change healthcare

Fortune Staff

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

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Change Healthcare | 2023 Fortune 500

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Change Healthcare

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Change Healthcare | 2023 Fortune 500 | Fortune

Patients are pleading for reform of a drug-pricing system driven by incentives and greed.

High insulin prices in the U.S. are putting some diabetics' lives at risk

JOEY MCLEISTER/Star Tribune via Getty Images

Health

High insulin prices in the U.S. are risking diabetics' lives

100 years ago this year. In 1921, insulin was discovered and produced for the first time. And for the first time in history it was possible For people with type one diabetes to live. And so the big issue and has been for a long time is why does it cost so much, especially when people need it to live? The price. In the year 2000 was around $30 a bottle. The price today Retail at my local pharmacy at $365 for this Very tiny little bodies of influence. My important prescription is for four bottles every month. So one bottle left me about a week. If I didn't have insurance, I would be paying Most of $1500 every month for my prescription. Insulin costs more in the United States than it does in any other developed economy and not just by a little, but by multiples. Insulin's that cost hundreds of dollars for the uninsured in the US Cost maybe $20 in other countries. You go back 2025 years and adjust everything for inflation. Insulin was much less expensive back then. What changed was the rise of a business called pharmacy benefit management companies in that pharmacy benefit managers actually began back in the sixties or seventies helping insurance companies just deal with the huge paperwork of all the prescriptions that they had to pay for. They saw that they had a huge number of prescriptions that they were processing and they realized they could deal with the manufacturers of drugs, uh representing many insurance companies had a lot of buying power and they could help insurance companies get good prices. They could help insurance companies pay less. That was the whole idea. The PBMs said to the insurance companies, look what we can do is negotiate with the drug manufacturing to get a rebate on the price you pay for their drugs. So whenever you pay for somebody's prescription, you pay whatever the drug maker is charging. But then we'll get you a rebate from them. So it lowers your overall cost fundamentally. The drug makers realized the bigger the rebate I can give to the PBMs, the more the PBMs are gonna like me and my drug. And that means that they're more likely to put my drug in the top tier of the drugs that the insurance company sells. It is not a typical supply and demand economic model. The model is the supply and demand Within that little bubble of manufacturer PBM insurance company and your pharmacy, the actual person who needs the product is left out of that equation. Yeah, a really major development in the insulin world took place just this past summer when the FDA approved the very first insulin that we consumers would regard as a genuine generic right now. We have just this one real generic and our experience with other generic drugs is that having just one doesn't do a whole lot to lower the price because after all, it only has to under price the brand name drug by a little bit in order to get the market. Now, will there be a second and a third generic insulin of this particular type? That's what everybody in the industry and everybody in the insulin world is watching mm The insulin problem isn't really just an insulin problem. It's an example of how all prescription drugs in the United States are Christ reports are that at least 25% of insulin using diabetic insulin using major type one or type two and stay alive. You need to take an insulin injection. 25% of us are reported to have rations at some point throughout our lives of having diabetes. This is incredibly dangerous because you can go into diabetic coma and die and it happens. Uh nobody knows exactly how often it happens, but it seems to happen on average a few times a day. Somewhere in the United States monetizing healthcare is a normal result of the capitalist corporate environment, which is what we live in in the United States. And that's fine. Just don't price it so high that we die. As a result, the risk to a diabetic, It doesn't matter if you're type one, Type two and gestational diabetes or some other newly discovered kind of diabetes, if you need insulin, you need it to stay alive. And if you can't afford it, you pay with your life. Nobody. No one should have to make those kinds of decisions when it comes to basic health care. Mhm.

[ MUSIC ] Neil, you're now the CEO of a public company and until now change healthcare has been private. How does this change the way you have to lead the company? Well, I think it's important for us to understand we've got new investors who support our vision for the company. We'll have a higher profile out there not only the knowledge our customers and partners have of us but now our broader marketplace. It's great opportunity for employee to see the vision that they support, the accepted and supported by so many other people across the United States .>> These days are so many business leaders talk about the importance of creating a culture Innovation and I know that you are trying to do the same thing to change healthcare. But given that change healthcare came about through so many acquisitions, something like 20 acquisitions over the last couple years, you inherited a lot of different cultures and now you are also a public company. How do you get your employees on board to think about the same culture and the same values? Well, I think it starts with Clarity and vision. You know, we talked about inspiring A Better Health Care System the values we have the leadership DNA. We look for in leaders in the company. We need to be consistent as one of my colleagues says you have to talk about it seven times seven ways. And if you do that consistently, people will first of all understand the vision, and then follow the vision and then act in accordance to how we can put that vision into practice. So how do you get that message accross. Obviously you're communicating it more but what other ways Get those points across. It really has to be by example, I think as a leader, when you look at the core values you have in the company, you have to live up to them. When you look at, for example, our values around being agile or championing innovation, or inclusiveness. People look and say is that something you're personally doing? And look at the executive team and see whether they're doing it as well. Many CEOs tell me that it's not enough. To be a good CEO yourself to be successful, you have to create a leadership mentality throughout the company. Do you agree with that? And if so, what are you doing to encourage everybody from the most senior levels to most junior levels to think like a leader? Well, first of all, I strongly agree with that. And we've been very explicit and what we call our leadership DNA. What are the behaviors we expect from leaders and we think about leaders, as you mentioned, it's at all levels of the company. So we try to be very clear what we expect. We expect people to exhibit those behaviors and we hold them accountable for doing so. What do you Meaning by leadership DNA? It's really a series of nine different behaviors that we've articulated around agility, around innovation around serving our customers in the industry, pursuing the passion we all feel for improving the US healthcare system. And we want to talk about that. But most importantly, we want to exhibit those behaviors as leaders. All right, so how do you get your employees to step up? And come up with new ideas to be agile, be more experimental, along the lines of what's yours? Well, first of all, I think it's an innately in our team members that they want to have a job and an experience at work. That really fulfills them and helps pursue the passion they have for improving the healthcare system. So first of all, again, I think it's clarity of vision. It's also allowed giving them the tools, the training and the ability to adopt new technology. New ways of working so they can actually progress in their lives and careers as well. So when you're hiring for some of the most important jobs at your company, what's the single most important leadership quality that you're looking for? I believe have to be lifelong learners Change is just accelerating not only in healthcare but throughout business, throughout society. So we have to be somehow [ UNKNOWN ] thirsty at how I can change, how I can learn, how I can serve our customers, our partners, our fellow employees better. And that's something we look forward in leaders we bring into the company. So speaking of being a constant learner, let me put it now on you, throughout your career, and you've worked at so many places besides Change healthcare. Your years at IBM, your years at Oracle. What's the best leadership advice that you ever got? And how did it influence you as a leader? Well, Susie, I have worked at some pretty storied companies, but I actually have to look back the advice I got from my mother, who worked until she was 80 years old, who was a strong influence on me. As I've learned and try to be a great leader, and I think of something she told me early on in my career, which, as a leader, it's not about you. It's about them. It's about the people you work with what you're doing for them and their families, what you're doing for society, what you're doing for your customers. And I've tried to use that as part of our leadership DNA, our vision Probably our core value as a company is pursue purpose. And part of that purpose is really helping people and really helping all Americans maintain or improve their health. [ BLANK_AUDIO ]

Change Healthcare CEO Says Leadership Actions Will Bring Change to U.S.

Leadership

This small Tennessee company is trying to bring big changes to US healthcare players.

[ MUSIC ] [ APPLAUSE ] Your congratulations your company listing here at the Nasdaq now as a public company Change healthcare has been a private company for so many years. Why was it important to go public and why now? Well, this is the time because we've really created a foundation as one of the largest healthcare IT companies in the country serving payers, providers, consumers. We built the foundation and now we have new investors coming in who share our vision. Many people might not be familiar about exactly what Change Healthcare is all about. Can you give us a real brief description? Sure. I mean, we actually help efficiency in the US Healthcare system. There's enormous opportunities for helping payers do a better job Serving their members. Providers help their patients get more value out of the healthcare system and help consumers make better choices about their healthcare. You provide the tech tools and the software for things like artificial intelligence, which is a So popular in just about every single business. But we find that the healthcare industry is not as quick to adopt to new technology. Are you finding that the healthcare industry is now ready to act rather than holding off? I think so because now really in the last decade which changed so we have digital healthcare data. It used to be in folders behind doctors desk. Now we have it available to take the clinical data, the administrative data, the financial data and help people make better decisions. What are your customers, the decision makers at like hospitals for example, Telling you about their willingness to buy up this new technology. They're basically telling us look, we understand we have to move to a value based healthcare system. It's all about being able to prove and improve quality with our patients with our members. And they want the tools they want the data, they want the systems to be able to do so. We're seeing major players outside of healthcare. They're jumping into your space. Amazon, Google, Microsoft and people like Warren Buffett [ UNKNOWN ] Berkshire Hathaway teaming up with JP Morgan and Amazon again, trying to fix the problems with health care. What's your strategy to compete and can you beat out these possible disruptors? Or fortunately, we're a practical disrupter ourselves and those companies and others that we work with amongst over 700 partners across the IT industry. Many cases partnered with us, given the scale we have and the understanding that we have and how to take their capabilities and bring them to literally 10s of thousands of healthcare customers. These very high profile companies, though, are determined To disrupt healthcare as we know it now. So how do you navigate this new space with companies that have nothing to do with healthcare getting into the business? Really by working with them proactively. And fortunately, we've got a long history of doing that and a lot of examples of how we worked with exactly the companies you've mentioned to help them and us. Disrupt healthcare. [ UNKNOWN ] Everyone is talking about making us healthcare better, cheaper, more efficient. And as you know President Trump just the other day signed an executive order requiring hospitals to tell the patients the prices that they're gonna pay. For a procedure before they actually have it done, and before they have to pay for it, which really makes a lot of sense, but it's not going on right now. How realistic do you think it is that that's gonna happen? Well, we can make advances and where we are today. And frankly, I think both the providers, the payers, and certainly the consumers expect this to end we can. Fortunately, with a lot of this data now being digital and the kind of scale that we have in the industry, we're a great partner for the providers and the payers trying to react to those sorts of trends. But everybody's been talking about the consumerization of health care, making the patient the center of all of these new cost decisions, but it really hasn't happened that much yet. What do you see, how realistic is it that we're gonna see That happening soon .>> It must happen really Susie because consumers are demanding it with the growth and high deductible health plans and how much their health care costs they're responsible for. They're really eager to become better shoppers of healthcare. And we're very well positioned to help our customers help them in that way .>> So, the price of health care and access to health care is a turning out to be, A huge topic for the 2020 presidential race. Is there any one idea or proposal that you've heard so far? That you think has a real possibility? I mean, what would you like to see happen, no matter who ends up in the White House I think all the ones that are focused on that kind of trifecta of improving access, reducing costs, and improving quality have merits. I think it's gonna be important that anything that's done is done in conjunction with the players in the healthcare system. Cuz we have literally millions of people in this country every day helping people maintain or improve their health. And we need to involve them in the process as well. [ BLANK_AUDIO ]

Change Healthcare CEO Talks IPO, Future of Healthcare Industry

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Change Healthcare

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