Drug Prices, Medicare Challenges, and Provider Sustainability w/ Marc Ryan

Erik Sunset: [00:00:00] Hello and welcome back. I’m Erik Sunset, your host of the DocBuddy Journal. We’ve got a, a familiar face on today we’re joined again by Marc Ryan. Marc is the Chief Solutions Officer with Lilac Software. Mark, how you doing? Thanks for coming back on.

Marc Ryan: I am doing great, Eric. Nice to see you again, and I really love doing these.

Erik Sunset: Yeah, I, I do too. This is such interesting subject matter. You know, we talked last year, kind of in the run up to the election and talked again after the election and there’s a lot of sort of opacity on what’s going to happen. You know, if you had a crystal ball, you and, you know, could see into the future, you’d have a pretty good idea.

Erik Sunset: But things are starting to crystallize a little bit, as it were. So, I know we want to talk a little bit about how, uh, the landscape is solidifying.

Marc Ryan: Absolutely.

Erik Sunset: Um, but before, before we get into the, the heart of the episode, I know you had a, a couple thoughts, sort of an exciting development in your personal life, um, related to one of the hottest topics in healthcare right now.

Erik Sunset: I don’t want to steal any of your thunder, but please, uh, [00:01:00] enlighten our audience.

Marc Ryan: No, that, that’s great. You know, you mentioned to me when I got on that I looked a little bit different over the months that I’ve been on here, and I told you that I am now on a GLP one. Uh, I’m on Manjaro. Uh, you know, I just reached the age of 60, and when you have type two diabetes, it tends to start inching up into that danger zone.

Marc Ryan: So I’m really conservative on medications, but, uh, my doctor and I talked about it. And I made the leap to going on a GLP one, and I was a skeptic. I don’t like being on, you know, brand new drugs. Uh, I like legacy drugs because I know they’re sort of proven and things like that. So, again, I’m a little cautious, but I decided to make the leap because my, uh, sister went on it as well, and she had a lot of great outcomes.

Marc Ryan: I’ve lost 50 pounds in about nine months. All of my [00:02:00] numbers that historically were high, my hemoglobin A1C, my cholesterol, my statins, my triglyceride, all of those things have literally come down into the normal range and I feel great, right? I lost a little muscle mass, which people have to wait, watch.

Marc Ryan: But otherwise, I’m vigorous and I really feel good, and I’m down 70 pounds total, 50 pounds on the drug, but. It really is amazing what these drugs can do, and it got me thinking that, uh, you know, I have a great retiree health plan from a government, and so I literally pay nothing for that GLP one. So the high price of the GLP one, which runs a thousand to $1,300, this price is not an issue for me because I’m privileged to have great healthcare.

Marc Ryan: And, you know, I, I have done well in my life anyway, right? So even if I didn’t have great healthcare, I probably could afford it. But it led me to really think about the fact [00:03:00] that most people either through means to pay on their own or through health insurance, where many of their health insurance doesn’t cover it just for weight loss.

Marc Ryan: Or they may have a very high out-of-pocket cost. They may have a di. Deductible before it’s covered. It’s a huge barrier to getting on a life-changing drug. And we often talk about, you know, people on insulin having to go to Canada because it was so expensive and things like that. But it really led me to think that drug prices in this country really are sort of hurting people’s health and hurting people’s access.

Marc Ryan: And GLP ones is a great example. Uh. I am sort of saying Medicare probably can’t afford to cover it right now because of the explosive costs, right? And it ends up hurting other parts of the health sector. But if we could get the price down, I think a lot of people could really benefit from it as long as they stay on it.

Marc Ryan: They [00:04:00] exercise, they eat right too. All those things are really important and when you’re on the drug, you have a change in psychology to say, I’m going to eat better, I’m gonna exercise more, things like that. So I was very pleased. Uh, I don’t agree with Donald Trump on everything. I’m a Republican, but much more of a moderate guy.

Marc Ryan: But I was very pleased to hear him on Super Bowl Sunday, say. Hey, these GLP one drugs are about 10 cents on the dollar in the United Kingdom. And frankly, he had studied the issue. He’s absolutely right and I really believe he’s gonna do something on this front. Uh, we’ll sort of get into the policy now.

Marc Ryan: It appears that his administration is gonna keep the Medicare drug negotiation law. Dr. Oz, who is now the CMS administrator wants to do that as well. So I think contrary to popular opinion, big pharma loses that debate. I think the populism in Trump, uh, keeps the [00:05:00] law. And I think over time you’re gonna start to see changes in drug pricing.

Marc Ryan: Right? I think I give Joe Biden a lot of credit for starting it. I think hopefully Donald Trump will continue that because I think it really is a question of equity with other nations. Uh, we’re basically paying for other nations, GDP, and even subsidizing their healthcare system in general. Uh, and uh, this would really be a great thing for Americans if they can have better access to drugs at much lower costs.

Erik Sunset: Well, that, that’s a huge accomplishment and a huge achievement. And Mark, you were like the, the poster child for the right application, uh, of the GLP. Ones, you know, o obviously we’ve had prior guests, uh, doctors, surgeons of different types. You know, I, I’m not qualified to give medical advice. I’m not, doctor, I know you’re not giving medical advice.

Erik Sunset: Mark, if you are curious about GLP ones, talk to your physician. [00:06:00] Do not the advice of our, uh, surgeons and doctor guests on the show. You do, you have no business going online and ordering them to your door without the oversight of your physician. So just.

Marc Ryan: Real, real, real, true. Whether it’s just weight loss or it’s in combination with a disease state. Right? And by the way, a caution. There are a lot of scams, there’s a lot of fakes out there. This is one area where people are falling for drugs that aren’t really drugs or drugs that could actually harm you.

Marc Ryan: So, uh, you know, just be very cautious. There are still some I. Compounding ones out there that are probably okay if you know who the compounder is and you work with your physician, that may go away due to patent infringement, lawsuits and things like that, and the shortage not being there. But Eric, you’re absolutely right, you gotta be very cautious.

Marc Ryan: It’s gotta be done deliberately over time and things like that.

Erik Sunset: Yeah, if, if you’re not qualified to know yourself, [00:07:00] then your physician is, where is your next phone call? Uh, so we’ll, we’ll, we’ll move past the red tape there. You, you said something interesting. Um, and turning our attention to the heart of the show, uh, that we’ve been subsidizing other nation’s, GDPs obviously, uh, this is maybe tangent to what you really wanna talk about today, but with the Department of Government efficiency and the uncovering all of all the U-S-A-I-D information.

Erik Sunset: And you know, I only know what they tell me. I’m not in Washington. I can only read what’s being reported on. And certainly I’m big, a big, big grain of salt type of guy. But what you just said really rings true that there seems to be tremendous amounts of money flowing to all corners of the earth. And maybe that’s going to stop.

Erik Sunset: Maybe that’s not, there’s judicial injunctions in place to prevent some of these things from being carried out. Uh, uh, stopping of these things from being carried out. What, from your perspective, mark, what does that look like in terms of healthcare? What could potentially be changing? Is there anything that’s caught your eye in the [00:08:00] dogue?

Erik Sunset: Uh, sense.

Marc Ryan: Sure, let me touch upon the, uh, the sort of subsidizing the GDP issue as I did some research here and it’s absolutely amazing. So, uh, the Manno. Uh, drug and its counterpart for weight loss. Zep Bound is, uh, manufactured by Novo Nor Nordisk, which is a Danish company. And it’s interesting, we talked earlier about Greenland and all those things going on with Trump.

Marc Ryan: Uh, and Greenland is a, is a Danish. Uh. Autonomous region, so to speak. But literally there are statistics today that says that the, uh, growth in trade exports from Denmark as well as uh, the GDP growth has very much been because of Novo Nordisk and GLP ones and essentially what’s happening, and I’m sort of more of a.

Marc Ryan: Anti [00:09:00] tariff free market guy, and I don’t totally agree with Trump on those things, but I do agree on this thing. Essentially, we are being taken for a ride by all brand pharmaceutical companies, but especially foreign ones that have cut deals to have very low prices in Europe and. I’ll give Europe credit for driving lower prices.

Marc Ryan: But then those foreign companies, and even domestic ones, because even our US based domestic ones are multinationals have basically, they’ve all come together to say, I am gonna get all of my profits and all of my revenue in ES, in essence, from America. And I am gonna cut deals in foreign countries for very low drug prices.

Marc Ryan: It becomes gravy, but the lion’s share anywhere from two thirds to three quarters of brand drug makers, profits across the world, regardless of where they’re based is from America. [00:10:00] And most of that American profit is from Medicare, just given the drug utilization. And so it really leads to the question of.

Marc Ryan: Why are we subsidizing foreign GDPs? Why are we subsidizing, in essence, the healthcare systems of other countries because they benefit from low drug prices, lower cost, where we have the highest cost and very high drug prices. So. It’s, it’s, I believe, Trump’s right on attacking this one. I may not totally agree with all the tariff policy and things like that, and I actually think some of the tariffs will increase healthcare costs for different kinds of durable medical equipment and other supplies and even drugs.

Marc Ryan: But it’s a very interesting thing if you really dig down into Denmark’s, GDP. Where it came from. It’s all about having Americans pay excessive prices on drugs, especially weight loss ones.

Erik Sunset: Well, and that, [00:11:00] that, uh, that brings to mind to talking point over the last 30 years or so, I think there’s been a little more enlightenment in the last five or so years and pe people that should know already know what you just discussed around, uh. A domestic domestically high price, and an internationally, you know, artificially low price.

Erik Sunset: But the talking point from from big pharma, if you will, was that it costs money to research and develop new drugs. You pay so much because you want the next new drug, right? What if the next new drug cures X, Y, or Z? Well, of course, these don’t just fall off the tree. We have to pay to research and analyze them.

Erik Sunset: That doesn’t seem to have been the case though. Uh, simply put, America was just footing the bill for essentially these pharma companies, r and d, as opposed to.

Marc Ryan: Absolutely. And I don’t dismiss the idea that innovation could be impacted, but I think there are ways around that, and I’ll get back to the Doge question here in a second ’cause I want to tie it in. But if you look at, um, [00:12:00] if you look at innovation so far since the Medicare drug law passed, there’s no evidence yet that it is impacting research and development and, and innovation in the sector Now.

Marc Ryan: We’re a little early in it, but the, uh, chicken little, the sky is falling argument from brand big pharma has not come true right now. Again, innovation could be impacted, but I would say a couple more things. One, if we can lower our price, maybe foreign prices have to increase somewhat. And that’s where we get some of the innovation monies back, right?

Marc Ryan: Number two, if you look at a lot of innovation in the drug sector, it has not been what I believe is true innovation for health. It’s been innovation for big pharma’s bottom line, they are picking drugs that they think will drive the. Best margin, and I don’t doubt that they help certain people, [00:13:00] but they are not developing, perhaps with the exception to GLP ones and a few others, uh, things that are really gonna profoundly improve health across the world or even in America.

Marc Ryan: And they also have invested a lot of money. In copycats where they are seeking to extend patents on drugs by cosmetically changing them and things like that. So again, I think the innovation monies are not going away. A lot of innovation monies have not been spent wisely. Uh, maybe the foreign governments have to step up and pay for some of the innovation.

Marc Ryan: And last, coming back to Doge. I believe in government investment. And I think if you look at drug innovation and other innovation in the nation over the years, really since World War ii, the science grants and the investments that NIH and other agencies of the US government. [00:14:00] Has been very beneficial and my fear right now with Doge, I’m a former state budget director.

Marc Ryan: I do believe there’s waste in government. So I support the idea of going in and you know, with a larger scalpel than usual, but not a hatchet going in and maybe doing things because we have. Our debt is incredible, but my criticism of what’s going on right now, whether it’s layoffs or holding up funding, is it is too quick.

Marc Ryan: It’s scattershot, and it really is impacting important things. There’s a great statistic out there that said some of our science and healthcare investments. Have increased our pro productivity dramatically since World War ii, and I think it’s about a quarter. If I remember the stat, a quarter of our increased productivity came from some of these government grants, and as we know.

Marc Ryan: Um, we are highly more [00:15:00] productive than virtually any other developed World Nation. Germany is pretty productive, but if you look at the rest of them, productivity is low and we thrive and survive on our productivity. In the US we have a whole bunch of barriers and costs that hurt us, but we thrive on the, the ability to be more productive and.

Marc Ryan: Unfortunately, I think getting rid of some of these research and other grants impacts innovation as well as productivity in our country. So I think we have to be much more balanced in terms of what DOS is doing. Although it’s a good idea, it’s time has come. I

Erik Sunset: Sure. Yeah, it’ll be interesting to see. I mean, you’re right, the pendulum has swung, you know, not just a hatchet, but how about a chainsaw, you know, in.

Marc Ryan: And we’ve seen chainsaws, right. So.

Erik Sunset: Right. We’ll, uh, hopefully end up back in sort of a, a happy medium, uh, as, as you pointed out, and I know, I know there’s a couple thoughts that you had on some of the [00:16:00] interesting dynamics that are in place in Congress. You know, not, not to fly through any of our discussion points, but Tom’s got his cabinet in place

Marc Ryan: Yep.

Erik Sunset: and got everybody but his, uh, CDC director, Dave Weldon, uh, installed, for lack of a better term.

Erik Sunset: You know, take, take us from there, mark.

Marc Ryan: Yeah. So interestingly, uh, contrary to popular wisdom, Trump got pretty much all of his healthcare appointees, right? So Weldon at the CDC was the one exception actually. Um, he sort of was an anti-vaccine skeptic, and even though. RFK Jr. Who was confirmed, was a skeptic too. They sort of went after Weldon because they really couldn’t go after Kennedy, right?

Marc Ryan: So he got Dr. Oz, he got Kennedy, he got Marty McCarey, who I think very highly of, who is going to lead the FDA. He got his N-A-N-A-H director. Uh, and there’s still a couple more out there, but he actually got his healthcare guys. I [00:17:00] know some of them were controversial. I’m sort of a guy that says A president deserves the guys he wants, as long as they’re fairly reasonable.

Marc Ryan: And I think the Senate actually did a good job of looking at that and getting some commitments from Kennedy, for example, that he would be balanced and things like that. So that’s one good development by the president. He’s sort of got people that people thought they wouldn’t, uh, they passed a funding bill for.

Marc Ryan: FFY 25, which ends in September, so that’s a success story. We will reach the debt limit in August, so we believe that a budget reconciliation bill to extend the Trump tax cuts will be passed anywhere between May and August. It’s still gonna be very tough fight. That vote counts in the house and the Senate are very close, and some moderates could jump off if, uh, cuts are too extensive.

Marc Ryan: But the GOP is fighting for those cuts because extending [00:18:00] the tax cuts cost money over the budget horizon. So they don’t wanna inflate the debt in deficit too much. So they’re looking for several trillion dollars over the 10 year horizon in cuts. Many of them are slated for healthcare at the same time, Trump and even some house GOP and Senate GOP leaders have said, we’re not gonna cut Medicaid or Medicare.

Marc Ryan: In terms of coverage, we’re not gonna take it away from people, but if you look at the bogey, almost a trillion dollars, 880, uh, billion over 10 years in the house. Uh, it’s almost a question of how do they do it without impacting coverage, right? They’re talking about waste, fraud, and abuse and things like that, but there’s not enough money really out there.

Marc Ryan: So my theory is they may not go after. Uh, redefining the programs like [00:19:00] Medicaid in a fundamental way, but they’re gonna find ways to reduce fraud, waste, and abuse. Curb provider taxes that drive spending and things like that. There will be coverage impacts because when you start taking hundreds of millions of dollars over horizon, out of any program, there will be coverage impacts.

Marc Ryan: But I say they’re trying to thread the needle. How do they say, I didn’t fundamentally impact your coverage, but I did find savings to pay for the tax cuts. So that’s sort of where we are now. We’ll know whether the bill passes. I think it will. I. But how big those cuts will be and what the impacts on coverage are is sort of the real unknown.

Marc Ryan: And you know, I say there’s a lot of dynamics in Congress. If I could jump to that one here again, you have the tight vote counts in each chamber. You have some moderate voices in each chamber. Um, some of my favorite senators are Lisa [00:20:00] Murkowski and Susan Collins. On the Republican side, they’re sort of pro healthcare coverage, but reasonable people as well, and they wanna sort of watch spending.

Marc Ryan: So I think that’s the good mentality. They’re gonna be very important in the vote in the Senate in the house. There are, they’re getting much fewer. In terms of moderates in the house, but there are still several dozen and they will play a role. There are swing districts in the house and in the Senate, so to speak, that will come into play.

Marc Ryan: The GOP does not wanna lose their majorities in either I. But a swing of a couple of seats in each chamber could do that. So even some of the Republican leaders and people in the swing districts are concerned about deep cuts. You have something called the GOP Doctor’s Caucus. In each chamber, there’s about a.

Marc Ryan: About a dozen doctors in each chamber that are, uh, have sway and they tend to be pretty pro providers, so they’re gonna be [00:21:00] watching for cuts that impact providers states have tremendous influence. They don’t wanna see the reimbursement cut. And lastly, I’d say Trump is actually now looking at his legacy.

Marc Ryan: He can’t run again or so we think we don’t know what he’s gonna do, right? But he can’t run again, and he is looking a little bit at his legacy. He wants to be known as a reorganizer and extending his tax cuts. But he’s also worried about looking too cut oriented in impacting the voters that got him back into office.

Marc Ryan: So all of those sort of six or so things come together to create a dynamic in budget reconciliation that number one is fluid and it changes by the day. And number two raises a lot of issues about exactly what’s gonna happen. So I hope that helps as an update.

Erik Sunset: Oh, absolutely. And, uh, one of the questions I have for you, mark, looking at the, the patient side of Medicare, looking at the [00:22:00] provider side of Medicare, you know, since the 25 fee schedule was released in, uh. October, I guess, you know, late last year, Q4, last year. Every single stakeholder on the provider side, whether they’re uh, an administrator, a business office manager, a provider, a surgeon, a nurse, whatever. Nobody’s happy about that. Nobody’s happy about the 25 fee schedule. They keep paying us less and they keep asking us to do more. It’s ridiculous. You, you look at the, the coverage and the out of pocket that patients, uh, have to endure to have, you know, any amount of what you could consider real care. When do we have to rip it apart and put it back together because it’s not really working for anybody at, at this stage.

Marc Ryan: Uh, I think you’re absolutely right Eric. And, um. I believe that we are at that point now where the system becomes unsustainable. I, I’ll give you a quick stat here. Employer coverage in 23 and 24. [00:23:00] Uh, and into 25 will grow at an annual rate. The cost of healthcare for employers will grow between six and 8%, 23, 24, and 25.

Marc Ryan: We have some of the stats and we have projections, and in 26 it will grow another six to 8%. So if we just say it’s seven times four, alm uh, close to 30% increase in. Four years in employer costs. Now we know that about half of the nation is covered with employer costs, and employers have tried to hold their employees harmless.

Marc Ryan: They’ve done a pretty good job. They’ve taken up more of the cost, but they’ve passed on a little. More and more employers can’t afford that. And we are starting to see seepage, we’re starting to see employee share of premiums go up. To your point, we’re seeing deductibles and Ben benefit erosion and that is causing what I [00:24:00] call, you may not be uninsured, like 28 to 30 other million people, but there are probably.

Marc Ryan: Between the uninsured and the underinsured, somewhere around 85 million in the country, about 25% of the country that are either uninsured or more importantly underinsured because the cost that they have to pay out of pocket to access their insurance and get into the healthcare sector is too high. And what happens is people.

Marc Ryan: Delay costs. They delay tests, and if you look at the statistics that is causing morbidity and mortality in our country, and so we do have to fundamentally do something different. I am sympathetic to provider rates in Medicare, with the exception of the hospitals, and I’ll go into that in a minute.

Erik Sunset: Well, right, right. They’re, they’re in their own zone, uh, when we’re

Marc Ryan: But if you look at physicians, other [00:25:00] providers, even some facil facility operators, uh, the rate increases, if they are at all, I think are very low, especially with the utilization happening right now. The doctors are the most hurt, right? Because, uh, once again, uh, we had a, you know, two bills passed to continue funding into.

Marc Ryan: Fiscal year 25 to the end, September 30, and they did not get fixed right. They have a 2.8% decrease Their, their real reimbursement has dropped dramatically over the last several decades. And what has it done? I mentioned it last time. It has caused an erosion of primary care as well as independent practices in this country.

Marc Ryan: So we have to fix reimbursement. I think there are ways to do that. We have to reign in hospital costs. They’re out of control, and I believe we need to equalize rates [00:26:00] across all lines of business. I’m a believer, and this sounds a little like price control, but you know what, uh, the healthcare sector is not a free market anyway, and I think you would’ve greater transparency if you set up a regional or national system depending on the type of provider.

Marc Ryan: And equalized rates across everything. We might have to spend slightly more money in some places in Medicare and Medicaid, but it’s worth it if we can bring down the cost to commercial insurance, give providers fair rates across everything, it will bring greater transparency. It will encourage efficiency in the health plan sector in the provider sector, and you then suddenly could benchmark increases to quality better and you could benchmark it better to utilization, increases inflation and things like that.

Marc Ryan: But right now, as you mentioned, we just have this hodgepodge of nonsense, which never really rewards anybody, [00:27:00] uh, adequately year to year. Except for maybe the hospitals, which constantly will push back on site neutral payments and things like that, and that’s where there’s hundreds of billions of dollars over a time horizon to save.

Marc Ryan: I would argue that should be invested back to solve some of these rate problems throughout and maybe as a down payment on equalizing rates because our employer coverage. We’ll begin to just collapse over time if we do not do something.

Erik Sunset: And by the way, I know this isn’t lost on you, mark, by the way, all these issues with, uh, benefit and coverage, erosion and cost going up for patients, reimbursement down for providers, you know, you’re really only have this problem if there’s any physicians to treat you because we’re on this bridge that is falling apart underneath our feet.

Marc Ryan: Yep,

Erik Sunset: Who’s gonna, who’s gonna treat you in five years if nobody wants to be a physician? And I retire early and pursue other work. I mean, then you really have [00:28:00] a problem.

Marc Ryan: A funny story. I’m gonna give credit in my book. I talk a lot about the impact of the uninsured and underinsured, and I got onto that from the most unlikely source. Again, I’m a Republican, fairly moderate, but the guy that put me onto that was Bernie Sanders. Now I don’t agree with him on Medicare for all.

Marc Ryan: I think that would be a travesty. It really wouldn’t work well. But Bernie Sanders and I have much more in common than you would ever think, and he really has championed the idea that the underinsured is a huge problem in this country and we gotta solve it.

Erik Sunset: I am gonna reserve my snarky comment there. We’ll move on. We’ll move on. Not about, not about your learnings from Bernie, but, uh, related to the a CA and how, how fiercely that’s championed despite getting coverage for so many, yet not yielding tangible benefits for the

Marc Ryan: it’s a, it’s a great point. The lower guys in the a CA [00:29:00] with very little premiums and cost sharing, they don’t care about the cost fees that’s being funded by the government. But as you move up in the a CA, as you’re pointing out, uh, you are insured, but you’re underinsured and you can’t access, that’s the real failure of the a CA.

Erik Sunset: Uh, it shouldn’t, shouldn’t laugh, but the irony there is just too, too juicy for me. So, to get, to get us back on track, I know one of the. Early on it was kind of a head scratcher. You know, I had Scott Becker on, on this very show in December. He brought up Dr. Oz and kinda had like a wait and see type mentality.

Erik Sunset: Like don’t really know about his actual chops, what his credentials really are, but he seems intelligent enough so we’ll, we’ll find out. Um, but he was confirmed mid-March. What did we learn about there?

Marc Ryan: So, um. Again, when I looked at Oz’s Senate campaign in Pennsylvania a few years ago, I was not. Terribly impressed with the guy, right? And I was a little suspicious of his, you know, [00:30:00] reality star type of things and some of his in investments and some of what he has said in the past. But I was, I was quite pleased.

Marc Ryan: I watched his, uh, confirmation hearing and he came off as incredibly knowledgeable and I think very qualified. That unfortunately for me, stands in stark contrast to RFK Junior. I thought his confirmation hearings were terrible. He could not even articulate the basics of Medicare and Medicaid, and when you’re the chief health official of the United States, to me, that’s a bit of a travesty, right?

Marc Ryan: But Dr. Oz sat there, took questions, went deep into issues, and he is very knowledgeable. I also like the fact that he’s a provider. Sometimes I don’t always agree with providers on certain issues, but I think the fact that he’s a provider and understands the health system is really good. But he showed a level of, [00:31:00] uh, you know, thoughtfulness, knowledge and I think qualification.

Marc Ryan: That was really good. And I know he’s still controversial, right? I do think he’s going to do some very good things, and I think he’s gonna be a very competent administrator at CMS and to me, I’m more worry about things like CMS. And the FDA, then I do. Who’s the HHS secretary? Because I think those other positions, and again, I know Marty McCarey pretty well, and that guy is, is going to reform the FDA and he is gonna do it with science and he’s gonna do it very thoughtful, right?

Marc Ryan: So to me, those are two very important positions. A little bit about NIH, and I’m worried about that one because of the grants. But getting back to Oz at that hearing, he said some very important things. He said again that he is backing the drug price law in so many ways. And I think when you have the [00:32:00] CMS administrator of Republican Administration saying those things, I do think you’re going to have change, and I think you’re gonna.

Marc Ryan: Keep the Medicare drug price law, and you’re gonna probably even strengthen that Medicare drug price law because I think, uh, they are both Trump and he are really out there saying, we gotta do something on drug pricing. Now, I don’t discount the fact that big Pharma could use their lobbying leverage in Congress and things like that, but I think having both Trump and Oz championing drug price change is good.

Marc Ryan: Uh, and he even mentioned international reference pricing, which is the ultimate drug price strategy, right? Which is benchmarking our prices against other developed world countries. He is a big supporter of Medicare Advantage. So am I. But contrary to popular opinion, he actually called out that we need great and massive reform in MA as [00:33:00] well.

Marc Ryan: And he cited along with some progressives on the committee along with some conservative Republicans. That overpayments and risk adjustment in MA needs to be changed. I probably wouldn’t go as far as they might. But that is an issue that’s gonna happen, whether it’s in the reconciliation bill or through regulation at CMS.

Marc Ryan: And that just sort of proves sometimes your biggest friends of a program may also be the biggest reformers of a program because they’re honest brokers and they say it’s a good program, but we are not going to put up with, uh, these overpayments in this case, in ma.

Erik Sunset: Well, I, I think that’s an interesting talking point too, because it’s not really something you could measure. I mean, you could, you know, commission as many polls as you would want to survey Americans, you know, what do you think about this? What do you think about that? But you can’t really get a sense for what everybody is feeling.

Erik Sunset: But there’s, there’s just, [00:34:00] you can feel it in the air. Like you know it when you know it, and that’s, you know, that’s the opposite of scientific. But you just, you can just kind of feel it, I think, and I, I feel it. That if you were to put the information around domestic drug prices versus international drug prices in in front of anybody in America, there would be a big question.

Erik Sunset: Why are we paying so much more? The do the companies based here hate us? Are we footing the bill for people that we don’t know that should be buying this for the same price that, that we are, you know, that does, that’s an unreasonable position. That’s not a, a position built on a foundation of hate or prejudice.

Erik Sunset: It’s just a question, why are we paying more? And that goes right back to the point around the, the overpayments that you referenced as well. You know, mistakes happen. There needs to be an accounting for mistakes. Hey, you know, we overpaid here. We’re gonna have to short pay you doc, you know, on the next one, just to it out.

Erik Sunset: Get, get

Marc Ryan: Yep.

Erik Sunset: But intentional overpayments without anybody, without any oversight, you know, this is going back to that sort of, uh, the sentiment that’s maybe simmering at this [00:35:00] point. We shouldn’t be overpaying anybody who’s, who’s at the wheel here, what is going on? If we’re the fraud, waste, and abuse that’s so rampant in the news, like, is that just okay?

Erik Sunset: But now we have a measurement for it and people are upset and I think, uh, reasonably so.

Marc Ryan: No, I think it’s a great point and. Um, I would like to see comprehensive healthcare reform, right? But I think one of the benefits of this look at fraud, waste, and abuse, as you note, will take fat out of the system and will force some change. I hope it’s rational and things like that. That’s my big worry.

Marc Ryan: Will it be rational if we could combine sort of true attacks on waste, fraud, and abuse and overpayment and things like that? Along with sort of rational healthcare reform, we would be so much better off, I think. But maybe we’re inching towards some change here is, is my optimistic look at this. I don’t know if that will happen, but it’s my optimistic look here and, and back to [00:36:00] your point on, you know, the overpayments and we talked a little bit of hospitals from just being a political observer for years and years.

Marc Ryan: I will give the hospital lobbies and the drug lobbies. Huge credit. For what they’ve done. I don’t agree with it, but they have won over lawmakers and administrators in the executive branch like nobody’s business. And if somebody is looking for a way to have a successful political lobbying campaign, I think, I think it’s excessive and needs reform.

Marc Ryan: But I would go to the big pharma playbook and I would go to the hospital playbook because they really have done a good job. At the expense I think of the American public and a good healthcare system. But just from a political observer standpoint, they, they’re tremendous, right? And in some ways, their lobbyists deserve the money they’re making because they’ve delivered for their constituencies. [00:37:00] It’s a little bit of a sinister type of look at it. Erica, I admit.

Erik Sunset: Well, they’re, they’re, they’re highly effective. There’s no question there, you know, but it’s also sort of like the, the never ending cycle of our services are super expensive. The American people want them cheaper, but we take the money that the American people are paying our company and going straight back to Congress and paying them to be sure that there’s no price control put in place.

Erik Sunset: And then. Rinse repeats until we’re at a point where, you know, one unit of a of insulin is, you know, a car payment and more.

Marc Ryan: Yep. Absolutely right. And you know, um, one of the other areas I’ve recently studied, if I could add, is. There’s actually a weird thing between health plans and hospitals when it comes to rates and it, and it really dawned on me one day and, and I probably didn’t think about it when I was actually negotiating hospital rates way back when, right?

Marc Ryan: At a health plan. But, uh, [00:38:00] the, the hospitals argue Medicare and Medicaid payments are too low and we have to charge the commercial and the employer sector. You know, multiples of what we get paid in Medicare. Right. And, uh, you know, the, the differentials are amazing and when they do that, it means they don’t have to be efficient.

Marc Ryan: They can just ask anything they want from the employer sector. Uh, they can lobby for some Medicare increase and some Medicaid increases at the state level with slush funds. So they get Medicaid slush funds, they. Do better on Medicare than most providers as we know. And then they ask for exorbitant rates.

Marc Ryan: And very few hospitals thus have reformed. There are some good ones out there that actually make money on Medicaid and Medicare, uh, but the vast majority are inefficient. They’re bloated and they just love the game they’ve [00:39:00] created. Right. Health plans though, contribute to that because you know, health plans have to stay at Medicaid rates.

Marc Ryan: They are low and the way they make money there, if they make money at all, they have to keep the Medicaid rates. So providers and plans pretty much stay close to Medicaid rates. What they then do health plans with providers is especially hospitals, some other providers, but largely hospitals, is they go and health plans are complicit, Andre to those huge, uh, increases in rates over Medicare and the employer sector, largely because the health plans aren’t at risk.

Marc Ryan: It’s self-insured funds under erisa, so they’re happy paying. Two and 300% to a hospital or another provider of Medicare because it’s not on their balance sheet. They’re getting an administrative fee and it’s not on their balance sheet. [00:40:00] And what they do is they say to that provider, I’ll agree to these, uh, employer coverage, excessive costs, if you give me something close to Medicare and Medicare Advantage, because that’s where I make money, where I’m at risk.

Marc Ryan: So it’s it, you know, the health plans are as guilty as anyone in terms of this huge inflation in the employer sector, and it’s very much lost on people, right? So. I begun criticizing health plans as much as the hospitals on these employer things because it just perpetuates this huge waste and inefficiency in the system.

Erik Sunset: There, there’s a lot of, a lot of really good reasons to throw spears at the carriers. Every single one. Um, you can see ’em online. Some of the reasons for denial of care. You know, you, you as a physician get into a peer-to-peer review for medical necessity and you’re an orthopedic surgeon talking to a, and this isn’t to, to take a shot at nurse practitioners, but [00:41:00] they’re not an orthopedic surgeon, they’re a nurse practitioner.

Erik Sunset: Uh, is that peer-to-peer?

Marc Ryan: Yep.

Erik Sunset: It isn’t.

Marc Ryan: Understood. Hey, uh, on that topic, Oz, also at his confirmation hearing really said he wants to work with Congress on further pulling in prior authorization. claims denials. So that’s another point where he’s a friend of ma theoretically, but he’s now. In the middle of that friendship saying we have to reform, and between the progressives on PAs and even like the Bill Cassidy, who are fairly moderate to conservative leaders in the Senate, they’re all over this issue too.

Marc Ryan: So they’re gonna continue to see change there. And. On other podcasts we’ve talked about, you know, I’m a believer in the correct use of pa. I hope that doesn’t go away because I think there is a role, but you will, you will see more changes there for sure. I.[00:42:00]

Erik Sunset: Well we’re, we’re, we’re kind of getting to the conclusion of an arms race with, uh, denials for prior authorizations for any type of procedure where, and even just straight up payment denials as well on claims that the arms race is the carrier sends back an AI generated nope. Claim was denied. Figure it out.

Erik Sunset: Practices and healthcare organizations are now going and doing the exact same thing, pulling in references, pulling in patient’s chart, having LLMs write up the letter, send it back. So something’s gotta give. You can’t have healthcare or provider organizations and carriers just nuking each other with LLM generated letters back and forth, like nothing’s gonna happen.

Erik Sunset: You know, just let the robots hash it out, like they’re not gonna reach a

Marc Ryan: Yeah, and, and I think you’re absolutely right and I dream of a day where for the most. Important services that might be abused, PA should be there. But right now, as I say, you know, plans are saving cents and not dollars if [00:43:00] they really truly pivot. To a care management model and a reimbursement model with providers that incent provider for efficiency and quality performance in tandem with plans, we would save dollars.

Marc Ryan: We’re saving sense. It’s, it’s, it’s an old legacy system that needs to go away in terms of how plans operate, prior auth, and even the claims practices as well.

Erik Sunset: Yeah, agreed. We we could spend the rest of the day talking about all that’s wrong and, and funny anecdotes there. But, um, I know we’re, we’re getting near to the end of our time together today, mark. Um, we got, we got pretty deep into fixing Medicare on the physician side. Was there anything we glossed over or any other points we wanted to make on all the places we could use a magic wand?

Marc Ryan: No, again, I just feel like. A fix for 25 for physicians is absolutely critical. There’s been a loose commitment to the doctor’s caucus to do [00:44:00] it in budget reconciliation. I hope it happens, but I don’t think it’s gonna be a permanent fix. There’s gotta be a permanent fix because you’ll have the further erosion of independent practices.

Marc Ryan: 70 to 75% of doctors today either are, uh. Owned by hospitals, owned by private equity, or owned by health plans. There’s no independence there. And number two, again, primary care will continue to erode and we, we have to bolster primary care. So in tandem with fixing the Medicare, uh, physician rate, we should actually be investing money in Medicare to, uh, increase rates and foundationally find a way to get back to primary care in the country.

Erik Sunset: The, the profession’s on life support, you know, I don’t want to get totally up on my soapbox here, but people that aren’t plugged into healthcare like, like you are, or people that don’t work in the space, they have no idea this is coming. It’s not on the news. No [00:45:00] sites outside of Becker’s healthcare portfolio of sites is reporting on this cataclysm, like the asteroid is, is in the atmosphere.

Erik Sunset: Now, it’s not too late to fix the problem, but primary care as a, as a job

Marc Ryan: Yep.

Erik Sunset: doesn’t look good. Something needs to change foundationally.

Marc Ryan: Yep. I, I love your reference to Becker’s because, um. I’m a convert on Becker’s. I wasn’t really reading it every day, but for my newsfeed now, I rely a lot on Becker’s. I used to be a fierce healthcare, which I think is good, and a modern healthcare, which is pretty good. But I actually look at the Becker’s provider and hospital site, as well as the Becker’s payer site.

Marc Ryan: It’s phenomenal. They cover so much more news. Really, really good.

Erik Sunset: And, and Scott’s a friend of the show, I guess, mentioned he was, he was on in December. I don’t know how he does it. He’s got, obviously, he’s a, a force of nature himself, but what an incredible team to do that much content. I cannot fathom how he [00:46:00] does it, but I’m glad he does.

Marc Ryan: I love the short briefs with Press on the Link to go deeper if you need to because you get everything. And then if you wanna go deeper, you go deeper. So, yeah.

Erik Sunset: Yeah, I agree. I agree. So outside of, uh, our shared, uh, respect for Becker’s Healthcare, what, what else is on the horizon? What other trends do you see materializing now through the end of the year or beyond? I.

Marc Ryan: Sure. Uh, I think we talked a lot about the budget and the cuts and things like that. I’d mention a couple of other things. So, um, antitrust, everybody felt that. Uh, antitrust scrutiny was gonna go away under Trump. He’s more pro business and things like that. Biden had done an executive order on antitrust and was really sort of beefing up, and I’m critical of both Democrats and Republican administrations throughout the years.

Marc Ryan: I’m a little more Teddy Roosevelt than most Republicans. I’m a, [00:47:00] I’m a big antitrust guy. I’m a trust buster. I. Whine about the fact that a given health plan merger may have died or a provider merger and it wasn’t fair. But if you look across the continuum, the consolidation, whether it’s provider and provider, payer and payer, or payer and provider, has really raised cost in the country.

Marc Ryan: And it’s created an anti-competitive environment. I believe that companies like UnitedHealthcare and some of the other big guys ultimately need to be broken up because the dominance of the industry and the lack of transparency and price and things like that, that’s one of our source problems here.

Marc Ryan: Right. And I think the change healthcare thing proved it. They didn’t care about their infrastructure and most of the country was relying on it, and they were just making margin without bringing true improvement. And to me, that’s what these big mega corporations do [00:48:00] historically, whether it’s healthcare or big oil or what have you, it doesn’t matter.

Marc Ryan: That’s what happens. So I think Donald Trump is going to be. Almost as aggressive as Biden on antitrust. And I think that’s very important in healthcare and frankly, honestly, across the entire economy because I think, uh, there are examples in almost every sector where, uh, consolidation has become a big problem.

Marc Ryan: PBMs part of that consolidation concept because 70 to 80%, depending on the stat you use, are three PBMs in the country, right? So I think PBM reform will happen as well. Um, so I think those are probably two other big ones I didn’t mention earlier that I think will happen.

Erik Sunset: Obviously the, the antitrust side of this is driven, you know, by the executive branch of our government. What, how do you see PPBM reform, um, being [00:49:00] handled? Who, who’s gonna take the wheel on that, I guess.

Marc Ryan: Yeah, well I think part of it will happen through F-D-A-C-M-S and HHS, and it’s gonna be more regulatory about transparency. And reporting and accountability and things like that, but I also think that Congress is going to pass some changes that will be very good. Number one, they will pass transparency reporting as well.

Marc Ryan: They will rule out certain kind of reimbursement arrangements between plans. And, uh, PBMs and then PBMs and pharmacies that have really hurt the stability of many pharmacies out there. A lot of independence as well as chains. But on the plan side, they’re gonna mandate transparent pricing and things like that.

Marc Ryan: Over time. They’re gonna ban spread pricing as an example. And then I also think that they will also get into [00:50:00] areas of Orange book reform, which allows, uh, drug makers to, uh. You know, stop the penetration of generics, which will help indirectly. It’s not exactly PBM reform. I think they will also require, uh, uh, PBMs to, uh, become, uh, again, from a transparency standpoint.

Marc Ryan: Uh, they will require some of the big guys to show their books on related party reimbursement because there’s a lot of evidence even in the FTC lawsuit that some of the big guys have arrangements with their own health plans to their own specialty pharmacies. Or the retail pharmacies that are not arms length arrangements and actually are raising prices for consumers, but also for employer groups and the [00:51:00] government and things like that.

Marc Ryan: So it’s a bit of an arcane mess. It’s so opaque that pulling it back is difficult. And I haven’t even done a great job of explaining it ’cause it’s so opaque. But they will go after these little areas in PBM reform that will make it work. Now I. I think PBMs do some good things. I wanna go back to the brand drug maker as we’ve talked about, because they’re as much a part of the problem as anything.

Marc Ryan: So price reform is key too. You gotta really do both to, to rationalize drug pricing.

Erik Sunset: Well, and your, your points about Trump being a populist are, you know, very much true. I think that’s just an objective fact. So love, love or hate trump. And then looking towards what he’ll view as his legacy. You know, helping the common American, the common man, the common woman, however you wanna phrase it, pay less for their healthcare.

Erik Sunset: I think that’ll probably be on his radar. So I’m, I’m hopeful, just as a consumer of healthcare myself, that costs can go down. That’d be [00:52:00] great.

Marc Ryan: I absolutely agree, but as I point out, I like some of the changes and I hope they’re reasonable, but it would be really nice to pair it with rational healthcare reform. I don’t predict that’s gonna happen unfortunately because of the state of American politics, but, uh, they gotta start thinking about the issue.

Marc Ryan: And I’m really, really very worried about employer coverage. I think it’s become untenable, as you noted earlier.

Erik Sunset: Well, it’s, it’s, it’s insane. And as a quick anecdote in, in years gone by, I was, uh, covered, personally covered by my employer. But the employer’s decision was that if you wanted your family and I got a wife and, and two great kids, if you wanted your family covered, then you are really gonna have to pay.

Erik Sunset: And it felt kinda like you were just gonna pay for all of that. There was no, uh. Employer there for it to be less expensive somehow, and you’re based in Florida as well, for it to somehow be less expensive for me to insure my wife and kids separately for [00:53:00] my employer plan with Florida Blue directly. Yikes. Uh, ’cause any, anybody that has had to go through that process knows that is not inexpensive and you just, you don’t feel good about it. You feel bad paying that, it’s just insane.

Marc Ryan: Absolutely. And you know, I retired from a very large tech firm, several hundred employees. We had some wherewithal, we struggle. With providing good healthcare coverage just because costs were going up right now. As you know, lilac is a relatively new company. We’re struggling with how to fashion healthcare affordably.

Marc Ryan: For our employees. We’re a healthcare company, so we wanna make a commitment, but again, costs are high. I’m also on the board of a police, artificial and intelligence law, law enforcement company that I do a lot of work for. They’re in the same boat. We’re talking starting with Icra. Uh, because it’s probably the best way we can funnel good money to [00:54:00] people to buy in the, uh, individual sector because it actually, as you point out, is cheaper than maybe providing employer sponsored coverage right now until it gets larger.

Marc Ryan: So there’s all these weird things out there that are happening that are, is just a signal that we’re in real trouble.

Erik Sunset: Well then I’ll, I’ll add to that this could be the topic for another show the next time you’re back on. What’s even fair if you’re gonna offer coverage to your employees? What? What even is fair now? There’s so many nooks and crannies people that are generally healthy. Probably get the, the better end of this deal, but for those that need more regular care or, or are faced with a chronic condition outta their control, like what even is fair?

Erik Sunset: How much cost do you expect them to bear? I don’t, I don’t have the answer. I’m not sure anybody.

Marc Ryan: I think it’s a great point. I think comprehensive coverage is important to serve those people with chronic conditions so they don’t cost the system more money down the road, but there’s [00:55:00] also excess throughout the healthcare system in terms of benefits. Um, we should have a good comprehensive standard benefit for everybody across these lines of business.

Marc Ryan: I’ll take. You know, for example, in Medicaid, one of my worries there is we have southern states that don’t provide much benefit or coverage at all. Dumb. Uh, and then in say, a California, not to pick on them, but they seem to have a really excess in terms of coverage and benefits, and where’s that happy, comprehensive medium that can help rationalize the system?

Marc Ryan: I think you’re absolutely right.

Erik Sunset: Yeah. Well, we’ll cover that one on the next one in more

Marc Ryan: Sounds great.

Erik Sunset: un until then, where can our listeners get in touch with you online? Where can they reach out on social media? Your website? Where, where can they get more? Marc Ryan.

Marc Ryan: Sure. Well, a couple ways. Number one on LinkedIn, that’s my only social media, and [00:56:00] you just search Marc S. Ryan, and you’ll find me on LinkedIn. Would love to hear from people. Lilac software.com is my main healthcare venture right now with two co-founders and I, and then if you wanna learn about healthcare every day, I.

Marc Ryan: I do a daily newsfeed. I do two blogs a week, and I do a weekly podcast, and you can go to healthcare labyrinth.com, sign up and get emails or follow me on LinkedIn and go there each day. But it’s sort of a comprehensive newsfeed that brings in Becker’s and fierce and modern and gives a little bit of my commentary there.

Marc Ryan: And then I deep dive on blogs and podcasts too.

Erik Sunset: I was just gonna say, you took the words outta my mouth. In a way. You’re giving the, uh, Becker’s healthcare portfolio run for its money, uh, with all that content and great content too.

Marc Ryan: Well, I appreciate it. Thanks a lot. And Eric, as always, it’s a pleasure to be with you. It’s really fun, you know, going back and [00:57:00] forth on healthcare and it’s, it’s amazing. So many things are changing, so next week it could be totally different.

Erik Sunset: Well, as you, you put it, we can get some, uh, some rational reform, some common sense stuff across the line. I think that will make, uh, everybody happier with maybe the exception of the carriers, and that’s okay.

Marc Ryan: Yep.

Erik Sunset: So until next time, I am your host, Eric. If you’re not already subscribed to the DocBuddy journal on Apple Podcast, Spotify and YouTube, go ahead and hit that button.

Erik Sunset: That way you always get the newest episodes of the show and we’ll talk to you again soon.