…eliminate perverse incentives like the rebates that many pharmaceutical manufacturers and pharmacy benefit managers use to position certain drugs on a client’s formulary. These rebates manipulate — if not negate altogether — the market forces that would normally drive consumer and payer decisions.
Aspart of my series on The Future of Healthcare, I’ve had the pleasure of interviewing Michael Rea, CEO and Founder of Rx Savings Solutions. A former retail pharmacist, Dr. Michael Rea founded Rx Savings Solutions in 2008 after routinely witnessing consumers struggle to pay for medications. His research on behalf of patients uncovered ways to find equivalent therapies at lower costs, which became the foundation of the company’s patented, groundbreaking technology. Since then, Rx Savings Solutions has grown to more than 100 employees and 5 million covered members, setting the standard for pharmacy transparency and advocacy solutions. Spurred by success with large health plans and Fortune 500 employers, the company debuted in the Inc. 5000 at №1630 thanks to a 284% 3-year growth rate.
Thank you so much for joining us! Can you tell us a story about what brought you to this specific career path?
About 10 years ago, I was working as a retail pharmacist and had a regular customer named Betty. She needed eight prescriptions to manage a multitude of health conditions. She asked me which ones she could skip that month, because her limited budget could only stretch so far. Skipping even one prescription was not a good move for Betty, but neither was not eating or paying the gas bill. What could she do? Long story short: I went home that night and figured out how she could treat her same conditions for $3,000 less over the course of a year. That was the spark that ignited the solution and company we have today.
Can you share the most interesting story that happened to you since you began leading your company?
Early in the life of our company, a prospect literally asked us to get up and leave the meeting. We were about halfway through our pitch, but they thought we were so out of touch. They politely asked us to get up and said, “Have a safe trip home.” We might have shared a truth they didn’t want to hear, or they felt we might threaten their financial model in some way. Whatever the case, they’re in an industry that now accounts for the majority of our book of business.
Can you tell our readers a bit about why you are an authority in the healthcare field?
I don’t know that I am, but I would say it’s probably due to collective knowledge of how money moves throughout the pharmacy supply chain, between all the players. I’ve seen and worked with various constituents in the supply chain, analyzed the prices and transactions, and spent time with patients. That’s helped me be able to break it all down in a digestible way that people can understand. And I’ve been vocal about it.
What makes your company stand out? Can you share a story?
I would say it’s an unwavering commitment to the member. Every time we gather for an all-company meeting, we spotlight a great member story, someone whose life has changed because of what we do. It helps us stay focused and accountable to the member, our clients and each other, every single day. I also think it’s about having no ulterior motives or any influences trying to change what we do. We’re transparent. We’re doing what we’ve promised, and we can measure it. We’re not perfect, but we’ve proven we can deliver on a promise.
Can you share with our readers about the innovations that you are bringing to and/or see in the healthcare industry? How do you envision that this might disrupt the status quo? Which “pain point” is this trying to address?
We’re really excited about the promise of personalized medicine and the role that pharmacogenomics can play in that. Everybody has their own formulary based on genetics. Some of the most frequently prescribed and expensive drugs simply don’t work for certain people. How do we better understand the science to pinpoint the most effective drug for that person at the lowest cost? When the science produces better outcomes, I think it will disrupt big pharma’s current direct-to-consumer marketing model. Instead of rainbows and unicorns in a TV commercial or marketing to doctors, we’ll have drugs prescribed based solely on science and results. That will help with cost, nonadherence and the current lack of visibility we have now.
Are you working on any exciting new projects now? How do you think that will help people?
As you might have guessed from my previous answer, we are actively working to incorporate pharmacogenomics into our solution. We want to produce a personalized drug regimen based on the genetic nuances of every member. I think we have a great opportunity to do that with the pharmacy claims data we already have. As the market evolves, the depth of genomics testing will improve, as will the cost and convenience for consumers, all of which will make our solution even more impactful. When members can see not only the cost of all possible therapies but also which are most effective for them personally, we’ll see better clinical and financial outcomes throughout the system. This is valuable for all medications and particularly in the realm of specialty and mental health drugs.
What are your “5 Things I Wish Someone Told Me Before I Started” and why.
I can’t come up with five, so I’ll combine with things I’m glad people did tell me and what we’ve learned to date:
- I’m glad no one told me how hard it would be to do what we’re doing, or else I might not have started.
- I wish someone would have told me to go big from the get-go. Initially I thought it would be better to start small, to pursue smaller groups and prove the concept before targeting the bigger ones. But we’ve learned that bigger clients are better for us, and we’re better for them.
- I’m glad someone told me to find the right people. Getting it right is like playing a slot machine — you need the right combination to line up for the best team and the best solution. Unlike a slot machine, though, you can control the reels.
- Sometimes timing is everything in life. I worked on this as a hobby for a long time, failed a lot and learned a few things. At the time, the market just wasn’t ready to embrace our talk track, but now it is. We have audiences now that didn’t exist five years ago.
- I’ve learned to never get too high or too low about anything. So often you’ll win and lose in the same day. To be a guiding force for a company, you have to stay level. Kind of like raising capital — you can never get enough, but you can’t get too much.
According to this study cited by Newsweek, the US healthcare system is ranked as the worst among high income nations. This seems shocking. Can you share with us 3–5 reasons why you think the US is ranked so poorly?
- Life-saving and -sustaining medications are too expensive. What good are they if most of the people who need them can’t afford them? When the choice comes down to paying for food and rent or paying for medication, most people will take care of the needs of their family before they take care of themselves.
- We don’t share enough data. It’s not that the data isn’t there, it’s just siloed throughout the country and the system and not easy to access. We miss out on so many opportunities because we don’t “own” our own health information. In an ideal world, it’s all in one organized place that’s easily accessible. A national health identifier, similar to a Social Security number, would do wonders.
- The healthcare system is rife with inefficiency and frustration. I’m amazed at how difficult it can be to simply make an appointment with a provider you want to see or get a prescription filled at a different pharmacy.
- The lack of cost transparency in procedures, providers and therapy options prevents consumers from making informed decisions on whom they see, what they pay, and whether they get the most effective treatments for whatever conditions they may have.
You are a “healthcare insider”. If you had the power to make a change, can you share 5 changes that need to be made to improve the overall US healthcare system? Please share a story or example for each.
- I would eliminate perverse incentives like the rebates that many pharmaceutical manufacturers and pharmacy benefit managers use to position certain drugs on a client’s formulary. These rebates manipulate — if not negate altogether — the market forces that would normally drive consumer and payer decisions.
- I would increase both price and therapy transparency. Patients need to know every clinical option available to treat their condition and what each one costs, as well as the clinical efficacy of the various options before them. I would make it easier and cheaper to get second opinions.
- I would try to evolve our current system so that it resembles how we pay for elective procedures. Not long ago, Lasik surgery cost $2,500 per eye. Today, you can get it for $250 per eye and it’s more effective. How can it be that so many medications that have been around for decades cost 1,000% more today than they did before their patent expired?
- We need a national health identifier similar to a Social Security number. Right now I have a member ID for my health plan, another ID for my primary care provider (yet I still have to fill out paper forms every visit), a different ID for a specialist in a different system … and yet another ID for Rx Savings Solutions. A single healthcare ID would let us combine systems, merge data and not have to create so many custom processes for everything in healthcare. Everyone likes to talk about it, but nobody’s really achieving it.
- We need to eliminate the clinical language barrier. As med students work their way through school, they have to learn a whole new language and they forget that no one else speaks it. We need to do a better job of translating complex clinical speak into language a normal person can comprehend and act on. If someone can’t understand something, they’re a lot less likely to change behavior or make informed decisions. What Amazon does on the back end is incredibly complex, yet they compel consumers to act because they make it so simple.
It’s great to suggest changes, but what specific steps would need to be taken to implement your ideas? What can individuals, corporations, communities and leaders do to help?
Don’t pay for things that don’t work, and don’t pay more for something that works just as well as something that costs less. In pharmacy, rarely does the “you get what you pay for” mantra apply like it does for other things consumers buy. The data is there to inform those decisions, if only we make it available. If we have the collective political will, we can legislate necessary change. But more often than not, the entities that are causing the problem are tasked with solving it. You can’t rely on the Golden Rule, because the people with the gold are making the rules. That’s why I believe only consumers and payers can drive meaningful change for a broken system. We need to harness technology and adopt solutions that allow consumers to be consumers. Only then will healthcare be able to function as an efficient market and eliminate the waste we’re all paying for.
What are your favorite books, podcasts, or resources that inspire you to be a better healthcare leader? Can you explain why you like them?
There are so many great examples out there, but almost two decades later my favorite book is still Good to Great by Jim Collins. I find it fascinating to learn how some companies make that leap and others don’t, and how some did but couldn’t sustain it. I love the simple but powerful examples and case studies, the bulleted bits of advice, and how they challenge you to think and do more, to constantly be better.