CareTalk Podcast – Renal Failure & What’s Wrong with Kidney Care in the US

Cricket Health CEO, Robert Sepucha, joins the show to discuss what’s wrong with kidney care in the USA and why so many Americans are on dialysis.

David Williams:

Kidney care is an absolute disaster in this country and there’s nothing that can be done about it.

John Driscoll:

Absolutely wrong. We could do more at home. We could take care of the patients. We could actually fix reimbursement. It’s 1% of the Medicare population. It’s 8% of the costs and rising rapidly. I’m tired of listening to you. Let’s talk to an expert.

David Williams:

I’m hearing Crickets.

Welcome to CareTalk, your incomparable home for incisive debate about healthcare business and policy. I’m David Williams, President of Health Business Group.

John Driscoll:

And I’m John Driscoll, the CEO of CareCentrix. David, who do we have as a victim today?

David Williams:

You know what I thought it’d be fun to talk about? Let’s talk about some organs. How about the kidneys? We have Cricket Health CEO, Bobby Sepucha. And he is going to talk to us all about the kidneys, the left kidney and the right kidney, John, this couldn’t be more interesting.

John Driscoll:

Why did you bring a lawyer to a medical conversation?

David Williams:

I don’t trust you, John. I know it’s being recorded, but I need more protection than that. So let’s ask him about the, I mean, what’s wrong with kidney care in America? Last I checked, everything was good. There are two companies, each one does a good job. I think Fresenius works with the left kidney and DaVita works with the right kidney and it’s all good.

John Driscoll:

Hey, David, how about we start with the fact that Bobby is the CEO of one of the leading, new tech care platforms for kidney care, Cricket Health? Let’s at least get through the introduction before we get to the insult.

Bobby, what’s up with kidney care? Talk to us a little bit about how you got into this field and why Cricket? Why now?

Bobby Sepucha:

First of all, thanks for having me. It’s great to be here and quite frankly, I could just listen to you guys, go back and forth. This is fantastic. Why kidney care? I had a different kind of career. I started out as a lawyer working in venture capitalists and high-tech startups, did a stint in DC working for a Congressman, and then ended up going to Fresenius, which is, as you guys know, one of the two largest dialysis providers.

Spent eight and a half years, there had a wonderful time, wonderful people, but over time realized that the incentives are all topsy-turvy. And we as a country, there are 36 million people suffering from kidney disease. There are little over half a million of those folks who are on dialysis. And we spent all of our time, attention, focus, resources on those people on dialysis and none of the attention on the people upstream, prior to kidney failure.

So as a result, you have 90% of Americans with kidney disease who don’t know they have it. The standard of care is they get close to kidney failure, they show up at a hospital, they don’t know what’s wrong with them. The doctor does a couple of tests and says, “Your kidneys have failed and you’re on dialysis today and for the rest of your life.” That struck me as a very backwards system and the incentives are all topsy-turvy. So with the advent of value-based care, I think we have an opportunity to try and change it by going upstream. And that’s what Cricket is all about. So engaging patients prior to kidney failure, helping them understand their disease and give them the tools to make better decisions about their care.

John Driscoll:

But even before then, I mean, if you think about the cost to Medicare, I think the last number I saw was about $90,000 a year for, and that’s just chemo dialysis per patient per year, and that’s 28 billion. Transplant and patient care is 3.4 billion, and they’re all going up. With an increasingly obese population and more and more people running into kidney problems, it’s a massive high cost problem. How did you get into it? What drew you to this area?

Bobby Sepucha:

I guess true confessions, I’m not sure I knew what a kidney was before I started at Fresenius. And what I quickly realized is that this is just a fascinating intersection of business, medical and policy. Back in 1972, when dialysis was still relatively new, unbelievably expensive and not accessible to the vast majority of people who needed it, Congress did something that I suppose in retrospect looks unbelievably remarkable, given our current state of political affairs, which is, they stepped into the breach and did something remarkable. They said, “If you’re 5 or 65, if you’re on chronic dialysis, you’re eligible for Medicare, the government will pay for it. We want to make sure that people have access to this care.” And it saved millions of people’s lives. It was truly remarkable.

But to your point, I don’t think anyone then understood either the cost of care on a unit cost basis, how that would accelerate, or just as important, if not more important, the sheer number of Americans who have hypertension diabetes therefore will develop kidney disease. And therefore, a lot of whom will go through kidney failure and need dialysis, which is the number of patients metastasized in a way that no one could have expected.

So you’re right. We have this situation today where my favorite statistic that exemplifies what’s so wrong, the dialysis population represents less than 1% of the overall Medicare population, but they account for more than 7 and a half percent of the total Medicare spend. It is, if not the most expensive cohort in Medicare, it’s certainly one of them. And so you’ve got just this unbelievable challenge of how do you get these unit costs under control, and by the same token, you’ve got this wave of folks, we as a society, can’t seem to get ourselves off of Big Macs. And so, that’s going to drive obesity, which is going to drive diabetes, which is going to drive kidney disease. It is a horrible, horrible cycle that we’re in.

So when I got involved with the kidney space, I was just enthralled how policy was driving business decisions, which was driving clinical outcomes, which is probably the exact opposite of what you want to have happen. And so I think we have an opportunity now, as we all try and figure out, all right, it’s time to put more financial and clinical accountability on providers to do the right thing for patients, yes, but also the right thing for the system, that we have an opportunity maybe to correct some of these odd incentives that exist in the kidney care space.

David Williams:

Bobby, it could be like a trivia contest on. You say, “Medicare covers people over 65, the disabled, and one other thing, end-stage renal disease.” I’m not sure the common person on the street would get that one. It sounds like you’re talking about, well, no one could have foreseen what was going to happen. I bet if Medicare said, instead they were not going to cover a dialysis, but they were going to cover, let’s say, cuts on the left arm, that would have gone crazy too since 1972. So how much of it is just based on government trying to do the right thing and having a basically universal coverage for one condition? How much was that preventing a disaster and how much was that just driving the market, given the way that it’s worked out here?

Bobby Sepucha:

I think it was clearly both. They prevented a disaster in the sense that up until 1972, in the wake of Obamacare, we heard all these horrible stories and scare tactics of, “Well, you’re going to create death panels.” That’s what we had in the late ’60s and early ’70s. If you were approaching kidney failure, whether it was in Seattle or Boston or anywhere else, you had these panels of folks who were luminaries in their communities, whether it’s members of clergy or business people or clinicians, sit together, look at case files, patient files, and literally decide who lives and who dies, who gets dialysis and who doesn’t.

So it was remarkable in the sense that it gave people access to dialysis and took the financial burden off their shoulders, but by the same token, it clearly led to some topsy-turvy financial incentives where the dialysis providers realized, “Well, there’s the pot of gold, it’s all in dialysis.” So Fresenius DaVita, did what any good entrepreneur does, I suppose. They said, “Let’s gobble up every single dialysis clinic in the country.” And that’s what they’ve done in the last two years. So now you have a scenario where two companies control 77, 78% of all dialysis treatments in the country.

John Driscoll:

But it’s a pretty screwed up system from a patient perspective. I mean, it’s a center-based system treating patients like factors of production, is not just somewhat dehumanizing, but we lag the world in dialysis at home, where the technology exists and you’d think that the incentives exist. And yet the big two oligopolies DaVita and Fresenius, you were part of one of the dark duo oligopolistic dialysis providers that were fed by-

David Williams:

John, he said they were only bad in the last two years since he left.

John Driscoll:

… The track record of patients who get home dialysis, which is much less expensive, is that fewer patients die, because if you schedule dialysis along that production line phenomenon, there’s a pretty large period of time. And you can literally see the mortality rate go up in for those who were having an extended delay or just scheduled time later. I’m still stunned that, I think it’s over 70% of the dialysis is done at home in Australia. It’s like 30 to 50% in some of the Northern European countries, and it’s de minimis here. Is that the problem you’re now trying to solve? Because it’s scary, we’re spending more, and it’s classic American healthcare, spend more, get less, stocks go up.

David Williams:

Bobby, I forgot to tell you that John is a geography buff too, so he can also recite the rates in Lithuania and Mongolia as well.

Bobby Sepucha:

You don’t hear much about [inaudible 00:10:09] dialysis anymore. Not as much as you should, clearly. John, I think you raised the exact right point. And to me, it’s, in some respects, home dialysis is a symptom of a bigger problem. And it’s what we talked about a few minutes ago, which is, are you managing all of kidney disease or just dialysis? Just post kidney failure? If you’re managing all of it, then you help patients understand, A, that they have the disease. You refer them to a nephrologist at the appropriate time, whether they’re stage three or stage four, as they progress through the disease. So that when they do arrive at kidney failure, they are a better candidate for transplant. And they’ve already been referred to a transplant center and they’re on the list. The healthier you are and the better you’ve managed your meds and your diet and your exercise, the better candidate you are for a transplant. That’s the-

John Driscoll:

Just to give us a sense of the problem, what percentage of the population crashes into dialysis as opposed to transitions?

Bobby Sepucha:

… That phrase, “Crashing into dialysis,” exemplifies all that is wrong. What part of healthcare do you have a descriptor, “You crash into it?” It’s north of 60, 65%. So you show up at-

John Driscoll:

So we’re failing almost 70% of the patients?

Bobby Sepucha:

… Correct. So these people either don’t know they have the disease, or if they do know they have the disease, they haven’t seen a nephrologist, so they’re not prepared. So they show up at the ER, again, don’t know what’s happening. “I got chest pains, I’ve got blurred vision. What’s happening?” “You’re on dialysis. I’m going to plunk a catheter in your neck,” which is the number one source for infection, and the number one cause of hospitalizations after dialysis starts. The only choice you have at that point is in-center dialysis. So as much as I like to point the finger at my former employer and DaVita, and yes, I was part of the problem for a long time. I was the head lobbyist, the guy walking the halls of CMS and Congress. I’m talking about more-

John Driscoll:

Nice job on the rates.

Bobby Sepucha:

… Yeah [crosstalk 00:11:58]

John Driscoll:

A few years ago, I was betting against you.

Bobby Sepucha:

And you probably were right. So when you haven’t prepared for it, your only option is in-center dialysis. You don’t even have the option to get a transplant or go home. To me, it all flows from the same basic problem of, we’re not managing patients early, we’re not working with them early, because again, all of the money is in post-kidney failure, just dialysis.

John Driscoll:

I thought all the nephrologists were already under pretty tight non-compete and sourcing contracts with the dynamic duo of DaVita and Fresenius?

Bobby Sepucha:

For dialysis, yes. And to be honest, once I left Fresenius and went into trying to work with a startup, who’s trying to revolutionize kidney care, my biggest question was exactly that, how are we going to work with all of the nephrologists out there who already have these relationships with the dialysis providers? They’re either medical directors at the DaVita, Fresenius clinics or their joint venture owners of these same clinics.

John Driscoll:

So think about that David, a system that is systematically incented to support the current infrastructure, as opposed to better patient care.

David Williams:

Well, John, thinking is usually not part of my role here, but I will do that. And I also was going to say that all these problems I thought were solved, the former president did two things. He tried to destroy democracy and he’s upended the kidney care system, which I think is now all fixed because of this, right?

John Driscoll:

Well, I actually think that president Trump’s CMMI was trying to move kidney care in the right direction. And at some point we’re going to let Bobby talk about where he’s going, as opposed to where he’s been, but I think understanding how screwed up and how tightly locked in we are to a dumb system, it helps prepare the ground for Bobby’s company Cricket, which I’m really excited to learn about at some point during this podcast, and some of the other alternative care models, because whatever we do, we can’t repeat what we’re doing now. We’re failing some of the sickest people in America.

Bobby Sepucha:

It is remarkable, but I will say there is, and maybe I’m a hopeless, naive optimist, but I think there’s reasons to be excited. One is the doctors, even though, again, they’re so aligned with the dialysis providers for dialysis, we’ve actually struck a bunch of partnerships with large practices across the country. Almost all of them are aligned somehow with the two big folks on dialysis. They want to work with us in chronic kidney disease, pre-kidney failure. So they realize that there should be a better way of doing things. There should be a better way of engaging patients. And they’re working with us to build networks, to do more and to go to payers and take more risk on doing better things for chronic kidney disease patients.

John Driscoll:

Now that you’re looking for absolution, what exactly are you doing at Cricket?

Bobby Sepucha:

The model is yes, I get down on my knees and I thank the good Lord every day that I get to try and do something better for kidney patients, but in all seriousness, the model is working with payers and systems. So going to large payers like Blue Shield of California, or Cigna, and saying, “We will take risk on your population. Let us work with your late stage chronic kidney disease patients. We will enroll them in our platform.” So every single patient gets their own dedicated care team, a nurse, a dietician, a social worker, a pharmacist, a patient peer mentor, that they can interact with over our platform anytime they want. So it’s a rich library of content that they get to immerse themselves in. And then our care team can see that and engage the patients and say, “Mrs. Jones, I see you’ve been reading about home dialysis. Would it help for you to talk to a patient who’s been on peritoneal dialysis at home for the last five years?” So by doing that, by engaging patients [crosstalk 00:15:46]

John Driscoll:

You actually spoke like you’re creepily wandering through people’s searches and figuring out what their interests are. I’m tired of those sneaker commercials, by the way.

David Williams:

John, objection. I think the word creepily is not even a word, and also, it’s not neutral. They do have the social media.

John Driscoll:

I’m not neutral.

David Williams:

It’s even worth it. [crosstalk 00:16:05]

John Driscoll:

Seriously, Bobby, how do you identify, it’s obvious when someone’s really sick and they’ve got a diagnosis and they need care. They’re in failure, which is what crashing means, but upstream, chronically ill people, folks who are obese, pre-diabetic or actually early onset diabetes, how do you then figure out who you’re going to reach out to and what you’re going to do?

Bobby Sepucha:

If you go too far upstream into stage one, stage two kidney disease, or even before that, so pre-kidney disease, it’s going to take too long for them to progress for us to have any meaningful impact on them. They’re better served quite frankly, working with their primary care docs, and we will leave that to them. As they start to progress towards the disease, certainly, if they have a claim for kidney disease, they’ve been diagnosed, terrific. But as we’ve talked, there’s so many who are underdiagnosed. So we’ve developed algorithms where we can mine their claims through the insurance company and identify those who we can predict with a 90% accuracy, not only if they have the disease, but what stage they’re at. Then we reach out to these folks, enroll them in our platform and start to provide the care that we can do.

You mentioned, that is the side working with commercial plans, NA plans. And I think we’ve been very successful on a strong track record for building in the future. The other thing you guys mentioned was the initiatives of the Trump administration to try and extend these same types of arrangements for the Medicare Fee-for-service population, which was a massive step forward. And it’s slated to go into effect this January.

You guys like to mix it up and be a little edgy. I will say, at the risk of diving into politics, the thing that I’m most encouraged by is that the dirty little secret of DC is that there is way more than Democrats and Republicans agree on with respect to healthcare than they disagree. The notion of moving towards value and to give more clinical and financial accountability to providers, I think there’s widespread consensus, that’s where we need to go. And especially with respect to kidney care. As much heft as my former employer has, and DaVita has in terms of political giving, I think people recognize that the duopoly has not served tens of millions of Americans and it’s time to do something different. And I give the agency, CMS, an awful lot of credit, and that’s what they’re trying to do.

John Driscoll:

I think we agree with you, that there’s less daylight between Brad Smith and Liz Fowler, the different heads of CMMI and that makes a lot of sense. I guess my question though is, how does your model work? The insurance companies are looking to obviously downstream risk to anybody. That’s something we at CareCentrix now, what are you doing differently, other than predicting who’s going to have kidney challenges? What are you doing differently with the patients that allow them to really live their best lives and manage that illness? What’s different than what they would normally get from a great internist and nephrologist.

Bobby Sepucha:

Part of it is that this, and this is a sad commentary on our healthcare system, is that they’re just wildly unmanaged. So almost any care we give them is going to be an improvement, being able to speak to them in their native language and help them understand their disease is a massive improvement. But I think even if you have a wonderful nephrologist and a wonderful set of care managers at that nephrologist, you’re only going to see them on an appointment basis once a quarter, twice a year, maybe. So we get to be the doctor’s eyes and ears between appointments.

So again, what we’re seeing in our most recent launch in Texas is that our patients are interacting with our clinicians every two or three days, so 10 times a month. So again, it’s this immersive experience for patients so they can read and understand much more about their disease, talk to clinicians on a fairly constant basis. So the next time they go to their docs, they’re far better informed, far better engaged. They can start making better decisions. That in and of itself has led to, we’re seeing our patients start at-home three times the national average. So we have a 12 or 13% home penetrations country. Patients, once they go through the Cricket platform and work with our clinicians, whether they’re starting home dialysis, to the tune of about 36, 37%. So it’s been terrific what we’ve seen thus far, and we’re excited to keep growing.

David Williams:

Bobby, what role does transplant play? We’ve been talking about pre-dialysis and then dialysis, but what’s the role of transplant and what’s the potential?

Bobby Sepucha:

Clearly, transplant is the gold standard in terms of care. If you can get a transplant, you don’t have to deal with dialysis. That is where everybody wants to go. I think our big challenge is that there’s just a dearth of kidneys. Talk about a complex problem to try and figure out. There aren’t enough organs out there, and on any given day, you’ve got a 100,000 Americans on the transplant waiting list to get a kidney. So clearly, we have to figure out that, and the government has launched a massive program to try and increase the number of kidneys that are available. But the other piece is trying to make sure all the transplant centers are talking to each other because there’s widely different standards.

So those are big, hairy, ugly problems that we need a nationwide response to, but the other piece, just from a blocking and tackling perspective is making sure that every patient is referred to a transplant center timely. You don’t have to wait until your kidneys have failed to be referred. You can go early to try and get a preemptive transplant. And as we said earlier, you’re only going to be accepted off the waiting list if you’re healthy enough to actually receive the kidney. So you got to have help managing your meds and making sure your diet is where it should be and you’re exercising. And that’s where we empower and help patients to be able to do.

David Williams:

Well, as you could tell before, John’s big on Facebook and some of the other social networks, including some that are less popular and maybe he’s not allowed to be on, I don’t know, but you do have a social media element to what you’re doing, is that true? John, wasn’t just talking nonsense?

Bobby Sepucha:

No, it’s a huge component of it. And it sounds soft and squishy, but to us, it’s incredibly important, and it’s frankly, part of our DNA. It is about putting patients in touch with others. So yes, you have a patient peer mentor who can engage with you as part of your care team, but the other thing that we do is we create communities of patients online through our virtual platform so that patients can get together and discuss the issues that are important to them, whether that is understanding their disease or figuring out home dialysis or likelihood for transplant, whatever the issues are, where they can get together and talk. And that’s often, as we’ve watched these conversations, that’s when the light bulb really goes off for patients. And it’s why our patient engagement, it’s been so high and why our retention is so high, to the tune of 90% today.

So we are thrilled with what goes on in those dialogues and they’re all monitored and curated by our clinicians so we can correct if there’s any mistake made or misinformation conveyed to patients. So they’re getting top flight information from each other. And that is what really, again, empowers patients to make much better decisions about their care.

John Driscoll:

There’s a bunch of little companies that are taking on this big problem, Strive, Somatus, Cricket and others. What’s different about your approach other than the odd name, that would make a health plan or a doc want to partner with Cricket to help the hundreds of thousands of people who have kidney disease and don’t even know it?

Bobby Sepucha:

I think it’s two big things. One is we have results. We were very thoughtful and intentional about how we went to the market. And we ran a long pilot program with a health system up in the Pacific Northwest, where we cared for their patients at no cost to prove that the clinical model works and the patients would be willing to engage over our platform. And as a result, we have results. As I said earlier, patients three times more likely to start dialysis at home, they’re twice as likely to start dialysis in an outpatient setting. And that’s what Blue Shield of California and Cigna and Scott & White in Texas saw, and that’s why they signed us up. So one is a strong track record of actual results that are peer reviewed and published.

The second piece is this notion of patient engagement. We have unlocked that in a way that I don’t think other competitors have even started to think about, certainly not the dialysis providers, this intentional focus on community, fostering relationships of trust, with the clinical care team, but also with, and among other patients. That’s why our patient satisfaction scores are at 94%. That’s why-

John Driscoll:

It’s sort of like PatientsLikeMe model where people share [crosstalk 00:24:41]

Bobby Sepucha:

… It’s remarkably similar. On the social media side or community-based side, once patients understand that they’re not alone, that they’re in this together and that there are other people who have grappled with the same issues, it’s really fascinating to watch how that changes things.

John Driscoll:

That’s super helpful, Bobby and I’m excited about what you and frankly, everyone else is trying to do to blow up the current screwed up system, because it really is devastatingly bad for us as taxpayers, and much more importantly, for all of those vulnerable chronically ill people. I wish you all success.

David, I’m sorry that you waited so long to let Bobby join our program. I think he’s actually done an okay job, regardless of what you said before he came on.

David Williams:

All right. Well, John, well, that’s it for another edition of CareTalk. And of course, John, I agree with everything you said, except that Cricket is a weirder name than Somatus. I don’t know where he got that idea from. I’m David Williams, President of Health Business Group.

John Driscoll:

And I’m John Driscoll, the CEO of CareCentrix. If you liked what you heard or didn’t, please give us feedback and subscribe. Thanks, Bobby.