Speaker 1 (00:04):
Welcome To 340B insight from three 340B Health.
David Glendinning (00:13):
Hello from Washington DC and welcome back to 340B Insight, the podcast about the 340B drug pricing program. I'm David Glendinning with 340B Health. Our guest today is Matthew Perry, President and CEO of Genesis Healthcare System based in Zanesville, Ohio. Matt is a member of the 340B Health board of directors and is very active in 340B advocacy and education efforts. We wanted to have a 340B hospital chief executive on the program to speak about his perspective on 340B and help our listeners learn best practices for engaging with the CEO. But before we go to that discussion, let's take a minute to cover some of the latest news about 340B.
(01:05):
340B Health is out with a new report on the effects of the ongoing drug company restrictions focused on 340B contract pharmacies. The research is based on 340B sales data obtained from HRSA, as well as a survey of 600 hospitals on how the restrictions have affected them. The report finds that hospitals 340BK savings for the first five of the 21 companies to restrict discounts decreased by an estimated $1.1 billion from 2020 to 2021 alone.
(01:37):
That means the total financial impact of all 21 manufacturer restrictions that have taken effect to date is expected to be much higher. 340B hospitals are reporting being forced to make cuts to healthcare services because of these restrictions and patients who are losing access to discounted drugs through 340B are experiencing worsened health outcomes. The report also analyzes the types of medications that drug makers have restricted and details hospitals experiences with submitting patient claims data to try to restore 340B discounts 340B Health recently joined with six national hospital and pharmacists associations on a joint statement and opposition to a new pharma led effort for Congress to cut 340B eligibility for hospitals and make other major rollbacks to the program.
(02:27):
The groups are the American Hospital Association, the American Society of Health System Pharmacists, America's Essential Hospitals, the Association of American Medical Colleges, the Catholic Health Association of the United States and the Children's Hospital Association. The statement concludes that the association's "will continue fighting back against these drug company attacks on a proven and effective healthcare program for patients and communities in need." Learn more about these news updates by visiting the show notes.
(03:09):
And now for our feature interview with Matt Perry, CEO of Genesis Healthcare System. We know many of you are members of 340B teams or pharmacy departments that report to your hospital CEOs. We wanted to hear from one such executive about his approach to 340B at his hospital, his advice for 340B professionals who might want to be members of the C-suite someday and more. Miles Goldman sat down with Matt to discuss. Here's that conversation.
Miles Goldman (03:38):
Thank you, David. I'm joined by Matt Perry, President and CEO at Genesis Healthcare System. Matt, you are the first hospital CEO to join us here on 340B Insight. So we're looking forward to hearing your perspective on 340B. Welcome to 340B Insight, Matt.
Matt Perry (03:55):
Thank you, Miles. Thank you for having me.
Miles Goldman (03:56):
I have a lot I want to discuss with you today, but to start, what can you tell us about Genesis Healthcare System and the communities you are serving?
Matt Perry (04:05):
So Genesis Healthcare System is a CMS designated rural referral center. We're a medium size integrated health system with a main hospital, bunch of outpatient centers, large medical group, et cetera. And we serve a rural region, a six county region, of about a quarter million people in eastern Ohio. And we are a large 340B safety net organization and we participate extensively in the program and it's a very, very important piece of who we are.
Miles Goldman (04:36):
Well, I'm looking forward to learning and hearing more about that. Want to sort of start off by talking a little bit about your unique perspective being a CEO. What are some of the main things you think hospital providers and other staff should know about the hospital CEO role?
Matt Perry (04:55):
That's a great question. So one of the things that I think people need to know is that CEOs are pulled in a thousand different directions. We have a thousand different things that are running through our minds that at any given time we are accountable to many, many, many constituencies. Most of us have very short attention spans, but it's also... There's something that's really important is for staff that are involved in 340B to be able to present information and insights about how 340B could impact the organization in a positive way and also the impact if 340B was somehow challenged or changed negatively, the impact that could have.
(05:37):
Every CEO in the country right now is dealing with unprecedented economic challenges in their organization. And as 340B leaders in your organizations, you have an enormous amount of to offer to help the CEO and help your organization to weather these economic storms. And being able to present that information in a way that they can help the CEO understand, A, what his or her role is and then in which you need from them.
Miles Goldman (06:06):
You mentioned their economic challenges. It's of course been no secret to anyone listening to this podcast, a eventful would be an understatement, last several years for hospitals, for safety net hospitals, what is your largest challenge today for Genesis as a hospital CEO?
Matt Perry (06:28):
Well, I would say that the economic challenges are just unprecedented. We're dealing with macroeconomic issues of significantly high inflation that may or may not persist for longer periods of time than anybody would like. And we have enormous workforce challenges, workforce shortages. The payer community is working to ratchet back reimbursement and basically give us price cuts through utilization management and other tactics.
Miles Goldman (07:00):
I want to segue to talking more about 340B. Why is a hospital CEO's engagement in 340B important?
Matt Perry (07:09):
It is critically important that the hospital or system CEO be engaged in 340B for several reasons. One is the incredible, and for most organizations, the very large positive financial impact that 340B has. It brings in resources, it reduces costs. It is also a very strategic program in that, done well, you can utilize the program and the resources that the program can generate to greatly expand services for the communities that we serve.
(07:50):
By definition 340B entities serve disproportionate high percentage of financially challenged individuals, Medicaid, et cetera, and for the CEO to understand the program at a level that again, she or he can incorporate into strategies the best way to utilize the program, and then for that improved utilization of the program to then generate resources that enable the organization to grow and sustain their service offerings is absolutely crucial.
(08:28):
The CEO does not need to know all of the intricate details, which as you all know are many, about exactly how the program cans work and some of the regulations around it. But they do need to have a very solid understanding of the fundamentals in a way that they can partner with the 340B leaders and the rest of the senior leadership team on how to use the program to best impact for the organization and the organization's ability to serve the community.
Miles Goldman (09:03):
Talk specifically about Genesis and how 340B is important to the work specifically you are doing and how your health system is using its 340B savings to support patient care.
Matt Perry (09:14):
We live in a rural region about an hour away from the closest metropolitan area. So physicians don't just come to our community. We are far and away the largest provider, so the community and the region looks to us to be able to bring physicians and to offer service. So Genesis has used the resources that 340B generates to create our cancer center, our rheumatology program and endocrinology program, pain management, our infusion center. Without the resources of 340B, we wouldn't be able to afford to bring those type of specialists to our community and/or sustain those services to take care of people that don't have a whole lot of resources. One of the main components of the program, when it was created, was to stretch the scarce federal resources further. We all know that most hospitals have enormous negative operating margins for Medicaid, and again, 340B organizations take care of a lot of Medicaid patients, as do we.
(40:17):
And so it gives us the ability to not only create those types of programs but also sustain them. It also gives us the ability to make sure that when we have a patient who comes to our organization that is either significantly underfunded, such as Medicaid or they have no insurance at all, that we are able to make sure that they get their medications. We have a lot of programming around how to do that.
(10:39):
So a good year for Genesis is about a 2% operating margin. That's a really good year. We have not operated at that level consistently. So I'll give you a couple of numbers. We generated a $12 million operating margin, positive operating margin on 750 million in revenue, and our 340B program generated about $34 million in financial impact. Just do the math. If we didn't have 340B, we're not solvent. It's a very important piece of the economics of how our health system functions.
Miles Goldman (11:16):
And what are the considerations that you and other leaders think about when assembling a team to manage the hospital 340B program? What are some of the characteristics?
Matt Perry (11:25):
Yeah, so we created a 340B steering council, or steering team. And that is comprised of our 340B leader, our general council in the organization, myself, our chief financial officer and our chief operating officer and president of our medical group. So that sounds like a lot of people. We're very efficient with our meetings. We meet about once every two months, but what it does is it enables us to make sure that we are on track for utilizing the program effectively, making sure we understand the yield. We are there to help our 340B leader to break down barriers that she might have, and then also to make sure that all those different folks understand the impact that the program has and what their role is to ensure that it continues to operate effectively.
Miles Goldman (12:17):
It certainly sounds like you're in regular communication with the steering team that you're working with, and I want to talk about how can hospital C-suite executives become more involved on the advocacy side for the 340B program?
Matt Perry (12:33):
Yes, that is very important. So the other thing that it does is I don't take the 340B program for granted as a CEO. I'm very involved with 340B Health, but also my 340B leader provides me information about the ongoing challenges. And the fact that I have a kind of strong working knowledge of the program, what it also does is... And I would say the vast majority of CEOs of health systems around the country and hospitals, they have good relationships with their federal elected officials, so House of Representatives members, state senators, and it is, I cannot emphasize enough how important it is for the CEO to engage those federal elected officials in discussions on 340B. That has been the linchpin for how we get our story ingrained into an understanding by the elected officials throughout the entire country, because almost every federal senator and representative has a 340B organization in their district that would be dramatically, negatively impacted if something happened to the program.
(13:50):
So being able to tell the story of how that 340B actually helps that organization to serve the community and what would happen if it went away or was significantly changed is our most powerful weapon, if you would. And so I think it's important for all 340B leaders to be able to really, really educate their C-suite and their CEO about, here's how you can advocate and here's when you need to. Cause a lot of CEOs don't have the time to keep up on all the details and what's happening to the program. So you guys need to be that person. And try to do that, provide that information in a summary kind of format, get right to the point without a lot of the technical jargon, if you would, associated with the program in such a way that the CEO can articulate to a federal elected official the challenges that are happening and why the program needs to be sustained.
Miles Goldman (14:44):
When you think about everything we've talked about here, what have been the keys to Genesis managing a successful 340B program?
Matt Perry (14:53):
I would say you have to have exceptional leadership of the program at the operational level. So you have to have somebody who's very sharp, who's a real go-getter and not just kind of presiding over what you already have done. How do you constantly look at ways to enhance it? You have to give that individual the resources that they need. They have to have the resources, whether it's technology, whether it's people, whether it's support, whether it's taking away barriers. And that's another reason why I think it's also a non-degradable thing by the vast majority of CEOs. I mean, not a completely delegatable.
Miles Goldman (15:32):
Switching gears, we have a lot of our listeners who are 340B coordinators and 340B managers, and I wanted to hear your perspective on what your advice would be to those of them who are interested in becoming hospital leaders interested ultimately in ending up maybe in the C-suite. What steps can they take to move forward in that pathway?
Matt Perry (15:54):
Well, I would say that first of all, being able to do an exceptional job of managing the program and making sure that the senior leaders in the organization see the results of that. For growth professionally, there's nothing like generating exceptional results to get attention, a positive attention. And then also the ability to work across the organization. So most 340B leaders, if they can really understand and get connected with all of the position offices that operate, that fall underneath the program, the financial aspect of it, the more people that you can get connected with on the program and to be exposed to and exposed to their operations, I think the better chance you have of growing yourself professionally, even past what you're doing as if you were in a role, for instance, a narrow role of just managing the 340B program, you can be doing great things, but if nobody knows about it, then you can't hide that light underneath that bushel basket to borrow a phrase.
(16:57):
That's a big way that you can further your career. And continue to understand more and more of how you can use that program and to be able to come up with different ideas about how you can use it to benefit the community and your organization. That's helping people to solve problems. Helping senior executives to solve problems is a sure way of growing yourself professionally.
Miles Goldman (17:19):
Well, thank you for sharing that advice, Matt, and for the many insights you've provided our listeners that they can keep in mind as they engage with their hospital or health systems C-Suite and the CEO specifically. Thank you for taking the time to join us.
Matt Perry (17:34):
Thank you so much. I appreciate the opportunity.
David Glendinning (17:36):
Our thanks again to Matt Perry, not only for giving us a CEO view of 340B, but also for his service to our board and his commitment to serving patients in need. For more from Matt, please visit the show notes to read his narrative on how 340B was essential to Genesis Healthcare System during the COVID-19 public health emergency. And our thanks to those of you who attended the 340B Coalition Winter Conference in San Diego last week. It was great to see so many of you stop by our podcast booth in the exhibit hall. And a special thanks to those of you who sat down with us for interviews while we were there. You'll be hearing those conversations in the coming weeks. We will be back later this month with our next episode. In the meantime, as always, thanks for listening and be well.
Speaker 1 (18:30):
Thanks for listening to 340B Insight. Subscribe and rate us on Apple Podcasts, Google Play, Spotify, or wherever you listen to podcasts. For more information, visit our website at 340Bpodcast.org. You can also follow us on Twitter, @340BHealth. And submit a question or idea to the show by emailing us at podcast@340Bhealth.org.




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