people to pay attention. Hospital services have been growing more rapidly than.
[22:28] Any other goods and services that I’m aware of since 2000. They’re outpacing college tuition, they’re outpacing child care, they’re outpacing, you know, medical care services overall, wages, housing, food and beverages. Well, if this is more than a third of what our National Piggy Bank is paying and it’s growing in terms of what the prices are, well then shouldn’t this be where we start looking?
Have you ever had a moment in your life that altered your future?
To see that we have this bottleneck with residency that so many people don’t get that chance to get that so needed training.
Have you ever wondered why you chose the direction you went?
When I had left my prior position I didn’t plan on going back to practicing medicine.
Coming this month, it’s Life Changing Moments, hosted by Dr. Dale Waxman.
The parts of your job that are professionally fulfilling, can you say a little bit more about that?
In this companion show to Prescription for Success, we will explore those decision points with our former guests and provide you with the wisdom and insight to make those choices for yourself.
What can I do for the country other than the psychosocial assistance?
[23:39] Getting the new show is easy. If you are already subscribed to RX for Success, you’ll get it automatically.
But if you are not subscribed, now is a great time to do so.
You can find the RX for Success podcast on Apple, Spotify, Amazon, or wherever you listen to podcasts.
[24:00] This puts me in mind of something that a physician colleague of mine, gentleman a good bit older than I.
Used to say, I learned so much from my elders when I first got into practice, but he was very fond of saying, we don’t actually have healthcare in America, we have disease care.
And it’s so true, we put so much money, as you say, into hospitals, which is a place where people go to get sick or after they get sick, because they’re sick. But we actually put very little cash into the discipline of healthcare maintenance, would you agree?
[24:42] I mean, you know, we certainly need to focus on prevention and, you know, like taking care of ourselves instead of like, okay, let’s wait until everyone gets sick.
You know, you don’t want a patient to show up in diabetic ketoacidosis.
Instead, you want to make sure that you discover the diabetes first and have the patient learn how to manage it and get access to all the things they need to do that before you spend on that hospital.
By no means am I saying hospitals are unnecessary. Certainly they’re necessary.
If you look on all of American patients at all ages and you think about what it is that they need, and I always focus on kids because I’m a pediatrician, but really prevention is, should be at the top of the list.
We all need good preventative care and the education to be able to have that, right?
And then when that good preventative care isn’t working or when we get sick, then we need a physician and the auxiliary services to help get us better.
And sometimes we need medications. And I think we should talk about medications because they’re always a big topic.
[25:49] And then when we’re too sick, the medications don’t work, other things don’t work, then we do need the hospital.
Not saying we don’t need the hospital, but if it’s the most expensive part and the fastest growing cost that’s there, then we should be paying attention to that.
But when we, you know, I mean, and like, look, I mean, during the pandemic, I think the number that I saw, I think we spent close to 300 billion, to offset the hospital’s problems during the pandemic.
That’s a lot of money. And yet if you open up and look up, how are hospitals financially doing?
The hospitals will all tell you, we’re dying, we’re at risk of closing, we need more money.
It’s like, where’s the money going?
[26:33] And then when you read the details of our paper in there, what you discover is despite the fact that we have had, now a Democratic President, Joe Biden, push for hospital transparency, and his predecessor, a Republican, Donald Trump, push for hospital price transparency, The hospitals aren’t compliant.
[26:55] And 85% of hospitals are ignoring the executive orders of two presidential administrations, and they’re not being transparent about the pricing.
So for something that’s taking up more than 30% of our piggy bank, you know, where the money’s flowing, and it’s growing faster even than college tuition, shouldn’t we do the most simple thing and insist that they be transparent about their pricing?
[27:21] You would think that would be the logical conclusion, but alas, as you have pointed out, that’s really not the case.
You know, there are so many areas down underneath this or down inside this deep hole where the, problems in our healthcare system are lurking.
I know, and I want to give you an opportunity to talk just a little bit, but you’re particularly knowledgeable about how the pharmaceutical industry is quite a drain and the tricky ways that they go about getting a hold of way more than their share of the budget.
So just as an illustrative example of how we can be taken advantage of, would you like, to talk about that particular area for just a minute? Absolutely.
You know I love talking about this.
So I mean, look, drug pricing has been in the news and I think it certainly should be in the news. I mean, it’s taking up close to 10% of what the piggy bank spends. It’s, connected to a lot of the other expenditures that we put out there. We do have a whole section on this in our paper. And you know, I tell people, like, we tried to make this, simple for people to understand. And this section of the paper is the second part. You, We thought hospitals and the transparency were the most important.
[28:44] Given the percentage that our piggy bank is spending on them.
But certainly the pharmaceutical section needs to be looked at.
And I think that, you know, America, like immediately they think to themselves, got to blame the pharmaceutical companies.
And look, there is definitely a lot of, there’s a lot of things that pharmaceutical companies do that keep prices high.
Predatory pricing is something to look at from the pharmaceutical companies.
But Americans and our politicians have started to learn over the past several years about the middlemen in the pharmaceutical chain, the pharmacy benefit managers, PBMs that are the outpatient prescription drug middlemen, and the group purchasing organizations or GPOs that are the hospital middlemen.
In the paper, we discuss both, and we discuss the similarities and the crossovers between them.
It’s been very gratifying because this is something that I’ve been writing about personally since 2018 that we brought up in the 2019 paper that people across the aisle recognize. I think it was just.
[29:57] In a roll call article that PBM scrutiny, pharmacy benefit manager, middleman scrutiny was going to be one of the hot topics in the upcoming Congress and that is good news for all Americans and, Actually, they- That’s very encouraging.
Just as we stated in the paper, this is a bipartisan issue. It’s not red, it’s not blue, it’s an American issue.
It’s great to see because in the Senate, Cantwell and Grassley have a bill to help along with PBM transparency and where the money is flowing for these PBMs.
On the House side, the Energy and Commerce Committee has really, people within there, spoken about this very eloquently.
Pharmacist Buddy Carter from Georgia has been a big voice in this.
Michael Burgess from Texas has been a big voice in this.
And you can listen to hearings and the former head of Energy and Commerce Health Subcommittee, Anna Eshoo, you can tell that there’s a great relationship between her and Congressman Carter in talking about pharmacy benefit managers.
So I think there’s hope.
[31:05] That we could really do something here. But it’s a big topic. I think people have to understand that, these pharmacy benefit managers are taking money going and coming. And what I like to say is like, you know, I said, we have like a big picture example of what’s going on here. Insulin cost has been a big discussion. And in the last Congress, there was an act, the Affordable Insulin Now Act, that unfortunately only helped with the copay.
And the Inflation Reduction Act actually gave a free pass to the pharmacy benefit managers, which isn’t helpful.
Because if you take just insulin as an example, which we do in the paper, and we put this chart up there, if you look at the net price of insulin, which is roughly what the pharmaceutical companies get, the net price of insulin has actually decreased since 2014, when the pharmaceutical companies were making way too much that bottle of insulin, that little vial that should cost about $10 to manufacture, they were getting about $150 in 2014.
So they were doing great on that.
And then that steadily decreased to where they’re still getting too much. They’re getting $50.
But that net price is not what is paid by the piggy bank.
The piggy bank pays the list price.
[32:23] The list price is what the pharmaceutical companies are making, approximately an average of $50 on that $10 vial of insulin, but the list price is now $350.
And that $350 is what the pharmaceutical companies make plus what the PBM middlemen make.
So they’re making 80% of the cost of insulin.
So you can’t fix the cost of insulin or the cost of most drugs without reform of these pharmacy benefit managers. So.
[32:58] It would be difficult to go through everything that the pharmacy benefit managers do.
I’ll bring up two little simple things that we like to discuss in the outpatient pharmaceutical world.
These pharmacy benefit managers that are making 80% of the cost of insulin, and mind you, without manufacturing or without doing any research, they have the right to receive legalized kickbacks.
[33:25] Congress gave the right to the hospital middlemen in 1987, signed by Ronald Reagan.
And then in 2003, the then head of HHS under the second Bush administration passed forward that right for legalized kickbacks to the pharmacy benefit managers.
So these are the guys that decide what drugs get covered by insurance.
In other words, what you’re allowed to take and have your insurance company pay for.
And because they can receive this money from the pharmaceutical companies, they have a, perverse incentive to make up a formulary based on who’s going to pay them the most money.
And they’re furthermore perversely incentivized to pick a more expensive medication because, the cost of the kickback or the amount of the kickback is usually a percentage of the cost of the medication, which is outrageous.
And you can see people that will get an unusual disease or a rare disease, and when they do, they fight for a medication that works for them and then they’re not able to get it.
You know, the other day I tweeted a reply.
There was a reporter for the Washington Post, wrote a beautiful article on her toddler who Thank you.
[34:42] Got juvenile rheumatoid arthritis, so he got a chronic disease.
He was suffering with pain, with fevers, with fatigue. She had a medication that was working.
She fought for that medication, and her doctors fought for that medication, but the insurance company and their pharmaceutical benefit manager, because they own each other, would not allow her to use that medication.
Eventually, the pharmacy benefit manager and its insurance company approved a much costlier medication.
So the piggy bank, instead of paying $17,000, is paying over $200,000 for a more costly drug.
And there’s no transparency for the interaction, for why they made that choice, which makes absolutely no sense. I’m really glad her child is on a medication that’s working, but the less expensive drug was working too.
Why would they choose a more expensive drug? Why are they making that piggy bank pay for a more expensive drug?
We think at Freed to Care it’s because the formulary is incentivized to pay for the more expensive drug because they’re getting more in a kickback that flows to the PBM that then flows to the insurance company that now owns the PBM because our major insurers either, own or are owned by our PBMs.
[36:02] Yeah, the answer to your query is very simply that the system has a built-in mechanism for the people who are in a position to benefit the most are able to sidestep the usual pressures of supply and demand.
And if you can do that, there’s no incentive to try to get cost under control in any area.
I mean, this is, to me, the most egregious phenomenon in all of healthcare, although I could be wrong.
I’m sure there are others. But this is just absurd that suppliers are able to work outside the constraints of supply demand pressures.
And it’s no wonder that it’s created just an incredible amount of financial pressure.
And you think about this poor child and his mother and the fight they went through.
I’m glad he’s getting the care that he needs, but it illustrates the other example that her physicians were trying to get her on the drug that worked.
[37:15] And like our physicians don’t have the choice all the time, right? They fought for a medication.
The scrubs aren’t making the decision. The PBM suits are making the decision. And these are very conflicted suits because as I mentioned, they’re allowed to receive the kickback. So they’re pulling, in the money from the pharmaceutical companies. And so we’re getting the best drug that money can buy.
[37:38] But it might be too much. And then the money is flowing to the insurance companies because as I mentioned, CVS Health owns Aetna, but they also own one of the big PBMs Caremark. United Healthcare, they own one of the big PBMs Optum. Express Scripts was bought by Cigna. Those are the three big ones, and those three big ones control about 85% of all prescription drugs.
Why are we letting these three companies that collect kickbacks control our prescription drugs?
And if you know, I mean I mentioned I would say you know two things that the PBMs that are doing that are of concern, You know that the kickback is a problem because it’s a giant conflict of interest So you don’t even know that you’re getting the right medication. It’s not a medical expert necessarily. That’s deciding it It’s a suit. It could be a financial decision and not a medical decision and that’s dangerous.
[38:32] One of the other issues that we discuss in the paper is you know, people say oh just let the government run everything Look at the Medicaid landscape.
So each state has Medicaid and they have their prescription drug Medicaid that is often outsourced, and most states outsource to one of the big PBMs and this has been uncovered in recent years.
In Ohio, they’ve done a really great job there.
The Columbus dispatch, some tremendous reporters there have been uncovering this.
Antonio, I hope I don’t say his name wrong, I think you say Cha-Cha, but he’s been on top of this.
He’s from 3-Axis Advisors and one of the things that they’ve uncovered is really functionally what’s happening is when the PBMs are, they get to be able to pay the money to the pharmacy, they get the money from Medicaid or the insurance company and they use the money that they get for a certain prescription drug to pay off the pharmacy.
There’s no transparency in that payment. they can just keep a portion of the payment.
[39:36] And let me tell you, these big PBMs are not keeping a demure portion of the payment.
In Ohio Medicaid program alone, it was 240 million, I believe, per year that they were helping themselves to.
I mean, functionally, they’re robbing Medicaid. And they’ve been doing it for years.
And it’s getting found out in other states. So I think when you see this happen, I think we have to question these big, consolidated PBMs that are tied with government programs, and they’re tied with private insurances as well.
And we have to unwind where the money is going. And even though it’s necessary to have some administration of the prescription drug benefits so that the pharmacy gets paid, we, have to have transparency in that.
And we have to be hiring people in our government programs In our piggy bank, we have to be responsible so that we’re hiring PBMs that are doing things transparently.
I mean, like, you know, some people will come along and say, Marion wants to get rid of PBMs.
Well, not really my goal. We do need someone that’s controlling the money, but we need someone that’s being transparent, being fair, and being ethical.
And when you’re robbing Medicaid at the tune of 240 million per year, you’re not fair.
You’re not ethical. You’re not responsible. Thank you.
[40:56] Yeah, you’d think somebody would be concerned. 100% because there’s 240 million that just went to a suit or a whole bunch of suits, you know, that then flowed to other places.
And then that means down the line, there’s fewer people that are able to get the help that they truly need.
Well, along those lines, and I know we’re about to run out of time here, I’d like to, I see if I can get a little bit of an assessment from you about our government.
We now officially have divided governance, you know, with a Democrat in control of the White House and Republicans in control of one house of Congress, which is usually a recipe in my experience for nothing’s going to happen.
Can you give us your latest assessment and tell us whether we should be optimistic or, pessimistic about Washington for the next couple of years?
[41:55] Well, I’m actually optimistic. Because if you- Man, I’m glad to hear that.
If you look at healthcare, it’s all nonpartisan.
It’s like all the things that we believe at Free to Care, at least, that need to happen shouldn’t be dealing with the healthcare food fight.
They should be dealing with the need for transparency, the need to investigate these pharmaceutical middlemen, the need to look at cutting the glut, of what physicians are having to do, the need to looking at these mergers.
We need to look out for the patient. We need to look out for the people that need some help here.
All of these things are across the aisle items.
But honestly, instead of getting caught in the healthcare food fight, if the American patient took a look, became more familiar with where the money was flowing, as we point out, and we give specific things that our government can do.
[42:48] And they push on their legislators whether their legislators are R’s or D’s, because that’s responsible.
If you’re a Democrat and you live in a district that’s represented by a Republican, they’re, supposed to represent you too.
You bet. The corollary is if you’re represented by a Democrat and you’re a Republican, you should feel completely comfortable in going and speaking to that Republican. We should be talking to our legislators and pushing on our legislators across the aisle, telling them the problems, and expecting them to solve them, not for the red swath or the blue swath, but for all Americans.
That’s the responsible thing. These guys work for us no matter who they are, no matter the letters behind their name or your name. So it’s really unhelpful when people go out and claim that the Democrats are doing all the wrong things, the Republicans are doing all the wrong things.
Pete Well, and I am really truly encouraged that you see some reason for optimism, but my big worry is exactly something that you’ve alluded to in the past, and that is there are some enormous companies that have buckets of money that they can contribute to political campaigns.
And let’s face it, those people that are voting on bills are going to listen to the people, that give them the millions of dollars.
[44:07] So that is my big worry. And I wonder if you think there may be a solution in sight for that issue.
Well, at some point, Randy, votes matter more than the money.
Can certainly use the money to buy the votes, but not when you get a consumer that becomes educated.
And in healthcare and like look it’s a fifth of the economy. Let’s get educated on it because we’re not going to have a future or children are not going to have a future without that.
Well that is absolutely the key is consumer involvement and you have been a huge champion of just exactly that and I’m grateful that you’re doing what you’re doing and I hope that our little conversation spurs some people to go to the Free2Care website and learn more about what you’re doing. I never get tired of talking to you and I do best when I just listen because you have a lot to say. And at this point, what I have to say is Dr. Marion Mass, thank you so much for being with us today. It’s been a great pleasure to have you back on RX for Success.
[45:16] Dr. Marion Mass My pleasure to be here. Thank you so much. Thank you so much for joining us today. We really hope you’ll help us out with a review and a five-star rating. The ratings give our show much more visibility, and that helps us reach more listeners. You can find exclusive content on our, Patreon page, where you can see membership-only material, including, personal rapid-fire Q&A sessions with our guests. Make sure you never miss an episode by visiting our website at rxforsuccesspodcast.com to subscribe, and while you’re there, you, can offer your very own personal prescription for success.
And please check out our companion podcast, Life Changing Moments, with Dr. Dale Waxman.
Special thanks to Ryan Jones, who created and performs our theme music for the show.
[46:07] And remember, be sure and fill your prescription for success with my next episode.