Aarti Karamchandani, Chief Growth Officer at MacroHealth, discusses the significant challenges facing the health payer industry and highlighted the potential for marketplace dynamics to drive innovation and improve affordability. Karamchandani emphasizes the importance of price transparency, interoperability, and robust data analysis in creating a system of continuous improvement within the healthcare ecosystem.
Watch the interview to learn more.
Stephanie Butler:
Welcome. I am delighted to be here with Aarti Karamchandani, who is the chief growth officer at MacroHealth. So welcome to Aarti.
Aarti Karamchandani:
Hi. Thank you. It's nice to be here.
Stephanie Butler:
Thank you for taking the time to speak with me today. I wanted to kind of start our conversation with maybe a little bigger picture question to set the stage, which is, what do you think the biggest challenge is facing the health payer industry today?
Aarti Karamchandani:
Well, I really believe that healthcare affordability, access to quality healthcare continue to plague our industry. The latest predictions right now are that by the end of 2025, healthcare is going to be in excess of $5 trillion, making up 18% of the GDP. That's a 50% increase in healthcare costs since 2017. So the costs are just accelerating, and unfortunately, we still have a problem with uninsured Americans. We have 26 million Americans that are currently don't have access to healthcare insurance, and that number continues to be predicted to rise between now and 2034.
So payers have this tremendous responsibility, really, to help the American population, whether that's if you're getting coverage through employer sponsored care or through Medicare or Medicaid government programs, they have this responsibility to help address these real world problems. And whether they do that through contracting with providers, there's 2.4 million different types of providers they can contract with, or they're now starting... We're starting to see them focus much more on some innovative solution partners that might have access to preferred provider networks that enable care navigation and member engagement. And they're really looking at those types of partners to help get them get their members access to the kind of providers that they need to see when they need to see them.
Stephanie Butler:
Right, I mean, those numbers are a little scary. Whatever we can do to make a difference in that. You're mentioning affordability and cost, obviously, as an issue. But I wonder how does price transparency then help make care more affordable?
Aarti Karamchandani:
Yes, for sure. So the data that came in, or the requirements through the Transparency and Coverage Act that came in, required payers to put out what's called machine-readable files, where their pricing information is available. Taking that data and combining it with the current data that they might be working with, and looking at clinical data or benchmark data out there, they're able to actually run analyses and identify those areas where their costs are way outside of the market norms. Whether they're looking at it from a regional perspective or from a national perspective, looking at population specific benchmarks, they can kind of see where their costs are significantly outside of the marketplace norms, and then start to identify partners. Some of these 11,000 partners that we talked about in the previous question, they can start to identify some of those partners that can help them bring those costs more closer to the marketplace norms or the mean, and then hopefully creating a more efficient healthcare ecosystem.
Stephanie Butler:
Okay, but what element is missing from that data? From that price transparency data, what's missing and how is that leveraged? How is it leveraged that is required to make healthcare more affordable?
Aarti Karamchandani:
Yes, great question. So look, that data is still somewhat sporadic. The quality may not be as robust as it needs to be. But there are organizations that are starting to use that data combined with other data sets that are out there that, when you combine all of that data and use some machine learning to help fill in some gaps, you can get a pretty robust data set. And making sure you combine that data in some of these more advanced analytics models that we see out there with AI, we're talking a lot about that here at this conference. But combining that data, those other data sets will help to create a more robust analysis framework.
Stephanie Butler:
Yes, that they can then use more efficiently and effectively.
Aarti Karamchandani:
For sure, yes.
Stephanie Butler:
So what does the interoperability, right? Combine that with the price transparency and then also the ability to accurately benchmark. What does that enable? If you combine all of those factors together, what do you get?
Aarti Karamchandani:
Right. So the interesting aspect is you can take that price transparency data and see where the payer's cost maybe outside of the benchmark or the marketplace benchmarks. Well, that's great. It's great to know that. But there are 11,000 vendors and partners out there that can help them reduce those costs. So what if you could take that data where you're outside the norms and start to look at those partners and see if those partners can help plug those holes? And we are able to take some of that data and actually reprice the historical utilization against some of those partners out there and then really help them say, "Okay, these are the partners that are really going to help you reduce your overall cost of care." And then the interoperability comes in too, an interesting aspect. Because then you can connect those partners, start to realize some of those savings. But wait, there's more, because it's not just about connecting, then it's about taking and harnessing all of that data that's now being exchanged between all of their ecosystem partners, normalizing that, and then continuing to feed that into the system. So now you create a continuous improvement system and a flywheel of innovation starts to occur. Because, in theory, if more marketplace partners are starting to come towards the mean of the cost, then the mean should shift. Because there is efficiency, so now you're constantly moving towards-
Stephanie Butler:
So then the next time it's like, "Oh, you're more expensive." Two years ago, you would've been on point. But now you're too expensive. Because other people have found a way to be more efficient.
Aarti Karamchandani:
That's right. And so new innovative partners can come in, new solutions can come in to add more fuel into the innovation funnel, and so you start to see a cycle appear and the markets become more efficient.
Stephanie Butler:
And more affordable.
Aarti Karamchandani:
That's right.
Stephanie Butler:
And that's a great concept. Because I can imagine that you are looking at it and you see that it's expensive, that you're priced outside of the norm, and you see, "Oh, there's 11,000 vendors that can help me." How are you going to figure out which one you're supposed to go to? So having an efficient way to do that is really... I think can make a huge difference.
Aarti Karamchandani:
For sure. And we find clients that work with us see significant cost savings where they're not only seeing savings, but that savings can be reinvested to other areas. So really, our perspective is that innovation should fund itself. So savings from moving towards that mean can help to fuel the ability to continuously reduce costs and make care more affordable for the members out there.
Stephanie Butler:
Back to innovation. In the few minutes we have left, if I look down the road, 5 to 10 years down the road, what do you think will be the biggest innovation or disruption that can change the healthcare industry?
Aarti Karamchandani:
Well, we really think that marketplace dynamics can be a huge enabler of innovation and disruption. So if we think about other industries that are out there, banking. You used to have to go to your local bank to get money.
Stephanie Butler:
Oh, remember that?
Aarti Karamchandani:
Right? Remember that? Well, now with data being standardized, interoperability occurring between banks, the ATM revolution appeared, and now you can conduct banking transactions from your phone.
Stephanie Butler:
I was just going to say, on my phone. Nobody even needs money anymore.
Aarti Karamchandani:
That's right. And same with the transportation industry, right? Glenn talked about that this morning, where he said, "Remember hailing a cab? When does that happen anymore?" And then certainly Amazon has come in and revolutionized retail. And they're using transparent pricing, dynamic pricing, and data to help a consumer pick the solutions or the products that are helpful for them, and then they're actually delivering it. So I think that is a new fundamental way that healthcare will evolve over time. So we have the data now that will continue to get better. With the pricing transparency data that will continue to get better. We're seeing clinical data being exchanged much more robustly now, and we believe that will start to drive some innovation. And the technology infrastructure exists right now in the marketplace.
Stephanie Butler:
Which is enabling that and allowing that to happen.
Aarti Karamchandani:
That's right. So I think the... We believe that the efficiency of markets are going to drive more of innovation, and then you create the fundamental system to help continuously improve healthcare. So we're not constantly chasing the next area of cost containment that we have to focus in on, a system exists that allows for that continuous-
Stephanie Butler:
The market checks. It's a checks and balances on the market system. I love that.
Aarti Karamchandani:
That's right. Yeah, thank you.
Stephanie Butler:
That's really interesting. So we're talking about innovation, right? So I'd love to hear from you in the time we have left, what do you think the biggest innovation or disruption will be that will fundamentally change the industry in the next 5 to 10 years, the healthcare industry?
Aarti Karamchandani:
Well, look, I think marketplace dynamics can play a fundamental role in helping us create a system of continuous improvement in the healthcare industry. And we can learn from some of the other industries that have experienced some of the same transformation. So if you think about banking, remember the time when we used to go to our local bank and transact with them? And now, with data being exchanged, interoperability standards within the banking industry, the technology enablers that have been there, we can conduct banking transactions on our phone.
Similar to the transportation industry. Remember hailing a cab? Now we have... Through price transparency and dynamic pricing, we have organizations such as Uber and Lyft that can help us get our services right when we need them, where we need them. Same with the retail side of things. We're starting to see players like Amazon using the same concepts of price transparency, dynamic pricing, to help consumers pick their products that they need, but then also delivering those products to them.
So I think the healthcare industry is poised to do that with some of the data now that is available through transparency and coverage, and that data becoming better, clinical data becoming more robust and available more holistically. And you're starting to see the standards for data exchange come into play.
Stephanie Butler:
Oh, yeah. That's right.
Aarti Karamchandani:
So I really believe that whole concept of leveraging data and marketplace dynamics will help us create this continuous innovation cycle where the cost areas will constantly be evaluated, members, patients will be able to get the care in the manner that they want to receive that care, and we'll start to fuel a cycle of innovation and cost reduction.
Stephanie Butler:
I love that idea of a cycle of innovation, right? So that should be really interesting to see where things go. Thank you so much, Aarti, and to MacroHealth for talking to me today. Really excited to see how things develop in the next year.
Aarti Karamchandani:
Great. Thank you. It's great to be here.