We have reached episode 10 of The Value-Based Healthcare Podcast series! Our guest this episode is Harry Nelson, founder and managing partner of Nelson Hardiman as well as the author of The United States of Opioids: A Prescription for Liberating a Nation in Pain. Nelson Hardiman is a law firm focused exclusively on healthcare and life sciences.
Mr. Nelson talks with us about the changing healthcare landscape, his take on where we are headed in United States healthcare, and the best way to be prepared for what is to come.
Click play below or the platform links underneath the video to listen to the entire podcast. Scroll down to read the transcription.
Podcast transcription:
Jay Ackerman:
Hello and good day. I'm Jay Ackerman, CEO of Reveleer. I'm back again with another installment of our podcast series, The Value-Based Healthcare podcast. This is truly one of my job highlights as I have a regular opportunity to engage with thought-leaders and visionaries in the healthcare arena. Through our podcast, we aim to widen the visibility and voice of people working to change how healthcare is provided and the impact it has on all those who participate in the care delivery chain. I'm thrilled today to be joined by Harry Nelson. Harry is the founder and managing partner of Nelson Hardiman, and he's a well-read author. Beyond his legal expertise he is known nationally as a thought-leader at the intersection of healthcare, law, and strategy as evidenced by his work in addressing vexing questions facing the industry. He's deeply immersed in healthcare transformation and innovation. He writes and speaks on cutting edge issues, and the future of healthcare.
He testifies regularly as an expert on healthcare compliance standards, including data privacy, corporate practice of medicine, and other issues. Please enjoy this podcast as always, and feel free to share it with others. Harry, let's begin with a few questions regarding your career journey. Tell us a little bit about yourself, and how you've managed to progress along through your professional career.
Harry Nelson:
I grew up in suburban Detroit, and I had a privilege one summer. I was going to college at the University of Michigan. I had the privilege one summer of going to DC to work as an intern for a congressman, and I spent most of my summer writing constituent letters dealing with social security, and a number of healthcare related things. I all of a sudden discovered that the Department of Health and Human Services was this massive bureaucracy and the Food and Drug Administration as well. It was eye-opening for me. So, when I went back to college as a junior, I found myself really interested in how US healthcare had evolved. Then when I went to law school a couple years later, that continued. I took every class I could on healthcare law.
I started off my career looking for a job to do healthcare regulatory work, advising on those issues, and it led me from Chicago to LA, and to ultimately starting my own firm which has grown into the largest healthcare life sciences specialty firm in LA. It continues from that time back in summer of '88 to today, to be in an area that just is transforming and so central to everything that happens in this country. For me, it's a never-ending source of learning and fascination.
Jay Ackerman:
Harry, why don't you talk about the decision to launch your own firm and what you were trying to accomplish?
Harry Nelson:
You know, I'll be honest with you. I didn't set out to start my own firm. I went to Chicago right after a clerkship for a judge, and was working at a firm that was a break off of a big Chicago firm, Winston Strawn, and doing work for these fantastic health systems in the Chicago area. I was working with Northwestern University's health system, and Loyola University's, and it was only when I was forced to do something different because my law firm splintered, my wife, our oldest was just a baby at the time, she said, "I want to be out in California near my parents." So, I came out here and I discovered very quickly that before I got my bar completed, I needed to find something to do. I happened to start working with a solo practitioner lawyer who was doing the complete opposite end of healthcare. He was representing doctors in trouble before state medical boards, before Medicare and Medicaid agencies over payment issues, in front of the DEA, over prescribing issues.
I discovered this whole other world of healthcare, and as we started working together, I realized that I was perfectly happy to start working on the provider side and see how the different issues that played out both on the institutional side, and on the provider side, particularly when people make mistakes and those need to be corrected. So, I ended up deciding to stay in that work, but growing over time to represent a broader and broader range of healthcare entrepreneurs, and ultimately pulling in colleagues who represent many of the largest health systems and healthcare providers across California. So, it was an accidental path on building my own organization. It continues to be, again, just a great journey.
Jay Ackerman:
Perhaps one more question on building your own firm, and the last 15 to 18 years in doing that. What's been the most surprising thing for you in building this firm in the healthcare space?
Harry Nelson:
What's surprising to me most is how much the work has changed over time. So, what I found in the early 2000s as I was trying to grow a firm was that my immediate clientele were small medical groups, small home health agencies, small pharmacies, and when I look today, not only those clients have disappeared from the landscape, the healthcare landscape has continued to evolve. It hasn't just been that doctors have migrated to large hospital affiliated or managed care groups, and that consolidation, but what surprised me the most has been the way that new technologies and new health problems like addictive disorders, like autism, have really transformed the landscape so that there continue to be plenty of large and small operators. Just the degree to which the problems facing healthcare have evolved in a relatively short period of time, to me, staggering. I find the nature of our work is we always have to be ahead of what the next problem is, and the next shift, and helping our clients get ready for it.
Jay Ackerman:
Harry, that's a perfect segue to our next question. What industry trends is your firm watching most closely in healthcare?
Harry Nelson:
In the value-based care area, we're seeing this regulatory sprint of agencies really moving quickly to try to push forward the value-based care initiative, but more broadly, we're spending a lot of time focused on changing FDA rules and FDA’s attitude towards some new therapeutics like biologics. We're spending a lot of time looking at the way that both federal and state governments are adapting to the transformation of behavioral health the way that health plans are as well, with an explosion of claims and concerns about fraud and abuse, and also concerns about evidence-based care. The other big thing that occupies a lot of my time is transitions around digital health and telemedicine, both getting much more acceptance as a way to bring down healthcare costs and create more efficient access, but also looking at areas where there are concerns at a federal and state level about whether quality is being sacrificed in the name of efficiency.
Jay Ackerman:
Who do you think is making the greatest inroads on digital health and telemedicine?
Harry Nelson:
You know, what's most exciting to me has been the rise of asynchronous telehealth. We're seeing it coming both from large health systems, adding it for existing patients, and from a number of new providers. It's controversial because we're so used to the modality of a doctor and a patient either being in person together, or being live across the computer screen together, but what's interesting to me is that there's so many conditions where the patients want the care delivered more efficiently whether it is dealing with basic health conditions that come up all the time like sinus infections, whether it's women interested in oral contraception. A whole range of conditions where we're waking up to the fact that you can achieve the same level of quality in terms of evidence-based protocols being pursued, and you can offer doctors and patients the chance to connect and get their needs met in a way that doesn't sacrifice quality, but that pushes up against what our regulatory agencies are used to.
To me, that's one of the most exciting places where I really think healthcare is being changed. The other area that we're seeing moves on, personalized medicine and the wave that we're seeing the beginning of a move towards immunotherapies and genetics. Really transforming how we provide care. We're working with companies that are doing really exciting early stage work in terms of triggering the body's own immune responses to fight autoimmune disorders and cancers. Also, just the way that we're learning how medication really affects people differently, and how technology will allow more people to get much more targeted and safer, better care just by understanding their own physiology and biology.
Jay Ackerman:
That's great, thanks for sharing that. Staying with the patient, what are the greatest barriers or challenges that you think affect patient improvement in today's environment?
Harry Nelson:
I think the capital infrastructure challenges of changing our existing system, which is designed to provide late stage care, expensive care, very well but not really tooled to provide lower cost-effective cares. Capital and infrastructure is a huge challenge. I also think there's a culture change that needs to happen, both on the institutional side and on the patient side, where the rules of the game are changing but I think people are only slowly waking up to how the system is changing. So, I think of those as the two overarching challenges.
Jay Ackerman:
Can you share a little bit more about how you see that culture change unfolding for the patient?
Harry Nelson:
I think patients are seeing over the last few years a shift towards much greater responsibility, financial responsibility, for managing their own care. They're seeing the system evolve, and some patients are doing well, thriving in that environment, and others are struggling to catch up. What I see is a lot of people struggling with the financial challenges of being responsible for managing their own care. I'm trying to think of a good story to share with you. Being a healthcare lawyer, even though my work is mostly on the provider side of the equation, I'm constantly getting calls from patients who are struggling with aging parents, for example, and the need for care providers, and struggling with the cost of dealing with addiction and autism. Seeing that our system is providing more care, but not knowing how to access it. So, I find I spend a lot of time in personal conversation trying to help people navigate, but there aren't always good answers just because healthcare is so expensive in this country.
Jay Ackerman:
With that, what recommendations would you have for the public regarding their empowerment and ownership of their own health?
Harry Nelson:
I think our system, the landscape, is adapting not only in terms of our payment models, but also in terms of our underlying therapeutic options. My advice to patients is that you really need to be much more of a proactive force, and think of yourself as a member of the care team when it comes to your own care, and the care of the people that you care about. Not to be afraid to go out there and do your own research on what kind of care you want, or you want for your family members, on who your providers are. I think that there's a lot of opportunity to find better options. I think there are plenty of good doctors and good healthcare providers out there, but there's also a lot of people who are just doing things the way they've always been done. My advice would be that you can actually get better care and reduce costs substantially if you become a proactive shopper in the market rather than just assuming that you're being treated appropriately, and being charged fairly within the system.
Jay Ackerman:
Yeah, it's fascinating the amount of research somebody will do regarding the purchase of an automobile, but then when it comes to their own health and perhaps a significant medical issue or challenge, that they'll show up seemingly having done no research about options, different modes of having the treatment delivered, and just handing off ownership of it.
Harry Nelson:
Yeah, it's an interesting thing. A lot of people in the early days of the internet and WebMD, which was the grandfather of all these web-based resources, I remember hearing a lot of talking down this whole “patients doing their own search.” I think we still have this idea of the doctor, the trusted advisor. That's great, there's plenty of great doctors out there, but the lesson for me has been the medical evidence, and the technologies, and the options, continue to change at such a rapid pace. People really need to wake up to the possibilities that it doesn't preclude you having a good relationship. In fact, part of that work may often lead you to the health professionals who are doing exactly what you're looking for, but I think that getting out of that old passive mindset is such a critical piece of taking care of your own health and the health of people you care about.
Jay Ackerman:
With seeing that in our own personal life, I have a family member who's older, suffering from a fairly significant medical challenge. My wife was recently with her, with a set of doctors, and she was providing some feedback, in this case it was her mother, how her mother was doing. One of the care providers that was in the room turned to my wife and assumed that she had studied in medicine based on how much she knew about the condition, and the options, and the treatment, and some of the other issues surrounding it. She had done her homework. She was an informed part of the team trying to figure out the best path.
Harry Nelson:
That's funny, I was just going to add it's one of the things I see. The response that you get from the doctors and the other care providers too is very telling, because doctors who appreciate an informed, educated patient, in my experience are going to respond well to that and appreciate somebody and respect somebody for having done their homework, and really being engaged by it. It always worries me a little bit when the doctors threaten, still clinging to the idea that there's only one expert in the room, and there's not anything to have a conversation about.
Jay Ackerman:
Yeah, I agree with you on that one. What advice might you have for healthcare executives in navigating the healthcare industry and all the change unfolding at this point in time?
Harry Nelson:
So, I think it's a challenging time. It's a challenging time for healthcare executives in the sense that the Affordable Care Act ushered in this new era in terms of value-based care of market transformation. Then we had a surprise and some lack of clarity when the Trump Administration began efforts to change our healthcare laws, and it can be a very confusing time for healthcare leaders, for healthcare executives, because of the political uncertainty and the polarization. Are we going to move towards an environment of Medicare for All, which has become the theme among the democratic candidates? Are we going to see continued undermining of different pieces of the Affordable Care Act? To me, the key thing for healthcare executives is to be focused on the structural drivers of change. What I mean by that is there was the movie, All the President's Men. Talking about Watergate. There's a great line, ‘Follow the money.’
To me, what that means is when you look at federal health spending, what you see is we're living through a period where over the next decade there's going to be the aging of the American population, means fewer Americans paying into a system, taking care of more and more seniors living longer with chronic conditions, and that is above everything else driving spending on major healthcare programs, on social security, and crowding out everything else. So, I think that the politics can be paralyzing. The important thing to see, over all, for healthcare leadership to see is that the reimbursement changes are almost inevitable no matter who wins because of the cost pressure, because of the aging of America, and other health issues like the opioid crisis driven work.
So, that to me is the overriding message. The other place I would say that healthcare executives need to be focused away from the payment, the payment structural change forcing lower cost care is just the way that patient expectations are evolving. It's critical not to be left behind with the most economically challenging patients, but to focus on finding places that are going to drive the economic health of the system that you're looking for by meeting their needs and expectations.
Jay Ackerman:
Harry, you mentioned a minute ago the recent drumbeat about Medicare for All. Any thoughts you want to share about that?
Harry Nelson:
I think it's very confusing. This is one of those places to me where the political rhetoric and the end result are likely going to be very different. What's most striking to me about US healthcare is that we have almost half of Americans covered under employer sponsored plans. Nearly 50% of Americans are covered by either a small business plan or with a private health plan. Current federal law carves out over 150 million Americans from the federal government being able to manage those healthcare dollars. My sense is that the Americans who get their care that way, the businesses that deliver care that way, they have plenty of complaints about the way our healthcare system works but that population is not excited, from my perspective, about moving to a true Medicare for All system.
So, I think that the worries about moving to a single payer system like the United Kingdom or Canada has, are overblown. I think it's good rhetoric, but I don't think it's realistic. I think what's more interesting to watch is the interplay between the way that the Medicare program has evolved and Medicaid has changed, and also the way that Medicaid looks different in those states that expanded Medicaid, and those states that elected not to. So, I think there are going to be significant changes. I think we're going to see more of a push to deal with a new solution to replace Obamacare, or bolster Obamacare, depending on who's talking, with more options to make sure that we get everybody covered. I don't expect that we're going to see a grand solution.
My expectation is that what we're going to see are reforms that address the real paying point like those uninsured patients who are a problem for everybody. They're a problem for hospitals and providers who are providing uninsured care. They're a problem from a public health standpoint, when people show up with advanced states of disease that could have been treated more efficiently at earlier points. My view is we're going to see lots of incremental changes to address pain points. I'm a skeptic when it comes to all the high flying promises of radical change in American healthcare.
Jay Ackerman:
Well, staying on the topic of regulatory change, any thoughts that you can share with us around changes you'd like to see come from CMS over the next one to two years?
Harry Nelson:
You know, personally I think that, when we talk about value-based care, there were places where there's been a little bit of a slowdown over the last few years in terms of moving forward. Things like bundled payments and moving more aggressively towards value-based purchasing. I personally would like to see… I think those are ideas shifting more from a volume-based system to a value-based system, and really forcing efficiency onto health systems I think is a positive thing from all sides. We're getting to a point where we really have the ability to put more pressure on our healthcare infrastructure to deliver and to see more accelerated transfers of risk downstream, so that we're seeing more care provided. So, for example, when you go in for a surgery, the doctor, the hospital or surgery center, the radiologist who reads the scan, the anesthesiologist who provides the anesthesia, everybody in that process is getting paid out of one pool with some reasonable controls in place. That's one regulatory change I'd like to see.
The other thing that I'm watching, that we're watching, closely and we're really interested to see how far it goes is more transparency on drug pricing because that has continued to be such a spending challenge for so many health plans and systems. I think there's a really opportunity to bring more savings there, and the question is just whether we're going to have the political will to force that change onto the pharmaceutical industry.
Jay Ackerman:
Yeah, I was going to ask you if you could share your thoughts on what it's going to take to actually make a change there?
Harry Nelson:
You know, it's funny. We talk in this country a lot about the gun lobby and what side people stand on politically, and its power. I think we do not talk nearly enough about the power of the pharmaceutical lobby, and when we look at where the profits have been over the last decade in healthcare, pharmaceutical companies have really continued to be big, big winners at a time when we have to figure out how to reduce the healthcare spend in this country. So, when Obamacare was crafted, the Obama team and congressional democrats tried to learn the lessons of the '90s and the failure of the Clinton Administration in terms of bringing the drug companies, bringing health insurance, bringing everybody around the table and making sure not to make an enemy that could bring the whole thing down. From my perspective, we went way too far in terms of giving the pharmaceutical industry protection on its sacred cows. One of which was the idea that Medicare should not be allowed, and the federal government shouldn't be allowed to negotiate drug prices.
I give credit to the pharmaceutical industry for pushing that and prevailing on that, but I don't think that's good for anybody. I think when you look at why US healthcare has the most expensive system in the world, with really mediocre outcomes, I think that you certainly can point to pharmaceutical pricing in the United States as part of the problem. It's not the whole problem, but it's a big one, so personally, I think that there's an opportunity. If more people were paying attention to this and not just letting lobbyists from the pharmaceutical industry drive the conversation and drive the pressure on legislatures, more people were paying attention to how their congressmen and senators voted, I think we're close to a shift on this. I think it would be good for America to see negotiation on drug prices, pricing transparency, and hopefully bringing down the cost of care for all Americans in the process.
Jay Ackerman:
Yeah, same here. I mean, I hope your thoughts on that one come to fruition. I think what we're experiencing here, the trendline, needs to move in the other direction. Harry, you've been a great guest, and we're going to move in a second to our rapid-fire round to start to bring it to a close. Before I do that, you mentioned it at the start, but just for our listeners I'd love to call it out, which is your most recent book, which was just published at the end of March by Forbes. It's called the United States of Opioids: A Prescription for Liberating a Nation in Pain. I certainly encourage everybody to listens to this podcast also, follow up and take advantage of your book, and I know that'll be a fruitful read.
Harry Nelson:
I appreciate it. Yeah, the book really became a passion project of mine. I was blessed to be brought into conversation at the highest level with policy makers at all the federal agencies, touching the opioid crisis. I came away excited to be part of the conversation, but sort of frightened by the lack of urgency in the response. It made me really want to issue a call to action to everybody across the spectrum whether, thinking about opportunities in the workplace, and opportunities in schools and throughout our lives, or new awareness and to address both the opioid crisis and the broader social crisis that it represents. I feel like we're at a moment in time where the problem is just horrific in terms of the number of people dropping dead, the number of people suffering with substance use disorders, and the number of people living in severe, chronic pain who can't get access to care. So, I think that this is an issue that touches everybody, and I'm hopeful that my book will change the conversation around what people can do and what the solutions to the problem really are.
Jay Ackerman:
Yeah, I hope so as well. Let's move to our rapid-fire round. I've got six final questions, real quick, top of mind. I know you talked a bit about Chicago on the front end where you started your career, but I think you're a Detroit sports fan at heart. So, what's your favorite Detroit sports memory?
Harry Nelson:
It's a tough one. The '84 World Series was a great one. I've become friends with Joe Dumars from the ’90-’90 Pistons, so that would be a runner up, but it would be the '84 Tigers.
Jay Ackerman:
Yeah, well that was actually a great time in basketball. I'm a Boston Celtics fan, so remember those-
Harry Nelson:
I don't remind you about the game five of the '87 playoff. It was a blood curdling one for me.
Jay Ackerman:
Alright, so continuing on. What was the last truly great book you've read?
Harry Nelson:
You know, I just read a book Bad Blood on the story of Elizabeth Holmes and Theranos. I think that's a must read. I hope people feel the same way about my own book, but I'd have to give credit. That book provides some insight into how easy it is to be deceived with our healthcare system. How many smart people were fooled by this idea that we could use microscopic amounts of blood to do lab tests, and how far Elizabeth Holmes got. I highly recommend it.
Jay Ackerman:
Great, thank you. A little bit of a deeper question if you don't mind. If you could redo one decision in your life, what would it be, and why?
Harry Nelson:
That's a tough one. When I was in law school, I had friends who I watched get MBAs and understand the business world, and I decided to pass. I was having too much fun playing basketball in my afternoons and enjoying the student life. If I had to go back, I wish I had gotten an MBA because it took me a long time to learn to read a balance sheet and understand a financial statement. I think that having the ability to go back and forth and understand what's really happening, what drives organizations, is so important. I've been spending my whole career reading business books, trying to get smarter on those topics, but that would probably be the one for me.
Jay Ackerman:
Ah, well, as someone who earned his MBA, I often think about not having gotten my GAD. So, it seems we both have some similar thoughts there. Moving on. What's your favorite app on your mobile device?
Harry Nelson:
You know, I say Waze has changed my life. I was chronically late to everything, and I feel like I have no excuses. It's either that or my Fitbit, which has keep me focused on all these health data points like how long I've slept, how many minutes I got my heart into peak aerobic condition, and all my personal data.
Jay Ackerman:
Well, I think this next question's then a natural. So, how do you invest in yourself?
Harry Nelson:
It's been a challenge for me because I love the work and serving other people, but I've come to take a different view of what my wellness means, and realizing that time with my wife, with my kids, the amount of sleep that I get, my own exercise level, that that's all part of my wellness. So, I invest in myself by sticking to a regular structure that builds in all of those things, that builds in prayer, that builds in time with friends, and making sure I'm checking in with myself because I find; we live in such a chronic stress environment that it keeps me at the top of my game. That's my own self investment.
Jay Ackerman:
Yeah, perfect. Lastly, what's your favorite quote?
Harry Nelson:
Oh, that's a tough one. There's a great Branch Rickey quote that I'm going to screw it up because I don't have it right in front of me, but he says, "I never got luckier than when I was working hard." I do think that I like it because I see plenty of people who are working really, really hard and a lot of people in our society think everything comes easy. To me, you've got to put both together. That's the quote that speaks to me the most.
Jay Ackerman:
Yeah, we'll peace on that one. I keep reminding my son, who's a freshman in high school, of that one. Well Harry, this will bring our Value-Based Healthcare Podcast to a close. You've been a tremendous guest, extremely open, with a lot to share and some great insights. I appreciate you taking the time out of a very busy day to join us for this today.
Harry Nelson:
No really, a pleasure and an honor to be with you, and I'm glad that you're bringing more thinking about what we need to do in this country about healthcare and value-based care out there. So, thank you for including me.
Jay Ackerman:
You're welcome, and thank you. So, this will bring us to a close. Please follow Reveleer on Facebook, Twitter and LinkedIn. You may also follow me on Twitter @AckermanJay. Over and out.
