Dave Chase and the Long March on Health Care Benefits – Harlow on Healthcare

Dave Chase, co-founder of the Health Rosetta Institute, is seeking to identify and scale successes in health care that deliver on the Quadruple Aim. He is focused on the current state of the healthcare industry as an “extractive” industry, and the need to change it by changing health care benefits and services purchasing behavior among the country’s employers. As he puts it, we didn’t get better lighting by optimizing oil lamps.

The current evolution of Dave’s thinking is captured in his recent book, CEO’s Guide to Restoring the American Dream: How to Deliver World Class Health Care to Your Employees at Half the Cost (available via the Health Rosetta Institute website). In his view, we need to rationalize health benefits purchasing in order to stop the unceasing increases in spending with no increase in quality or value. There is a profound disconnect between price and value, and there is significant overtreatment of individuals. On the pricing front, many employer-based health plans seem content to pay just about whatever the providers charge, while better-managed plans focus on reference-based pricing (say, 140% of Medicare fee schedule).  Some would say that, as individual employees have more and more responsibility for health care costs, the self-insured employer health plans’ failure to better manage health care spending is a massive breach of fiduciary duty under ERISA.

Dave sees the future of healthcare as being local, open and decentralized.  All health care is local, but financial players have inserted themselves into the equation, taking some portion of the payment for the services out of the local community. Health care needs to be more open in order to create new solutions to problems in a market dominated by a handful of payors and a relatively small number of integrated delivery systems. Dave finds inspiration in the community of craft brewers who have managed to survive and thrive in the face of almost overwhelming market power of a couple of players by sharing information openly with each other. In addition to openness, craft brewers bear the hallmark of decentralization. Small actors like craft brewers — direct primary care practices, for example — are able to replicate successes rather than scale them. Since these new success stories are decentralized, they do not necessarily appeal to traditional venture capitalists, who look for scalability rather than replicability.

Dave observes that framing an issue as a political problem virtually ensures that nothing will change: folks line up along predictable battle lines and dig in for the duration. His goal is to frame issues as local issues, as employer issues, as issues that can be solved by benefits consultants with their consciousness raised, certified by the Health Rosetta Institute. This small band of benefits consultants now represent four million lives. He sees employers’ current investment in health benefits as being no better than investing in toxic mortgages. We have a system wherein clinicians are mopping up the floor, while the spigot is still turned on full blast. There is no way to improve the situation without turning off the spigot. Five years from now, Dave hopes to have ten times as many lives represented by a growing cohort of certified benefits consultants. These consultants are the vanguard who can begin to turn the supertanker.

I spoke with Dave as part of my ongoing series of fireside chats with healthcare innovation leaders – Harlow on Healthcare, on HealthcareNOW Radio. You can catch me live weekdays at 8:30 am, 4:30 pm and 12:30 am. As each new show goes live, the last one joins the archive, available via SoundCloud or your favorite podcast app (iTunes, Stitcher). Your comments are welcome here. Join the conversation on Twitter at #HarlowOnHC.

David Harlow
The Harlow Group LLC
Health Care Law and Consulting