Redefining Pharmacy Benefits Without the Gimmicks | Joey Dizenhouse, FSA, MAAA SlateRx, President & CEO

This transcript was generated automatically. Its accuracy may vary.

Mike: Joey, introduce yourself to our listeners.

Joey Dizenhouse: My name is Joey Dizenhouse. I serve as the president and CEO of a company called Slate Rx, as in a clean slate. We are in the pharmacy benefits business serving Plan sponsors trying to help, fight back, , against all of the challenges we have in the industry related to, affordable prescription drugs, transparency, fiduciary responsibility, and the like.

Mike: It's good to have you on again. Last time I remember how interesting our conversation was, how down to earth it was coming from I think as a PBM guy. I think the difference there is we were talking about opaque versus transparent. Now since we've talked though, you've got the title of a CEO at a different company.

What happened there?

Joey Dizenhouse: Well, there's more of a connection than might, originally meet the eye. And so when we talked last a couple of years ago, I was leading the pharmacy purchasing operation for a group purchasing organization called Health Trust, which manages about $15 billion of pharmaceutical purchasing across different, as we call classes of trade, hospital buying and surgery center buying.

And then of course, employers and unions buying as A PBM. So we had a large PBM coalition deal negotiated with A PBM and. Slate was formed as a channel partner to HealthTrust and what we built our model around and continue to do is help empower that program To be its best. It's a great program, but we help fill in some additional value adds.

I mentioned fiduciary earlier, so we provide fiduciary support in our contracts with the plan sponsor. I'm sure you're familiar with some of the lawsuits that have been surfacing over the last year or so and help protect plan sponsors in that regard. We also have a very custom. Bespoke clinical model that's all about getting the patient to the least expensive efficacious product, educating prescribers on what the cheapest product is for the patient, and sort of removing those barriers to data that have been traditionally a problem.

So we are partners with my former group at HealthTrust and we expand on that program to deliver additional value to plan sponsors.

Mike: I know if, if some company has like, let's say Blue Cross or something that's Blue Cross and then they kind of sub out the PBM part, would you call yourself not to label you as Blue Cross, but would you call yourself that or are you now an intermediary between someone like a Blue Cross? There's probably a better term for that. And a PBM.

Joey Dizenhouse: The last thing the industry needs is more intermediaries and more acronyms, but we call slate a PBX. A pharmacy benefits experience and there really is no magic to that name, but we want people to know that what we're doing is different from the traditional models. And so we didn't want to use PBM or PBA per se.

Pharmacy benefit manager, pharmacy benefit administrator. Those are pretty commonly used terms. So to answer your question, let me backup just a half step. If you look at the list of all the things. That the, the vendor, the PBM, whatever you wanna call them, that the vendor does in this kind of a relationship with an employer or a plan, they do things like provide the network of pharmacies, do things like collect rebates from pharmaceutical manufacturers and they should be passing those on to the plan.

Sometimes they do, sometimes they don't. They should be providing clinical support and services they should be providing patients. Customer service, and ongoing support and plan, customer service, and prescriber customer service. What Slate does is we partner with HealthTrust and we use the core model that HealthTrust has negotiated because they have over three and a half million covered lives across hundreds of plan sponsors, which gives them a lot of leverage. And then that deal means that the financials are very strong.

So we are using the Health Trust program, which is delivered via a partnership with Optum. So as a very big PBM that's well known. Optum is handling things like the network and the rebate contracting with pharmaceutical manufacturers.

They operate the call center and they process claims when Slate is involved. Slate's doing everything else. Most importantly, we're doing the clinical model. So it is our pharmaceutical and therapeutics committee that derives the clinical protocols. So we are fully URAC accredited and SOC ii compliant.

We're deciding, what is the, clinically appropriate criteria for access to this particular drug for this patient and this circumstance, and providing the appeals and external appeal contracting all of what's required. We're doing all of that separately from, in this case, Optum. And even if Optum was doing a good job, there is of course the obvious fox guarding the henhouse problem in that model.

So in other words, outsourcing it to a third party that's completely independent and using their own p and t committee adds a lot of value. And then the other thing that we do that's different. we're militant about alignment of incentives. We want to make it very clear that we have no incentive to do something that would not benefit the plan and the patients.

It comes right back to our mission of serving those who pay for healthcare and those who receive healthcare. So to do that we are a business, so we have to be paid, but many in this industry charge fees based on how much the drug costs, or they charge fees every time they do something.

We have one fixed flat administrative fee. We charge it per belly button,

button 

Per member, per month, as we say, PMPM. And that's it. There's no other fees, period. Full stop We're aligned with the plan sponsor. We're not looking for any upside. There's no misgivings about what our objectives are.

Joey Dizenhouse: When we speak with prescribers, when we tell prescribers that there are alternatives for their patient, we also make it very clear to them that we're not getting compensated for this interaction. We're there to help educate the prescriber because oftentimes the prescriber simply doesn't know that there's a cheaper alternative for the patient.

Mike: the patient,

Joey Dizenhouse: They're writing one of three or four molecules that they feel comfortable with, but don't have access to the details of which drug is cheapest. And there's so much complicated economics in that decision making that's very frustrating for the prescriber. So we're building trust with them

Mike: them

Joey Dizenhouse: and backing that up with absolutely zero financial incentive.

Mike: incentive. 

Joey Dizenhouse: in doing all that, what you get is a model that lets you still buy the drug. Well, because there's a lot of leverage. But you're also managing utilization and mix in a unique way. We're not denying patients access to drugs. Clinical efficacy and safety always come first, but there are lots of situations where there are less expensive, efficacious products that get overlooked because there's so many problems in the inherent model of PBMs and hidden incentives that come between the various supply chain organizations.

So we're putting the pieces together in a different, better way. But a more complicated way so that we can help get a better result for those that pay for care and those that receive care. 

Mike: So Joey, how has your life changed as a CEO then?

Were you doing about the same stuff? Do you have people under you now? How does that work out for you?

Joey Dizenhouse: You need a lot of people to be able to effectuate change in this business. It's really difficult and I had a great team of people at Health Trust.

If I had to point at one thing I wish I had that was different, it would've been more people. And so part of building the slate model was, when the founders reached out to me saying they wanted to build A-P-B-M-I. After laughing at them a little bit in that reaction to you wanting to build a PBM, that's lovely that you wanna do it.

It's nice that you wanna do the right thing, but you got a, you got a big mountain to climb. There's a lot of barriers to being successful after starting there, but then realizing that they were serious and that they had good track records of being honest, transparent, and folks trying to do the right thing.

I suggested this partnership and taking advantage of the Health Trust deal as a way to anchor the program and then build from it. And so to answer your question, slate is now up to about 70 FTEs. 

A lot of the services I mentioned are already handled by the core program, Optum doing those. We don't need a team that negotiates rebates with manufacturers. We don't need a team that negotiates network contracts with pharmacies. We don't need an adjudication system. We use our own team.

For things like account management, implementation, support, reporting and analytics, legal and regulatory management. And then most of all, the clinical model is important. So we have, we have a number of pharmacists and pharmacy techs that help us review, update, manage our criteria and formulary to ensure meeting of our objectives.

But we are continuing to grow at a pretty Healthy clip and expect to continue to do so. As long as we can add value, for our clients, then, we'll continue to scale our program.

Mike: How do you sell something like that, Joey? As far as. Getting your stuff off the ground. I always complain about the brokers who go in with their smiles and tell a company, look, we're gonna save you so much percent where, you know, percent doesn't matter. " It's like dealing with an invoice on a used car kind of thing. How do you guys do that? Is that the industry standard with brokers, you have to convince brokers to include your product instead of just the PBM product, or how does that work out?

Joey Dizenhouse: Yeah, that's a good question, Mike. the broker, community, consultants, brokers, wherever you want to draw the line, they're certainly not black and white lines. there is a variable sort of, set out there. There are advisors, I'll use the term advisors generically.

There are advisors that are only focused on doing the right thing for their customers and finding value at any cost, really selflessly looking for the right value, whatever that is. Then there are those that are more focused on hitting an easy button or a simple button. And maybe looking out for their own financial interests.

We live in a capitalist society. I can't blame 'em for doing that. But getting to the right answer is very complicated. It requires rigorous financial, clinical understanding, operations understanding. So the answer to your question is, we work through many advisors.

There are some advisors that have taken the time to understand our model. And they appreciate the value that we add and they come to us looking for that value to be added. And then there are others who are not yet, ready or willing, to expand their sort of bitter set and include entities like Slate.

But, our methodology and our model. Is, is not to just go ahead and throw proposals over the wall to everybody and anyone who asks, because we need to be efficient. On the flip side, we're not expecting that advisors will just automatically give us business unfairly and just give us the nod.

We want to work with those that have The means, the resources and the motivation to get to the right answer. 'cause when that happens, we believe that we have a very strong value proposition and we're doing things that others aren't, which makes it a little bit easier to point to.

Not the least of which is that we're putting guarantees on the table. we will not take any upside, but we will accept downside risk. if our clients aren't happy. Then we're not going to keep them. So the upside of doing a good job is not more money.

It is, we get to keep our clients. and so we put guarantees in place, real guarantees. And to your point about trends, I smiled because for years, I've been hearing promises for 20% cost savings on the pharmacy plan. And then every year the costs go up. So how do you save 20%, but then your costs went up.

Were they gonna go up 30% before? I think it's a bit of a misnomer, this whole trend game in the numbers. So what we do, is, , we'll say that your costs are gonna go down, in adopting the slate model from where they were to where they are, they will go down and if they don't, we're going to absorb the difference out of our own fees.

 we won't go out of pocket beyond our own fees and actually write a check, but we'll put our entire fee at risk for financial results and client satisfaction.

Mike: My listeners know here, but for anybody that's not in pharmacy, about three years ago, we stopped selling brand names at our pharmacy we're doing quite well. So we haven't done a brand name in three years. And one of the ways I explain it to people when they come in, is when we still had some of the brand name on the shelf we were selling off. I'd hold up an inhaler and I'd hold up like one finger and I'd say, is a hundred dollars and I'd hold up the other hand, I'd say, this is $500 . And I would say the PBM, the insurance is gonna take that 500. And they're gonna say, look, we're saving you one finger, two finger, you know, 20, 40%. Without telling you that there's a product over here that only has one finger, you know, sticking up. 

Joey Dizenhouse: Right.

Mike: That percentage game is just crazy. Joey, what is something that is an idea that you would have? That you'd say, this would be so cool if we could do this in the industry, but you would be ahead of your time.

Or, you know, slate can't do it because of this or that reason. What's something that if there was maybe some, guarantees or, you know, I know it's a chicken and the egg, but what's something that, is maybe coming in the industry that we're not seeing yet?

Joey Dizenhouse: So a couple things I'll give you, I'll give you the cliche answer because it still matters. And then I have another one that's more of how I'm thinking about things, maybe a little bit differently. The cliche answer is like the removal of all of the nonsense, One of the reasons you stopped selling brand drugs, 

the hidden incentives that the pharmacy ends up underwater on the brands, the rebate money that has increasingly become more and more on fewer and fewer drugs, but is so dominant that it can run a plan and it can force utilization of unnecessarily expensive drugs. That probably won't have a safety risk for the patient, but certainly won't help the patient from a safety and efficacy perspective.

It's just spending more money unnecessarily. And, you're starting to see a bigger and bigger backlash over this, call it the gross to net bubble, . We're starting to see some progress. I don't think we're gonna see it fully pop , anytime soon.

There's just too much embedded. History , politics, incentives that have made the machine run. It takes a long time to unwind, so the game . Between now and whenever it pops, is to extract as much value as you can for, in our case, for the customer. So we get the value of that rebate money we use Optum to, to collect it from the manufacturers, because, well, we use the health trust program that uses Optum to do this because they've got a lot of leverage and they get very good value in that.

And then we get that money, we pass it on to the plan sponsors as an example. But wouldn't it be easier if that money just didn't exist? It'd be painful for a little while, but then it would go away and we'd be left with a rational pricing and payment system like we have in every other market, generally speaking.

But, that's more of a pipe dream at this point, I think. And then and my, my second answer, which is sort of more of a personal bias. if we were to think about what are the ingredients to cost? For a plan sponsor, what are the things that makes a plan sponsor spend money? And this equation, this simple equation has been around as long as I've been in the business 25 years or more.

And that equation is that the cost profile or the trend profile is a function of A, the unit cost. How much is the drug, B, the utilization, how much you using, how many scripts are we taking on average? Three, the mix or the intensity I like to call it, what are we treating the patient with that they have high cholesterol?

Are we using a regular statin, cheap and generically available for many years or are we using a PCSK nine inhibitor that's much more expensive for hypercholesterolemia? And then the fourth element, so you got unit cost utilization mix, and the fourth one

Mike: one

Joey Dizenhouse: Volatility is the, if anything is new in the equation, volatility will be that.

And that's because over time, as I'm sure Mike, it used to be impossible to find drugs that cost a million dollars.

Mike: cost a million dollars.

Joey Dizenhouse: Impossible to find drugs that cost $25,000 and now there's tons and tons of this stuff, and if the entire pipeline's full of it, rare disease treatments and orphan products and so forth.

And so what we're building is a volatility management program. A traditional insurance product that's available for plan sponsors to say, okay, I don't wanna absorb the volatility of having a patient that needs a super expensive drug like Strq or Gatx or Hemlibra. There's tons of them.

And so instead of having that risk that could blow up your plan, you can buy an insurance product that covers you. The difference is, if we're not designing the insurance product to make money, insurance usually has the cost of insurance, plus, plus plus. So what we're doing is we're trying to build something that has no margin in it.

It's just designed to protect the plans and administer it as part of our service. And so what that will do is help plan sponsors who want it, get a little bit more protection against the, the perils of. you could have 2000 lives in your plan, 3000, 5,000, even 10,000 or more lives in your plan.

And you could have one patient with one diagnosis, where all of a sudden you have to decide between continuing to exist as a company

And that's a very difficult place to be at. I don't envy anyone in that spot. And so just trying to help, deal with that volatility element that my answer.

Mike: Yeah. So Joey, you know the system in Michigan, we have all these laws that were put in place a couple years ago PBM laws and things like that. And I don't know if it has to do with. Allowing them to have a certification. I think Michigan has maybe a PBM certification program, something like that.

Joey Dizenhouse: Mm-hmm.

Mike: I don't think anything's being done about these laws. The PBMs are just, thumbing their nose at them, and in my opinion, let's say that in general three of the big PBMs have, let's say 30% of the market each, something like that, and then the other ones have 10%. I'm not sure if that's true or not, but in my opinion, they're saying, look. You know, we got 30% of the market.

If you don't want to give us this certificate or if you don't wanna let this happen, fine, but you're gonna be the politician that is responsible for having 30% of the people in the state not getting their medicine on Monday. How do you fight that? What I want to happen is I want PBM people to be put in jail because if you've got a ton of money in A PBM, what do you care if you're getting fined a certain percent?

If you've got 30% of the market, I wanna see people go to jail. I don't know if Wall Street has any precedent on that. I know this is very simple, but if you were talking to the politicians of Michigan, and let's just pretend they're not doing anything.

I dunno if they are or not, but I haven't seen it on our side, in our store. What could be done to drive the screw into these companies that are not, complying without. They say, well, fine, you're, you're the one responsible for 30% of the patients not getting their medicine Monday.

Joey Dizenhouse: Very difficult question to answer, and I'm happy to answer it. I'm not trying to be evasive. I don't know what can be done because The market share of the big three entities has been and continues to be upwards of 80% in total. And then it's a distant sort of fourth and fifth and sixth and seventh and 28th and 39th and so forth.

And, and so many states. You mentioned Michigan, I think, I think that licensing requirements went in place one last year. They may have done something before that too, but it's not just Michigan. There are several other states putting their own regs forward, each doing it a different way.

Starting to argue that the sort of laws that affected health plans, which was federal in nature, is not superseding the state rules anymore. And there's a lot of controversy over that. And so I think it's good that the states want to get involved. The question is. Are they adding more complexity to the market dynamic?

Especially if you're thinking about commercial plans, because most commercial plans are not targeting people in one state. They're in multiple states. So how do you regulate people that are across state lines and then is it where they live or where they work?

And is it where they spend their time, where they pay taxes? It just gets very complicated. And I think the, I agree with you a hundred percent, the consequences for the. Wrong behavior should be serious enough that it deters the bad behavior. So for example, if you're facing a $5,000 fine, if you're caught doing something bad that you make a million dollars a day doing, you're not motivated to stop doing it from a financial perspective anyway.

It's just, it's just not set up necessarily correctly. and ironically, these laws affect organizations like mine too, where we have to submit applications. and get acceptance as. It might not be a PBM, it might be a third party administrator, it might be a utilization review vendor, but there's protocols you gotta submit.

You have to pay and allow for audits and things. And there's good reasons to do that. But we have 50 states all trying to do it at the same time. What ends up happening is a smaller outfit that's trying to do good. Has to invest a lot more resources proportionally to deal with this state by state stuff, versus a monster organization that can have a whole department of people.

So it's counterintuitive and I don't know what's gonna make change happen in that regard, but what I would say, what, what's really started raising eyebrows? Just like what happened in the 401k industry some time ago. What's happening now with the plan participant class action lawsuits against the plan sponsor, fiduciaries, board members.

Those lawsuits, the most recent of which was announced just within the last couple of weeks, JP Morgan's program, was the center of that one. I'm sure you saw. It's calling into question the responsibilities of those that are making decisions. And in making those decisions, if those decisions are not looking out for the plan participants, that is a textbook failure of the fiduciary rule.

So who's responsible for that? Well, it is technically the fiduciary. And the PBM is not the fiduciary. It is. It is the plan sponsor. And so that's part of the reason why. Why Slate is trying to help with that is because we know we're doing the right thing. We know that we've covered the basics of those things.

Like one of the issues that constantly comes up are specialty drugs that the PBMs want to protect, dispensing from their own pharmacies that are available generically, like, like Tecfidera and Gleevec, and Zytiga the same suspects, 

Aubagio. And it turns out that the patient paid.

Mike: pay

Joey Dizenhouse: $4,000 for a drug that's available on a direct buy website for 20 bucks. How is that possible? Well, that's, I dunno if it's greed or disorganization, probably mostly greed, but

Mike: but

Joey Dizenhouse: That's unnecessary, we don't have that problem in our program. So we provide the language to help protect the plan sponsor so that they know that if they were to, find themselves in a lawsuit, that we would be defending them and we could defend them.

And that helps take some of the pressure off. But none of that. Addresses your point, which is what's gonna make the, what's gonna make the traditional PBM that's earning money in these ways that are unbecoming to the long-term viability of this business, for plan sponsors. What, what's to stop them?

 I don't have a good answer for you. There are no consequences of any substance today, and we've seen all of them. The trials and bringing these leaders in front of the senate hearing, senate committees and, and testifying, and it's such a complicated model that if you listen to the best of the best and the worst of the worst, both tell you what they're doing.

It'd be really hard to discern the difference unless you're knee deep in it.

Mike: I remember as a kid listening to like the state of the Union, you know, Nixon and stuff like that, maybe Ford and, you know Charlie Brown, the teacher on that, or when, when they're on the phone, it's, you know, the wa wa wa, wa you know, I remember as a kid watching that stuff and this stuff would actually sound like that going over my head, you know, the, the terms and stuff, and I don't.

Think I know a hell of a lot more now, but anyways, back in the federal trade and all that Ma Bell and all the phone stuff , which was always confusing as hell as a kid, I guess one of the answers to this is whether it's through the FTC or whether it's through good companies like Slate and so on, it's, you know, gradually chipping away at the 80%.

And then that way when the state of Michigan finds someone doing something nefarious, they can say, we're gonna shut you down. And instead of you being 30% of the market, you're 12% of the market, something like that. So, or not, give you your license and things like that. That takes time.

But that's one way to, to stop that from happening. Here's one that gets me is we've got this company in town, priority Health, and. They give these OTC cards to employees around the area. And let's say they get like I don't know, maybe it's a hundred bucks a month on a card. And that seems like it. Perfect opportunity. And I'll get to the prescription side of that in a second.

It seems like the perfect opportunity for someone to use that card to say, you know, I can either go to one of the chains in town and God bless our chain, brothers and sisters, but they just don't have a lot of the resources that maybe an independent would as far as patient care and so on, they can either go to this chain and use their, their OTC card and they can get something for $10 or come to us and get something for $11, whatever, and so they can decide if that dollar is worth it to them or not for the extra service, quicker service, that kind of stuff. What a perfect time to do this, and it wouldn't seem to affect the insurance plan that much because they're given a hundred dollars. They're not spending it anyway. Long story short, they don't allow it. They only allow it for these certain chains. They don't allow it for things like us and like, what a great time that they could put this decision into the people's hands Now. a guest of mine quite often, Kyle McCormick from Blueberry Pharmacy. Last time he was on, talked about something similar to that with prescription drugs, especially the generic ones. And so the example quite often that I'll use is for when you have car insurance, you don't use car insurance for gas or for you know, oil changes to for tires, that kind of stuff. Speaking about cars, golly, I'm in Michigan and kind of a sloppy winter we've had here. And , windshield wiper fluid runs out. and I talked about this last week on the show. Joe, I dunno if you remember this, back in the day, you didn't have these just side little things to put the antifreeze in.

It was actually you had to like open the, the actually the antifreeze, you know. Tank in front and have the stuff spray over with

Joey Dizenhouse: Oh, oh sure. Oh, sure.

Mike: Now they have these little side tanks. So I put in this windshield wiper fluid and it's like, it's not working. I hear the, I hear the VVV, you know, I hear it, the pump working, but there's no fluid coming out.

So I put more into it And pretty soon I'm like, God, it must be frozen. I think there must be a chunk of ice in there in this hard Michigan winter. So finally I got this stone. It's not the antifreeze, it's Prestone freeze free windshield wiper fluid. putting it in this, this windshield wiper thing ends up that I've been putting the windshield wiper stuff in the. Extra antifreeze the thing the whole time. So, so anyway, so I'm, I'm

Joey Dizenhouse: Believe me, that's something I could see myself doing too. Absolutely

Mike: , and it's like every time I put this new windshield wiper fluid in there, I'd look and I'm like, none of it's been used, but it's all like brown and stuff. I was like, how the hell is that happening? Anyways, to the insurance. You don't use that kind of stuff for the cars,

Joey Dizenhouse: right.

Mike: Kyle's idea maybe among other people is let's put. You know, put a thousand dollars on there for any drug that's below a certain amount. Any, any drug that's below $500 is paid for with this card. And let people do the same thing as I'm talking with the over the counter card, you know, maybe one

Joey Dizenhouse: Mm-hmm.

Mike: 10% more, but they

Joey Dizenhouse: Mm-hmm.

Mike: That decision and it doesn't seem to be effective.

Affecting the insurance that much. It lets the patient get the care they want. But it's back, I think, to the five finger, one finger, there's not that slide in there for them. There's nothing they can get their hands on, so they don't do it. But the point is it seems to go along with the whole car insurance thing.

It's like, why are insurances even involved for drugs that are under a hundred bucks? It just

Joey Dizenhouse: Oh yeah.

Mike: it seems like that day has passed now with the, with the disparity between the generics and the brand names.

Joey Dizenhouse: Oh, you're absolutely right. And, and the, the best way, the, the best way I can sort of, empathize or, or agree with you via story is if you look at, if you look at forget pharmacy and just look at sort of like traditional medical insurance and then traditional dental insurance.

Traditional medical insurance, at least for the most part, is designed to cover you against the stuff that you, you know, God forbid, or in a situation where you need it, you, hospitalization, expensive stuff. Dental insurance on the other hand is like almost the inverse of insurance. It pays for the first thousand dollars, 

and it has a lifetime maximum. So if you need major restorative dental work, no insurance policy I've ever seen, or if you've got kids with ortho like me and everyone else out there. I've got orthodontics coverage. That's great. And then you get your bill, it's like, well, hang on a second.

How much are you paying? And because you hit the maximum on the very first treatment, you're done. And so it's, insurance is designed, you go back to the textbook definition, it's designed to protect against significant loss. That's not predictable. And cheap generics are not real.

They're neither of those things. They're not expensive and they are predictable, generally so now your next issue, Mike, is the legislative environment because if the patient is covered by a qualifying high deductible health plan, then you're not allowed.

You're not allowed to. Sort of cover, you have to be careful, I should say, how you cover drugs and make sure you're not, forcing the patient to pay. You could still do it the way you're describing by giving them an HSA account, a health savings account here, here's some money. Use it as you want.

And that could work. And there's also a, what's called a health reimbursement arrangement, which is one that has less rules. Where the plan sponsor can literally say, I'm gonna give you a thousand bucks. You can only use it on drugs that cost this much. You can only use it on generics. And I'm gonna help subsidize care.

But I want you to, I want you to go after the cheaper drugs because drugs are expensive, for example. Well, that's a good idea. And some employers. Tried it. Varying versions of this, and this is the whole consumerism movement that started circa 2000 and still lives to this day.

and the Medicare Modernization Act of 2 0 0 3, I believe, brought on these health savings accounts that are great tax vehicles if you can afford it, to fund your healthcare that way.

The problem is that well there's, there's more than one problem, but the big problem I think is literacy. What, what does the drug cost? Patient goes out and, and tries to shop the price of the drug, are they using a pharmacy that's in their network and they can use it? 

 Because the price varies by pharmacy, as it varies by payer. it's just complicated. And I think it's easy to get frustrated. I've been doing nothing but pharmacy work for 25 years. And I still learn something every day. And it's amazing to me.

And I just imagine people who dabble in this space and they do pharmacy for one 10th of their time or one 50th of their time. 'cause they don't do pharmacy, they just use drugs like 52% of the population for their conditions. It must be overwhelming and there is no good solution to that. But , if we can fix the opacity of the pricing.

And make things more competitive on that front, so that if you want to get a tablet of Omeprazole and it's a prescription version of Omeprazole, that you know what the price is supposed to be. And it's not gonna vary based on where you get it or who the PBM is. But again, we are a long way from there because, fundamentally, and this is, again, I'm not, I am not trying to promote what Slate is doing.

I think there's lots of organizations out there trying to do the right thing. I think plan sponsors should strongly encourage a look at other vendors and not necessarily just the traditional models. 'cause you can really create value, but if you just look at, if you just look at where the money is going, more and more of the money is going to less and less of the patients.

With less sort of rigor applied to understanding the sources and uses of that money. So, making an effort to try and separate out the misalignment is just, I always advise that you're gonna hire somebody to work for you, make sure that they're benefiting from your, from your strength, and they lose if you lose.

When you sign an agreement with A PBM, it is not an aligned agreement. Their loss is your win and vice versa. And that's what you gotta get away from. So it starts with the contracting. And we just don't expect things to change seismically tomorrow. So in the meantime, let's pick away at this every way we can.

To get at the value that we know is out there, hanging that hasn't been capitalized on, and it's significant.

Mike: Well, it sounds like Slate is taking the right approach. As I understand it, when one of these insurances comes in, the whole medical insurance, I'm not talking just A PBM, when the whole medical insurance comes in, they say you're gonna pick one of these three big PBMs, and if not. You can't carve that out. 

If you don't take one of these, we're gonna raise your insurance price. I mean, they can slice it any way they want to, but we're gonna raise your insurance 25% if you try to carve out things like that. And people are like, what am I supposed to do? I guess maybe find a whole new mother's insurance. But it sounds like you guys are taking the right approach because you are still attached to the bigger PBMs, you're just kind of kinda riding on top of it so you don't have to get a special carve out to use you. You're kind of on, on top of something that's already in place it seems.

Joey Dizenhouse: yeah, it to some extent, yes, but you're absolutely right. And this is, this is part of the problem. If you look at the. Various medical providers that are out there, the medical, third party administrators, they, they now generally have their own PBMs, and so they're not forcing you into a specific model.

They're forcing you into their own captive company, and it opens up a whole lot of issues. The medical loss ratio limit means that the insurance company's not allowed to make more than a certain amount of money on the medical premium.

if inside that medical premium, it includes the pharmacy delivery, then they get a sort of double dip.

There's a lot of good collateral out online about how they do that. And so it just adds more challenges in our world. We try to make it as easy as we can. For example, we handle the burden of that integration. So we'll take the data. You have to pass data files back and forth.

Accumulators, like deductibles and stuff, and then eligibility, who gets benefits or not, and we'll do all the lifting on that so that other vendors don't have to do it. So they can't argue. It's more of a lift. But we still find situations where that other vendor, the medical vendor, will say something like, oh.

If you're gonna separate out the pharmacy and give it to slate or whomever, I'm gonna charge you an extra X. And I've seen ridiculously big numbers. So that kind of behavior is just in my mind, unacceptable. And, unbecoming, consumerism and capitalism, but what I would suggest to combat that is to be a plan sponsor.

If you're, if you're thinking about this for your own program. And let's say your plan renews every January 1st, like most, do you have a January calendar plan? Don't start talking about this with your medical vendor in, in, August. Start talking to them about it in March and explain that.

If you don't get this permission to carve out a pharmacy that you're gonna have to seriously consider if you use them for medicine, either. Generally speaking, they'd much rather keep something than nothing. But if it's last minute, they know that they can apply pressure by stalling. Some of these tactics of extra fees.

So we've had some success. But Mike, by no means are, is it easy or as simple as, oh, if you go to Slate, you can get it done? No problem. It doesn't work that way. We have the same sorts of challenges and just do everything we can to try to make it easier for the customer.

Mike: You know, I can't think of any middle people that I like these days. I'm trying to think, if I need to buy something, I'll just say Amazon. I want to go to Amazon. I wanna, I wanna look at all the reviews of, of honest people.

I want to see the top seller. I want all that stuff. the old days of, well, let's just say a mattress. The next mattress I get, I'm gonna get online. I don't want that middle mattress guy who's not showing me everything. You don't know what incentives he has and all that kind of stuff. I can't really think of anybody that I want the middle person available. I can't really think of any field. I really want a middle person. Help me out. Joey. Besides you, I mean I'm looking at one of 'em right there. I want you right in the middle of it, Joey. But

Joey Dizenhouse: I appreciate that.

Mike: What other middle person do I want?

Let's try to think of one. Well, I guess I

Joey Dizenhouse: Maybe a travel agent,

Mike: A tra Well, I was just gonna

Joey Dizenhouse: maybe

Mike: You know, I want the pilot between me and the ground. Maybe travel, maybe travel if, and sometimes travel, know, you'll get the transparency and they'll get a fee from it. That kind of stuff. That doesn't make your stuff go higher, but I can't really think of anybody that I want in the middle anymore.

And I

Mike: Same about pharmacists.

Joey Dizenhouse: I don't know how someone could say that. Same about pharmacists. I think pharmacists need to be doing more, the ability to prescribe. I think you might remember, I was born in Canada, lived, lived in Toronto for the first half of my life.

And so, I know that system fairly well as well. And pharmacists in the US have less prescribing authority than in many other markets around the world. I think that's a mistake. I think it would open up a lot more value and support for prescribers too. For physicians.

 The point you make is a good one. And at the risk of sounding defensive, which I'm not trying to do, I'm not really viewing what Slate is doing as a middle, as a middleman or middle person, in that, in that traditional context, we're providing services that are necessary for the plan.

So, for example, you can't administer your own appeals and nor would you want to if you're the plan. You wouldn't want to decide if a patient gets a drug or not. You need someone to do that for you.

 The stuff that we are using an intermediary for, the value comes from the economies of scale.

Optum is a big organization and they're, I'm not gonna say that they're without challenges, but the agreement, the way we work with them, we have a special team, dedicated team, dedicated program. It's a strong program and they're really just part of the delivery solution, but they bring the leverage of their 70, 80 million lives to the table.

And this program that we're part of is their largest customer, so we get the leverage from them. So that's where the middleman model can help because in essence, instead of buying assuming this is true, if you buy the product on your own, you pay a dollar. But if you buy it through this enterprise, you might pay a couple of cents for the privilege, but then you'll buy it for 90 cents instead of a dollar, and you'll save money.

That's the model. But I, Hey, I, I agree with you, and in today's day and age in technology. As a personal consumer, as an individual consumer, the amount of information that's out there as compared to when we were younger is unbelievable. You can learn

the, the most minute details about anything you want if you have an iPhone and 20 minutes, and maybe less now because AI will go and get it for you.

So now we're back to what's the problem with the insurance and PBM industry is that it's, it's sort of a club where you don't get access to the good stuff unless you have.

to get in. You can't just go, and sometimes you can, but not on balance. You can't just go and buy at the best price because it's not made available that way.

There's too many moving parts in the supply chain.

Mike: absolutely.

about YouTube. We can learn so much now, back in the day. I used to try to lift weights. I'm, you know, 13, 14 years old, something like that. And I bought these Wheater, Mr. Universe, you know, books or something. back then nobody talked about steroids and so no one said anything. So I'm lifting weights and I look like a pud, you know, compared to these guys on steroids and zero body fat. If I knew then, what I know now, About you don't look like that without steroids and without doing all this stuff, I probably would've kept lifting weights.

The other thing is I used to play bass guitar back in high school, the thumb slap in the pick and stuff like that. Kids take it for granted. Now, would you learn something like that? You don't see it in the newspaper. You're not gonna find it in the library.

You're probably not gonna go to a bass guitar teacher, you know, to say, Hey, I, I only need to hire you for five minutes to show me how to make this sound. And it's just crazy the stuff that kids and. People can do now that, , you had no idea before, you'd have a thought and you'd just say, huh, and that would be the last time it crossed your mind.

Joey Dizenhouse: You're right on. And having three teenagers myself, The wealth of information at their fingertips, the ability to learn it. You wanna learn a language, you wanna learn a skill, you wanna understand the history of something.

You don't have to pay for it. You don't have to trek yourself to a library. It's just right there. And yet, the, the, what's it called doom Scrolling, the, the flipping through one of these social media sites, YouTube and Instagram and Snapchat and whatever. It's never ending. And, I'd like to think that if I were a young person, again going through this day and age, I would take the time to learn, I don't know, organic chemistry, I'd probably doom scroll like they do.

But it is amazing., and taking advantage of it. Now, I, I don't know if you noticed, you mentioned the bass guitar. Your listeners won't be able to see it, but so I picked it up. I started late in life. I picked up the guitar maybe four years ago because my middle child wanted to play, and so bought her guitar.

We started playing. About three weeks later, she gave up. And I kept going and I found a guy online, a British fellow by the name of Justin Sander Co. He has a site called justinguitar.com. There's a paid site, but it's mostly free. Literally 10,000 hours of videos starting from which way is the most complicated thing and just, just learn.

And it would've cost a fortune and time and effort and I'd have to go somewhere to get lessons. It's just amazing. It is amazing what we have access to today. And maybe a bit scary at the same time, Mike.

Mike: Well, you're right Joey, and there's a sweet spot there because when I came in the computer age, you still had to, you know, decide is this a serial port or parallel and you know, does this card go here and stuff? And I don't think so. Kids nowadays, if a screen doesn't turn on, they count down from 10, and if it doesn't turn on by one, they throw it in the trash and tell their parents they need a new one.

I think they've lost that. I call it joy, but I, I think you're right on the doom scrolling is that you've gotta find the right age because use the internet to maybe learn about the podcasting and do this kind of stuff, but anybody, a whole lot younger, they've got all the information, but there's so much of it and it's so mesmerizing and you know, the doom scrolling that they don't have the initiative to wanna learn something because they're enjoying just scrolling through their phone. So I think there's a happy medium of people at a certain age that appreciate it and will actually do something about it.

You know, pick up the guitar or do the podcast, the piano, that kind of stuff. But for the younger generation, it's gonna be similar to, you know, throwing out the screen if it doesn't turn on in 10 seconds. 

Joey Dizenhouse: All good points. It is a, it's an interesting, it's an interesting time and a lot of, a lot of risks too. Everything gets memorialized, I feel bad for young people these days 'cause you can't, you, there are some things.

People make mistakes, there's some mistakes you can make that are innocuous enough, but because of this, everything gets recorded and displayed, it can really follow you for a long time. And, tried to warn my own family about this. The technology is wonderful, doors that it opens, but it also has some pretty big drawbacks as well.

 On the pharmacy side, you know that technology applications are increasingly becoming more useful. How do I get access to the best coupon to help me buy the drug I want the cheapest? If you really wanna research the clinical, the clinical sort of support of data.

I mean, every patient should be their own advocate. You should listen to your pharmacist, you should listen to your physician. But you don't have to just blindly accept what they tell you. You should do your own research. Nobody knows your body better than you do. Read up, see what the side effects are.

You can get your hands on anything you want. The clinical data trials pharmacodynamics, how the drug works in the body. All that stuff is right at your fingertips with a quick Google search. So whether it's for you or a family member. Take the time. Look it up. You'll be no worse off.

Just don't look up weird symptoms on the internet to see what it might be. You'll, you won't like what you find. 

Mike: Alright Joey, so someone's done listening to this. They've pulled up home, they're pulled up to the shop. They got 30 seconds to do something. After listening to this, what would you like them to do?

Visit your website. What do you want them to do in 30 seconds?

Joey Dizenhouse: , I would welcome a visit to our website. It's slate. hyphen rx.com. Take a look around. There's a place to ask questions or send us a message whether you have your own plan that you're responsible for, whether you're a union or you're an employer, or a public sector entity, whatever it might be.

Or you're just a participant yourself and you have questions, whether we can help you. Serve you as a customer or not. We'd still love to help you answer questions. Understand more about the industry, and essentially, look out for your own interests, fight back.

And the more that that happens, I think the better off , we'll all be. So, by all means, check out the website and be sure to listen to Mike's podcast. Of course. Because it is a very good one. I think it's got a good variety of relevant and interesting content.

So listen to Mike Kelzer.

Mike: All right. Hey, Joey. Boy Kelly. Great having you on. Again. I loved our conversation the first time. I love this one. We can go off track always knowing we've got the beauty of the transparency of the PBM guiding this versus the opaqueness.  

Joy, I know you're busy. You got a lot of stuff going on. I appreciate your time. Our listeners appreciate it and look forward to next time.

Joey Dizenhouse: Mike. Pleasure to see you. Be well. 

You've been listening to The Business of Pharmacy Podcast with me, your host, Mike Kelzer. Please subscribe for all future episodes.