Unifying Medical and Pharmacy Benefits: The Blueprint for Better Employee Health and Wellness

Hello, everyone. Welcome to today's Achieve Engagement live webcast and program. My name is Zach Dahms, president at Achieve Engagement and your head of community. And just appreciate you all taking some time out of your busy schedules to join us for this program. It means a lot to continue to learn, to grow, to sharpen your craft, and continue to expose yourself to some new research, frameworks, strategies that can create larger ripples effect in the world of work and the cultures that you serve. So, I'm really excited to unpack another topic with you all that we can do to enhance the world of work, enhance the employee experience, and do that as a community. So welcome. Thank you for joining. I love some of you already engaging in the chat. This is a more interactive dialogue and conversation that we want to have with you all. So as we're going through this program, I really encourage you to add your own questions, add your own thoughts, share what you're doing today in the chat so that these experts can almost give you some free executive coaching and strategy on the spot, and we can unpack this topic. And I would also be, just be curious, how are you navigating these things? What are you doing right now that you are dealing with, and how are you looking at this subject as we go into 2026 that we might be able to align and support you with? So, appreciate all of you that are already engaging. We got Nicole from USI. We got Laron in New York. We got Texas in the house. Uh, Ethiopia attending. That is amazing, Taya. Welcome Florida in the house as well. Very cool. So if you haven't already, add in the chat where you're calling in from. And more importantly, I'm excited to dig into this topic. We actually haven't really hit on this subject much at all this entire year. We talk a lot about employee wellbeing, employee health and wellness, but I think there's kind of this, this core theme and subject within this world around medical and pharmacy benefits that can be pretty complex and ever-changing, and the landscape is also pretty hard to navigate as well. So, I'm excited that we have some experts to tap into. And to do that, I'm excited to welcome our co-host and one of our good friends and partners in crime here at Achieve Engagement, Dan Schawbel, who is a managing partner at Workplace Intelligence. You've seen him with our programs in the past. Just an amazing leader in this space. So that being said, Dan, welcome. Let me hand it over to you, my friend. And also congrats on some of the new news, and I'll let you maybe talk about that, but appreciate you taking some time out of your schedule and being here with us. So, thank you. Yeah. You really put me on the spot, Zach. I had my second child, uh, late last night, so that's really exciting news. And hey, I was in, in, in a, a hospital, so speaking about health and, and, uh, and, uh, you know, healthcare costs (laughs) and, and how to make the industry better and more affordable and efficient, you know. Really, really happy to, uh, be part of this conversation today. Uh, done a lot with obviously Ach- Achieve Engagement, and I'm happy that you all, you all showed up today for this webinar conversation about innovative strategies to transform health benefits, uh, into a cornerstone of employee wellbeing and to create positive outcomes for everyone, whether it's, you know, HR leaders and benefit leaders or just employees, the people who are, who are, uh, you know, some of whom are s- are struggling with their health, uh, care concerns right now. So I'd like to introduce our presenters today. Uh, heard from this company before, and I think that they have an amazingly important message when it comes to this topic. So first, I want to introduce, uh, Dr. Sunil Budhrati, the chief innovation and medical officer at Judy Health, responsible for innovative clinical offerings and partnerships, expansion of Judy Health platform capabilities, enhancing pharmacy benefit management and administrative solutions, and continued success with membership growth. So happy to have you here, Sunil, and good to catch up. Uh, we've spoken in the past before, and you have just such a wealth of knowledge, obviously being a doctor too and, and really studying this area. Yeah. Thank you for the opportunity, and congratulations again. (laughs) You look great, and I'm sure the... Wish the best to the family. Um, yeah, looking forward to the discussion. You know, it's a ongoing conversation about how can we can improve healthcare. Excellent, and his sidekick, (laughs) who I've a- also spoken to in the past, Josh Golden, senior vice president, strategy at Capital RX, which is a Judy Health company. Uh, and he's responsible for assessing market trends, evaluating business initiatives, and developing strategic partnerships to support the continued growth of Capital RX and Judy Health. Also, a musician in a family of entertainers. (laughs) Trying to encourage it as best I can, but yeah, thrilled to be here, Dan. Thanks very much, um, for, uh, you know, giving us a venue to talk about this. Look, it's a topic that's, that's front of mind for not just employers, but, but for pretty much every human in the United States that's just trying to navigate this space. So... One of the hottest topics of the year and will be going into next year, which we'll talk about as well. I'd love to first from both of you hear about, you know, y- you know, you both have unique backgrounds and lenses, uh, through which you look at this topic. Uh, how do you come together, and how do your backgrounds kind of shape your view in how you tackle the issue? Yeah. Uh, I'll jump in first. So I joined Capital RX about six years ago, um, eh, when we were, at that point, a fledgling PM just, just starting to chart our course, uh, as a disruptor in the space, uh, a PBM, pharmacy benefit manager, for those who aren't up on the acronyms. We'll try not to, uh, dump too many acronyms on you today. Um, I, I like to say I'm a recovering consultant. So I spent about-... two decades prior to this, helping large, some of the largest plan sponsors in the, the country navigate the world of healthcare. You know, because they're the ones largely responsible for paying for healthcare in the United States. Um, and in particular, navigating the darkest corner of the healthcare world from a financial standpoint, which is the pharmacy benefit supply chain. Highly convoluted, very opaque, very difficult to understand. And frankly, these employers are, are, uh, you know, practically helpless in this ecosystem, and just trying to, trying to find the best outcome for their, the, the members that they, that they manage. Um, so, you know, I was, I was proud to help a lot of employers, but, but even more proud to be part of an organization that's now changing the industry, we believe for the better. And w- we'll tell you a little bit about that later. So. Yeah. So, I, I always find it interesting when I, when I have this conversation with Josh to see how our backgrounds came from different angles, but we converged in the same goal and solution. So, you know, I kind of divide my career in, in three phases. You know, my first phase was primarily, as you mentioned, Dan, you know, I'm a board certified emergency medicine physician. I practice in the DC area. Um, and I've been doing it, I always say, uh, in my mind, I'm 21, but I've been doing this for more than 25 years. Um, I always say it keeps me on the ground game. Um, so I spent the first phase working and managing and leading some of the largest health systems from Boston down to Florida, and really understand kind of the nuances that providers deal with and health systems deal with in, in the country, and watched that evolve. Kind of second phase was in the digital health space. I was an early pioneer in remote patient monitoring and telehealth, and how you can implement technologies to improve the patient-provider experience, um, and, uh, and, and see that kind of robust well before the pandemic. And then kind of third phase was the payer world. Um, I was with one of the big three. Uh, I was with CVS Aetna for almost eight years. Um, I was a chief medical officer and head of population health for a while for them, and then I, I was a CEO of one of the markets with a joint venture of a major health system in the DC area, Nova Health System. So I ran their commercial, Medicare, and individual business. So I always say Judy Health, uh, Capital Rx is almost the intersection of all these different things in my career, where we are going after trying to improve the plumbing, the not so sexy, exciting part of healthcare. But the only way to improve, which we hope we deliver in this conversation, is you gotta gut the system out. It- Building garbage over garbage over garbage, and not to, you know, m- be negative about any persons or groups' platform, it's, it's not fixing the heart of the problem. So hopefully we can get to the bottom, or at least talk about, you know, on the pharmacy and medical side, why plumbing is so important to healthcare. And, you know, we did our 2026 Workplace Intelligence Forecast for this year. It came out first week in November, as it does every year for the past 12-plus years. And one of the biggest topics was healthcare. I mean, everyone has a perspective and a frustration with healthcare. Healthcare, it's costly, it's co- convoluted and complex, and it affects everyone. It's very universal. So, it's a, it's, uh, it's just become a big topic, especially with all this new research showing the cost of care increasing substantially and premiums increasing for next year. Um, you know, it's, you know, especially with mental health, weight loss, drugs, I mean, this is front page of The New York Times, right? They, these are the hottest issues. And I know part of, you know, both of your backgrounds, Josh and Sunil, is looking at trends. I mean, you know, you know, uh, you know, studying trends, Josh, and Sunil, somebody who has been in the forefront of the digital revolution. Um, so the goal is really, uh, is how do you control costs while providing benefit that, uh, that works? At least for the, the majority of people. And, you know, all the research shows and, and forecasts the cost increasing. HR, you, you know, executives bana- uh, benefit, uh, managers who are listening today are dealing with this, and how do we navigate all these changes? And it's very hard to keep track of, unless it's (laughs) , unless it's your full-time job, right? And so, you know, Josh, we'll, we'll start with you. What does this industry look like and who's driving it? Yeah. Uh, I mean, what we really are dealing with is an entire ecosystem, an entire supply chain that is architected to profit off of the increases in cost that you're describing. And that's the, the tectonic force that these employers and patients are up against when it comes to the, the misaligned incentives that exist here. I, I think it's great to start with pharmacy, because I call pharmacy right now the tail that's wagging the dog from a healthcare finance standpoint. And there's a couple reasons for that. You gotta understand what the industry looks like. With your permission, I'll share my screen, um, and maybe we can, take a quick look and just remind ourselves what this industry currently looks like, which is basically a pie chart divided into four roughly even slices with three large vertically integrated healthcare conglomerates controlling three quarters of the, the PBM market. Now this is sp- specific to the PBM market, but believe it or not, over on the health plan side, the dynamic is largely similar. And that's because these three mega PBMs are vertically aligned through ownership with the three biggest carriers in the United States, Aetna, UHC, and Cigna. The market size for the PBM industry alone, $600 billion. I don't have a number for the healthcare industry more broadly, but it is massive. We're talking about trillions and trillions of dollars that are at stake here. Um, and the vertical integration is at the heart of this discussion about the challenge with the industry. But, a- and we all sort of take it for granted, yeah, PBMs and health plans are all sort of vertically aligned. But that, that actually wasn't always the case. For those of us that have been in the industry for a few decades, we actually know that this industry used to look very different. PBMs used to be administrators, right? Before the year 2000 and in the '90s and '80s, PBMs were really operating at an arm's length with the supply chain. They were at the, they were operating, um, you know, essentially on behalf of plan sponsors, but negotiating arm's length contracts with all these supply chain entities. It was really only during the early 2000s that we saw this...... this, the PBMs sort of started to realize, "Hang on a sec, there's a lot of money to be made in these different operations, in the dispensing of drugs through mail order, in the ownership of retail pharmacies, in the diversion of some of this rebate revenue that we see flowing in from pharmaceutical manufacturers, and eventually in aligning with health plans so that, you know, our sphere of influence as a PBM now extends to the health plan and to the providers that they manage and have strong relationships with." So, you now have this, sort of this amoeba shape that the PBM has assumed, and every, ev- every arm that reaches out is a profit center for the PBM. Now, now there's two things I wanna say that are really important about this evolution. One is that it turned the PBM into the primary engine of profit growth for these vertically integrated conglomerates. So it's only about 25, 30% of healthcare spend, but it could be as much as 50% of the profitability for a carrier, right, in terms of, of sort of being outsized in its influence. But second, and this is where the real problem is, and I'm gonna pause, and I w- I would welcome Sunil's comments, it anchored most of the PBMs' profitability to the price and the volume of drugs, which in plain terms means the PBM only really makes money when plan sponsors and patients spend more money. That, that, that there's a direct and linear relationship there. Um, and w- we're gonna talk about how PBMs actually have an incredible ability to influence how much plan sponsors and patients spend, but that's sort of the, the next chapter of the discussion. Uh, Sunil, I- I don't know if you had any reactions or comments, but this is what- Yeah, ... what it looks like. Absolutely. And- and I- I find this, whenever we put this slide up, I find it pretty fascinating. Um, the whole concept of vertical integration over the last 10, 15 years was supposed to deliver value to the patient. Mm-hmm. Um, by bringing all the parts of the ecosystem on the pharmacy side, the medical side, the providers, the pharmacies, mail order specialty all under one roof so that you could deliver a bundled value to the patient. The problem goes back to what I said earlier. If you don't have the integrated plumbing, you're not gonna deliver any value, and I always say it doesn't really matter what we think or talk about. The market is speaking for itself. It's pretty fascinating, 10, 15 years ago, when all this vertical integration was really starting and then propelling in the last seven or eight years, everyone started realizing that we're not delivering the value, costs continue to keep going up, and now the market is calling for disintegration. So if you're following all the major events that are happening, there's the conversation about breaking up all the parts into its different pieces 'cause the integration didn't deliver the value it promised years ago to the- the government officials that, uh, uh, you know, actually, uh, allowed this to happen. Yeah. Uh, it's, uh, Sunil's absolutely right. Uh, he keeps going back to the plumbing. Do you guys all wanna see what the industry largely runs on? I can show you kind of what it looks like w- quite literally. Like, this is a- a typical example of an Rx claim administration platform, a PBM claim admin platform. Um, th- this is what's used today. The tech here that we're looking at is early '90s technology. So the code base that most of the industry runs on, most pharmacy claims are processed on right now, uh, for adjudication was written originally in 1993. Now I want us to jump in a time capsule. Dan, come with us. I know you've got a new baby so you're a little tired, might feel like you're already in a time capsule. But let's jump back to- to understand how business was done in 1993. This is how most of healthcare was transacted in 1993. In fact, how a lot of business was transacted. So this is a contemporary technology with the code base that we're talking about for most of claims administration on the, on the pharmacy and medical side. And if you did wanna connect to the internet, this is how we connected to the internet in 1993. I wanna remind folks, you put this in your computer and you were able to get 14 kilobytes a second, which means you could download an X-ray image, uh, over about two hours if your phone line was stable, right? Um, and compare that to the modern internet era. We've got fiber optics, we've got... Uh, you know, they could send me a- a- an entire, uh, high definition MRI f- image set and I can download it in 10 seconds, even as a consumer, even as, even as a patient, right? So we're... The rest of the industry, the rest of the business world has moved forward. We're dealing with fiber, we're dealing with, you know, cloud-based computing. We're dealing with ultra-secure protocols for security and, and PHI management. But claims administration continues to chunk along on this screen on the left. It's, it really hasn't been, been updated, and the issue is that these big conglomerates, I think, had an opportunity in the early 2000s when they hit that profit center, when they started reaping in the profits of mail dispensing, specialty drug dispensing, that they could have chosen to invest in tech, in modernizing the plumbing. But instead, they largely invested it in acquisitions and- and vertical integration. And- and this is where we end up, right? This is- And I'll even, I'll even add one more thing, Josh. You kind of sprouted something in my mind back to my days of... I am dating myself, but it's to prove a point. I went through the transition in the hospital going from written records when I saw you as a patient to electronic records. It was a very, very tough time for providers to make that adjustment. But even the technology within the hospital has been, the electronic medical record is much more advanced than all the technology that happens outside the hospital. That's right. And the irony in that is why where we see so much wasting...... of expenditure in healthcare because all of these old, old systems that cannot connect with each other in each step result in delay of payments, poor patient care, and et cetera that happens outside the hospital. Which is why there's a renewed interest now in modernizing infrastructure outside of that place. Yeah. We've been talking for a while, Dan. Did you have any questions or do you want us to... No. It's just, it's just, uh, interesting how this is like similar to other industries, but even worse where it's like, it's our health. (laughs) And it's, and it's like everyone's trying to like push the issue like aside and like, "Oh, we'll get to..." It seems like everyone wants to like, you know, oh, we'll get to it eventually and nothing ever gets changed, and so it just kind of builds up and becomes a bigger problem over the, over time. That's my read on this. Well, and there hasn't, up until now, been a lot of pressure on achieving efficiency, um, on these big players. So they really haven't been, their feet haven't been held to the fire to create more efficient processes, to create more modern tech and more modern adjudication. But now the pressure's on, because the good news is we do have new players like Capital Rx, Judy Health and others, you know, that are bringing in the new technology, essentially forcing their hand and saying, "Look, y- you're either, you're either gonna modernize or you're a dinosaur and it's time to get out of the way." Um, and that's largely, you know, w- the, sort of the movement that, that we, you know, we hope we're driving here within our organization. I, I do wanna be clear, like they do... You know, big PBMs do make investments in, in tech, but the problem is that they tend to be investments that are geared towards revenue optimization versus creating efficiency. I have an example. I hate to call out specific PBMs, but, but this one's public information so anyone can look it up. You go to the US Patent Office and you look up this patent for this parallel processing for pharmacy fulfillment. This is, this is super geekery stuff. Like, this is like arcane, dark corner of the geek pharmacy world that I live in because I am a, uh, probably the biggest pharmacy nerd among us. Um, but what was interesting in this, what this patent does, this is a large PBM that has created a software package that essentially is designed to manipulate the price of drugs at a claim by claim level to extract hidden profit. We call it spread profitability. But basically, if they can just bump the price up a little and tuck in a little bit of spread for themselves, they can extract margin. Essent- essentially rent-seeking within the supply chain here, right? They can extract margin, pocket that, and again, drive value for their shareholders. They're, they're doing it for a reason. They're fiduciaries to their shareholders, and so we understand the motive behind it. Um, but the problem with this is that this adds no efficiency to the healthcare world. In fact, it adds more opacity, it adds more price volatility, and from the patient standpoint, creates an unpredictable environment for pricing. So they go in... This is, this, this, this type of price, this sort of, sort of real-time price manipulation is the reason why you, Dan, can go into the pharmacy and right behind you is a plan member that's on the same benefit plan as you getting the same drug, same quantity, same NDC, same everything, and your prices can be completely different. It's literally the role of a roulette wheel because behind the scenes, it's not the pharmacy determining how much that drug is going to cost. That actually is quietly dictated by the PBM and it's, uh, changing all the time because of, you know, quote unquote innovations like this. So, you know, we really do believe that the industry deserves better, um, moving away from mainframe. From a security standpoint, a PHI standpoint, this is just, it's table stakes at this point. Things need to be in the cloud, they need to be at a level of security where we can, you know, protect, uh, sensitive info. But more importantly just being able to integrate in the new world order and to be able to inter-operate. Um, w- we could talk about things like open API integration, which is a major hassle for old world systems like this, but it's the modern language of how two computers talk to each other. Um, and pretty much every cloud-based platform is fluent in it at this point. Ours is, of course. But, you know, what we're seeing struggle is these old world systems. They're reaching their breaking point. The plumbing is rusting out. That's the issue. Yeah. T- that makes perfect sense. It's, that's like a called, uh, we need to fix this now, right? We can't just keep pushing this, pushing this back and pushing this back because it's just gonna be like a snowball effect. Yep. Yeah. It r- it really is. And, uh, and again, it, it, it's coming to a head now, which I think is good. There's some market forces. I was... Sunil and I were just talking earlier today about the interesting phenomenon of the rise of high deductible health plans. And I would love to hear Sunil's take on it from the medical plan side because he has deep history there. But on the pharmacy plan side, I can tell you that the rise of prevalence in high deductible health plans has forced a national conversation about the price of drugs, which I think is... It, it's tough. I- it's a tough conversation, but it's one that this country needs to have, right? Because suddenly patients are exposed to the full sticker price of a drug that they're now understanding what, what used to be a flat copay, five, 10 bucks is suddenly the real price of drugs. And now, frankly, the industry has some explaining to do, you know? Yeah. I, I think it's... You know, it's really interesting. I think it's important to understand how we got here by looking at history. And, and I'm always fascinated on all the different kind of areas I've touched in healthcare, you know, the four Ps, the stakeholders. You know, your PBMs, your payers, your providers and your patients, right? All of them sit in different silos. I always say healthcare is not a free market. I can't buy healthcare. I can't buy my appendectomy like I can buy my shoes. I have no transparency. Now, you just had a child- ... that can vary tremendously depending on region, provider, hospital, et cetera. Mm-hmm. Th- and, and I don't often find out the cost of all that until after I actually get the service delivered to me. This is fundamentally a fragmentation of services problem that no other industry in the United States experiences. When you look at the history of those three stakeholders, the payers, PBMs, and providers, that even on its own is very interesting. Hospitals have been around for hundreds of years. They've adapted to the financial chassis that exists in a fee-for-service model. Unfortunately, a fee-for-service model supports a reactive healthcare system, meaning I'm trained as an ER doctor. When you come see me and you have a, uh, chest pain, stroke-like symptoms, abdominal pain, I'm throwing the kitchen sink at you. I am gonna do whatever I can to save your life, get you better, and so on, without any regard of the cost. Yes. Somebody's gonna deal with that cost later. Okay? So when I think about how health systems have been kind of addressing this issue, costs have gone up on the provider side. It's no secret that the costs are not just in one area or another. It is true, as Josh said, pharmacy costs are faster than anything else. Okay? However, that provider costs continue to go up also. Tylenol pills shouldn't cost 30 bucks when you come to a hospital. But it sits in a silo and health systems are operating a business in a silo. Now you take the payer world, insurance health plan worlds have list, uh, lift, uh, have existed almost 100 years themselves. They've adopted in their own silos to the way that they do things in the, in, in that procedure, and I'm gonna get to s- that in a second, but with the Afford-... I believe the Affordable Care Act was a pivotal moment for employers to swallow the next generation of healthcare, and I'll get to that in a moment. But then you have payers adopting in a silo to all the changes that have happened, continuing to increase their costs, and like I said, the ACA posed a big change there. Now, PBMs, which fascinates me, I've recently, you know, I've been in the industry five years, but it's drinking out of a fire hose. What fascinates me is it's the youngest of all of them. When it first started, the industry, the idea was to create a mass collection of employees and members and bargain prices of drugs down and pass those costs downstream. But now with vertical integration, like Josh talked about, y- the opacity and the kind of spreading of costs amongst the retail, mail order, specialty, and then I always say words like maximizers and accumulators make it sound like a Terminator movie, you're burying all these names in confusion. The more complicated something is in healthcare, the more money is buried in it. So now you fast-forward into a situation where employers are feeling the pressure like never before. We are at a breaking point. 15 years ago, people don't realize the ACA has been around a long time. It feels like yesterday, but the minute the ACA, with good intentions, rolled out, the idea was to cover, you know, people for important screening conditions, chronic disease, you know, cancer screenings, vaccinations, preventive care. Well, all of these costs ha- uh, to be taken over and covered with zero copayments and zero copay, uh, uh, deductibles, et cetera, coinsurances, but what insurance companies did quietly is they shifted those costs over to the employer. So they said, "Yes, we will cover all these required areas." We get that, but then the emergence of the high deductible plan kept growing and growing and growing. And as companies got larger, and that's what's happened over the last 15 years, consolidation, mergers, acquisitions have made companies burden the cost of their employees greater and now it's gotten to a tipping point. This was inevitable. The shift of cost to the employer and then to the employee created a situation where it's the number one cause of cost burden to an employer, so now they're functioning like health plans. Employers are saying, "You know what, insurance company? We don't want to do fully insured business with you anymore. We want you as a self-funded administrator. We'll take care of the cost and the care of our employees and push prevention. You just give us your network and take care of the administrative aspects, and now we're gonna figure out how to do this on our own." So now, with the shift of cost and more and more patients burdening the cost of care, it's at a tipping point, people can't individually survive bankruptcy, employers can't do this, so now there's a, a reclaiming of, "We're gonna take control of our healthcare. Insurance company, we're gonna use you just for some administrative logistics." And the pressure is on right now. Why we think it's important to start bringing all these systems together so that you can take out the fat that results in all the waste between these different processes. I have a question. So obviously, like, uh, this is a big topic because the number one reason why people go bankrupt in America is medical debt, right? I mean, that's pretty much well-known at the, uh, at this point. But what happens if s- let's just say hypothetically, something isn't done about this problem. Like is it gonna, uh, would it amount to layoffs because the cost burden so, would be so great that it can only handle so many employees and the, and the cost associated per employee? Like what, what happens if this train keeps going and (laughs) - Oh. It already is. I- it already is impacting employment rates and things like that. And think about for most mot- auto manufacturers, for most large automotive manufacturers, they spend more on healthcare than they do on steel.Like, that is literally a fact. They're spelling, spending more on healthcare than they are on literally the primary, you know, the primary, uh, ingredients in their, in their (laughs) vehicles, if you will. So, this is already having a massive impact on their sustain-, their economic sustainability. If it continues, I think it implodes. I don't think this is sustainable in the long term. So- You know, you think employers might... Well, could it get to a point where employers are like, "We can't just-" It, it becomes unsustainable. "... can't do this for our employees anymore," and then, then what happens? Uh, yeah. I mean, that's an interesting thought experiment. Uh, but I would bet that the government would probably step in at that point. Yeah. I don't know that they could necessarily manage it more efficiently than we're doing in the private sector. As long as the private sector can adapt, um, and a lot of it is plumbing. Like, as Sunil mentioned. A lot of it is making sure that we got new rails 'cause you can't run new ra- new, new, new trains on old rails. We're, we're seeing the, like, this evidence of the, the rusting of the plumbing when a client goes to their existing vendors, their health plan or their PBM, and they say, "I, I've got this great new point solution that's going to save me a ton of money. It's gonna help my diabetes patients become non-diabetic. It's gonna help them lose wei- It's gonna," whatever, whatever solution they get. It's a musculoskeletal plug-and-play solution. Um, "Can you just integrate with this third party, get them the data that they need to be successful?" And the, the health plan or the PBM's answer is either A, "No, we can't do that," or B, "Yeah, we could do that, but it's gonna take about a year and probably cost you about $100,000 to build that, that digital bridge." Um, and that's the friction that's preventing us from achieving better efficiency, you know, because there are solutions out there that can bring more efficiency. But they need to be interoperable, and the current ecosystem just doesn't allow that to happen. And how does this affect, either of you, uh, like, company size? Like, do you see differences in terms of what a, a company with, you know, billion-dollar revenue, I don't know, 30,000 employees or something versus a company that's maybe smaller, maybe under a thousand, under even 500 employees, how does it affect them differently in terms of, in terms of, like- It's a good question. Yeah, I mean, I think- ... how, how they function and how they maybe work with you? Yeah. So, uh, the, the, the threat is real, uh, for companies of all sizes. So pretty much every company is feeling financial pressure tied directly to the rising cost of healthcare, and specifically pharmacy. With the smaller companies out there, the, the threat is more existential, and it's more of a tidal wave threat because there are some therapies out there on the pharmacy and on the medical plan administration side that can cost upwards of a million dollars a year for a single patient. You know, you got some- Wow. ... therapies, things that could literally, you know, create a, a financial black hole for the com- Like, it could, it could change the course of the company financially, um, just from a single patient, a single unfortunate, you know, condition, a single claim. Um, and that, uh, that's actually a really great example because it points to where we, uh, are moving as an organization and where we believe the industry needs to move, because cell and gene therapy is an example of a pharmaceutical product, essentially a regulated drug under the FDA, but it's administered in the, um, under, typically under a medical plan, right? So it's a medical specialty type of product, and it is usually a-accompanied by a whole lot of wraparound medical services and provider services that have to accompany it to ensure its success. We're talking now about careful coordination between the world of pharmacy and the world of medical. And this happens with a number of different, uh, injectables, procedures, specialty medical, uh, medical specialty, uh, products, et cetera. Uh, and, and what we see is a sharp divide or a sharp gap between those worlds from an administration standpoint, that as much as a, an integrated carrier PBM says, "Uh, we've got it all integrated," the reality is they still exist entirely on separate platforms. They're exchanging data maybe monthly, something like that, in batches, uh, and there's no real-time interoperability there. Uh, this is part of the reason why we feel like this, this all needs to live in one, in one system, right, Sunil? I, I, I agree, Josh. You know, I say 15 years ago that we wouldn't even have this conversation. People were just dealing with the status quo. Yeah. What you are seeing now is if you're a small business- Uh-huh. ... 100 employees, it is very difficult to sustain the administrative healthcare cost to maintain your company. So you're seeing, unfortunately, healthcare is directly responsible for the closure and the shutdown of smaller, 500, thousand lives or under group companies. It's just too hard. Now you have these mega-sized companies that are existing out there that, as I said earlier, that are saying, "You know what? We'll take control of our own employee healthcare costs," and here's what's happening that I'm hearing in the marketplace, and I know Josh is too, both on the medical and pharmacy side. Very often, it was very easy for your chief people officer or your head of HR to continue the status quo because they would go back to their broker or they would go back to their health plan or PBM, and they would negotiate a number that made sense to keep going down the status quo. Now, what's happening is there are hard conversations, I'm hearing universally, between the CFO and the chief people officer saying, "We can't sustain this anymore. We're willing to take a calculated risk." That is over and over and over happening internally in organizations because they're realizing, "We have nothing to lose other than our company. If we don't look for new solutions..."... to our problems. And that's what I find pretty fascinating in terms of there's a confluence of stars happening right now. There's a breaking point, not just in commercial. Follow the Medicare news. Half of the Medicare Advantage programs are falling apart right now because they weren't able to demonstrate the value of a public-private partnership between the government and a commercial plan to deliver Medicare Advantage. So this is not just... And then you have the baby booming population continuing to boom. So we have a- a- a real tsunami waiting to happen both in the commercial employer space but also in the federal program space because ACA subsidies are going down or away. We also have Medicaid going down or away. And guess who's gonna get hit? The hospitals are gonna start... If you just look at the news, the market is speaking for itself. The hospitals are operating on narrow margins. I predict you're gonna see dozens, if not hundreds, of hospitals closing over the next two to five years because they just cannot operate uncompensated or undercompensated care. So you really need to think about the plumbing because the process of a patient seeing a doctor, then generating a pharmacy or medical claim, then going to a clearing house, then getting adjudicated, and then marrying your plan design and then paying the doctor or pharmacy, that process takes three, four, five weeks and then it costs a hell of a lot in that journey. And that ends up creating complete wastage, and some will even call that the $1 trillion of waste we're seeing in the broken healthcare system. Yeah. Agree completely. Yeah. It really is. It's a perfect storm right now, uh, that's driving employers to take more accountability for the administration of their benefit. Um, Sunil mentioned, you know, the financial pressure, but there's also frankly regulatory and- and, uh, legal pressure that they're seeing on the horizon. You know, you got class action lawsuits, uh, filed against ERISA plan sponsors, against the employers alleging that they're, they're not fulfilling their, the, you know, their ju- their fiduciary responsibility with prudence because they're selecting these old world vendors that have old world profit models that are misaligned with the interest of the, the, the plan or the interest of the patients. Um, and so it really is. I- I've been calling this the perfect storm for radical change within our landscape. Um, and we do see employers wanting to take the steering wheel, wanting to get more accountable for how their plans run, uh, because historically they've just kind of trusted the vendors. They've just kind of said, "All right, promise me some savings and just go about your business." Um, but I think what they've learned, uh, in the last five years or so has really opened their eyes, uh, that you can no longer just close your eyes and trust. Yeah. Well, I also think it's, it's all being scrutinized more, right? Because of the current economic climate, there's been a lot of layoffs. You know, I love how you mentioned, Sunil, about this whole idea of the, the CFO and the chief, you know, CPO, chief talent officers, you know, chief people officer, whatever it might be coming together and be like, "You know, this, this head of finance is looking at these numbers. Hey, this is not sustainable. I see this going up and up and up and up." But the, the HR person is saying, "Well, we have to be able to still offer something to employers because, you know, despite the economic conditions and the tightened labor market, we still have to compete for good talent. We don't want to lose talent." Right. And this is- That's right. ... the most important thing to talent, you know. Obviously salaries the number one, but after that it's healthcare for most workers. And then you brought up a really good point because there's 80 million boomers and, you know, relative to previous generations, they're remaining in the workforce longer, right? And so they're not gonna have fewer healthcare conditions when they're, you know, working in their 60s, maybe even 70s. So this is like... This becomes a very, very big deal. And I love that, you know, the conversation. And this is really what's happening in the HR world is, you know, when it comes to employee experience, you're seeing, you know, all the IT, you're seeing HR, you know, come together with, with medical. You're seeing CFOs come together with, with HR to kind of solve these problems. And it's kind of creating these, these new like work groups within companies. Um, we have, we have some good questions. I'd love to get to them if you guys are for it. First goes up to Josh. Uh, Patrick McQueeny says, "Can Josh walk us through a real world example of how parallel processing for pharmacy fulfillment happens?" Yeah, that's a great question. Uh, what we're really dealing with largely in the old world PBM business model is what I call a dual ledger system. That means that the PBM has one set of books for what they pay the pharmacy to dispense the drug and pay for the ingredient cost of the medication. Then they have a separate and very different set of books that they bill the plan sponsor and the patient, that they tell the patient this... and the plan sponsor, "This medication costs $65." But in reality, what they paid the pharmacy was $45. There's a discrepancy there, a gap between the two ledgers. And that gap, that $20 gap in the example that I just provided-... uh, is converted into hidden profitability. It's retained by the PBM. We call this, notionally we call this spread, right? This happens not just on retail pharmacy transactions, but at almost every step along the economic supply chain here. So, we think about drug rebates, which are quietly transacting sometimes, you know, months after the claim has processed. This claim is sent off to pharmaceutical companies, and as a thank you for covering the drug, the pharmaceutical company sends the PBM a rebate. Again, two ledgers are introduced. The ledger of rebates that's received from the pharmaceutical company that might be a $100 rebate and the ledger of the rebate that's then paid to the plan sponsor, maybe that's $80. The difference, another 20, captured by the PBMs' hidden profit. Now, uh, w- w- we're a for-profit company. I- I'm not anti-capitalist. I- I like to see companies make money and grow. But the problem is not making money. It's how you make money influences your behavior, and that's really the problem we're seeing play out. And so if a PBM stands to make money off of the rebate flowing for an expensive brand drug, maybe they'll start recommending that expensive brand drug even if there's a cheaper generic or even an OTC, over-the-counter oppor- uh, alternative available. That's the pattern that we saw playing out in the old world PBM models. Um, and in fact, there, there's another example that's even more kind of, uh, how do I say? It- it- it flies even further below the radar. But I, but I want to share it because as PBMs are profiting from the price and volume of drugs, they're also controlling how frequently those drugs can be dispensed. And one pattern that we see, uh, ac- across the big old world PBMs is this pattern of over auto- auto refill and over dispensing. For a specialty drug, in this case, this is an example from real world data that we got from a client that uses another PBM. This drug is an expensive specialty drug, Otezla. Uh, you see it costs thousands of dollars a month. They start... This is a single patient getting a refill, uh, for this medication every month. But you can see there's a little overlapping portion. They get them the drug four days early the first month, six days early the next month, five days early the next month. This is actually good. You want your patient to have a little extra of the- the therapy in their medicine cabinet or under their fridge. But it doesn't need to happen every month for the rest of the year. And when it does, which is what it inevitably plays out when the PBMs are controlling the throttle here, you end up with a patient sitting on three months of extra supply at a cost to the plan, to the benefit plan of, in this case, $13,000 that they spent on drug that's sitting in the patient's refrigerator not even to be used. It's just pure waste. This patient could have achieved the exact same clinical outcome, uh, at a $10,000 lower cost just by staggering out the refill pattern which, you know, honestly, modern platform PBMs can do that, um, uh, you know, if you've got the financial incentives aligned. If we're not making money on the dispensing of the product and we don't have a- a pony in the race and we have modern tech, and again, it ge- gets back to the plumbing again, that can look back and see, "Oh, that patient's already accumulated some supply. Let- let's just push out their refill date and, uh, not allow the pharmacy to, uh, to dispense excessive supply of this medication." So, we're seeing a rift here. We're seeing a- a tale of two PBMs. The old world PBMs that are just trying to churn the- the- the system and milk what they can out of what remains, and new world PBMs that are going to bring efficiency and solve for these problems. And the same is true on the TPA side. On the, on the, uh, health plan and medical claim admin side which suffers from th- I think the same if not worse levels of- of- of waste and inefficiency. Right, Sunil? Yeah, and I think that goes to, you know, where we started this. It's like we believe if you can predict the future as much as possible, that companies are getting larger, they want to take control. We believe that our role as a platform is to try to create a healthcare free market where you can make intelligent decisions. This is really important. This is our mission. This is our goal. This is my personal, like, drive is like, "How can I empower the p-" I always say PBMs and health plans, their goal is to empower the provider-patient relationship, not get in the way with administrative burden and with all these excess spaces. If I may show a slide, um, Josh, if we can show... Like, the- the whole concept, the why unified claims. To me, we call it unified claims processing as a single place where you can bring together medical and pharmacy claims under one roof. If you follow the news these days, many of the big three are starting to invest in infrastructure. It was all over the news recently where one of the big three said, "You know what? We're already predicting a down year next year because we have to invest in infrastructure to maintain profitability." It is very disruptive and that's why they were predicting what they are. But it's important to understand if you create a single unified place where medical, pharmacy, vision, and dental claims are processed, what I call an enterprise health platform, you can start getting a connected view of the patient. A holistic view of the patient. We've been talking about value-based care for years. I mean, like 20 years I've been to seminars and conferences and spoke on value-based care. You can't do meaningful value-based care if you can't attach a diabetes drug to a diabetes visit, to a diabetes endocrinology copay. It's all gotta be connected in one holistic view. I also al- always used to say forget AI. You can't have a conversation about AI these days (laughs) um, until you first understand in healthcare that-10, 15 years ago, we should've been able to do predictive analytics. If you just give me 10 data points about their drugs and about their visit history, I can probably tell you that they're going to get worse in their diabetes. But I always say they that hold data are kings in healthcare. Nobody shares data. So, if we can create a single view and a single place where claims are processed, we can simplify operations, we can fuel data-driven decisions, and we can really take care of patient care safety issues, which we hear about all the time, and we give these tools to employers. Now, here's where it gets interesting. On the next slide, we have an, uh, a unified world that we envision, okay? Where you have a single source of truth for where you receive the pa- the member's eligibility information. You create plan designs that are specific to their conditions. For example, if they have diabetes, you have a $0 copay for a Metformin or a GLP-1. You have $0 visits to go see an endocrinologist or a primary care doctor. $0 visits to go get your labs. What you're doing is creating plan designs that are specific around disease that bring medical and pharmacy together. This is, what a novel concept. That was the whole point of vertical integration 10 years ago for the big three. But unfortunately, that value couldn't be delivered on because of plumbing. This is a- Mm-hmm. ... plumbing problem. This is not a desire problem. It's a plumbing problem. And I think, I, I, it's funny, Sunil. I, I just went through this mental exercise because we went through open enrollment, you know, uh, and a lot of people are going through open enrollment right now that maybe have a plan change at the end of the year, and you're kind of asked to do this absurd exercise where you have to choose between three cookie cutter, off the shelf plan designs, one of which is totally draconian, the other one's sort of middle of the road, the other is luxury but costs an arm and a leg. And you basically have to sit there and gamble and say, "How sick am I gonna be next year?" Right? What, uh, "How many times is my kid gonna break a bone?" Or, like, what, like, you're trying to anticipate and predict things that are outside of your control, conditions that might change and evolve over time, and it's kind of an absurd exercise. I love Sunil's comment about a plan design of one, right? A plan design around a patient that i- that sort of evolves, if you will, to address the needs of that patient as the patient evolves. I, I think that's where this industry has to go, right? I mean, it, these, this sort of cookie cutter, one formulary for everyone, one plan designer, pick your, pick from these three and good luck, right? Th- that, that old world model is, is not, uh, around for much longer. Yeah, and this, it, it's already been acknowledged by all the four Ps I said, the patients, the provi- Everyone is realizing they're missing the other half of the story. Yeah. And they're, and that's why you're hearing about payers saying, "We need to invest in this," employers saying, "We want transparency." If you create a platform that allows you to plug and play any network, I always say, "We don't care what network you choose because it will show its true colors if you create a transparent platform." If I give you a platform, you can choose Aetna, Cigna, United, a regional network. You can choose your pharmacy of choice. Because a transparent platform will allow the best point solutions, the best diabetes, women's health, musculoskeletal. People will show their true colors if you create a platform that can transact a claim efficiently. Mm-hmm. Yeah. Well, and payment, time to payment is another thing, you know? 100%. I mean, that's huge. I mean, one of the reasons that there's excess cost in healthcare is because it takes so long to administer these payments. It's essentially a massive float. There is time value of money there. And what we're learning is that if you're able to pay more promptly, and if a system works more efficiently, providers are willing to do the job for a little less. There's, there's inherent discounting available there that is not being capitalized on now because of how slow and archaic the system is. Yeah. What you're really saying is it's a win for everyone involved. Because even if you think about the employee or individual, yeah, who wouldn't want more transparency? Who wouldn't want- Yeah. ... lower costs and more efficiency? Yeah. Right? And for employers listening today, they want the same thing. You know? So I think- I agree. Yeah. ... that that's why it's... You know, I, one of the things I learned in my career, I interviewed George Foreman (laughs) and he, he, I always ask people, "What's your, what's your best piece of career advice?" And his was, "Create win-win situations," because if one party benefits at the other's expense, it won't be a long-term relationship. Yeah. And that really has stuck by me. Yeah. Well, uh, we're seeing that play out now, right? Yeah. The lopsided nature of the, the, the supply chain right now. So I, I, I am, uh, at heart, an optimist. I don't know if, Sunil, I remember, we never had this discussion if you're an optimist or a pessimist. You strike me as an optimist. Yeah, me too. He's definitely an optimist (laughs) . I, I, I do believe that, that- Unless he's a pessimist in sheep's clothing, in optimist clothing. (laughs) (laughs) In, you know, in dynamic markets like the new world of healthcare, innovation can, can break the mold, can- You read, you read my mind. J- It's so funny, Josh. Uh, eh, uh, uh, eh, w- we've gotten to know each other pretty well over the last few years and you, it read what I was gonna say. With chaos comes opportunity. As much as I've tried to think about, oh, what other industry would I go try to get involved in and, and, and try to fix and so on, what makes healthcare so near and dear, not just to me, you know, I'm a patient and I'm a doctor and I have families who are patients. It's, it's home to all of us. It, it's near and dear to all of us, but it's chaos. It's absolute chaos for all the reasons we've talked about. And so that comes opportunity like not many other industries. So-You said it in those words, I say to mine. So I'm a p- I'm an optimist, and I enjoy the, the opportunity to improve something so dear to all of us, because it's personal, excites me to keep pushing onward. Yeah. Yeah. Agreed. I'd like to end, just wrapping up, like what's your best advice, each of you, uh, in terms of the, the thing that, uh, you know, Benefit and HR leaders should focus on after this conversation today? What's the, what's the next thing they should do? Should they, you know, kind of analyze their data? Should they have conversations on their own? What should they do? You know, if you're not a deep expert in this field, find one that you can trust, but find one that is... The, the consultants and subject matter experts also need to demonstrate their objectivity. 'Cause there's also conflicts that extend up into the consultant or broker community that, that buyers, employers need to be aware of. At, at this point- How do you know? I, I think that actually you're raising a really good point. Like how do you know if someone's being honest and, and are not conflicted by, uh, you know- Yeah, I think at the heart of it all- ... their financial incentives? Yeah. Uh, at the heart of it all, you need to understand how any vendor or partner is making money. And if you can't clearly understand or explain it, then I wouldn't do business with them in the world of healthcare. That, that's really the... If I have one, you know, if I have 60 seconds in an elevator, uh, with a large employer, and they're struggling, uh, with the cost of healthcare, my one question on that elevator ride, from the ground floor up to the, whatever, 18th floor, is, "Does your vendor make more money when you spend more money?" That's it. Yeah. O- on a related theme, I'm a curious learner, if you haven't figured it out already. Like, I, I, I, I, I really think that if you don't ask questions, you don't grow, you can't think, make things better. So my biggest advice to anyone in those positions of deciding the healthcare of their constituents, chief people officers, CFOs, we all are responsible for the healthcare of the people that are around us. That's not just family, it's the people that work within our organizations. Y- you have a responsibility to ask questions. So you educate yourself. It's always good to know if you stay with your current vendor by asking questions of everyone else and your vendor. Because then you know you're making the right decision. It's when you practice ignorance, I always feel like you're not doing the responsibility to yourself and the people that depend on you. So tha- that's what I would, I would say. I love that. Well, thank you both for joining us here today. You know what I say, and I'll, I'll tell everyone here, you know, Capital RX, Judy Health, some of the best spokespeople I've ever worked with, and I've been doing this for a very long time. (laughs) And you guys are just amazing. Obviously good chemistry, a lot to learn. I always learn something when I speak to you. So, that's good. I, I'm genuinely curious about, you know, the healthcare industry and how much has changed and it's... You know, my grandparents always used to say, "If you don't have your health, you don't have anything." So it's, it's, uh, gonna remain one of the big trends, uh, coming next year and, and I'm sure subsequent years. So you can follow, you know, Sunil and Josh on LinkedIn to learn more about them. Th- they share a ton of great content. And, uh, go to judyhealth.com for more insights and to learn more about th- more about the company and their, uh, their unified platform. So, I wanna thank everyone here today and till we meet again. Thank you. Thanks Dan, been a pleasure. And congratulations again. Yep. Congrats, Dan. Yeah. Take care.