Marc Ryan, Chief Solutions Officer at Lilac Software, returns to the DocBuddy Journal with big news: Lilac Software has been acquired by Medisolv, combining payer and agentic AI expertise with Medisolv’s established provider and quality measurement platform.
From there, Marc and host Erik Sunset break down the most important trends shaping healthcare in 2026 — the Trump administration’s technology-first agenda, value-based care expansion, and the slow but real progress on interoperability. They also dig into the financial fallout from the One Big Beautiful Bill on state Medicaid programs, the turbulence hitting health plans across every line of business, and what landmark PBM reforms and Most Favored Nation drug pricing could mean for American consumers.
Medisolv’s acquisition of Lilac
See Marc’s work at Lilac Software.
As always, be sure to follow DocBuddy on LinkedIn.
Click to expand and read this episode's transcript.
[00:00:00]
Erik Sunset: All right. Hello. Welcome back. I’m your host of the DocBuddy Journal, Erik Sunset. If you are a first time listener, we’re so glad you’re here. If you’re a long time listener, welcome back and if you’re a long time listener, you’ll see a friendly and familiar face with us. This is Marc Ryan, chief Solutions Officer with Lilac Software.
Erik Sunset: Marc, thanks for joining us again today.
Marc Ryan: Great, Erik. It’s great to be back. Love doing it.
Erik Sunset: Yeah, and let’s lead off with some big news. I’m gonna leave it just like that. Marc, you’ve got an announcement to make. Go ahead and tell the
Marc Ryan: Oh, great. Thanks Erik. So, you know, as you know, um, uh, three of us Neetu Rajpal, Alex Schaeffer and I started Lilac Software back in 23 or so a little bit earlier. Uh, and we’re very proud to announce that uh, we have sold Lilac software to a really great company and we’ve entered, uh. Tremendous partnership.
Marc Ryan: Lilac software is now becoming part of Medisolv, [00:01:00] which is a very major participant in the Market. It’s focused a great deal on providers. It serves many hospitals and ambulatory, uh uh. You know, physicians and, and other folks out there. So it is an expert in quality measurement in the provider world.
Marc Ryan: We are combining forces. We are bringing our payer expertise, our agent AI expertise, and we’re really excited about it because we know the world is going the way of interoperability, sharing provider and payer data. Uh, and, uh, agent AI is going to be in huge demand for both providers and payers. So. We think it’s a great match and we’re just delighted to be part of Meta dissolve.
Marc Ryan: We will still continue as Lilac software as a brand, but we are now part of the Medisolv family and, uh, we look forward to serving our payer, our VBC risk clients and, and contributing to the provider [00:02:00] clients that Medsol has as well.
Erik Sunset: Well, that’s huge. I know everybody on the DocBuddy team is really excited for you and the Lilac team. And for that matter, the Medisolv team. And we will be sure to get a, a link to any announcements or press releases out there in the show notes so folks can, uh, take a, a, a good look at your new
Marc Ryan: Beautiful. Thanks so much. Thank you.
Erik Sunset: So that’s, that’s a little bit of trending news, but there’s also quite a bit of trending news in the industry this time of year. So HIMSS just occurred, CMS held its quality conference. What’s the writing on the wall Marc? Where are we going next in healthcare?
Marc Ryan: Right. Yeah, no. As you noted, uh, HIMSS just occurred in the CMS Quality Conference is actually going on. I didn’t attend in person. I did it virtually. I’m so busy, so I like try and catch all the sessions along the way. Uh, but really it’s very interesting. The Trump administration is trying to make their Marc on healthcare very clearly.[00:03:00]
Marc Ryan: It’s a very, very different approach than say, we had under the Biden administration. Um, I would say a couple of things here for the listeners and viewers to know Erik. Number one, um, everything is really about technology and artificial intelligence. We know that that’s the case throughout healthcare, but at CMS, that’s a huge emphasis right now.
Marc Ryan: We know payers and providers are looking for ways to reduce cost and improve quality and become just more efficient. And, you know, um, that is really something in top of mind for CMS. So they are extremely active on the digital health front. Furthering interoperability. There was a great deal of work done under Trump 45 and under Biden, the interoperability frameworks and all those kind of things are, are moving forward.
Marc Ryan: Greater focus on digital health and also while the value-based care and other payment [00:04:00] transformation was occurring under Trump 45 and Biden as well. Trump 47 is really, really going all in on that payment transformation, really moving toward value-based care payments, whether that’s in the Medicare fee for service world or encouraging that.
Marc Ryan: You know, in the Medicare advantage world and things like that, in rough measure, in, um, you know, healthcare, today we’re at about a, roughly a 50 50, depending on the line of business. It could be less, but let’s just think about it. In the high forties, around 50%. So we really have a lot further to go. I think, you know, where I think about this is the old transactional payment system clearly limits quality.
Marc Ryan: Uh, and it sort of is, is really time to sort of move past that. We’ll always have some transaction payments in the system. More and more we’re gonna see these value-based payments in [00:05:00] many, many different flavors. There’s not gonna be one flavor, but these value-based payments are really gonna take hold.
Marc Ryan: And I think the Trump administration is very, very focused on them. Uh, so much so that, uh, I call it the acronym or alphabet soup, right? As if healthcare was not. Uh, didn’t have so many acronyms. I think under the Trump administration they’ve invented dozens more. And so we have, you know, a CO team which will succeed a CO reach, which some of your, um, clients and, and viewers and listeners will, will know about.
Marc Ryan: Uh, we are now having something called Access, which is a technology first type of way of. Monitoring chronic disease and care. Uh, we have the new most favored nation models, which I’m sure we’ll talk about. There is globe guard and generous, depending on the line of business, and [00:06:00] each of them is a great acronym with capitalization, sometimes at the beginning of the word, sometimes in the middle of the world.
Marc Ryan: But they’ve done a great job of, of acronym further, as I call it. There’s also a GLP one model called Balance, uh, and then there’s also, that’s an acronym, and then there’s Bridge, which is a temporary program in Medicare to get GLP one. Uh, for those who are obese for weight loss in this year alone, that is not an acronym.
Marc Ryan: It’s simply a bridge, uh, from 26 into 27. So, uh, that’s sort of the broad overview. I’ll also tell you that I think insurance products are changing a great deal as well. There’s a brand new exchange, affordable Care Act rule, and just really quickly, what the Trump administration is trying to do here is they are moving, uh, toward the bronze and the [00:07:00] catastrophic, less generous insurance.
Marc Ryan: Their philosophy is, is that things have become so unaffordable that if we can create better designs at the lower end, uh, that will help people with affordability. So they’re busy introducing some preventative care non-network plans at the lower end of the spectrum. Now, it is controversial. Admittedly, I’ve always told you I’m sort of a.
Marc Ryan: You know, universal coverage guy, but I’m als also willing to admit that, uh, we are unaffordable. So experimenting in these areas is not unreasonable. Uh, there is gonna be fallout in the system for sure, but the Trump administration is going down, uh, these more novel roads to they say bring more to affordability.
Marc Ryan: Right? We’ll see how that works out, but certainly experimentation makes some sense here. There’s a lot of prior auth reforms that the Trump administration has [00:08:00] pushed across all lines of business. And we’ll talk probably a little more about Medicare Advantage, but there’s some big developments there too.
Marc Ryan: But that’s sort of the sort of the overview, digital health interoperability, tech forward initiatives, and a lot of VBC within CMS.
Erik Sunset: I, I gotta, I have to pause there for just one second. The interoperability piece, I mean, I, I’m sure you remember many moons ago. Oh, when we. Get meaningful use, uh, up and running and everybody’s incentivized properly to have an EHR. Everybody will be interoperable just like that. We know that’s not how it played out.
Erik Sunset: And it is, uh, coming now to private industry to solve. And it has, it’s been going this direction for
Marc Ryan: Yeah.
Erik Sunset: now and, uh, making that mistake. But I’m glad to see that there’s actual meaningful interoperability, uh, occurring, at least at, at some scale. But would you, would you, uh, indulge [00:09:00] our listeners and peel that back just a little bit?
Erik Sunset: You know what’s different now when the federal government’s talking about interoperability?
Marc Ryan: Yeah. You know, and as you point out, you’re right, it’s been talked about in and. Teased for years and years. Right? And I am the first guide to admit that notwithstanding all the talk of interoperability, um, we are probably years and years away. Let’s, let’s be just very honest, we have disparity in our systems.
Marc Ryan: Um, and it’s just not an easy thing to connect all of the provider disparate systems with what are disparate health plan systems, uh, and connect all that with health information exchanges and things like that. So there’s no question that we are years and years away. We’re probably a decade before we might see really, really.
Marc Ryan: Meaningful. Not to be confused with meaningful use, but meaningful real attraction here. [00:10:00] Right. But I would tell you that I do think with the digital transformation that’s occurring and predictions that digital health. Will become sort of the linchpin of how things are delivered in the future. I do think that’s where interoperability and digital health sort of come together and there are initiatives clearly, uh, that people are trying to do with prior authorization and things like that, making prior authorization real time.
Marc Ryan: You need interoperability to do that. Uh, and I think just the advent of technology will begin to push interoperability down the road and start to create efficiencies in real time, data sharing and things like that. But again, you’re absolutely right, Erik. It’s gonna be years and years before we really come to something that is.
Marc Ryan: You know, maybe not even mature. It may be more adolescent than not, but I think it’s [00:11:00] a good development overall, and I think you’re starting to see people rally around the idea that we have to move down that road.
Erik Sunset: We’re, we’re on the right track. Uh, and I’ll give a little bit of credit to the federal government, something that listeners will, uh, not have heard me, uh, say a whole lot and, and this shows runtime. But there’s a lot of good things happening, and I don’t want to toot DocBuddy’s own horn too loudly here, but there is true meaningful interoperability happening with DocBuddy customers at small scale where there’s a commercial, a great commercial reason for our provider organization clients to pursue interoperability.
Erik Sunset: We see it with other vendors, obviously, things like, uh, Surescripts, Commonwealth Health Alliance, and pick me up here. Marc, what’s the Cerner driven?
Marc Ryan: Yep. The name’s escaping me too, but yep.
Erik Sunset: Oh my gosh, Sean. Embarrassing. We’ll put it in the show notes. I guess I’m under caffeinated to record with you today, but the, the point I’m trying to make is that things are actually moving, like there are good things [00:12:00] happening for interoperability, probably a long ways away from, uh, instant real time meaningful interoperability from coast to coast.
Erik Sunset: But I think listeners should take heart that there’s a lot of vendors and even the government doing a lot of the right
Marc Ryan: Yep. Absolutely.
Erik Sunset: Well, and, and shifting gears just a little bit, we’re in a, we’re in a world where the one big, big, beautiful bill is reality. Uh, we talked about that at length in our last recording session together.
Erik Sunset: What’s the update there? And then I’m sure there’s a little bit of fallouts, uh, both, uh, in real terms and in opinion, uh, terms. So what’s new there,
Marc Ryan: Yeah, absolutely. So, you know, just a brief refresher. We know the one big beautiful Bill Act passed, uh, uh, party Line vote. It’s a Republican initiative, sort of like the Affordable Care Act was similar there. Uh, but we are, we are now at a point where we’re starting to see implementation at the state level on many of these things, right.
Marc Ryan: And [00:13:00] so we know that about $1 trillion is being taken out of the growth of, of things. You know, people debate whether this is really a cut or not, but we know a trillion dollars is coming out of. Um, the system and you know, it really comes in two places. The exchanges less so with tightening eligibility, but really in the Medicaid world, and we’re seeing a lot of that in the Medicaid world and here.
Marc Ryan: Uh, there are probably two major initiatives going on at the state level that really reduce the amount of funding available to the states to match federal expenditures, to carry on their, their entire program. So, number one, uh, work requirements are coming in that’s less a revenue or a, or, or a funding issue.
Marc Ryan: That will mean probably millions of people losing eligibility and, uh, the Medicaid program [00:14:00] contracting even more than it has with the redeterminations coming back after COVID. But those work requirements will be administratively expensive for. Uh, states to do, they have to do it correctly according to the regulation.
Marc Ryan: There’s very little guidelines, so work requirements as an administrative burden at the state level, and it will mean we think millions of people losing eligibility, not so much because they’re not working. But just because, you know, in government programs, people fall through the cracks with documentation, understanding the rules, and therefore there is still probably millions that will lose eligibility there.
Marc Ryan: The bigger issue for states and funding is what’s known as provider taxes and what’s known as intergovernmental transfers. So these two things sort of work together, and in this case. The limits are being [00:15:00] placed on provider taxes that help fund the state share of Medicaid, which leverages the federal share.
Marc Ryan: And so with provider tax limitations coming in and a reduction in the percentage that can be charged, that reigning in of provider taxes is already starting to show major issues in state budgets. We expect the state share. To support the Medicaid program to go up compared to the federal share, and that will mean further cutbacks probably at the state level in terms of generosity, in terms of benefits and eligibility, and states are really struggling to sort of deal with that whole.
Marc Ryan: And so that will also lead to millions more probably losing eligibility. As you know, I’m a former state budget official, so I know firsthand that states do rely on ways of generating [00:16:00] revenue to match the federal revenue that comes in to support the program holistically. And so it is going to be a trying time for states, and it’s at a time right now where.
Marc Ryan: Uh, their revenue is not doing as well as it might’ve been doing before, during COVID where they were getting greater federal revenue. So not only are they not getting that COVID revenue, but they’re now also seeing the reigning in of provider taxes and some more requirements in the Medicaid program that will also cause them to spend some more money.
Marc Ryan: Administratively, so that is a big, big deal. I will tell you one other major thing happening under the one big beautiful bill is because of the fallout on Medicaid, a Rural health initiative was put together $50 billion over five years, and that is rolling out now. And so a lot of states are [00:17:00] also preparing, working with rural providers especially to try and figure out how to safeguard these rural, uh, health systems and providers and actually augment and solve some of the problems of specialty access, ER coverage and things like that.
Marc Ryan: And this is where some digital innovation is coming in as well. So this, I think, in general, is a good thing. We’re trying to help stabilize rural health, but unfortunately it sort of came about because of the major one big, beautiful cuts out there as well.
Erik Sunset: Uh, I’m glad to see some attention heading to our friends at RHCs, FQHCs, CHCs, those, those providers of all types, physicians. Levels, care team, staff, administrators, that is really important. Work access is pretty tough to come by and it’s fresh on my mind. I spent the weekend in, uh, fairly rural Georgia, and if you need help out there, you’re really gonna need it.
Erik Sunset: Um, so that’s, that’s [00:18:00] positive in my mind. Continuing down our, our show today, Marc, um, we referenced, uh, the reformulation of some plans, uh, earlier when we were getting into the show here. Uh, what’s an update on some financial situation and impacts of these plans? I’m sure it’s, it’s varied and I would imagine a lot of the news isn’t great, but take us through that.
Erik Sunset: What do people need to know?
Marc Ryan: Sure. Uh, so, you know, uh, you know, when people think about plans, you really have to think about the impact throughout the healthcare system, right? Because providers are, are, uh, relying on not only government direct revenue, but most importantly, most of the dollars they’re relying on are coming from health plans, right?
Marc Ryan: And so what happened? What happens at health plans, impacts, really everything going downstream. So I would say in general, I would use the word financial meltdown. The words financial meltdown, right? And we [00:19:00] sort of had that occur really starting in 24 with some plans going all the way up to now today. And by the way.
Marc Ryan: While they’re recovering financially, we will probably see it going into 27 for a couple of reasons. And so let me just sorta, I’m a proponent of private health delivery, but in the spirit of, um. You know, transparency here, I think at least some of that financial meltdown was self-inflicted, right? I think health plans lost a view of what good financial discipline was coming out of COVID and during COVID.
Marc Ryan: And so they had some, you know, massive expansion and they just were, uh, you, you know, frenzied about expansion to some degree. And I would also tell you that, um. You know, the investors, the investor community also were part of that frenzied [00:20:00] expansion and sort of looked the other way a bit. So shame on the plans to some degree for a lack of financial discipline and really accounting for some of what’s occurring today.
Marc Ryan: Now, of course, the other, perhaps half of that are some, you know, actions happening external to the plan. So. Medicare advantage rates have been extremely tight and we’ve had very, very high utilization right across the board, but especially in Medicare. So that’s created some problems for Medicare Advantage plans.
Marc Ryan: Medicaid, uh, we saw some rate issues. Uh, we’re continuing to see rate issues. We’re seeing lower enrollment. Which tends to create more adversity in the roles. And so that’s an external force. You’re dealing with exchanges, we’re seeing the um. The, uh, ex expiration of the enhanced subsidies from COVID.
Marc Ryan: That’s [00:21:00] creating some problems there, although not as much as, uh, was imagined, but we probably will see because the rising premiums in the exchanges, people falling off. Which will create more adversity in the exchanges and in the employer world, the big Kona out there, we are seeing very, very high utilization, right?
Marc Ryan: Six to 9%. And if you’re a smaller employer, your trend. Is even greater than that. So we’ve seen these external forces with some lack of financial discipline on the part of the insurers. All of this creates challenges for providers along the way, and they’re already dealing with, uh, one big, beautiful bill aspects, taking billions and billions out of their coffers.
Marc Ryan: Um, this has caused a major realignment in many different. Parts of, you know, uh, insurance businesses, especially in ma, where footprints have contracted [00:22:00] products, have contracted benefits, have contracted, which in. Impacts not only, uh, providers, but also beneficiaries. So we’re in a uncertain time right now.
Marc Ryan: Um, insurers are starting to better, to do better. They’ve reinstituted discipline, they’ve pulled back in certain areas, and they’re getting back to what we call margin as opposed to enrollment growth, right? And that is occurring. It should continue to occur over the next year or so. Bad rates and continuing problems in other lines of business, uh, other than ma will complicate their effort to come back to margin.
Marc Ryan: But it is occurring. Things are getting back to normal, but we’re a bit still in a rocky road for the plans and therefore for providers and even beneficiaries relying on benefits along the way.
Erik Sunset: I don’t know if you’re gonna have a thought on this, and [00:23:00] it’s very anecdotal, but you referencing the expiration of the enhanced, uh, subsidies. One thing that I’ve found interesting over the last, I guess basically since the turn of the year, is that in, uh, the Public Town Square Online pick, pick your discussion forum.
Erik Sunset: You know, what comes to mind for me is, is the artist formerly known as Twitter x. Where there’s appears to be a much greater, uh, public awareness of the expiration of these subsidies driving the increase in cost, whereas in years past, I haven’t seen chatter, uh, to this degree. And that begs the question, are these people talking about it?
Erik Sunset: Are they bought farms? Is a special interest. Being sure that awareness is, is rising. I, I don’t have the answers to those things. However, I’m hopeful that these discussions are legitimate and not from a room filled with 10,000 iPhones and Androids, you know, typing away automatically. Uh, but I think if, [00:24:00] if that’s true, that these are real people voicing concerns over the expirations of these subsidies, either concerns or elation, uh, depending on how you look at it, but it appears that the American public is.
Erik Sunset: Wanting to, to take the reins here of why does this cost me so much? You know, I’m healthy. I see the doctor twice a year. Why am I paying an arm and a leg? Is that, is that just anecdotal or are you seeing or hearing anything that would either confirm or deny that to a
Marc Ryan: Yeah, no, I think Erik, you’re onto something here because, um, now more than ever, probably in the last couple years, but it’s becoming much more of an issue in the public’s mind. If you look at the. Uh, percentage increases in healthcare coming outta COVID, the utilization increases, and to some degree, price has forced premiums up. In costs in the system up, I’m gonna use that [00:25:00] word, six to 9%, right? That’s generally what we’re seeing. And if you look at the latest report from the CMS actuary, which is projecting increases over the next 10 years. It averages about 7%. So just think about that impact. We’re a over $5 trillion healthcare economy right now, and we’re gonna be over $8 trillion in the next 10 years, and it’s clearly unsustainable.
Marc Ryan: And what’s happening is, as you point out, the American public is becoming. War weary, so to speak, from the constant increases, right? They’re being asked as much as employers have tried to insulate them, they’re being asked to cover more of the premium. Now deductibles are going up and benefits are becoming raw.
Marc Ryan: And that forces the out-of-pocket costs up for every American family. And, uh, it’s true [00:26:00] across the board. But when you look at lower income families or average income families, the percentage devoted to healthcare costs of the family budget is increasing dramatically in its. Come to points now where again, it’s unsustainable.
Marc Ryan: People are dropping insurance, uh, or if they maintain insurance, you can’t afford it. I talk about the uninsured, which is, you know, between 25 and 30 million in rising, uh, depending on the year. And then you have the underinsured, which is about 80 some million people in America. So. This is becoming a real problem.
Marc Ryan: Uh, and we have to get our arms around price and things like that. We talk about sort of different kind of benefit structures, but ultimately price, I think, is the issue in high price in America. Is is part of the big issue here. If you look at election polling right now, going into the midterms, and I know we [00:27:00] wanna talk a little more about that, affordability is at the top of the list.
Marc Ryan: And by the way, healthcare affordability within affordability is at the top of the list. So, uh, all those polls are clearly showing it now. The expiration of the subsidies was sort of the big headline out there. But it’s also really across the board if the majority of our country is on employer sponsored coverage, and the price of individual coverage now is over $9,300 for each individual enrolled employer coverage.
Marc Ryan: And if family coverage averages $27,000 now almost, you know why they’re talking about it. So you’re absolutely right, Erik.
Erik Sunset: Well, and I, I wanna scratch at this a little bit more too, because you mentioned some new formulations for plans and for coverage that the administration is taking a look at. Would, would you classify that as innovation? Where you kind of have an idea of your [00:28:00] inputs and uh, or an idea of what your outputs will be based on inputs, and this is a really crass way to put it, or are they just trying stuff to see what might work?
Erik Sunset: Uh, because it’s such a black box.
Marc Ryan: Um, I would say part of it is. Political. Right. And as as healthcare policy always is, right? So part of it is political. The Republican party, uh, wants to experiment in these different areas of lower cost care, less generous care. Uh, and I think that’s a fair thing to try and look at because we have a crisis of affordability of traditional insurance.
Marc Ryan: So there’s nothing wrong with looking at it. Again, clear repercussions, uh, for traditional products if you do that. Uh, but I think the world of very, very generous coverage, which you might say Democrats are more aligned with, is [00:29:00] failing right now. And I’m a believer in more generous coverage than not. But if the price point and the utilization increases and the cost year to year are so high.
Marc Ryan: Generosity. The only way to firmly leverage that generous coverage is, uh, government spending and, and, and that kind of thing. And that just doesn’t work, right? Employers are tapped out if you think of them trying to carry much of that burden. So part of it is. Political with different philosophies, but part of it is also the fact that nobody really wants to get to the real issues of what needs to occur for healthcare reform.
Marc Ryan: So people are out there trying to come up with different ways of lowering the premium, which may mean less generous coverage. Now, I’ll also tell you though, that there are some models out there. That actually are emerging. That could be very, very important in healthcare reform overall. Right. I’ll go to something [00:30:00] called Direct Primary Care, which some of your clients and some of your listeners and viewers probably have heard of where there’s a big incentive to do primary care coverage.
Marc Ryan: It’s not insurance, but it’s a contract you have with your. Primary care physician that allows you pretty unfettered access to their office and some limited testing, and it’s focused on primary care. And the idea is, uh, with primary care, do all your prevention, see your primary care physician more often.
Marc Ryan: Work with him directly on your care plan and, and that is meant to reduce costs. And there is some studied and evidence out there that Direct primary care does just that 10 to 15% reductions in over healthcare, healthcare costs, right? So some of this innovation, even teaming up. Digital applications and telehealth and things [00:31:00] like that, um, are showing some promise in cost reduction.
Marc Ryan: So some of this is real innovation. Some of it is just sort of this blunt response to this being too expensive and moving over here and trying to fashion something less expensive. I, I frankly think we need all of them. Right. You might have to move a little farther down. Uh, to try and get coverage for people that aren’t covered.
Marc Ryan: You need to experiment with the direct primary cares of the world and things like that because they do show promise, but you also have to fix pri fix price. And I’ll go back and say, I do think a affordability and having subsidies for families that can’t afford it. It is very important because ultimately attachment to insurance, uh, is proven to be a, a cost reducer over time as well as the moral thing to do, right?
Marc Ryan: So there’s many different things you can do, uh, but some of it is [00:32:00] politics, some of it is true innovation, uh, out there as, as, as I think where we, we, we probably have seen for years and years, uh, along the way.
Erik Sunset: Yeah. The, the way of the world. And I, I know we have more we want to cover, but I do wanna ask you one, uh, uh, final question on these points. You mentioned that utilization is, uh, is, has increased and that’s part of what’s driving the increase in cost. Are Americans sicker now than they have been? Or are folks simply visiting their doctor more frequently?
Marc Ryan: Um, I think there’s a couple of different things I note here. What I will tell you is first. People are not necessarily visiting their doctors more, believe it or not. And Dr. Oz, uh, the CMS administrator made this point in a speech he made, and it was top of mind that only about half of people. Do annual wellness or frequent visits to primary care physicians, [00:33:00] and people will argue that, oh, that’s because they’re healthy.
Marc Ryan: But as Dr. Oz noted, a part of the issue is that’s not really the case. The people that aren’t getting primary prevention and wellness visits actually end up being sicker than those that actually are engaged with their primary care physician. So they’re not seeing doctors more. And we have an underinvestment as we talk about a lot in primary care and in physicians in general, and an oversubscription to high-end services, and that creates a very costly dynamic in and of itself as well.
Marc Ryan: I will tell you that there is aging of America, so that is driving a lot of costs in our system as well. That’s driving utilization and to some degree price. So. People aren’t seeing their doctor, which drives costs. There is aging, which drives costs. We do have the advent of high technology [00:34:00] and expensive drugs and things like that.
Marc Ryan: So that also factors into all of this, but you sort of put all of this together. Coming outta COVID, there was this pent up demand for utilization. So all of those are factors in what we’ve seen the last couple of years. But it’s also true that we’re not seeing that utilization and demand stop. Some of it is because people are seeking out technology and expensive drugs and things like that, those that are doing that.
Marc Ryan: Right. But some of it is the. Old line stuff that we’re just not taking care of ourselves and disease states exacerbate, which contributes to costs. We have far too many admissions and lengthy stays because of the exacerbation of disease states and things like that. So it’s just a hodgepodge of different things that are coming all together to create this very high utilization and high cost drivers from year to year.[00:35:00]
Erik Sunset: It’d be interesting if you, if you were running the, the simulation as it were and could flip switches and toggle things how you want because there’s, I that, that selection bias is perfectly counterintuitive. I think to most that healthy people go to get their annual physical and unhealthy people don’t.
Erik Sunset: If you could reverse that, it would be fascinating to see what that would, uh, do for the overall health of America. I would imagine it would fix it. Uh.
Marc Ryan: Yeah.
Erik Sunset: Improve quite a
Marc Ryan: Yeah, I, I go to two studies. There was a interesting study, uh, from the N-A-I-N-I-H, uh, that talked about direct primary care and the savings there and why the savings is there. And again, that’s a 10 to 15% number depending on the study. But I’ll also give Wakely a great actuarial and consulting firm credit.
Marc Ryan: They recently did an analysis in Medicare of annual wellness visits and what they found. Was they basically sort of took years worth of data [00:36:00] and said, uh, here’s people highly involved in annual wellness over a period of time. Here’s people sort of moderately involved, and here’s people that aren’t involved.
Marc Ryan: And they basically determined that individuals that were closely to highly involved in wellness visits and Medicare saved about $885 a year in costs. Now, when you put it against. Not including Part D drugs, but put it against a 12 or $13,000 number. Uh, that’s not insignificant. You know, it’s below 10%, but when you’re coming close to saving a thousand dollars a year because people are engaged in wellness in a senior community, that’s also very verifiable about the importance of engaging and the fact that.
Marc Ryan: Uh, it’s counterintuitive, but people that don’t seek out wellness end up costing us more than those that do seek wellness.[00:37:00]
Erik Sunset: Hey, Marc. A thousand bucks is a thousand bucks, man. I don’t care who you are. It’s still a thousand
Marc Ryan: Yep.
Erik Sunset: Uh, that’s.
Marc Ryan: If we could save a thousand dollars on employer costs. Now that might be a little high because it’s a different pop, but that’s about 10%, right? On an individual, I told you it was about $9,300. If we’re saving 8 85, it’s about 10%, right? So we could immediately bring down costs, uh, by 10%. Now we know that’s not gonna happen overnight, but it’s a good example of the need for primary care investment.
Marc Ryan: Uh, for primary care and prevention and really just doing things differently, even beyond price in our system.
Erik Sunset: Well, that’s, that’s a nice little segue. Thanks for teeing me up there. I know we wanna talk a little bit about PBM reforms and drug pricing. It, it, uh, if you’ve been paying attention to the headlines, there’s some pretty serious developments happening there. Will you walk us through what those are? I.
Marc Ryan: Yeah, absolutely. So, um, you know, we just saw the [00:38:00] first major PBM reform in a long time. It actually was attached to a funding bill and, uh, some of these things were supposed to. To get into a bill a year ago. A year before that, the PBM lobby sort of stopped that in its tracks. But finally, we have, we are seeing some major PBM reforms.
Marc Ryan: Now, I’ll always tell you I do not think it’s enough, but at the same time, I’ll give Capitol Hill credit both sides of the aisle for coming together. And giving us some fairly good PBM reforms. So across the employer in the Medicare world, a couple of things, and they’re different depending on the line of business, but we, um, have different ways now mandates about compensation, uh, in general.
Marc Ryan: Uh, the rebate compensation to PBMs are, is going out the window, right? So, uh, PBMs are more and more going to have to charge fixed fees. They [00:39:00] can’t be tied to withholding rebates or tied to formulary placement, things like that. You’re gonna basically get paid a fixed fee or so. Uh, and operate with health plans and employer groups on that basis.
Marc Ryan: So some of the machinations related to rebates and passing through of rebate dollars and things like that are sort of gonna go away. Now we know that there’s a whole lot more that can be done, like reforming the GPO relationships with PBMs, many of them owned by the big PBMs, but at least that’s progress in the payment and the rebate world.
Marc Ryan: There’s unprecedented transparency requirements that were passed, right? So, uh, in the employer world and in the Part D world, PBMs are going to have to tell about their financial relationships with various stakeholders and be very transparent with the government, with health plans and with employers.
Marc Ryan: That’s a good [00:40:00] thing. What I will tell you, the reason I love that is because if you know both the Trump and the Biden administration put a priority on hospital and plan transparency, a price, it’s been sloppy. It’s been half-hearted to some degree on the part of, uh, payers and hospitals and payers, as well as enforcement by government.
Marc Ryan: But it has led to unprecedented discussions now about price in America, in healthcare, and I think the same thing’s gonna happen on the PBM side of it. We’re gonna start to learn a lot more. About the veil, what’s happening behind that veil, and I think that’s a great thing. So I’m really in favor of even these incremental transparency reforms because it begins to up the ante forces change.
Marc Ryan: I will also tell you two other things on the PBM Front is, um, express Scripts owned by [00:41:00] Cigna. Uh, settled with the FTC on an insulin suit and a lot of those reforms that FTC was able to get parallel. A lot of the PBM reforms. But that’s a signal now that we’re having enforcement actions against these kind of behaviors, and I think that’s very important and very likely CVS health.
Marc Ryan: As well as OptumRx will settle the FTC suits on insulin, but they do have far reaching implications for reform. They’re paralleling some of the PBM reforms. And then lastly, I will also tell you that Express Scripts has also made a major announcement that they’re starting to phase out rebates in general and moving from a gross and rebate pricing to a net basis.
Marc Ryan: Where rebates won’t be involved. Now again, they are going to run parallel systems. They’re gonna have net pricing without rebates. They’re gonna [00:42:00] have gross pricing with rebates, and that’s gonna be around for a while. But again, I give Express Scripts credit there because they’re beginning to phase out this rebate system that has really created huge costs for consumers at the point of sale.
Marc Ryan: And, uh. Actually drove behaviors by employers and plans that were really not in the best interest of consumers and the healthcare system in general. So that’s a good development. Do I believe it’s gonna be fulsome? No. But again, you gotta take small wins and let that move forward. I’ll close out on this PBM issue.
Marc Ryan: With giving Donald Trump a great deal of credit in the area of drug price control, and I think he’s one of the few presidents that have actually tackled this issue of drug price reform. Again, it’s gonna be years in the making, but the [00:43:00] president sat down with 16 of the 17 largest drug brand drug manufacturers and sort of coerced, um.
Marc Ryan: Uh, things out of, uh, these drug makers, right? And some people, uh, say that sometimes the presidents, um. You know, behavior is not that great, right? I’m not gonna comment on that. But here’s a good example of where being, uh, someone who knows what he wants to go after and get, he actually got concessions from brand drug makers.
Marc Ryan: Then he, uh, had some executive orders and he’s now unveiled generous. Um, globe and guard. Those are the three most favored nation. Pilots in the Medicare part D and part B in the Medicaid world, again, five years of time, not every drug is gonna be covered, but the models should sort of prove out Most [00:44:00] favored nation pricing, which means America over time and it’s gonna take time, will only pay what other developed countries basically are paying, which I think is fair.
Marc Ryan: Now, some people worry about. Uh, you know, brand drug makers have a lot of views on this, and they’re gonna say, it’s gonna cripple innovation, it’s gonna do certain things here. Now, you know what, there could be some fallout, but I fall back on two things and I’ve said them before. One, there are ways to. Get into most favor nation pricing to not cripple innovation, but make sure all parts of the developed world are paying their fair share toward innovation.
Marc Ryan: And number two, I would also tell you that even if there is some impact on innovation. There is a huge price that Americans pay today in terms of morbidity and even mortality. ’cause they do not have access to drugs to treat their disease states. So these two things alone, [00:45:00] uh, you know, I think. Those factors say a most favored nation type status is not a bad thing.
Marc Ryan: And I give the president a lot of credit for going down this road. Traditionally, the Republican party has been the defender of big pharma, but the populism of Donald Trump, uh, is very different. And I think he’s starting to create a new paradigm, uh, throughout America on drug pricing. And he’s making a lot of movement there.
Marc Ryan: So I give him a lot of credit.
Erik Sunset: I would encourage listeners if you didn’t catch, uh, Marc’s appearance the last time around, and we’ll put a link into the show notes for this. We went pretty deep on most favored nation and, and this was sort of the beginning of that dialogue from the president.
Marc Ryan: Ab absolutely right. And you know, it’s, it’s, it’s a, it’s a fascinating look at how we could over time have a, a much fairer system come about. Yep.
Erik Sunset: Yeah. Yeah. I’m, I’m, I’m pleased to, to hear progress being made on that front
Erik Sunset: and then bringing us [00:46:00] home, you know? Uh, uh, continuing in a little bit of the political vein here, midterm predictions.
Erik Sunset: We’re there, it’s the year 2026. What do you think’s gonna happen? I think your crystal ball’s been pretty accurate, uh, so far. Marc, what, what’s on the, what’s on the docket for
Marc Ryan: Yeah, so, you know, it’s very interesting. So I actually published a recent blog on my predictions. I’ve been in this political world forever, having been in politics. But, um, so I like following it. It’s fun. Uh, people make fun of me for saying is fun, but, uh, you know, polling and things like that are very interesting to me.
Marc Ryan: But, um, I will tell you, uh, that, uh, in many ways. The grand old party fell into the same predicament as the Democrats. Did in 24. I think they, and we’ve talked about this a little while ago, uh, on affordability, Erik, but uh, they are now in the same bind on affordability [00:47:00] that, uh, Harris and the Democrats found themselves in 24.
Marc Ryan: That led to all three branches of government, so to speak, the White House, the house in Congress, as we call it, the three parts going Republican. And I think right now we are seeing that same kind of thing on affordability popping up. Um, I feel like, uh, the White House and the GOP Congress has not taken the issue in the impact of affordability seriously enough.
Marc Ryan: Right. And so right now affordability is sort of the top issue. In addition, of course, we have the war, and while this war likely will be. Uh, and not getting into the pros and cons of the war. I think this war probably will be shorter than not, but the problem with that is that the disruption to energy supplies will be.
Marc Ryan: Longer lived right for a whole bunch of different reasons, including put all of the, putting all of this back online and things like that. [00:48:00] So that certainly is going to impact affordability, the price of oil and the downstream effects of, you know, the prices of goods and things. So it’s certainly complicates, complicates the GOP’s, uh, picture at the ballot box moving forward.
Marc Ryan: I had predicted in November. That the Senate would stay Republican. Uh, you know, in, I’m sorry, in December, in my normal predictions, I had predicted in December that the Senate would stay Republican, the House would go Democrat. My latest prognostication is the same. But I will tell you that, uh, the Senate is now in play and there are at least seven major races in the Senate.
Marc Ryan: Could decide whether the Senate goes Repub Republican or stays Republican or goes Democrat. Um, I’ll give you a great statistic. If you look at Kaci and Poll Market back at the [00:49:00] end of last year, um, the prediction Markets were saying that there was a 75% chance that the Senate would stay Republican. Uh, those same Markets today gauge that at 53 or 54%.
Marc Ryan: So the Senate is clearly in play. The house is about an 83 to 85% projection to go Democrat. I think it’s a question in the house of whether they have a, uh. A slight margin, sort of like the ha the Republicans have today, or if they have a more comfortable margin that may depend on the affordability issue.
Marc Ryan: And what happens, what I would tell you is that, uh, about 92% of all house seats. Are not competitive, which is a whole different story. But of those 8% that really decides things, and depending on how much of that 8% of those seats, about 35 to 40 seats, how many [00:50:00] of those Democrats take, uh, how many of them the Democrats take will determine whether they have a tight margin like the Republicans do today or if they have a more comfortable one in the Senate.
Marc Ryan: It could go anywhere from 49 for Republicans to 53 or 54 for Republicans. So that shows you that that Senate is now in play. And so it’ll be very interesting. But what we have had for the past many elections is a very tight electorate, right? Uh, things always flop back and forth. We’re seeing that again.
Marc Ryan: But again, affordability. I think the GOP really. Undervalued affordability, um, from, from coming back into office. They just didn’t pay enough attention to it. I’m a Republican, so I feel okay saying that. Right. I’m criticizing my own, my own, uh, my own party here.
Erik Sunset: We’re calling balls and strikes. It’ll be, it’ll be very interesting to see [00:51:00] if the, uh, Republican base can, can get to the polls. That seems to be a recurring failure of the GOP to get people to the polls. Uh, I don’t have an answer for that. And. This is the DocBuddy journal, not you know, Erik on your cable news, uh, program.
Erik Sunset: So I’m, I’m tuned in, uh, just like you are, Marc. We’ll, we’ll see what happens. It’ll be a very interesting run
Marc Ryan: I’ll give you one other stat. Uh, it’s almost true, almost entirely true that even a popular president in the White House loses something in the midterms, right? Uh, I think it was 19. I think there were three cases. It was, uh, 1934 Franklin Delano Roosevelt’s first midterm, it was George W. Bush after the terrorism in the midterms, and then it was Bill Clinton, uh, during his impeachment.
Marc Ryan: Those are the only three cases. Where in two [00:52:00] cases there were gains in both houses. In the third case, there was a gain in one and a, uh, staying the same in the Senate in the case of Clinton. So in all the midterms since 1930, almost a hundred years. There was only three times, no matter how popular the president was, that there were gains.
Marc Ryan: So there’s sort of a institutional bias against the White House party doing well, and then you compound, you know, affordability and the war on top of that, which creates a, a very bad dynamic for the Republicans.
Erik Sunset: Yep. Hey, like we said, calling balls and strikes. That’s, uh, those are facts there. Um. Well, Marc, we’re, uh, we’re coming up on time. I know, uh, in the past we’ve asked where folks can find you. Has it, has anything changed? And refresh our listeners memories and of course we’ll put it in the show notes, but has, are, are you handle, do you have any new social handles?
Erik Sunset: The website we wanna send people to
Marc Ryan: Uh.
Erik Sunset: with your big acquisition
Marc Ryan: No, [00:53:00] those are still the same. Let me, let me give you sort of the two best places to reach me. Number one is, um. Uh, healthcare labyrinth.com. News feeds, blogs, podcasts on healthcare in general. Uh, and you can go to any, uh, podcast app or site and search Healthcare Labyrinth for the latest podcast every week.
Marc Ryan: Two blogs a week, and then five newsfeeds a week, so healthcare labyrinth.com. And then my company is still lilac. software.com. Now part of Medisolv very proud of that. And, uh, you can read some more on Stars Analytics and data analytics there, and AG agentic AI for providers and payers. Uh, those are still the best places to to, to get me.
Erik Sunset: Fantastic. Well, as always, we’ll get links to those destinations into the show notes. Marc, congratulations once again and thanks for your time
Marc Ryan: Thanks very much, Erik. It’s always a pleasure. Hope to see you again.
Erik Sunset: Oh yeah. You know, you’ve got a standing [00:54:00] invite. And on behalf of the entire DocBuddy team, thank you out there in the audience for listening. Be sure you’re subscribed on Apple Podcast, Spotify, and YouTube to get the newest episodes of the show. And until next time, I’m your host, Erik. We’ll talk soon.