“The people who are crazy enough to think they can change the world are the ones who do.”
Steve Jobs
Swim Lanes and Ecosystems
A friend recently shared the quotation above with me. The truly crazy thing is our $4 trillion dollar healthcare economy that seems to frustrate everyone, and our struggle to make meaningful improvements within it. Some complain. Some lobby. Some pound their fists. Some take action.
There is no guarantee that anything we do will ever “change the world.” However, we firmly believe that, given enough focus, we can change the lives of patients, one at a time. We also believe we can change the costs and results our employer and union clients are seeing, one patient, one disease state, one day, one location, at a time. We further believe we can change things for our healthcare provider partners one site at a time. That seems like a good place to start.
Last week, Northwind Pharmaceuticals announced our acquisition of QVI Risk Solutions, an Oregon based health benefits administrator. For those that know Northwind and our story, this move is probably not surprising. We’ve spent the last 15 years following the signs, and the value, around how our self-funded clients and healthcare partners want pharmaceuticals to work for them, their plan members, and their patients. We have relentlessly and unapologetically pursued new ideas to help wherever and whenever possible.
However, our acquisition does beg the question: why? Northwind has experienced tremendous growth in our home delivery pharmacy, our programmatic chronic disease-focused Clinical BlueprintsTM, and our pharmacy services administration offerings. Though we are growing rapidly and seeing amazing economic and health-related results for patients and their healthcare sponsors, there is still plenty of work to be done in our “swim lane.” Why would a “pharma” company take on the broader challenge of healthcare and self-funded health benefits?
Health industry contextualist, John Singer, writes that we need to think of healthcare innovation in terms of the “production of health” as novel combinations of old and new systems, ideas, and technologies. All of us are now in the business of healthcare in one form or another. Northwind is not leaving pharmaceuticals behind but evolving our own production of health to focus on the biggest problems and highest areas of value for our clients. We see ourselves within this broader ecosystem and will continue to pursue solutions to our clients’ and partners’ thorniest challenges.
The simple answer to “why” is: because it is needed. All of us are sitting within the perfect storm of a healthcare system that is in danger of being crushed under its own weight. The weight of rising costs, the weight of an aging population, the weight of incredibly high expectations, the weight of conflicted economic models, the weight of entrenched interests and misaligned incentives, the weight of a hugely burdensome regulatory & legal environment, and the weight of its own complexity. No one is immune, the implications for our future are dire, progress is slow, and our demographics will continue to put more pressure on it.
But we’ve heard all of that before. Stop, please. We already know. Agreed. But that is why, we’ve got to keep trying. All of us.
Health Industry Point of View
Our strategy and plan for execution becomes clearer when contextualized within our point of view:
Point of View #1: Most of the myriad issues with our healthcare system, how we pay for it, and the results it produces, can be bucketed into three categories: access, cost, and complexity. These are simple buckets with serious challenges and no simple answers.
Point of View #2: Our healthcare system will not be “fixed” from the top down. We will not solve the deficiencies through regulation or consolidation, but through innovation that happens bottom-up, through localized efforts in smaller, targeted populations.
Point of View #3: The “fix” must incorporate existing systems but they will need to be enhanced with innovation and reimagined in novel combinations – technology, process, and thinking. We need to think in terms of the “production of health” rather than simply reduced costs, regulation, or single-threaded technology solutions. No one player can do it all.
Point of View #4: The production of health is an act of stewardship – of ideas, of technology, of resources, of organizations, and of systems; all of which are necessary to create better overall outcomes in health, cost, and experience.
Point of View #5: Healthcare system innovation will be led by self-funded employers and unions leveraging existing pieces in novel ways while simplifying and unifying the healthcare experience with technology.
Already Happening
Self-funded plan sponsors have been working to address our healthcare system shortcomings for many years. Unbundling traditional health insurance and “self-insuring” was the first step and many organizations have moved, and more continue to move, in this direction. From there, point solutions have emerged and often have great impact for their adopters. Direct primary care, population health, direct contracting, chronic disease management, centers of excellence, care navigation, benefits navigation, and patient apps have proliferated among self-funded employers.
However, as the point solutions have matured, we’ve begun to realize that the access, cost, and complexity barriers to better results still remain even as we invest more in our efforts to address the issues. From a vendor perspective, this is the “what have you done for me lately?” conundrum. It also reflects the reality that we cannot solve the bigger problems in a vacuum. Focusing on solving single-threaded issues is appealing because they are easier to understand and seem to require less investment, but they do not fix the broader issues around cost and can actually increase complexity.
Lessons Learned
Over the last 15 years, Northwind has had the opportunity to partner with innovative direct primary care and advanced primary care providers to address access, cost, and complexity barriers through onsite and nearsite health centers. We have successfully paired our direct contract pharmacy services with our partners’ direct primary care offerings to provide robust clinic programs that reduce costs and improve health outcomes.
How? By taking money already being spent on prescriptions through a traditional PBM, shifting it to a direct contract, and redirecting it toward clinical programs delivered inside the health center, we’ve increased access, decreased cost, and removed complexity, resulting in better outcomes for the patient. We call this Strategic Rx StewardshipTM and it has made a huge difference for thousands of employers and hundreds of thousands of patients.
Through our approach, we’ve discovered that we can help the employer influence and reduce overall drug spend while improving health for targeted populations and decreasing downstream healthcare costs. Today, drug spend makes up 25-30% of a self-funded employer’s overall healthcare costs. What about the other 70%?
Nexus of CareTM
This brings us to the point of this post and the answer to the “why” question brought up earlier. In my book, Nexus of Care: Fulfilling the Promise of Employer-Sponsored Health Centers, I propose a strategy built on what we’ve done so far, what we’ve seen with our health center partners, and what we’ve heard from our self-funded clients. Those paying for healthcare for their employees & plan members want greater influence over healthcare costs and health outcomes. Many are having success with sponsored health centers but there is more to be done and not all self-funded plan sponsors have an onsite or nearsite health center.
Northwind acquired QVI to extend the success we’ve had with our self-funded clients and healthcare partners in pharmacy services into the broader realm of overall healthcare services. We see a world in which the self-funded employer or union leverages their own Nexus of CareTM built upon a primary care point (or points) of influence to quarterback the overall health of their employees within the health center and beyond.
We see a health plan approach that is built from the self-funded plan sponsor outward. We see a non-disruptive (at least to the plan sponsor, the patient, and the provider) path to removing the access, cost, and complexity barriers that are plaguing our healthcare system today. In this world, the patient knows where to get care, does not ration it due to cost, receives care and counsel through their journey, and understands their decision points along the way. In this world, the self-funded plan sponsor has real-time visibility and understanding of their healthcare costs and opportunities, receives expert guidance on key decisions to be made along the way, and is able to track overall healthcare spend like any other investment to determine return and efficacy. In this world, the healthcare provider knows the patient and the health plan, is empowered to help with navigation, has visibility on what happens outside of direct care, and collaborates with the plan sponsor to manage overall population health.
Northwind, QVI, and the Road Ahead
Our plan to bring innovation to our clients and partners will center on the following approach: start from the bottom-up, go local first, be relentlessly patient and payer-centric, stay non-disruptive from an experience perspective, begin with targeted populations, and offer low-risk, progressive path to novel innovations.
Here is what our clients and partners can expect:
- 1) Northwind’s direct contract pharmacy and pharmacy benefit services remain available in all 50 states.
- 2) Northwind QVI’s benefit administration services remain available nationally.
- 3) We will launch our full health plan offering in Indiana, Ohio, and Kentucky for 2024.
- 4) Targeted population health versions of our plan, built on Northwind Clinical BlueprintsTM, will be available in all markets we serve, in coordination with our healthcare partners.
- 5) Northwind’s plan will be built upon relationships with our national health center manager partners, local direct primary care partners, and local health systems.
- 6) Northwind is expanding our clinical and support team in Indianapolis to support new demands from patients, clients, and healthcare providers.
- 7) Our RxStewardTM platform will continue to support our pharmacy services and HealthStewardTM will be made available to support new health plan offerings.
We will continue to post updates as we progress and welcome questions and conversations.
