How do hospitals and health systems stay profitable as they transform to value-based care? What is the role of telehealth? Why is healthcare moving out of hospitals towards home-based care? How will telehealth play a key role? Join Dr. Josh Luke, FACHE healthcare futurist, former hospital CEO, Forbes contributor, author of Amazon bestseller Health-Wealth, and executive edutainer.
Transcript (click to expand)
Thank you so much for having me. This is no surprise to those of you who follow a milton on social media or me, but Milton and me met on social media. What a shocked? Think we both always spent too much time on social media, but it’s only because we both realized the value of social media and about branding and not just personal branding, but branding. The messages that we believe in and the message that Milton and I believe in although mine’s very broad. I know the message he believes in is the telehealth or remote monitoring are an integral part of the future of healthcare and how health is gonna be delivered in the future. And so before we kick off any slides, I just wanted to share with you.
I actually have three books. My first book is called re-admission prevention solutions across the provider continuum. This was written for healthcare administrators. It is really technical about preventing avoidable hospitalization. It was the best-selling book for the american college of healthcare executives, but that’s a trade book. So I got so much great feedback on that back in 2015 that I wrote another book called “Ex-Acute” a former hospital CEO tells all on what’s wrong with american healthcare, what every american needs to know. This one actually went to number 1 on Amazon. It was really cool, its a short book. It’s a fun read. It’ll make you laugh. It might make you cry a little bit. It’s also a guide for how to navigate your parents through their golden years, whether it’s doing assisted living or a nursing home, or providing them home care.
There’s a lot of detail on when and where its appropriate to do that, how much it costs, who pays for it. The kind of secret they don’t want you to know about those levels of care. So you can go check that out on amazon. It’s got about 90 reviews and it’s done really well. In my most recent book, which Forbes asked me to write is called Health-Wealth, Is healthcare bankrupting your business, 9 steps to financial recovery. This one went to number 1 on Amazon the day at launch, which was really cool, but I know Milton loves this. Of the nine steps to financial recovery that I recommend, number 8, Health-Wealth step 8 says promote telehealth and remote monitoring services in your business, in your home with the insurance offering that you provide telehealth and remote monitoring, even if it’s your phone. I’m gonna tell a story in a few minutes about a friend of mine who routinely does physician consult from her couch with her children ’cause she found it to be more productive, more efficient, and she just didn’t have to wait in line or wait in the doctor’s office that’s germ-infected. So that’s kinda where I think Milton and I found some common ground and a little bit about my background. That was a hospital ceo for a lot of years. But before I was a hospital ceo, I actually was a nursing home administrator. So when it came time for somebody to write a book on readmission prevention, healthcare transformation, value-based care, and of course a strong component of that being telehealth remote monitoring, I stepped up and I’ve had a lot of fun doing that.
I do have just a brief presentation that I mentioned to you about that really made the healthcare executives that originally asked me to write. My first book were my diverse background, being a nursing administrator, also a hospital ceo. I was a VP over a health system for post-acute services. I oversaw home health and hospice. So obviously, that led to me founding the national Readmission Prevention collaborative. I now teach it the University of Southern California, and I also do some strategy for a big healthcare law firm here in Los Angeles county. There are a couple slides that talk about the exciting things that happened in my life in 1998. It was a cool year. I got married, and my brother is a ballplayer made it to the majors with the team. That was really cool. And then I also was working in sports marketing, and in that career in sports marketing, I was able to represent mark on wire the year he broke the homerun record from a major basebal in 1998 was really cool. With that said, a lot of cool things were happening, but what happened as soon as I got married and I realized that my career in sports marketing probably wasn’t this fulfilling, is what I wanted to do long term. So I told my new wife, I just… My wife at the time it was brand new, think I wanna do something different. I’m not sure what it is, but it was actually on the way back from new york, where we took mark with wire on the david letterman show, and it had a real quick fun media tour where I just say hey I want to look for something different.
And that ended up being healthcare. My grandmother had been sick, and I’d seen her the week of my wedding, and she was on a lot of complaining about how she can’t get her wheelchair fix, she can’t get a walker. None of her caretakers were communicating was frustrating for me because of the time I was just this young dude. I was a sports marketing guy. But it really started a pull on my heart to say, maybe this is where you should be in healthcare. And it was that lack of communication and inability to access resources and benefits for my grandmother, who was so close to my whole life, that really led me to healthcare. And so I started in a nursing home administrator program, and I did that for a year, and I got my license and started doing that for another year or two. And then I got called by the owner of a hospital company. And basically his question for me was, hey, we have five nursing homes across the street, and they’ve all lost confidence in us. If we hire you to be our ceo, can you get those nursing homes to start referring to us again ’cause we’re just an old hospital, not a lot of deck, we just need somebody to fill those beds. And so I took that challenge on, and it was very successful there for four years and then got recruited to go across town to be the ceo of another hospital and in california for three more years.
But I wanted to tell you what happened to me right before I took that first ceo job that really shaped who I’ve become now, and it was time for my wife and I had our third child and we had just moved back to Southern California after living in Nevada while I was getting my PHD. And I got an insurance card, and I called the two local hospitals on, was a big shiny hospital not for profit, has a bunch of people donate in money to it all the time. And then the other one, just a community hospital round the corner from our house. And so I call each of them. And today, could you tell me what it costs to deliver a baby at your hospital and said, oh, can you give us your insurance? I said, well, no first, just tell me what it costs. And he said, well, we don’t give those prices and we don’t have those prices. But I gave my insurance. I said, we still don’t have it. And so I actually got in the car and drove down to the local community hospital, and I walked up. Could I just get your price sheet for delivering a baby here? Here’s my insurance and the at the front desk, this kind of snicker and got up and went to the back and got her manager, the manager came out and said “Mr, we don’t have those prices, but don’t worry, your insurance will pay for it.”
And as I look back, that was maybe my first exposure to the great healthcare lie. The big lie that is american health care affordability, that our insurance will pay for it, and it’s those six words that killed american healthcare. “Don’t worry, your insurance will pay for it.” It was right before I took over running hospitals that I got those six words that killed american healthcare, but… But I kinda put them in the back of my mind for several years because like most americans, I believe that was true. Oh, I have commercial insurance through my employer. They’ll pay for it. Little did I know that when I choose the more expensive hospital, at the end of the year, whatever costs we’re passing onto my employer, they’re just gonna pass back on to me through an increased premium. So I call those the six words that killed american healthcare “which your insurance will pay for it.” And those words, I learned as a result of a lack of transparency from hospitals, they’ve never had any reason to publish their prices.
In fact, in april of 2018, when this webinar was taped this morning actually april 24th, Medicare announced that they have recommended that all hospitals be required to post prices, and that’s the first time that recommendations ever come from the federal government. I’m hoping it’s into made into policy eventually, because it’s very important that we start to create competition between hospitals. And remember, even if the hospital will tell you it’s cost, here’s what you need to know. Oh, that’s just an estimate ’cause we can’t tell you exactly how much it’s gonna cost until you’re done based on how much the doctor and the nursing team and the folks in the room tell us which procedures are done, which supplies were used. So let me ask you this, what other business in america do you not know the price of the goods or services that you are purchasing in advance? There’s not many, if any, and I’ll tell you in real estate and in finances, you’re not only giving those prices in advance, but they are required by law to disclose in writing. So how backward is health care, It’s those famous last words. Your insurance will pay for it that really have led to this great healthcare line.
So, I wanna ask you a question, listeners, and you guys, you guys can type in or ask this question, but when you shop for a car, do you shop the features, do you shop the color, do you shop how much mile you gets. And when you shop for a home, do you shop neighborhood, school, district bedrooms, things like that? Well, of course you do. Why don’t you do the same for healthcare? Well, let’s do hypothetical here. If you’re a parent like me, this isn’t an easy hypothetical for you. Let’s say we’re driving with our 16 year old daughter fo her 16th birthday. She woke up at 8 AM. She was at the dmv. She took her drivers test. She got her license and she’s so proud. You and mom had promised her for a year in advance, you would pay for half of a car. She’d pay for half, so she saved her money. She went on the internet weeks after that. She printed out the details, the exact car she wanted, right? So it’s now 9 AM on her birthday. She’s got her license in hand, she’s got her money and she’s got the print out of the exact car want. She’s in the backseat, dad’s drive and mom sitting. Okay. And dad comes to the stop light, there are a lot of auto center drive in your hometown, and he turns a signal and he’s ready to turn left to the dealership and daughter rolls down the window in the back and says, daddy, there it is. My exact car, the one I want it, the right color, It’s the right features, It’s even on the right radio station. I can hear my favorite song playing and in the window in big red and yellow sticker numbers. It says, 16000 dollar. We’re so excited. That’s exactly how much money we have. But wait, mom says, hey, look, there it is on the right side of the street as well. The exact car, the exact color, the exact feature. Same radio station, Same song, only different the window stickers in in red and yellow that say, 42000 dollar. So here’s what I wanna ask you. Moms and dads, particularly your dad ’cause I know you. Which way are you gonna turn? Because I know most dads I know would have pretended like they didn’t hear mom and they turned left and pay a lesser price. But I wanna pause this story before it ends and ask and ask you listeners in the last 20 years. Think about a time where you had to have a surgery, a procedure, deliver a baby and your insurance at you can pick between one of these facilities and you went to the one that you perceived to be biggest and best in highest quality or nearby your house. You didn’t look at price, you didn’t shop up those things you didn’t ask because you were led to believe you were really brainwashed just as I was as a young genx hey, your insurance will pay for it, so go wherever.
Now we’re talking about the same thing with a car. So if your insurance gave you a blank cheque, which I’ve had that happen, many people have from car insurance before, hey, just go pick out a new car, we’ll pay for it. Well, which way would you have turned if it was a blank check. Would you have turned right and said, hey, what’s difference with this car that went across the street, because if it’s your own money, I can guarantee you’re gonna turn left and ask the same question. What’s the difference between the 16000 version and the 42000 version across the street. Here’s the last point I wanna make on the hypothetical story ’cause I think it’s the perfect visual to help you understand that you need to shop healthcare. Here’s what I need you to know. The same doctor will operate on you on the left side of the street that would operate you on the right side of the street at 60% more, if not to you, to your employer, which means at the end of the year, you’re guaranteed that your rates are gonna go up and what do they do when they raise your rates. They also say, oh, hey, we removed a couple of your benefits as well. So you pay more, you get less right. So what is this that I’m describing? It’s called becoming really engaging in the process and becoming an engaged healthcare consumer. But let me tell you, I’m from Southern California, Orange County, which is just south of Los Angeles. And I read an article that talked about local medical tourism in Santa Barbara county, which is north of LA… The county of Santa Barbara takes all of their hip and knees surgeries and other procedures all the way down to San Diego county more than 200 miles away. If you’re one of their employees instead of paying the average rate in Santa Barbara county of 110000 for this specific procedure, they will send you down to San Diego county. They’ll pay five night to the five star resort for you and a friend or a spouse. Okay. One night in advance to meet the doctor, do the prep work, four nights of rehab in a really nice resort, pay for your travel, pay for your accommodations. And after they pay for that surgery in San Diego and five star hospital, they save 60000, your company does.
You know what really dawned upon me, Milton, about that story, is that’s the county. You would think that the county would be last to the game to make that really responsible decision, because usually the public sectors behind the private sector in figuring these things out. But what really dawn upon me is the county commissioner, whoever made this decision is probably on committees and boards of directors and having breakfast with the CEO of those hospitals once a month. And he or she might have said, Hey buddy, I’ll play golf with you, but I’m taking all the good business that you’ve been overcharging me for three hours to the South. And I thought that was very powerful because that’s very real. But think about that, and I’ll give you one more tip for your listeners here. When that opportunity comes for what I call local medical tourism, because the average distance, my friend david Contounell, says, you have to drive to get to what we call center of excellence. Like I just described, there’s only 35 miles, a lot of you drive further than that to work every day. So the average distance is 35 miles. But for example, if you need a procedure and your company says, hey, it’s a 1000 dollar if you go to the center of excellence, you might have to drive a few extra miles. Or it’s 5000 to you co-pay if you go to the big shiny hospital that has spent money on advertising and led you to believe for some reason their quality is better than the other which often is not. Here’s what I wanna tell you, if you decide to go to the 1000 dollar version instead of the 5000 dollar version, go ask your company, your hr director, if they will pay your thousand or co-pay for you, you might say, well, why would they do that? And here’s the answer. I just gave it to you a minute ago. They’re gonna save 60000 by throwing you an extra 1000. They still save 59000. Pretty good reason for them to pay a thousands to keep you from having to pay it out of your pocket, isn’t it?
So what are we talking about? We’re talking about becoming an EHC, an engaged healthcare consumer. We’re gonna engage in the healthcare shopping process just as we would if it was a house or a car. When I got done writing Health-Wealth “is Healthcare bankrupting your business. 9 steps to financial recovery”, I said aback instead of these nine steps that I realized are critical for folks to start thinking about if we wanna reduce healthcare spend. They all fit into these two categories and they both started with a P. So my new thing is to become an engaged healthcare consumer, I need you to do the three Ps, have a plan based on personalized medicine and preventative medicine. And most of these things, if not all, can be bundled into one or both of those ’cause they’re so closely related and that gets right back to telehealth and remote monitoring. I love the fact that millennials have no qualms, no hesitation whatsoever doing a doctor’s appointment from their phone from their chair, instead of doing what we did is Gen Xers and as boomers, which is to call and wait on hold and have some disrespectful. Receptionist tells they might be able to squeeze the sand in three days. But if we came before lunch today and waiting in this germ infested, waiting room for an hour, with kids running around licking the arm handles of the chair, the doctor might be able to squeeze us in, spend two minutes with this, write of prescription, and then I still gonna cancel everything for the day right. Now, I wake up and with these new alternative insurance models, I say, hey doc, can I do a consult in the next 20 minutes. Yeah, come on 17 minutes here, and we’ll just do a consult. We’ll call a prescription in, and you can pick it up a half hour from now and you don’t have to cancel anything. You have the kids at school on time. That’s the future. And Milton you know that because you’re one of the visionaries that’s bringing that personalized touch to healthcare.
So just in, in kind of closing out these last few slides, one of the things that’s really cool is this book was released on january 18th and became a bestseller on amazon, Health-Wealth, that same day check it all the five or six things that have happened since then. That same day, inter-mountain healthcare and Ascension, in some of the biggest healthcare systems in the country, said, we’re getting rid of our pharmacy and we’re creating our own generic pharmany by ’cause we healthcare providers, hospitals can’t afford healthcare right. Within a week, Guess what else happen? Apple announced it was putting your electronic medical record in the palm of your hand. Right here, which has never been possible. Today, If you want your electronic medical record from the hospital, you go ask, you gotta pay. They give you a dirty look ’cause you’re inconvenience them. They tell you, you got to wait three hours, they can go make a photo copy, and then it’s usually only half of what you were looking for when you get it anyway. And you come back three days later and you get it. That’s not right. It’s not appropriate. Thats your medical record, apple is making sure they’re putting it in your hand. Guess what happened a week after that, And you’ve all heard this one. Amazon, Berthshire Hathaway, and JP Morgan said, we can’t afford healthcare. We’ve reached our healthcare spending tipping point. We’re gonna blow it up, start all over and reinvent the whole model. I’m gonna predict to you right now, that amazon and Walmart, if not both, will be one or two of the largest providers of health insurance to the American public five years from now. That’s my hope. And that’s my goal. They’re gonna reinvent the wheel and they’re gonna let us do it right. They’re gonna do it the way millennials have always seen it because they weren’t poison and corrupted by this silly model. We had a fee for service where healthcare was more about doctors in hospitals getting paid, and it’s so hard for us Gen Xers to get that out of our head. I see the healthcare leaders of the future being millennials for that reason. Guess what happened a week after that, Disney have you heard of that company, they said, hey, in Orlando, we’re actually gonna get rid of our insurance carriers. Well, we’re gonna contract directly with the health system. We’re gonna start over with our own new model. We’re gonna implement telehealth remote monitoring because we can’t afford, Disney can’t afford healthcare. You know much to go to disneyland, they still can’t afford healthcare.
So what happened a week after that? Apple announced they are building on site clinics at their facilities where their employers work. This is actually one of the steps mentioned in the consumer driven healthcare section of this book, that if you have 400 employees or more on one campus, or 500 in a local area that makes you a candidate to put either a clinic on site, or to contract with one in your parking lot, because it will really bring your cost down and two other things that happened in the last since then, this is all since january 2018. We’re not even on May 18, right? This is all happening. Two other things happen. The first thing was that walmart said, hey, if you can’t beat them, join them. Oh wait, no, that’s the wrong cliche. If you can’t beat them, buy them. Healthcare is their only uncontrollable expense. One of the most efficient companies in the world, Walmart said, hey, Humana, every year, just bring us a higher rate, so that’s not how our company works, man, we’re about cost efficiency for the consumer. So we’re just gonna buy you so we can fix it. And that’s what you see happening right now.
And the last thing I mentioned, I think, just happened this morning here in the late april 2018, is that the federal government say, hey hospital, we want you to post your prices. And what that means is when they’re forced to do that, we’re gonna start to create competition. You’re gonna see hospital prices come down, the insurers are no longer gonna have justification to overcharge us and inflate their premiums as well. And now all the sudden, healthcare is become like every other capitalistic product, a competitive market, where they have to be accountable to us. So just wrapping up here, there’s a generational crisis. Did you know that more than 50% millennials’ lifetime earnings, that current projections is gonna go to healthcare in america. And that’s just tragic. There’s really no other way to describe it. If you read my writings or even my books, you know that when I did lose my job as a hospital CEO years ago, my wife and I made the difficult decision not to pay between 1400-2000 dollar a month, *unclear* benefits, even with kids in elementary and middle school, because we just didn’t think it was right. We thought it was unjust. We thought it was inappropriate. And I will tell you the last straw when Forbes asked me to write this book about healthcare affordability ’cause I wasn’t quite sure it was my expertise at the time a year ago, was when my wife said, well, you remember when you were out of work, we decided not to have healthcare benefits because we couldn’t justify 15 grand a month when you had no income. I got to think, and I’d been blessed. I’ve had the six digit income for years. I’ve been a good steward. My finance and my wife and I am just honored, saving money and preparing for what’s coming. And yet I have a six month loan. I can’t afford healthcare, so who can? And that’s really one of the things that led me to say, you know, I’m gonna write this book because america has reach this tipping point, not just families but businesses.
So if millennials are spending one and every two of their dollars on healthcare, what about generation Z? And my three kids are Gen Z and you know when they get to college and get out of college. And finally when they go, maybe I need health benefits ’cause you really don’t think about it till then, I’m not gonna be able to blame them when they go, I don’t want health care. I’m not gonna work my tail, so, one of every two dollars can be paid to a system thats inefficient. And my answer’s gonna be… I don’t blame you. Just talk a little bit about millennials here. There’s a slide here that talks about millennial culture and how important it is, but I’m gonna skip in the interest of time, so we get some of these questions. If you haven’t watched Simon Sinek video on millennials in the workplace, and how millennials interpret communication, I encourage you to go on youtube and look up Simon Sinek and millennial communication. And then I also would encourage you to look at *unclear* article and health leaders magazine about how a millennial and boomer cope exist in the same office in a healthcare environment. I want… You also know that as of february 2018, millennials is the dominant generation in the american workforce. So you can no longer roll your eyes every time somebody uses *unclear*, by the way, millenials were born between 1983 and 1999. Give or take. So if you’re wondering what millennial is, they were born during that time period. They are now the dominant generation in the american workforce, and they’re interpreting communication differently much differently than the rest of us. So it’s time that you stop trolling your eyes and started understanding that not only do they interpret things differently, but a milllenial culture has now become mainstream american culture.
So the two basic concepts we’ve been talking about in this presentation, are consumerism or consumer driven healthcare. Remember we talked about centers of value, local medical tourism, personalized, and preventative offerings, and specialized programs for chronic diseases. And the second thing is creating a health wealth culture within your home and within your company where you’re equipping your family members and your employees to be healthy, to live healthy, to use these more timely technologies like telehealth. Because, hey, I ran hospitals where I couldn’t get a psychiatrist to come and evaluate a patient in my emergency room for days at the time. Now with the camera and a contract, I can have it done in 15 minutes through telehealth. HIPAA is taken care of. There’s privacy, it’s more efficient. The patients are actually much happier. And remember the millennials have no objection to the telehealth consult. It’s us as boomers and generations X that aren’t used to it that are having to adapt to it. So the question I have for your listeners, whether you’re running a business or just up running your home is have you made accommodations to allow your family members and your employees to become engaged healthcare consumers?
We talked about local medical tourism. We’ve talked about telehealth. I’m also a big proponent of DNA testing in genome sequencing, because that gets you closer to personalized and preventative medicine. And I also would share with you, and this is where telehealth and remote monitoring mold with something else is what I refer to as integrative medicine. A lot of you might think of it as natural or naturopathic medicine. Some people say, oh, that’s eastern medicine. Well, I’ll give you the 60 second speech on eastern medicine, which is by the way, step nine of the Health-Wealth, nine steps of natural recovery, integrative medicine. What that simply means is use natural methods and combine them with your western health care philosophy. By the way, do you know what the western health care philosophy is? If you’re sick go to the hospital, and if you’re sick, you need a pill to fix it. That’s the whole model.
So integrate is simply saying, let’s not be naive. The pharmaceutical companies and the hospital trade convinced us as boomers and Gen Xers to buy into that you need a pill and you need to go to the hospital ’cause they get rich while we get poor. Integrative medicine is about taking natural methods, getting a DNA test, getting an integrative consult with somebody who might be able to look at your pharma code genetic makeup, your nurture genetic tell you these foods are fuels for you. These others aren’t. This type of exercise is good for you. This one isn’t, here’s some different things. Really what you learn when you study naturopathic medicine is that until the 50s and 60s, there were more than 120 university programs in the united states that offered naturopathic medicine and the big pharma message of you need a pill to fix yourself, really crushed that.
So with that, I have a big component of combining western and eastern technologies to really improve health. What employers can do to reduce corporate healthcare spending. I think we’ve already talked about this. One other thing is called direct primary care where you contract directly, as I mentioned with a clinic. So your employees can do walk-ins or any time telehealth and remote monitoring consults. If you wanna take 3-5% of your overall healthcare spend off the top right out the bat if you are a company, you can eliminate the annual required physical or wellness visit ’cause even the united states, food and drug administration doesn’t even commend an annual physical for individuals under the age of 50.
And then what about health literacy and health wealth culture on campus or in your house? If you’re doing these things to educate your family members and employees about how to live healthier and save money, then you’ll have a health wealth culture. I have a slide with some best practices. You can look at here for a second, but we’re gonna skip on because I wanna get some of your guys questions. If you ever need a speaker on health care affordability or how to live healthier, smarter how to use personalize preventative medicine tactics. I’m happy to speak to your church, to your business, to your trade group. I speak to all those all the time and just enclosing. A lot of folks are like, well, this guy’s pretty passionate. What’s driving him, it’s not just my grandmother, it’s that in 2010, my mom was diagnosed with Alzheimer’s disease, and this is an awful disease. My grandmother’s both had touched, I was familiar with it, but I was really angry that my mom got diagnosed at age 65, and I felt like that was too young. So it was about five years later when the first copy of my book Re-aadmission prevention arrived in the mail. And I looked at and said to my wife, and I wanna run up to my mom and dad’s house and take a copy this book to him. I’m thinking for always encouraging education that my wife looked back to me and said, hey, I don’t know if you know this, but your mom can’t read anymore. And I didn’t know that. And my mom is the women who taught me to read. And so that was the day I actually decided, instead of being angry. I want to honor my mom by honoring the value she instilled in me. I’m gonna wear purple and I’m gonna wear purple when I speak so I can honor my mom and raise money for alzheimer’s disease. I’m going to start a non for profit, so every time I speak or have somebody asked me to help them a strategy consulting, I can donate those funds to Alzheimer’s research. So it’s been a real pleasure and an rewarding to do these things and to be on this path. And for any of your webinar listeners that want to how to get a hold of me. This last slide, you can go to Dr Josh Luke on linkedin. You can go to DrJoshLuke.com.
About the Speaker:
Dr. Josh Luke is a healthcare futurist, former hospital CEO and health system vice president well known for his humorous and entertaining personal stories that engage audiences. His expertise includes sharing simple tactics on how hospitals and health systems can partner with innovative disease specific providers to increase revenues and market share. His knowledge of these specialized providers comes as a result of his role with Forbes as an author and contributor known to Fortune 500 Company’s as America’s Healthcare Affordability Authority.