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Digital Health is the Gateway Drug: Part I

Written by Andrew Le, MD

UpdatedJune 21, 2023

Welcome to the CEO Corner, where Buoy CEO and Co-founder Andrew Le, MD sits down with industry leaders to chat about the provocative topics of healthcare today. Andrew recently spoke with Jeb Dunkelberger, the Chief Executive Officer of the Sutter Health | Aetna joint venture, which offers both self-insured and fully-insured commercial health plan products to employers in Northern California.

Andrew Le: Maybe to start, Jeb, could you just tell us a bit about your background and your role at Sutter Health | Aetna?

Jeb Dunkelberger: A consistent theme throughout my career has been value-based care. I started off as a health economist with Ernst & Young, and then moved into my largest client at the time, which was McKesson. From there, I moved into the Blues family, working within Highmark. Then I did two startups, one in renal care with Cricket Health, and then a robotics company called Notable Health.

In October 2020, I took over as CEO at Sutter Health |Aetna - a joint venture between Sutter Health, which is a 24-hospital system in Northern California, and Aetna, one of the nation’s largest health insurers, and is also owned by CVS. You can think of it as a three-legged stool. You have a payor, a provider, and the largest retail pharmacy chain in the country. Being able to complement those three things and pull them together, has allowed us to come up with some really interesting things in the insurance space right now.

Andrew: Your experience across the ecosystem is just incredibly diverse. You must have such an interesting view globally on health care. Just talking first about Sutter Health | Aetna, what part of your job do you enjoy most day-to-day?

Jeb: Probably the best part of my job is the fact that when you have a payor attached to a large integrated delivery network, you have completely aligned all the incentives in favor of the patient, and the employer. For example, in the traditional provider world, where most value-based programs get stuck, especially effective population health management programs, is when they create too much demand destruction on historically strong revenue sources. Essentially, if you're driving down utilization too far, or simply redistributing it to areas that are lower reimbursement for a health system, it's really hard to justify against the existing and traditional FFS business model. Our payer-provider model alleviates that pinch and makes the economics work.

It's always fun because I get to be one of the people that comes into the room and expands the realm of possibilities for both clinical and non-clinical interventions. It's amazing to see doctors and clinicians in general think about all the possibilities, and now we don't have to worry so much about whether or not it's remunerated by fee-for-service mechanisms.

Add all that together with the fact that we’re competing for business in Northern California, where you are surrounded by massive and progressive employers, coupled with competition from Kaiser Permanente, and two strong Blues plans. It really seems to be a bastion of innovation and disruption - and to me, that’s a lot of fun!

"...when you have a payor attached to a large integrated delivery network, you have completely aligned all the incentives in favor of the patient, and the employer."

Jeb Dunkelberger, CEO of Sutter Health | Aetna

Andrew: That’s super cool. The idea of aligned economic incentives in healthcare in and of itself sounds magical.

Jeb: Right?

Andrew: But maybe a counter to the question I just asked, Jeb, what keeps you up at night in your current role?

Jeb: My fiancée is a trauma surgeon. Every day when she comes home from work, I hear about the acute reality of healthcare. She's dealing with a unique kind of high acuity traumatic event, but you still hear about patients that are refusing care or asking to be discharged because they're petrified of the financial repercussions of getting care. We all know that government-sponsored health insurance is going to be something that continues to expand in this country, either from legislation or just the reality that we have a material amount of aging seniors.

The reason I bring this up, is because right now, most of provider financial models are built on this premise that you can cross subsidize your government-funded members with commercial employers, and it's simply not sustainable. Sometimes I feel like I'm doing the math alone in my office, writing copious notes like some crazy scientist, trying to figure it out and hoping I’m wrong. What I worry about is, where's the breaking point? And for some they think it's years out, for me, I think it's actually much sooner than that. And I just continue to ask myself, the pandemic already put so much strain on a lot of businesses, and now we’re talking about their second or third largest line item being health insurance, growing faster than their own business. Something will not only break, but the very system could implode.

So I guess what keeps me up at night is the fact that this could implode sooner than most people realize. And then the question becomes, what do we do to avoid that?

Andrew: That gives me chills. Because you're so right. In one of your articles you mentioned that we need to take into account the perspective that being incremental is not enough, and that we might need full-on wholesale change. And you brought up this concept of, if healthcare could exist like a real free market, and people could shop like people shop for other things, that can create a lot of efficiency. A related question, then, is how do you see the role of digital health in the next five to ten years, and what opportunities are there to have that wholesale change? Or do you feel like digital health is just adding to the inertia and confusion?

Jeb: The incremental change problem is one of the biggest issues. I almost sometimes feel like we've created this shtick of redesigning, restructuring, re-engineering, resetting the healthcare sector. How many times have you heard, "Healthcare 2.0"? What decimal place are we counting? Because we must be on version 10,000 by now. All the necessary ingredients that you need for a free market today don't exist. Now, there's a lot of companies that are focusing on creating those to allow people a more shoppable experience. That's where I believe digital health comes in.

The problem, though, is that you also have to look at what's happening within digital health and the myriad point solutions coming out right now. What I fear is that not all digital health interventions are equal. For example, what percentage of claims will we see for an in-person visit happening within a few days or week of a digital or virtual encounter? Because what our sector can't afford is to mimic some of the early data that we saw from urgent care facilities, where folks would use the urgent care and then still go to the E.D. afterwards. I’m not talking about just the high acuity, I’m talking low to mid acuity where the UC was not staffed or equipped to deliver the standard of care needed, but still was able to bill for essentially triaging the patient. There is a critical threshold that we must measure and report on, otherwise you risk hitting a point where now you're just adding additional cost to the system with diminishing value.

This is why I’ve jokingly called Digital Health the next gateway drug. What I worry about is through digital health and the proliferation of point-based solutions is if we are just developing this loose constellation of new interventions, almost a new form of disintermediated care; where we have all these different players that are on all these different systems. They're not communicating, every program seemingly has a dietician, behavioral health specialist, social worker, nurse practitioner, you name it. These different clinical teams and digital therapeutics are all working on the same human yet are rarely talking to each other. How do those care teams all connect, or are we just ushering in new problems and trading them with our old problems? That's my biggest fear.

In Part 2 of the conversation, Andrew and Jeb explore Jeb's book, Rich and Dying: An Insider Calls Bullsh*t on America's Healthcare Economy, as well as their viewpoints on healthcare today, and in the future.

About the participants:

Jeb Dunkelberger, CEO of the Sutter Health | Aetna joint venture, which offers both self-insured and fully-insured commercial health plan products to employers in Northern California.

Andrew Le, MD, is the CEO and Co-founder of Buoy Health.