So when guest was the CEO of the GE, the annual employee health care bill was over $ 3 billion. That was more than the company spent on steel, I don't know what that number is but it seems like a lot. That's when he realized employee health care had to be one of their biggest concerns and now he is focused on collective health and changing the landscape of health care. How employers can shift gears and take on more responsibility themselves. The truth is, and he is here to talk about this in greater detail, no matter what business you are in, you are in the Health Care business. Please welcome to the stage Jeff Immelt with Fortune's Allan Murray. [ APPLAUSE ] [ APPLAUSE ] [ MUSIC ] Jeff, thank you so much. Alan, good to see you again. Good to have you here. Good to be here. We're not gonna talk about GE today, are you okay with that? I'm fine with that, there's been plenty of news so yeah. So we're gonna talk about something you wrote recently. Where you said today every company is a healthcare company. What did you mean by that. Yeah so I think you know I had a unique perpective because I run a big healthcare company and I also as a legacy company had a tremendous role as a pair. And so I've been around the healthcare industry for probably 25 years. I would say Allen that one of the failures in the U. S. Healthcare system is that employers just haven't been very good purchasers of healthcare. And as it's grown in expense over time, The extent to which employers can be part of this context, actually run it like a business inside their company, I think that's gonna be one of the catalysts of the next generation in terms of how world change gets made. But for a long time what I was hearing from employers were, we don't want this job. [ LAUGH ] We don't wanna do this so let's figure out a better way to do this. So it's not our responsibility. Look I think it's easy to kind of say that and maybe to some it's like a pair system would be a relief. I'm not sure if it's better for employees in the end it does not allow you to differentiate yourself. But I would say more broadly, Alan, what, I had been a long term employee of that company during the financial crisis was the first time I'd really given a serious look to how much we were spending on employee healthcare cost. At that moment, it crested about $ 3 billion It was slightly less than what we earned in our business which I thought was kind of ironic in that context. It had grown by 7 % over the last 25 years. And so if a relatively big company only does that well as a purchaser, There's something that's just fundamentally broken right that's when we embrace I think a series of changes which can actually move the but we have to be willing to take some risks, it has to be led by the CEO. Move the needle on cost But also in quality? look I mean I'd say that they starts like every business adventure by having metrics. You know your consultants are your let's say your insurer might tell you that a metric is like cost avoidance or something like that. That's not a metric you will allow anybody else in your company to ever use. And so the establish metrics of like net promoter score, cost for employee and absenteeism. Because we have a large blue collar workforce and absenteeism turns out to be a really good metric for quality, right? And we watch those things, I'd say Alan A go down, right, and some of its, you know, some of its I would say cruel, in, by going kind hide actual plan, somethings like that, some of its awareness inside the company, some of its better in negotiating and things like that But we basically started from a relatively low point. A company like ours, lower the high from a city standpoint is plus or minus 50 % our cost per employee. So let's say in 2010, the low cost would have been, let's say $ 9, 000 per employee per year. The high city would have been 16 or $ 17 per employee per year. Same cohort, same age, same profile, so that's what you're dealing with as a system that's got huge frictional cost and huge variation kind of city by city. Like, I've had, I ran our business in the late 90s When you have a conference like this Alan, the therapies in the US healthcare system from a cancer or an orthopedic standpoint have been transformed in the last 25 years. We still spent 20 % of the healthcare dollar on administrative costs, right? I would come a conference like this in 1997. Most of the discussion are more less the same, [ LAUGH ] She went to single pair, like who destroyed the matrix and who pays and stuff like that. So in many of them kind of very central ways things has changed .>> It's funny you say that because you are now executive chairman of the Vena health. And Jonathan Bush, the CEO was on the stage, I think two years ago, maybe two or three years ago. And there were a bunch of conversations like the one you just heard about cool technologies that have the potential to transform health care and he said, hold it everybody, we're dealing with As you said, administrative problems, reading doctors prescriptions, making sure people don't take conflicting drugs. We're blocking and tackling and dealing basics. It's a long time before we can get to transform it there. Look, I'd say AI, amazing. AI has got amazing potential Let me give you two new cases that I'm not sure you talked about this week. Sending a good bill: okay so if you look at the CPT code and how many dollars are hung up on a provider's balance sheet because of the government rejects the payment because of one digit on CPT code, classic machine learning That's number one, number two the x ray machine was invented in 1915, so it's more than a 100 years old. There is still four or 5 % retakes on xrays. So, let's solve two and then we'll cure cancer after that, right? Let's solve-- That's actually a little depressing but ,- Let's solve Two things that are right in front of us. I think that's where people get lost in healthcare is applying the tools to the most fundamental use cases that are really gonna make a difference. So I think we're back to maybe 6 or 7 % inflation, really major inflation which I consider to be Per employee, per unit and that's probably unsustainable over the long term. But you're also working as a partner at NEA, you're involved with a lot of venture companies. You must see some of these or a lot of these in citing new technologies that are coming up. So the one's I like [ UNKNOWN ], so there's all kinds of And again, you're gonna see and hear this week all of these great biotech, and immunotherapy, and these are amazing, and there are people that are you know kind of smarter than I am that can go through those. The two places that interest me the most are kind of what I would call tech enabled services, and the way employees buy their health care. Tech enabled services. The favorite company that I like to study is Uber because half of it is an operating company, half of it is a platform. And I think to be effective in services, and healthcare, you need to be able to capture the technologies of Automation or AI but you have to be able to deliver them as a unit of one. City by city, hospital by hospital, doctor by doctor, and you have to be able to differentiate as unit one. And it's the reason why some of the let's say the mega AI companies haven't been that successful is because to be good at this you have to have a brain and a body. Right? You have to be able to deliver. It's just the nature fragmentation in the industry and the other one is to crack in to and what collector does is all about the employer health care market. because again it's $ 1. 2 Trillion, they're people that have been known to be efficient in all the other things they do Who buy in large aren't efficient in this one practice. And it's complicated, it's because they didn't wanna disrupt their employees. It's because may be their HR leader isn't strong enough to wanna push through the system. There is all kinds of reasons in terms of Why I can support it but you can't support it. It's much more about culture than it is about technology. Look, I think the technology exist to do this. If you're talking about the ability to use data, to have transparency, to be able to see what a good bill looks like. If you are in a hospital or you go the doctor. Being able to dissect the bill is huge and that's what companies like Collective Health are doing. But it really, if every CEO in the country would stand down for like two days, and actually have their benefits people up on the sea suite Talking about how the benefits actually happen, how does contracting actually happen, which insurance companies are doing well, which are doing it poorly, what are my employees really feel. That is much as anything else in our ecosystem Which changes the direction of health care. And that is- You think can get that to happen? Again, every pretty reaches their own, it's like the boiling flock. Yeah. Three billion just may seem like a lot of money. That's abig number, not everybody has that bigger number. [ LAUGH ] It was bigger than steel. You sit there and say Which dummy did this and then you realize the dummy is actually look at in the mirror every morning all right, it's what I allowed to have happen and it wasn't like it was like the team was actually benefiting from lot of this, they were dealing with the same complexities. So I think you and I were talking about royal. I kind of teach classes of business course. And I always try for the young foxes give them, here are like four, five things you gonna be working on for the rest of your life forward. Right? I but China on that list, I put Kind of future of work, house work personnel, healthcare is right down the list because like we're gonna be above 20 % of the US GDP. Every person in our society as an American Is gonna be working on healthcare for the rest of their life. So in some ways, it's one of those instance where you, well, almost never early. Yeah. But Trump was never too late in this industry just because there are so many things that remain to be fixed. And employers are a particularly powerful group that hasn't use any of their Abilities, to be able to change nature and, look, I mean, I love Jamie and Warren and Jeff, they're great people. But, you know, you can't just declare it and have it be. You've gotta take a thousand actions to go with this in order to make it happen. And it's not just an opportunity, it sounds like it's a responsibility. I think it's. An opportunity is one of those things that's gonna be impended in everybody competitiveness as time goes on. But also I believe we can deliver better benefits for the people that work with us. I'm firmly convinced that there are aspects of mental health And some other systemic health issues that don't even enter the equation because we're just getting deluged by phony expenses in a bunch of other areas that just chew up the same dollar. I wanna change the topic just a little bit because Peter Sands from the Global Fund. Yup. For AIDS, malaria, tuberculosis, Sitting out there somewhere the lights are too bright. I'm not sure exactly where he is. But he was on the stage yesterday and he talked about how these are big trouble some diseases that can be cured and the corporations have a big role in it. But that they did a study that showed 75 % of companies now have a climate change action. Policy but only 10 % have a global health policy. You were instrumental in getting companies to that 75 % point on climate change. In 2007, US cap was a big change. Do you think he's right about the need for [ INAUDIBLE ]? Well, look, I would broaden the [ UNKNOWN ]. First, I love Peter and I think he's great. It's good to have him work on this. I think my own experience in emerging markets and things like that would say to me that the technology is actually catching up with the need, and you can actually change the parameters of these diseases In a really meaningful way. We had tried as part of the millennial challenge to develop an ultrasound, because one of the worst parts of the millennial challenge was breech birth. So we wanted to do an ultrasound that could just do wand, just take a midwife and a wand and say red or green. Yeah. Turned out a decade ago, that cost $ 20, 000 to do just because it was so hard. Now, you can do it four thousand bucks, right. So the technology changes in what you can do. I would just add to that. Over the course of my career We gave money to too big not for profits inside the us one was secondary education for the purpose of teaching stem to inner city high schools and the other one was community health right so those two things i can tell you after 35 years of watching i'm not you know despite all the great efforts we had I'm not sure we ever moved the needle on secondary education. It is so hard and so complicated, but there wasn't one intercetic clinic that we gave mind to that didn't do better, because of it. So I will just add to the point to say, emerging health Community health, developing health, not only is the need there, but I actually think you can move the needle faster there than you can in climate and all these other things. Jeff [ UNKNOWN ] thanks so much, great to have you here. Good to see you again, thanks. Good to see you Allen.

Every Business Is a Health Care Business

Health

Collective Health’s Jeff Immelt explains.
