COVID-19’s Impact on Healthcare Costs
Episode

GT Laborde, Chief Executive Officer at IllumiCare

COVID-19’s Impact on Healthcare Costs

In this episode, we are joined by G.T. LaBorde, CEO at IllumiCare where they help make the cost of care transparent to providers. The company helps providers have insights clinically and financially as to the cheaper alternatives and most appropriate medication.

G.T. shares some data gathered from 10 health systems covering about 180 hospitals from seven different states that are geographically dispersed. The data includes the cost of care and length of stay of COVID patients. G.T. Also covers some well-known medications used in treating COVID patients,  what they are for, and the cost involved. We got into specifics in this interview, and you’ll learn a lot from IllumiCare’s data sets, so please tune in!

COVID-19’s Impact on Healthcare Costs

About G.T. LaBorde

G.T is the Chief Executive at IllumiCare since 2014. He has over 20 years of experience in information technology to drive sales, recruiting, and growth efforts for the company. He is a graduate of Louisiana State University, where he completed his law degree and practiced as an attorney before co-founding his first medical technology MedMined. G.T. is passionate about helping health care technology startups grow. He serves as a consultant at East Side Partners Growth Equity Investment Firm in the Southeast.

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Saul Marquez:
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Saul Marquez:
Welcome back to the Outcomes Rocket everyone, Saul Marquez here. Today, I have the privilege of hosting our favorite G.T. LaBorde. This is his second time on the Outcomes Rocket. He is the CEO of IllumiCare, bringing over 20 years of experience in information technology to drive sales, recruiting, and growth efforts for the company. He is a graduate of Louisiana State University, where he completed his law degree and practiced as an attorney before co-founding his first medical technology MedMined. G.T. is passionate about helping health care technology startups grow. He serves as a consultant at East Side Partners Growth Equity Investment Firm in the Southeast G.T..such a privilege to have you back on the podcast.

G.T. LaBorde:
Thanks, Saul. Good to be with you again.

Saul Marquez:
Yeah, likewise. Obviously, you’ve been on the podcast before, folks. If you haven’t had a chance to listen to our interview with GT, just go to Outcomes Rocket that health and in the search bar type in GT, and you’re going to find where he really dives into what they do at IllumiCare around making your EMR work for you, lowering the cost of care, holding your physicians accountable, reducing overall variance in care. But that’s not what we’re going to do today. Today, we’re going to talk about COVID, some of the impacts, and some of the things that we should be thinking about as we look to solutions to our day to day care of our patients. So so thanks so much for really giving us something to think about here. Where do we start?

G.T. LaBorde:
Well, I guess just maybe a little bit of background of where this data comes from. IllumiCare is really in the primary business of making cost of care transparent to providers. We live in this value-based world and they’re told to make value-based decisions. And cost, of course, is a part of the value equation. But yet we don’t routinely tell doctors or really educate them about the relative cost of different medicines in different tests to help them make the best value-based judgments. So our primary business is the real-time costing and transparency to providers of every medication and test that they prescribe and to give them insights, both clinical and financial, as to what may be cheaper alternatives and whether that’s appropriate in a given case, et cetera. So we do this business and in health systems all across the country, and as a part of it, we have real-time data feeds around all lab orders and lab results on med orders and in many cases med dispensation and admissions and discharges and costs and all these kinds of things. And so it’s given us a unique perspective and insight. We were live in many of these places before COVID existed and then began to see patients test positive for it across our customer base and have really watched the evolution as it has sort of taken its hold on our health systems and all the while have been sort of tracking the length of stay effects and how patients with COVID differ from those that don’t as well as cost associated with them. And what drives most of the cost of treating a patient who’s COVID positive and then most interesting, the medications used to treat them and how that’s changed over time. So we can kind of work through each one of these, if that makes sense.

Saul Marquez:
Yeah, let’s do it. Let’s do it. And, you know, you’ve called out a couple of really interesting entry points to the discussion, so let’s get started.

G.T. LaBorde:
Yeah. So I guess maybe a word about what it means to be COVID positive and hospitalized. So your first impression when I say that is probably a patient in the ICU, on a ventilator, et cetera, but really many of the patients who are COVID positive, that is, you know, have a positive PCR test who are hospitalized, aren’t really hospitalized for COVID. There are quite a lot of patients who are COVID positive who are there to have a baby or they get into an accident or something. So just with that caveat, but we certainly see that patients who are COVID positive certainly stay longer in the hospital than those that aren’t probably on average about two and a half days longer in the latest period. And we’ve analyzed kind of about three or four-month segments along the way so that we can see, well, how are things changing over time? And in the most recent period, the average length of stay of a patient who’s COVID positive is about eight and a half days. But the good news is that that’s down from ten days just a few months back. So, you know, one of the good news is health systems hospitals are getting better at treating these COVID patients and we’re getting more efficient at getting them out the door, which is great. The cost associated with taking care of them has changed a lot, too, even if you sort of control for the length of stay differences and just look at cost per day of taking care of a COVID patient.

G.T. LaBorde:
Right now it’s averaging about $187 dollars spent on medications, labs, and radiology testing. So this kind of variable cost and of course, that doesn’t include nursing care and PPE and all these other things. Our business is to primarily focus on the things that physicians kind of make decisions about, you know, the things that they actually are variable cost that they can control. But that’s actually down from about two hundred and sixty-six dollars a day. So from two sixty-six down to one eighty-seven, a really nice reduction. And when we look at the subcategories of spending, really a lot of that reduction has come not really in a big reduction of medication cost or in radiology, but it’s mostly been driven by lab cost reduction. So in the beginning, we were spending something like nine hundred and sixty-five dollars per admission, and now that’s down to about five hundred and eighty-nine dollars in admission. Nice. You know, I should say parenthetically, I forgot to say when we started this, this data is across 10 health systems that cover probably about one hundred and eighty or so hospitals across seven different states that are geographically dispersed. And this data is around forty thousand COVID positive patients hospitalized covid to these are all inpatients. So I forgot to mention that.

Saul Marquez:
Big dataset. No, no, I’m glad you level set there.

G.T. LaBorde:
Sorry about that. I get so I mean, the overall story there is very heartening. You know, we’re getting more efficient both financially as well as kind of clinically in moving these patients kind of through the process. But there’s really been some interesting changes on the medication. So if you don’t have any questions, we can go to that next.

Saul Marquez:
Yeah, no. You know, just to kind of recap there, taking a look at what you guys normally do, you’re able to derive some of these insights. And overall, we’re doing better, providers are doing better reducing the total stay from eight-point five to ten days, reducing the cost from two hundred and sixty-six dollars down to about one hundred and eighty-seven dollars. We’re making progress. And so that’s encouraging. That’s encouraging to hear. And so tell us a little bit about what you believe. So why are we making progress and what’s next?

G.T. LaBorde:
I think we’re partly making progress. I mean, a little bit on the medications we’re using to treat and just physicians are getting better at managing when to use mechanical ventilation and when you use oxygen support and so forth.

G.T. LaBorde:
I think it’s a great credit to our practitioners when they’re confronted with these diseases, that sort of novel, how they really do. We come to learn how to manage these patients just clinically. And it isn’t about a magic pill at this point. It’s really about managing them medically and optimally. So it’s been interesting to see that. Now, while all of this is positive, the length of day is down and costs are down is great, unfortunately, our health systems now here in January of 2021, we’re swamped with a huge surge. So while we’re getting more efficient at moving people through the process, unfortunately, there are a lot more people showing up at the front door. So that’s kind of the downside for our health systems, is to see the surge of their admissions, the percentages of the hospital that are COVID patients. But hopefully, that will begin to wane sometime soon.

Saul Marquez:
Yeah, I hope so. And so let’s take the dive into the next category that you wanted to discuss.

G.T. LaBorde:
Yeah. So there’s been, I guess, three stories I wanted to share with you about medications that are used in and I’ll call the first one sort of the boom-bust cycles of drugs. I mean, one of them is Hydroxychloroquine. Lots in the news, of course. It was touted early on. And was seen as sort of a very common, very cheap drug. So let’s try it. Right. And there were some initial anecdotal stories of its efficacy. And we saw the spike in its use among our customer base. It’s not super expensive. It’s pretty cheap because it’s actually a generic drug. But, boy, that has just really gone away. So around by the summertime, that drug wasn’t used at all anymore. So it sort of had its boom it’s bust pretty quickly. Another one that sort of followed that that track still uses quite a decent amount, but a drug called — which is Pepcid basically. So there was some hope that that, again, was a cheap drug that could kind of help the process. And we saw that also sort of spike over the summer. But it’s really kind of waned significantly. And the last one that was really interesting was it was a super expensive drug.

G.T. LaBorde:
And this drug is called Tocilizumab and it is what’s called an IL six inhibitor. So it’s a drug used to slow down a cytokine storm, it’s called. And so in these patients immune systems are really kind of going haywire. It’s designed to sort of slow that process down and allow patients to kind of recover. And I saw when we did this analysis the last time, so around late in the summer, it was rising. It was the single most expensive drug used to treat COVID patients because it was it cost about two thousand four hundred dollars per admission to use this drug. It’s pretty expensive. It was only used on four percent of the people who were COVID positive in the hospital. But it was one of the most expensive. If you just looked at across all the drugs, what do we spend the most amount of money on? It was like in the top three, even though it was only used on four percent of the patients. So it was like, wow, there were some studies coming out at that time saying, hey, maybe we should use this drug a little bit earlier in the course and not just patients who had already kind of begun a cytokine storm, but maybe we should use it a little more prophylactically.

G.T. LaBorde:
And at the time, we were kind of concerned, boy, if that gets widespread use, that could get expensive fast right. Well, by August an NIH panel that looked at that kind of evidence around, it came out and sort of recommended against its sort of broad-scale use like that. And really since September, we’ve almost seen it go away. I mean, it’s down to around one percent of patients that get it now. So it’s another kind of boom-bust. But it’s interesting. That was a very small spike in terms of its overall use, but it was one that was super expensive and it was like, wow, what’s going to happen to this? This could really affect hospitals financially if this turns out to be the medicine. So that’s kind of one of the interesting things, kind of that boom-bust cycle.

Saul Marquez:
GT, you think about, you take a step back and you think about, OK, we’re and this is a very large sample that, you know, you’re talking to us about. You think about the challenges and the mindset that goes through provider’s minds when they’re trying to tackle a problem that we don’t have a lot of data on information right? So you’re reaching for whatever you think can help. And so as health care leaders listen to this data and this message, what would you say is the overarching message that they could take back to their teams and they could take back to their boards?

G.T. LaBorde:
Yeah, my business partner, who’s a practicing physician, said he’s really never seen anything like this in medicine where we anecdotally, lots of things appear to work for lots of things. You know, you can, but that’s not evidence. We shouldn’t base our practice on that. And look, I get it. When you see your co-workers dying of this disease, I mean, you’re desperate. And when it appears, even anecdotally, that something relatively cheap and relatively benign that’s kind of widely used could potentially have an effect. What you could see in this data is we’re trying everything like that has been given a try, which really leads us to the next drug I wanted to talk about. And it’s sort of a success story like that. And it’s dexamethasone. So it’s a steroid, a corticosteroid. It was one of these that you might say is enjoying a boom boom or maybe a bust boom, because in the very beginning of COVID, there was a bit of a worry about giving steroids to patients because there were some history and previous infectious disease outbreaks where the steroid actually made things worse. And so in the beginning, we sort of shied away from steroids. But at some point, practitioners began to see some positive outcomes using the steroid dexamethasone. And now it’s one of the two main drugs that are recommended for use by the NIH and certainly the use at the right time and the right course of the disease progression. But sixty-four percent of patients that are COVID positive in our data set receive dexamethasone. So it’s it is very widely used. It is the second most widely used drug that we see patients getting. And its average cost is like five dollars and twenty-one cents per admission. So it’s super cheap this drug is like 60 years old. So it’s sort of the flip side. It was sort of the bust to boom story. So sometimes that sort of cunning in that kind of, I guess, experimentation in the field turned out to yield, in this case, a fair success story.

Saul Marquez:
Yeah, that’s really interesting. And what does it being used for? What’s dexamethasone being used for?

G.T. LaBorde:
Yeah, so steroids very generally are anti-inflammatories. And you know what you have, part of what COVID does to your body is initiate this huge inflammatory response in your body. And so as a steroid, it helps to block the pathways that do that and help to reduce inflammation and so gives your body a chance. And there have been some really good outcomes demonstrated in reducing mortality and a need for mechanical ventilation. So it’s really been kind of a sort of a success story in this large experimentation we’ve been engaged in. Another one that’s kind of relatively cheap that is the most used drug that we see in this entire data set is a drug called enoxaparin or its brand name Lovenox. You know, and it’s interesting, it’s an anti-clotting drug and clots have been really the whole time of COVID, we’ve seen it be an issue where people will get blood clots in their legs or their heart or they’ll have strokes or whatever. So we’ve always sort of seen this clotting issue. And so we’ve always kind of suspected this. But a lot of patients, we’re on kind of a lower dose of this drug because it’s a prophylactic treatment for DVE, for deep vein thrombosis. And, you know, if you’re going to get you’re going to be laying in a bed in a hospital bed for a number of days, your chances of DVT go up. And so we were giving this drug quite routinely for prophylaxis, knowing these patients were going to be here for a while.

G.T. LaBorde:
But interestingly, and this is just a couple of days ago on January twenty-first of 2021, the NIH just put out a news release talking about suggesting that maybe we should use the full dose version of enoxaparin because it is shown early signs of reducing ventilator need and possibly also reducing mortality. So it’s another one. Its average cost is about one hundred and twenty-eight dollars an admission. So it’s relatively cheap as well and has definitely demonstrated some efficacy. So we’ve got a couple of shining successes that are kind of are so now we really see in this data that these two drugs are kind of the two go-to drugs. And really the last one I wanted to tell you about is the only other drug that really NIH has said, hey, this is on our kind of treatment plan and it’s Remdesivir. So you may have heard a lot about Remdesivir. It got a lot of press and there was a big study that showed that it was efficacious and so it was given FDA clearance and we see twenty-three percent of patients who are COVID positive in the hospital getting this drug, which is a pretty high number given its sort of special status and it isn’t a cheap drug. So just so you know.

Saul Marquez:
Tell us more about Remdesivir. What does it do? How much does it cost?

G.T. LaBorde:
Again, it’s a drug used for something completely different, but it’s found to be efficacious in COVID patients. And right now, when we look at our data set, the cost is a big fat zero. So it’s like, wow, this drug is awesome and it costs nothing. It’s free. And it’s because its manufacturer, I believe it’s Gilead has given away a certain number of doses that promise that the first and I forget what it was like a million and a half or something like that, doses would be free. So we see in our health system still working off the free doses. But the challenge with this and really something I wanted to leave you with and listeners with is this will be fascinating to kind of watch as we go ahead because they’ve already come out and said, you know, the price for the five-day course of it has been pegged at three thousand one hundred and twenty dollars for US hospitals and insurers. So, boy, if we start giving twenty-three percent of the patients with COVID a drug that costs three thousand one hundred twenty dollars on top of all of the other care and drugs and things that we use, it’s going to definitely drive up the price of an average COVID emission. So it’ll be interesting to watch this data as we go forward. And hopefully, we can as a health system can get past the surge and get the benefits of vaccines before we really sort of run out of these free doses of Remdesivir. And we really are forced to use this at a mass scale and our health systems at those pricing because it will definitely negatively affect the margins, what very little margins there are left for health systems that are having to kind of battle through this disease?

Saul Marquez:
Yeah, it’s really interesting. And sounds like it’s almost setting the hook. It’s been effective. And now what? So as you think about your health system, if your a health system leader listening to this, Remdesivir, you got to dig into that one and dig deeper for giving us these insights today. It’s helpful to dig into the numbers and to get specific. And today GT just that. And that’s something that Illumicare does so well. They dive into the numbers, they get specific. And on the back end, it’s about taking action and what you can find. And so GT I’m grateful that you shared these data with us, the risks, the booms and busts, the different profiles that these patients with COVID are showing up with and overall gets back to the cost of care transparency. So leave us with the closing thought here GT and tell the listeners where they could get in touch with you if they want to continue the conversation or explore more.

G.T. LaBorde:
Yeah, happy to do that. The easiest way is to find us on our website, which is illumicare.com and I’m sure you’ll put a link to that in the show notes. And how would you say that like, our hearts are out to everyone who’s on the front lines of this fight? We are so appreciative as a country for your efforts. It is a scary thing to come home from work and spend all day in a hospital crowded with COVID patients and come home your family. I get it. So I’m so happy that hopefully this vaccine is a wonder drug and can protect all of our health care workers on the front lines. We’re so indebted to what you’re doing. And yeah, as far as IllumiCare and your listeners, we just look forward when this passes, we’ll have to find a way to rein ourselves in from throw the kitchen sink at it medicine and get back to value-based care. And if anything, you know, these sort of boom-bust cycles are a great … that we need to be evidence-based. And I get the desperation of the moment. But when that when the moment passes, we’re going to have to all figure out how. There’s going to be a lot of economic carnage left. And we’re going to have to figure out how to tighten our belts again and how to really operate in a clinically and financially efficient way. And we look forward to doing that and helping hospitals do it.

Saul Marquez:
GT, really appreciate it. Again, thank you so much. It’s all about the specifics and you guys do such a great job of that. Thank you so much. And looking forward to staying in touch with you.

G.T. LaBorde:
Thanks, Saul.

Saul Marquez:
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Things You’ll Learn

  • The average length of stay of a patient who’s COVID positive is about eight and a half days. (It used to be 10 days a few months back.)
  • The current average cost per COVID patient is $187 including medications, labs, and radiology testing.
  • The cost of care needs to be evidence-based. 

 

Resource

https://www.illumicare.com/

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