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Have Faith in Catholic Education

Catholic schools are closing their doors all across America, leaving future generations with nowhere to turn for the high-quality academics and values-based education so many families are seeking.  The number of students attending Catholic schools in the US fell from about 5.2 million in 1965 to around two million in 2008.

Pioneer Institute believes these schools are worth preserving. For over a decade, we have raised our voice in support of these excellent academic options, and tools such as tax credit scholarships that would enable more families to attend.

Pioneer has held public forums, published research on the benefits of Catholic education, on successful models such as Cristo Rey, and on policy changes that would stop the Massachusetts education department from depriving religious school students of special needs services and school nurses. The Institute has also convened key stakeholders, appeared in local and national press, filed amicus briefs, produced a feature a documentary film, and much more.

Read Our Research

AFC’s Denisha Merriweather on School Choice Advocacy & Black Minds Matter

April 13, 2022/in Civil Rights Education, Civil Rights Podcasts, Featured, Podcast, School Choice /by Editorial Staff

https://chrt.fm/track/4655F8/api.spreaker.com/download/episode/53285016/thelearningcurve_denishamerriweather.mp3
This week on “The Learning Curve,” Cara Candal and Gerard Robinson talk with Denisha Merriweather, the director of public relations and content marketing at the American Federation for Children and founder of Black Minds Matter. They discuss Denisha’s inspiring personal narrative, from a struggling student to a leading national spokesperson for school choice. She shares her experience of receiving a Step Up for Students education tax credit to attend the Esprit de Corps Center for Learning, a small private school in Florida, and how it differed from her public school experience and changed her life. They delve into the organization she founded in 2020, Black Minds Matter, “a national movement to celebrate Black minds, support excellence, and promote the development of high-quality school options for Black students,” and Denisha explains the group’s long-term goals.

Stories of the Week: Results from a survey of 1,788 teachers in England revealed that 44 percent plan to leave the profession by 2027, citing the stressful workload and lack of public trust. Harvard is receiving criticism for its decision to end its undergraduate teacher education program and instead require candidates to enroll in the Graduate School of Education’s new Teaching and Teacher Leadership master’s program.

Guest

Denisha Merriweather is the Director of Public Relations and Content Marketing at the American Federation for Children and Founder of Black Minds Matter. Denisha previously served as School Choice and Youth Liaison to the Secretary of Education at the U.S. Department of Education. Denisha is a Florida tax-credit scholarship graduate, and now sits on the Board of Director for Step Up for Students. She received her Master’s degree in Social Work from the University of South Florida and bachelor’s degree in interdisciplinary social science. Along the way, Denisha has become a national symbol for school choice, headlining events with President Trump, Florida governors, and other advocates for school choice. Denisha has shared her story across the country and has been featured in the Wall Street Journal, PragerU, the Washington Examiner, EducationWeek, and Fox News among other outlets.

The next episode will air on Weds., April 20th, with Dr. Robert Alter, Professor in the Graduate School and Emeritus Professor of Hebrew and Comparative Literature at the University of California at Berkeley, and author of the landmark three-volume book, The Hebrew Bible: A Translation with Commentary.

Tweet of the Week:

Cross-party agreement among younger generations – and a significant generational split within the GOP – is telling the story of education policy in a way that may benefit Democrats. https://t.co/O8v9eApcvn

— Lauren Camera (@laurenonthehill) April 6, 2022

News Links:

The Guardian: 44% of teachers in England plan to quit within five years

https://www.theguardian.com/education/2022/apr/11/teachers-england-plan-to-quit-workloads-stress-trust

Harvard Crimson: Harvard Ends Undergraduate Teacher Education Program, Closing Off a Path to Teaching for College Students

https://www.thecrimson.com/article/2022/4/7/UTEP-shut-down-HGSE/

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Read a Transcript of This Episode

Please excuse typos.

[00:00:00] Cara: Well, hello, Learning Curve. This is Cara Candal and the great Gerard Robinson coming at you for some wonderful conversation. We’re going to be hosting today. Our friend Denisha Merriwether, always fun to have friend of the show and a friend on the show. And I’m speaking to my good friend, Gerard Robinson right now.

[00:00:42] How are you?

[00:00:43] GR: Doing well, as you know, I had a chance to travel to California, to see the oldest daughter and to hang out with her and do fun things for the two younger daughters spring break. So it’s always good to have the Robinson ladies altogether

[00:00:59] Cara: [00:01:00] vacation. I didn’t re spring break yet. Our spring break is coming up.

[00:01:02] Well, you know, what’s happening here to kick off spring break for kids in this area is, Patriot’s day. Do you know what that is? True.

[00:01:11] Gerard: Yeah, cause you must not be much of a Patriot, right.

[00:01:15] Cara: Patriot’s day is really something that’s just celebrated in new England. And now I’m speaking at, I realizing that our producer, Jamie Gass is probably in the background and if I mess up what Patriot’s day is all about, I’ll get in deep trouble, but just going to say more importantly.

[00:01:28] It is known as marathon Monday. It shouldn’t be more important, but that’s the reality. So the Boston marathon is run annually. Well, save for a couple COVID years, little COVID respite there, , run annually, on Patriots day, this new England holiday, and it also picks up spring break for most kids in this area.

[00:01:47] Now I live very, very. The marathon route. I actually, in fact, I used to live right on the marathon route for all you runners out there and live really close to heartbreak hill, which is super fun. for runners, I guess it’s much more fun [00:02:00] for spectators. , but you know, Gerard, my marathon Mondays are always played with the following people just randomly stopping by me.

[00:02:07] Well spectating to use the bathroom and grab something out of the fridge. So we’re looking forward to just because I live so close to the route, we’re looking for it though, to seeing some friends maybe that we haven’t seen in a long time into cheering on the runners. I’m glad you had a great trip Girard, to sort of open my story of the week.

[00:02:26] wanted to ask you to reflect for just a moment. And I wanted to ask you you’re former teacher, I’m a former teacher. we’re all still teaching, right? Gerard. This is what we do, but you’ve taught in schools at one point in your career. Can you just like, give me one sentence to describe the quality of your teacher education, whatever training you did to become a teacher?

[00:02:49] GR: I can’t answer that one because my degree was in policy at the master’s level. And my undergrad degree was in philosophy. So I never went through a program to become a [00:03:00] certified or licensed teacher. So I’m no good on that. And I taught in private school, uh, when I started and I also worked in a Saturday program and summer program for two years for public school students in Newark and New Jersey, but that was.

[00:03:15] Full time.

[00:03:16] So how

[00:03:17] Cara: interesting, so you and I have a similar story. I have a certification in teaching English as a second language, but I don’t have a certification to like teach English literature yet. I did, right when I was in my twenties, it sounds like you and I had very similar roots, but a lot of talk going on about teacher certification these days, how to get teachers emergency certified and who should be able to be in the classroom.

[00:03:40] Right. We’re seeing legislation and a ton of states we’re seeing, in all things. A real or imagined teacher shortage. I think teacher shortages are local. We’re seeing some pretty cool programs in my estimation, out of places like Tennessee and Texas, that involve teacher apprenticeships. I think a great model if you can do it well, but my story that week is out of house.

[00:03:59] Right [00:04:00] down the street here because, they have done a way with their undergraduate path to teaching certification. So Harvard doesn’t have a traditional what we would think of as undergraduate school of education. But of course they have a master’s program in education and a doctoral program in education, but they have just decided to do away.

[00:04:21] With these courses that undergraduates can take, that lead them to be able to get their teaching certification, , before graduating, so that they’re prepared to teach upon graduation. It would usually be at Harvard, like just a three or four months course that they could take. And I chose history the week.

[00:04:38] Cause I think it’s really interesting indicator Of sort of. Where things are going with imagining who can become a teacher, how should they become a teacher? Do we really have to keep emphasizing these traditional routes, undergraduate schools of education, continue to, really train the lion’s, share of people that go on to become teachers in this country.

[00:04:57] But, if COVID is any [00:05:00] indicator in this upheaval that we’re seeing in the profession, just in terms of turnover, if not an exit. I think, , indicates to us that we really need to be thinking seriously about what it takes to help people, become

[00:05:12] certified or qualified in certification.

[00:05:15] Doesn’t actually

[00:05:16] Cara: equal qualification all the time. If you read the research, but qualified teach in classrooms in one, what it takes to get people qualified. in a timely manner and in a way that’s going to ensure that they’re doing right by kids. So this article just had me thinking a lot about something, a theme that’s been wrong for a while, which is, , do we really need schools of education per se?

[00:05:39] Maybe we do in some places, but what does it look like if more and more people. Aren’t educated in a traditional undergraduate pathway. And if more people are entering the teaching profession at different points in their career, how do we imagine that and how should states in particular be thinking about it and how should we measure quality?

[00:05:59] [00:06:00] I have no answers to any of those questions, Gerard, but , these are wonderings that I pose for you and or our listeners. But anyway, that’s surprising news out of Harvard and. It’s not like perverts training, a ton of the nation’s teachers or even the Commonwealth’s teachers. So I’m not in the category of some of the people quoted in this article that think it’s like dastardly in a huge disaster.

[00:06:20] It’s probably a smart move on Harvard’s part, but an interesting move

[00:06:25] GR: Interesting. So I am a graduate of Hughsey, as I like to call it, the Harvard graduate school of education in policy ton of my friends were in teacher education. So what Harvard is doing or just did in 2022 was a topic debated by deans and researchers in the 1980s.

[00:06:48] And there was a report that was published. I believe it was called today, tomorrow. Report or committee. It was a group of deans who said one way to improve teacher education and to [00:07:00] improve outcomes with the students who work under these teachers is to abolish a undergraduate degree in education that instead you earn something in the humanities, social sciences, liberal arts, fine arts.

[00:07:13] Earned a degree, and then you can earn a master’s degree or credential, but their whole piece was to abolish it. And so there was a move for that at the same time you had. Dean who said, no, we need to keep that program in place. So I am in Charlottesville, affiliated with UVA. In fact, I attended UVA school of education.

[00:07:31] We have a program here where you can major and let’s say philosophy, which was my undergraduate degree. You can earn master’s degree from the Harvard ed school you can do so in five years. At times, depending upon how many credits you take, maybe even shorter, but here in you, the outgoing Dean, and we’re waiting to see who our new Dean will be.

[00:07:53] There was a push that we think it matters, and I have a thumbs up for that, but I also have a thumbs up for Harvard [00:08:00] if they decide that this is what they want to do. So for me, it’s not either, or. it’s an, and it really depends upon a commitment from the president, a commitment from the Dean and research to support why this makes sense.

[00:08:14] This is part of a larger conversation that’s been taking place even within the last two years of the pandemic. So just think about the American association of colleges for teacher education. Earlier this year, they released its second comprehensive report about the state of teacher preparation. And what they identified is that between 2008 and 2019, the number of people completing a teacher education program declined by almost a third and traditional teacher preparation programs saw the largest.

[00:08:45] 35%, but alternative programs also experienced a drop as well. So this is something that’s just part of the teacher education dynamic and the conversation that we’ve had for a [00:09:00] while. I can understand why people have an outcry at any point, you decide to get rid of something. People often don’t like it, unless it’s for taxes.

[00:09:09] Yeah, besides that when it’s a program, it’s a different story. So I give a thumbs up to my Alma mater. They’ve obviously looked into this. If it makes sense for them, they should move forward. But I’m also glad to see a place like UVA and other schools do the same thing, but this isn’t a Harvard UVA dynamic.

[00:09:27] This is really a dynamic about teacher education. So for our listeners, take a look at the American association of colleges for teacher education report released, earlier this year.

[00:09:36] my teacher story comes from the other side of the pond and my story comes from the guardian and the title. And just get this, everything you need to know is actually in the title.

[00:09:48] Cara: Can you do it in a British accent, the title? Oh, I’m not that good.

[00:09:53] GR: And I’m sure if I did, I would offend someone.

[00:09:54] So I don’t want to go that route 44% of teachers in [00:10:00] England plan to quit within five years. So. Many of our listeners know that I traveled to Birmingham, England, not too long ago to meet with scholars and practitioners who work in the field of K-12 education. I have a chance to visit a school and to talk to educators.

[00:10:15] Well, you and I are big fans of polling data because it gives us an opportunity to get a representative sample of the profession. Well, here’s a survey of 1,788 teachers. and a fifth of them, 22% said they will leave the profession within two years. But by the time we get to five years, 44% said they would likely leave.

[00:10:36] Now, if that is a representative sample, that’s going to be a major hit for England. And here’s why right now you have 461,000 teachers who work in across England today. That’s 20,000 more than 2010. So there’s at least an increase. But if approximately 44% decide to leave in five years, it’s going to be a big hit [00:11:00] on the economy, but also on the profession.

[00:11:02] So what are some of the factors as to why teachers were leaving? Well, you’re not going to find some of this to be shocking. , teachers find that it’s the workload. Is unbearable. , the number of hours they’re expected to work. I’ve been really tough. There’s also a problem with finding substitutes and staff.

[00:11:19] Teachers said, schools are finding it really difficult to feel big and seas, which is leading to teachers having to double up in their roles. And they said, when people leave, it’s tough to have some more. Come in two thirds of secondary school teachers say the issue of vacant teaching assistance and support has worsened since 2020.

[00:11:39] And so when we try and figure out what’s the cause of this, I turned my attention to Dr. Mary Boston, the joint general secretary of the national education union. It is the largest union. And England for teachers. So the national education union was created in [00:12:00] 2017. It followed the amalgamation of the national union of teachers and the association of teachers and lecturers.

[00:12:07] And they got together in 2017. This group. And so when I talked to the president that, you know, they say, well, what’s the problem. And she said, quote, we remain a profession with almost the highest number of unpaid working hours. And we’re still well above the international average for hours worked by teachers.

[00:12:25] This simply is on sustainable. She goes on to talk about the problem, trying to recruit teachers and to retain them in a profession. So when asked, what do you think, who do you think, or what do you. let all of this. And she said, listen, the state department of education or the department of education, these are take steps to quote unquote right, the wrong.

[00:12:46] And she, I particularly identified education secretaries over the years, simply have missed the targets. And so similar to what we hear here in the United States, she’s saying it’s an issue with policy makers. [00:13:00] Education secretaries and government in general. And in the article, she also took a note and it’s worth noting this for our listeners.

[00:13:08] she also found a problem with the, what they call Offstead, which is the office for standards in education. And it created a national, inspectorate whose job was to follow publicly funded schools K-12 and higher ed to see how well they’re doing. And. What the doctor is saying is, you know what, this is a problem as well, because it’s not really doing its job.

[00:13:29] So here are a few takeaways for me. Number one. I grew up in a union home. I am a supporter of unions. I understand why we have unions for educators because they formed a union to make sure their rights are protected. And so when the teacher said we’re burned out and we’re. I believe them. And I believe there’s a role for the government to play in trying to fix some of those challenges or as Mary said to ripe the ship.

[00:13:58] But I would also ask union [00:14:00] members to ask tough questions of their union members or the union leadership as well. So for example, if you’re overworked and if you’re not paid enough, What is a union done for that? Or what negotiations or trade-offs has your union made? that led to some of that.

[00:14:16] I just think there’s a role that members should play or look at when trying to figure out, who’s the culprit. I think there’s a lot of blame, but also a lot of benefit to go around, but often. Finger pointing outward it’s government. It’s the secretary. So, that’s one challenge, but it was also worth noting that I went to the national education union webpage and I would recommend our listeners do the same.

[00:14:39] When you look at the web page, I see support black members. Lives matter. I agree. And if you take a look at the educational outcomes, both college and K12 for black students in England, it’s not great. And if you go further down, you’ll see a number of things about, , an active zone at the end of the conference to replace Offstead.[00:15:00]

[00:15:00] And you’ll also see educators have lost 17% of their patients. Since 2010. So is a lot going on with the webpage and what they want to do. 44% is a lot. I don’t think it’s going to take the government alone, but I think there should be some internal looking as to what unions can and cannot do and what role they’ve played in leading to this.

[00:15:21] And that’s not only on the other side of the pond. I think there’s some relevant conversation for this as well on this side.

[00:15:27] Cara: Oh, well, you are not going to get any pushback from me on those comments. My friend, not that I think you normally do, but share a little Andrew, go here. I was, at a panel, , maybe a week or two ago, hosted by Boston university, Wheelock education policy center, shout out.

[00:15:43] Um, I am a member of their advisory board and it’s a wonderful, it’s a wonderful institution, new institution. But there was a panel that included a former teacher of the year, the current head of Boston teachers, union, Kate Walsh of NCTQ and the superintendent here of a community called fall [00:16:00] river.

[00:16:00] And one of the comments that was made that. Tons of snaps from, folks in the audience as we didn’t snap when I was a teacher. So I’m always going to play, I’ve done teacher training and teacher development, the snapping phenomenon. If you know what that is, I think my kids do it in school to give people props or say, I agree, but what received tons of stamps was somebody saying, well, you know, what would really just fix everything with the teacher crisis?

[00:16:20] And the teacher shortage and teacher burnout is if we could please just move to a four day school week. So teachers actually had planning time and we weren’t working until 10 o’clock at night. And I think.

[00:16:34] Because

[00:16:35] Cara: what’s lacking in that comment is a complete number while there are many things. One is, if you are to the point you’re making about the website and, outcomes for students, particularly black students from the union wants to support. What are you going to do with taking, the school time away?

[00:16:50] Right. And number two, there’s a complete and utter lack of an, impetus to re-imagine what the school day could look like. So I’ll give you an example of many, many of us who have worked in private schools know [00:17:00] that, to accommodate teachers with more planning time, one of the things you do is you fix your schedule and you move things around and yeah, you might have to hire more staff that.

[00:17:09] Might not be unionized such as staff and other people, so that students are doing enrichment and other supplemental activities while they’re subject matter experts. I have planning time and they should, they need it. All of those things are super, super important, but I just wanted to share that I was really taken aback by this comment that was so teacher centered versus student centered.

[00:17:30] And I think that if we would do a better job of leading with what students and families need in the first year, Then that might bubble up to giving teachers what they need because what students and families need is consistency thing. Teachers who are going to be with them for a long time, teachers who are happy in their jobs, that they’re going to be happy in their teaching, and they’re going to be more effective.

[00:17:47] All of those things, I was taken aback by this suggestion of a four day workweek. So I greatly appreciate Gerard your call for more introspection on both

[00:17:58] sides of the.

[00:17:59] GR: [00:18:00] one thing just came to mind as well. The article talked about the mental fatigue and health of teachers, you and I know that’s real.

[00:18:10] We’re going to make that something we need to invest in while these children are going home to parents who are equally fatigued and a number of them have mental challenges. So I’m saying if we do one for one group and that’s a factor leading to. Let’s talk about families and teachers as well. That’s it?

[00:18:26] Cara: Thanks so much. Cause this burned out mama would love that. And at any rate I have, one thing to say before we introduce our phenomenal guests. Dinetia Merriweather of American Federation for children and founder of black minds matter. But this is really important because as I said, Jamie gas, our producer was going to make sure I got this right.

[00:18:45] So for everybody who is dying to know Patriot’s day, I said it was the annual event, but it commemorates the battles of Lexington, Concord and monotony. And somebody is going to call and say, I said that wrong and that’s okay because I’m from Michigan. I [00:19:00] just want that to be clear. And some of the. Battles of the American revolutionary war.

[00:19:06] but for those of you, who’ve never had a chance to visit places like Lexington and Concord walk the wonderful trails here that we have in Boston, the freedom trail, et cetera, can’t recommend it enough, a learning experience for all

[00:19:17] agents,

[00:19:18] Cara: but we will be back with Denisha Merriweather right after this.

[00:19:40] Learning curve listeners. We are back with a woman that many of you know, Denisha Merriweather is the director of public relations and content marketing at the American Federation for children and families. Of black minds matter. Denisha previously served as school choice and youth liaison to the secretary of education at the U [00:20:00] S department of education.

[00:20:01] She has a Florida tax credit scholarship graduate year, and now sits on the board of directors for step up for students and other yay for step up for students. Denisha received her master’s degree in social work from the university of south Florida and bachelor’s degree in interdisciplinary social science.

[00:20:19] Along the way Denisha has become a national symbol for school choice, headlining events with president Trump, Florida governors, and other advocates for school choice. Denisha has shared her story across the country and has been featured in the wall street journal Prager U the Washington examiner education week and Fox news among other things.

[00:20:37] Denesha you and I met, I think it must’ve been two and a half, three years ago now at, the international school choice and reform conference. But even then it was clear that you were just a leading spokesperson for school choice and you. So you speak about your own experience and the possibilities that choice brings for other people with , such power.

[00:20:59] Could [00:21:00] you talk to us a little bit about your story and, , your school experiences and did that brought you to where you are?

[00:21:08] Denisha: Yeah. I know it wasn’t, it, it has to be longer than two, three years. Cause I think pandemic was like, I try not to remember how old? yes, but I, came into this, I always tell people that I was thrust into the education reform space because I benefited from school.

[00:21:30] In grade school. And before I received a private school scholarship, I really had a bad experience. That was , my experience in the public school system. I went to my local zone school. and my family situation was not that great. So I moved around a lot, which meant that I went to about five or six different elementary schools, and all of the schools that I went to.

[00:21:58] Not a good fit for me.[00:22:00] , I remember early on my earliest memory of school was like in the second grade of just being drug out of class by one of my teachers, because I was being disruptive and. , I failed the third grade twice because I couldn’t read. just knew I was stupid. I thought I was dumb in my self esteem was really low.

[00:22:25] and there was not a lot of assistance I would say, or help to. Helped me to get up to great level. in the fourth grade, I, my mother, , did enroll me into this program called the star program. I remember it so vividly. It was a program to help other kids, other students who were in elementary school to get caught up to their right grade.

[00:22:48] So I was in a classroom with other kids who were two grade levels behind three, four grade levels behind in elementary. Right. And I [00:23:00] didn’t pass that program. , and it really created just a spirit of despondence. I, hated school. I felt like there was no need for me to go to school. I would wear pajamas to school.

[00:23:12] didn’t care. I remember a teacher Scion when I came through the door, like when I would walk classroom door, teachers would hear, comes to Nisha. And that weighed on me. And so for the early part of my, life, it was, I did not have a great relationship with learning with education.

[00:23:33] It was not a place where I felt, that I could succeed or even that I wanted to succeed my family. my biological family come from a long line of people who’ve dropped out of high school. People who’ve had children at early ages have had, babysit as teenagers. And so for me, I thought that was gonna be my, narrative, my life’s narrative.

[00:23:55] I would, I would have a job. I would not follow that path. Cause I, I had, no, I like [00:24:00] to money too much. I would have a job and I would, but I will have a baby. as a teenager, And so, yeah, that was for me early on my early education was not, it was not a positive association with learning. in the sixth grade, I began to lift permanently with my godmother the summer before my sixth grade year.

[00:24:22] I moved in with her and that’s when everything changed. She wanted me to attend the private school that her, church had started and it was a private school. So she didn’t have a way to pay for her family. Her income was not that much greater than my biological families. And she found out about the Florida tax credit scholarships.

[00:24:41] Step up for students. She applied for. The scholarship and literally everything with education became night and day. When I first started to come to this school teachers instead of sign, like they would greet me with smiles, hugs, [00:25:00] prayer. At first I’m like, okay, it’s going to wear off the first day of school.

[00:25:04] You know, like everybody’s first week of school, they are happy and cheery, and never wore off. I promise you from sixth grade to 12th, every single day, there was someone welcoming us into the school with open arms, with smiles and hugs. And that was , my first experience everyday walking into the classroom doors and.

[00:25:27] Teachers. And I had two teachers who even met with me one-on-one the summer before I got started, because my reading was so low and I didn’t know how to do my times tables. I didn’t know them, not even my memory. And so that showed me that they cared and they, did. I ended up making, D’s and F’s consistently to making a B honor roll my first nine weeks at this new school.

[00:25:52] And. For me, it was like, wait a minute. So I’m not dumb. I’m not stupid. I’m not a failure. and [00:26:00] so ever since graduated from high school, I began to share about my experience because also along this time, I have siblings, biological siblings who are still in the public school system. I have biological siblings who have not graduated from high school.

[00:26:15] It really showed me that. Education really does make a difference. , and so I began to share my story. I became an advocate and kind of live this alter ego. So that’s, how it got started. I became an advocate for school choice, , because education really. Changed my life in the trajectory of my life.

[00:26:35] I went from making D’s and F’s to AB honor roll to graduating with honors from high school, going into college, earning a master’s degree. And I don’t think that would have been possible if I hadn’t been given a different opportunity. Yeah.

[00:26:51] Cara: You know, one of the things I, appreciate about the way you described that first day of school is every research schools, for a lot of my career.

[00:26:59] And [00:27:00] one of the things that I noticed, and I look for in schools for my kids, it’s a place. It feels like the adults really see the kids like every kid. , I appreciate that part. Now Denisha for our listeners, you mentioned that you were a recipient of the Florida tax credit scholarship, and Florida is known for having really the most robust school choice environment in the whole country.

[00:27:23] I think that a couple other states would like to quibble with that maybe Arizona looking at you, but , between tax credits and. education savings accounts, options. And now actually the Florida tax credit scholarship, and much of that has been turned into a more traditional voucher so that money’s not having to be raised all through donations, which is how it was when you attended.

[00:27:42] so you talked about how that changed your life. Could you tell us a little bit more about this idea that you mentioned that your first public schools didn’t work for you? that implies to me that maybe they were working for some kids, but one of the things, folks talk about advocates of choice.

[00:27:58] Talk about a lot [00:28:00] is. And that, every kid needs to find the right fit. Can you talk a little bit more about what we mean when we say fit and specifically with regard to academics and how you went from being a kid who thought of herself as a failure to somebody who was cheating high grades, and obviously given where you are now, they weren’t just giving you A’s and B’s to pass you on.

[00:28:20] can you talk a little bit about what fit means and what it meant for you at your school is.

[00:28:26] Denisha: Yeah, I think that is such a great question because that’s what, we, as reformers in education want for every student, for them to find the right school that fits their needs and abilities and interests, et cetera.

[00:28:42] And for me, that means, exactly that, that it’s a school environment where You know, it’s like a glove, you know, I don’t know what other words you use other than fit, but it caters and it, encourages their needs, their interests, their abilities. , and that could be [00:29:00] anywhere from, , a private Christian school to district school, to a charter school.

[00:29:06] To a Montessori school, to an outdoor tree house school, you know, forums. A zoo school I’ve been to so many types of schools. there are so many different types of innovative models that really, gets to. how to get a kid to learn and be interested in education.

[00:29:25] And for me, experi, to core you, what, you know, w what was that like for me? one, it was the nurturing environment that, yeah. They saw me as a person that not only as a person who. Came to school with a lot of baggage and not the, not the best, outlook or even disposition. at first, when I came to the school, I was a challenging student.

[00:29:48] Like I, I spend time in, in school suspension. they didn’t believe in, suspension or out-of-school suspension. It was all in school. And I was one of the students who attend. So it wasn’t like, I, you know, like you said, they [00:30:00] were just giving me A’s or that I just changed dramatically. I was a challenging student when I first came in, but them being so nurturing and consistent was something that changed.

[00:30:11] And that was the type of environment that I needed. it was a very rigorous school. So we were hopping from subject to subject to subject every day. We, we didn’t stay, stagnant, I would say spending a whole week or a whole month on one lesson, everything was, , rapid fire. I’ve never been diagnosed with ADHD, but I kinda think I am so like, that type of learning environment was so important because it kept me interested.

[00:30:43] Like it was a new challenge every day that okay. I had to, solve and, also I was pretty mouthy. Like I work in communications And I was pretty mouthy as a kid. And, , that would not sit well with a lot of adults, but at this school they encouraged it. , , instead of seeing that as a [00:31:00] deficit, it was just like, okay, use your voice, the vocal.

[00:31:03] And we’re going to give you these outlets in order for you to do that. so I do think every kid has. different, , , uniquenesses about them and they should be encouraged and not, stifled, Hey

[00:31:15] GR: Danesha, how are you? Hey, good to see you. Let’s go back to because you and I have been on panels together.

[00:31:24] We testified together. We’ve advocated together. Let’s go back to. Y you talk about this through the lens of public policy. I know one of the things that we often hear when we say we support school choices, that somehow we are anti-public education. When you hear that, how do you respond to those who bring it up either in policy discussions or elsewhere?

[00:31:48] Denisha: Yeah, that’s totally not the case. how respond is? No, it’s all about what is the best environment, whatever is the best environment for, , a kid. Yeah. There is a lot of,[00:32:00] development, a lot of things we need to change within the traditional public school system, just because, , they’ve been in the game for a long time, you know?

[00:32:10] We do want to hold them accountable. We do want to hold district schools accountable for students because over 90% of our kids go to district school. So it’s impossible to say that we want all of these students to leave our district schools are zoned schools and go to schools of choice because we don’t have that market, , yet.

[00:32:31] but that’s not the idea. We want our, public schools to. educate kids appropriately. and we want parents to be able to choose their public schools. I don’t think it should be a, just a default where you are mandated to go to, this particular school, just because you live. In an area.

[00:32:48] I think parents should have that opportunity to pick and many states do they have open enrollment policies where parents don’t just have to go to the school that they’re [00:33:00] zoned for. They can pick amongst all the schools in their. through open enrollment policies or they can go to a magnet school.

[00:33:07] So there is choice within the public school space, but yeah, for those who, claim like, oh, the school choice fight or the education reform fight is just to uproot everyone out of public school. would be impossible, first of all, to do that. And that’s not the goal. The goal is for parents to be empowered within a system while also holding district schools accountable for academic outcomes and, in students.

[00:33:36] GR: So glad you mentioned magnet schools because they existed before the creation of the first charter school law in Minnesota, or since we’re here at pioneer, they, one of the early states, with, , . Open enrollment procedures. Charter schools, part of a, you know, part of the open enrollment and even in places like the state of Washington, which several years ago, it’s Supreme court rule that is charter programs [00:34:00] unconstitutional, even though they allowed students in Washington to cross borders, to go over for parental choice, let’s take a look at the work you’re doing right now with black minds matter.

[00:34:11] we know that black lives matter is a part of the American conversation right now. Good bad, ugly, hopeful, and everything in between you created this group to do some good work, talk to our listeners about it.

[00:34:25] Denisha: at the height of the social unrest in our country in 2020 with the murder of George Floyd amongst others, like you said, the entire country was looking at, our systems, you know, we were thinking about how can we become more equitable from companies, who were in charge of certain bottles and pancake mixture, changing logos.

[00:34:49] And one of the things that I did I found frustrating was that we didn’t pay as a country enough attention to the education system. And. [00:35:00] To the inequities that exist in that system, , in some of the reforms and changes that really could make a difference in the lives of students. in particularly black students, minority students who, who are oftentimes.

[00:35:15] most of the time, I won’t even sugar coat. It lagging behind their peers in every academic subject, across, national statistics, state statistics, , , , the academic outcomes for black students nationwide, according to the NAPE are really a dismal. And it’s, depressing to look at, over five-year 10-year span how there’s been little.

[00:35:39] to close that achievement gap. And so, that’s why, I started Black Minds Matter to say we need to bring attention to the inequalities in the education system, into champion for more options, because there’s a lot of research, that shows that when school choice, when particularly [00:36:00] black students have choice in education, their academic outcome, Improve drastically.

[00:36:06] and here in Florida, we’ve had a number of research studies, in Milwaukee where the oldest program is founded in even, not just academics, but crime and teen pregnancy and all of these other issue areas. They’ve seen improvement. when students have school choice. And so that, that’s why it was founded.

[00:36:28] We also celebrate, , , black owned schools, which is another form of choice and education. , because in order to found a school that’s a different type of school. So it’s a homeschool co-op or micro school. School charter private. And, these folks are amazing. I’ve done interviews with them, have talked with them on panels and these school founders are just, can’t explain them enough.

[00:36:55] They have the passion and they also are putting their passion to [00:37:00] practice. With founding the schools and it’s, so amazing. So that’s, yeah, that’s a little bit about black minds matter

[00:37:07] GR: and it’s so good. You focused on minds because in the political work that we do, we forget that this is also things.

[00:37:15] And that when bills were signed and the ink is dry and regulations are put in place, they’re actually real people who are doing the work. And so glad you also give a shout out to black homeschoolers and founders, you know, during the pandemic, the black homeschool population grew faster than any other group in the United States.

[00:37:33] Here’s the last question for you. And it relates to stuff that you mentioned with Milwaukee. I had a chance to travel to Milwaukee last fall for the 30th anniversary of the Milwaukee parental choice program. The oldest urban based program in the country. You had Dr. Howard fuller. You had Susan Mitchell.

[00:37:48] you had former governor, Tommy Thompson. You had a former speaker and others there to celebrate. So that’s one. You also had the 30th anniversary of the charter school [00:38:00] movement. Third. Years into the game. We have a lot of wins. The one thing that we really haven’t focused on is the alumni of these programs, whether it’s tax credit, whether it’s tuition, tax credit, where they’re, I guess coming soon ESA a charter schools as a graduate of a program before.

[00:38:22] As you work across the country with people who have children in the program, enough for you are now old enough to have not only been college graduates, but you now are employers you’re entrepreneurs and you’re doing great work. What can we do for the alumni to become the Vanguard of the next phase of this

[00:38:41] Denisha: work?

[00:38:42] Yeah. What an awesome. And yeah, I think that. It is, it’s so important and it’s so amazing to, yeah. We need more alumni, but to see just the drop of students, , in parent beneficiaries who are taken on the reins [00:39:00] of the fight, one, I, yes, I think it’s extremely important because not only do you have someone who can.

[00:39:07] speak to the need, just writ large of more options of more, school choice, choice, and education, but they also have that personal story, that personal narrative of how they benefited from choice and education, how they were empowered. I think it is, it’s so amazing. And we do, we need wait, some, so many more students, at the American Federation for children, we do have a fellowship program.

[00:39:38] Um, beneficiaries, and we’re on our third cohort. And so about 30 students nationwide who benefited from school choice, , in some form. And these are, , charter school alum. These are private school alum, and we also have some homeschool alumni who. Participate in the fellowship to learn about the policy, to couple that [00:40:00] with their personal stories, , to go to legislatures, to go to, events, to just speak candidly about their experience.

[00:40:09] We do. We have so many students now who’ve benefited from choice. So we do need to all do a better job of finding them, nurturing them and empowering them to share their story because I believe they’re the ones that’s going to make the difference. You know, I think that I’m a little biased, obviously I’m a beneficiary of choice.

[00:40:29] but when you put somebody on. And they can talk to the policy aspect and they can talk to their personal story. It’s kind of hard to, refute them. I know I’ve been many conversations where people will be like, oh, I don’t believe in this, this does this. And it does that. , I don’t believe that people should have a choice in the education and.

[00:40:50] I share my experience like, Hey, this was my trajectory. This was what was going to happen to me. But something changed. And then people are kind of like, well, [00:41:00] I’m happy it worked for you. That’s awesome that it worked for you. but, uh, so it’s, it’s, it becomes hard, kind of review a person’s personal story.

[00:41:08] It becomes hard. So that’s what we need more.

[00:41:11] GR: Well, so glad that not only are you taking your story to the public arena, but you’re also doing it with philanthropy, you’re also doing it with the private sector. Glad you had an opportunity to, work in the U S department of education. And, , in the future, when you become us secretary of education, you can take this conversation to the next level.

[00:41:32] Denisha: Yeah, yeah. Ha we will be waiting in court in Asia. Yeah, waiting keyboarding. No, it was

[00:41:43] Cara: such a pleasure to have you on. Thanks so much coming on. Talk to us. They thank you for your time and for your work.

[00:41:48] Denisha: Thank you. I know. And it’s so great to reconnect with you guys.[00:42:00]

[00:42:07] Cara: And this week’s tweet of the week, listeners, is from Lauren Camera. It was tweeted on April. Cross-party agreement among younger generations in a significant generational split within the GOP is telling the story of education policy in a way that made benefit Democrats suffice it to say, I really, I strongly suggest that folks go, and this is from us.

[00:42:31] Go to U S news and look for this tweet from Lauren and read this article because it’s really interesting. Cause guess what folks turns out. there are divides among Republicans, especially younger Republicans on issues like, should we be teaching critical race theory or something that looks like it in the classroom?

[00:42:48] And surprisingly, some Republicans say, yes, it’s not monolithic among Democrats, especially under. Surprisingly support for school choice. So for [00:43:00] me, what was really promising in the findings of this poll from murmuration are that like, people are people and there can be differences of opinion, even within the same party.

[00:43:11] So we are not hopelessly split along party lines and. Gerard, maybe the kids have something to teach us because neither of us fall into the category of people who were pulled here. , anyway, we are going to be back listeners next week. We will be speaking to professor Robert alter. He is the definitive translator of the Hebrew Bible.

[00:43:31] Gerard. We’re going to get, biblical next week. I’m going to look forward to having more conversation with you and with our guests until then be, well, my friend

[00:43:41] Cara: look

[00:43:41] GR: forward to seeing you again.[00:44:00]

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https://pioneerinstitute.org/wp-content/uploads/TLC-template-6-1.png 512 1024 Editorial Staff https://pioneerinstitute.org/wp-content/uploads/logo_440x96.png Editorial Staff2022-04-13 10:09:232023-08-26 09:41:04AFC’s Denisha Merriweather on School Choice Advocacy & Black Minds Matter

Pharmacy Benefit Profiteers: Distortions and Costs of Half-Trillion Dollar Drug Middlemen

April 12, 2022/in Featured, Healthcare, Podcast Hubwonk /by Editorial Staff

https://www.podtrac.com/pts/redirect.mp3/chtbl.com/track/G45992/feeds.soundcloud.com/stream/1248906436-pioneerinstitute-hubwonk-ep-100-pharmacy-benefit-profiteers-half-trillion-dollar-drug-middlemen.mp3
Hubwonk Host Joe Selvaggi talks with ALVA10 CEO Hannah Mamuszka and Chief Medical Officer Dr. Blake Long about the perverse incentives imposed by Pharmacy Benefit Managers adding nearly $500 billion to U.S. drug costs.

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Guests:

Hannah Mamuszka is Founder & CEO of ALVA10, a healthcare technology firm. Hannah has spent her 20+ year career in diagnostics – both in pharma and at diagnostics companies, in the lab and on the business side. She believes that the challenges of diagnostic technology fully impacting patient care are more commercial than technical, and conceived of ALVA10 to create a mechanism to pull technology into healthcare by aligning incentives through data. She regularly speaks on issues regarding advancement of technology in healthcare, is on the Board of Directors for two diagnostic companies and writes a column on the value of diagnostics for the Journal of Precision Medicine.

Blake Long MD.

Dr. Blake Long is the Chief Medical Officer of ALVA10.   Blake was previously the Chief Medical Officer for Sapere Bio and for Echo Health Ventures, the venture investment group of BlueCross BlueShield of NC and Cambia Health Solutions. Prior to Echo, Blake served for 20 years as a practicing pediatric cardiologist at Savannah Children’s Heart Center and as a clinical professor at Mercer University School of Medicine. He earned his BA and MD from Duke University, and then completed his clinical training at Walter Reed Army Medical Center and Duke Medical Center. He received his MBA from Duke’s Fuqua School of Business in 2015, and now is an Adjunct Professor at Fuqua in the Health Sector Management Program.

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Read a Transcript of This Episode

Please excuse typos.

Joe Selvaggi:

This is Hubwonk, I’m Joe Selvaggi.

Joe Selvaggi:

Welcome to Hubwonk, a podcast of Pioneer Institute, a think tank in Boston. The high cost of healthcare is often blamed on the high cost of drugs, but a careful look at our healthcare system reveals that costs charged by drug manufacturers are less than the cost of the intermediaries known as pharmacy benefit managers, which neither make drugs nor provided insurance, pharmacy benefit managers, or PBMs, as they’re known, were designed to negotiate drug discounts on behalf of health insurance providers, and then take their earnings from a portion of the negotiated discounts. Incredibly the PBM industry itself today owing to the complexity and opacity of the healthcare system. Now cost the us healthcare system more than either the cost of drugs or the cost of insurance with PBMs. Now enjoying more than 400 billion in revenue annually, where still the incentive structures within PBMs combine doctors to prescribe drugs, not based on optimal clinical benefit, but on the price structures of the PBMs.

Joe Selvaggi:

How have organizations built to reduce the cost of drugs become bigger than the drug companies or the insurance companies themselves, and what can regulators and consumers do to reform the system to better align incentives in a way that encourages lower costs and greater freedoms for doctors to care for their patients. My guest today, our Alva 10 CEO Hannah Mamuszka and her firm’s chief medical officer, Dr. Blake Long as advocates for the use of testing to determine proper medical therapies known as precision medicine. Hannah and Blake have studied the costs of the distortions created by PBMs incentive structures. They will share with us how pharmacy benefit managers work, why they have grown to nearly half a trillion dollar industry and what consumers and policy makers can do to encourage reform. They can lower costs while encouraging more effective drugs and therapies for how healthcare consumers, when I return, I’ll be joined by Alva 10 Hannah Mamuszka and Dr. Blake Long. Okay. We’re back. This is Hubwonk I’m Joe Selvaggi, and I’m pleased to now be joined by Alva 10’s chief executive officer Hannah Mamuszka and Alva 10’s chief medical officer, Dr. Blake Long. Welcome back to Hubwonk, Hannah, and welcome to Hubwonk, Blake.

Dr. Blake Long:

Thank you so much, Joe. Yeah. Thank you, Joe. Pleasure to be here.

Joe Selvaggi:

Okay. We’re gonna be talking about pharmacy benefit managers or PBMs as they’re known and their effect on the cost of drugs and the availability of particular drugs in our healthcare system. Our listeners, remember you Hannah, I’m sure as an expert in precision medicine an advocate for precision medicine. So I’d like to have Blake introduce himself and share some about, of his background and how he came to precision medicine and alpha 10 and where he comes at this issue of PBMs.

Dr. Blake Long:

Oh, well thank you, Joe. So my background, I initially studied health economics and then completed medical training and practice as a pediatric cardiologist for about 20 years. And over that time, I became increasingly frustrated with the complexity of the healthcare system and its effect on patients and physicians. And so decided to make a career pivot and work on healthcare system change through innovation and investing. And I joined the alpha 10 team and Hannah they’ve been working on that about two and a half years ago.

Joe Selvaggi:

So your voice is coming from someone from the inside who sees that you have patients who need care. You have doctors who want to help them, but a system that somehow interferes with that, with that process.

Dr. Blake Long:

Indeed I did. I experienced it on a regular basis. There are a lot of distortions particularly with choices for therapies or diagnostics, whether it be testing or imaging. A lot of times those things were dictated to me and not in the best interest of patient care or as I saw fit.

Joe Selvaggi:

Okay. So now Hannah, I wanna dig into our topic of pharmacy benefit managers by first defining what they do. I mean, who, who created these things and, and what were they supposed to do, or what are they supposed to do for our healthcare system?

Hannah Mamuszka:

So PBMs have been around for a while. They’ve actually been around since the 1960s. They started to kind of creep into healthcare system in the, and nineties when the first ones were, were actually spun out of payers. The idea is that there needs to be some kind of an intermediary that works between the insurance company and the pharmaceutical company, the drug manufacturer who’s manufacturing the drug. So even though the name pharmacy benefit manager makes you think of pharmaceutical a and benefit manager is much more closely related to the insurance company than it is to the pharmaceutical company. The idea with the PBMs pharmacy benefit managers is for them to negotiate best drug prices and then pass that along to payers in theory, enabling a better competition in the market, better pricing and theoretically better value.

Joe Selvaggi:

So Blake and you study this, you have the background in the economics, how do PBMs make their money in the system?

Dr. Blake Long:

They’re, it’s, they’re in the middle of a multi-sided market. And so they have essentially four different ways they make money. The first is fees that they receive for, from predominantly from the health plan for managing transaction costs and medication management for patients. The second is what’s called spread pricing where they collect a, a price from the payer and then actually charge a different price to the pharmacy and keep the difference. The third is what’s called call callbacks, and these are contractual relationships with the pharmacists that if they need certain metrics, don’t meet certain metrics, they can reclaim some fees. And the lab last one is sort of the big one, which is rebates in that. The pharmaceutical company gives a discount to the PBM for guaranteed volume. And so they set a high price. And if that volume is met, they’ll give a discount. What’s key is that all these things are done after the point of sale. So those are the four real avenues of PBMs making money.

Joe Selvaggi:

So in theory they’re paid out of the discounts. They fight for on behalf of insurance companies, which ultimately where the consumers who pay those insurance rates, clawbacks, how do these work do consumers when they, when we get these dis presumably we get cheaper drugs do these clawbacks ultimately are down to the benefit of, of someone out there buying a drug.

Dr. Blake Long:

The clawbacks have less effect on sort of the consumer point of sale. They’re really affecting the margins of the pharmacist. And that is gonna be a less of a C the more important one is the, is the rebate issue. And that’s the big one. And just some general sense about the scale of this the contracts between the PBM and the pharmaceutical manufacturers, which is where the rebate is. The effect is very, but some published studies have shown how significant they are. For example, in 2016, 13 major pharmaceutical companies had gross revenues of approximately 300 billion and they paid 100 billion in rebates back to the system for a net revenue of 200 billion. So in other words, the pharmaceutical manufacturers paid 30% of their gross revenues back to the system in rebates or about 50% of their net revenue. In other words, the money they keep. And that’s been increasing sign over the last several years.

Joe Selvaggi:

That that seems like a lot of money. We’re talking about big bucks even in, in relation to the size of our healthcare system, how large is the PBM industry itself, meaning not the drug companies money to them though I’m doing the math. If they’re paying a hundred billion, we’re saying a hundred billion goes to the PBM or that that money goes some to the PBM and some to the back to the insurance company.

Dr. Blake Long:

The an yes, some goes to the PBM and some goes back to the insurance company. So just to, you know, a couple of other things on that issue the top five PBMs in 2021, their gross revenues were 422 billion, which is 9% higher than in 2020. So there’s been growth and it’s 56% higher than in 2015. So that, that revenue growth for PBMs has been dramatic. They have profit margins about four to 5%. So that’s a lot of profit it’s, it goes into the PBMs. And just to compare the top five pharmaceutical companies had gross revenues in 2019 of half of that, or 240 billion. And the top five insurers had 72 billion in gross revenue. So just to give you a sense of, of relation and scale.

Joe Selvaggi:

So if I get those numbers, right, the, the quote, unquote middleman, if I’m entitled to call PBMs, middleman are much larger, then the people that are standing in the middle, which are the drug companies and the insurance companies, they’re, they’re relative giant compared to the people that they’re theoretically intermediaries for

Dr. Blake Long:

That’s that’s correct. Yes.

Joe Selvaggi:

What, what percentage of, of drugs pass through these PBMs? And frankly with that much money I believe in markets, I hope we all believe in markets and the power of markets, shouldn’t that amount of money encourage competition. And we all know of basic economics in the long run profits go to zero, what’s going on here. You know, is do they compete with each other?

Dr. Blake Long:

There are three large PBMs and they own 90% of the market share. So they’re competing against each other, but they have, you know, quite a bit of market. That’s a significant concentration. And they, we know them as, you know, CVS care marks, Cigna express scripts, and United health group OptumRx of note, a lot of those are recent horizontal consolidation or with insurers. And then finally there are roughly about 70 PBMs, including those top three, and there’s been several, a few recent entrants. So there’s a lot of smaller ones that are competing against each other and against those big three.

Joe Selvaggi:

So presumably this is a, a industry that’s perhaps ripe for disruption. We will talk a little bit later in our conversation, whether any of that’s actually happening and how that would happen. But so far, I mean, at a high level, despite the fact that they seem to be collecting new nearly half a trillion dollars in revenue they do seem to be somewhat useful. They advocate for cheaper drugs and, and in theory, more competition, if a drug is too expensive, presumably they’ll choose a, a less expensive drug, but let’s, let’s talk about how a, a PBMs, how they were originally designed to negotiate on our behalf. And I presume encouraged competition of cheaper drugs where have distortions begin to where have they started to appear. Let me just throw out an idea here.

Joe Selvaggi:

I mean, you’ve, you sort of implied that if PBMs are driven by their own profits, 422 billion, a lot of profit, and those gen the profits you said are generated primarily by the discounts. They negotiate on our behalf with the drug companies and the more expensive a drug is the bigger, the potential for a discount. There seems to be clear initiative to or an incentive to include more expensive drugs on a formula instead of cheaper generic drugs, right? If a, if a drug costs almost nothing, the discount is almost nothing. So to me, you know, as, as a layman, this seems like an incentive for really expensive drugs.

Hannah Mamuszka:

Yeah. And that’s exactly how we’ve ended up with the hell healthcare system that we have. You know, if you look at what happens to new entrants, to drugs that get approved in indications where there are already drugs in other markets, you would expect a new entran to come in at a low price, right? To try to induce customers, to try a new drug to try and do physicians try to induce the PBMs and the payers, it’s actually the opposite in our system. Now if a new drug comes into the market and isn’t priced high enough to confer those discounts, that drug won’t be placed on the, on the formulary, the only way that you can get access to formulary tiering. And, and just to clarify, you wanna be as high on the formulary as possible because that’s the order in which physicians are allowed to order and, and try drugs on their patients. You wanna be as high up on that formulary, tearing as possible. It’s actually pricing your drug higher. That gets you there. It’s not pricing your drug lower that gets you there because that’s exactly what you said, Joe. That’s how you get that discount and that how that’s, how they make their money.

Joe Selvaggi:

So, so this would seem to be exactly counter to the notion of markets that, you know, a high price would invite lower cost competitors to enter the market. So the PBM looks at this lower cost alternative. I got drug a that’s expensive in drug B that’s cheaper. My mandate is to find cheaper drugs. And yet I may overlook the cheaper drug because there’s less discount for me to negotiate Argo. I choose the more expensive drug,

Dr. Blake Long:

Right? Yeah. That’s that, that that’s referred to as the rebate trap or the rebate wall. And so again, that established expensive incumbent, you know, gives a big discount. And so the new entrant w even might be a better drug for a patient or less expensive, but the savings that the health plan would realize from using that less expensive drug gets overwhelmed by the loss of the rebate for the more expensive one. So even though they may want to do that, they would lose money in the, in the aggregate because they would lose this massive rebate on the more expensive one.

Joe Selvaggi:

Yes. I can imagine all the drugs, some in the future go to generic, they’re all, you know, a dollar, I don’t know how one would earn 422 billion with a formulary full of very inexpensive generics. So we can see a problem right there as something working against, against the consumer. So I wanna Dr map our, our conversation directly onto your work with alpha 10 advocating for precision medicine for our listeners who haven’t heard our earlier episodes together, precision medicine, if you’ll, let me sort of generalize is, is the idea that different drugs and therapies work differently for different people and with better testing, we could bring to bear more effective drugs right away. We don’t have to give everybody drug one what works and then give those who didn’t, it didn’t work for drug two on and on, on, we test everybody and give everybody the right drug the first time. Again, I’m, I’m generalizing, but that’s how I see precision medicine. How, how might the dynamics of PBMs ate against the idea of precision medicine? How, how would it work against what you’re trying to do?

Hannah Mamuszka:

Yeah. You know, in some ways I think that the concept of having a PBM to help a physician figure out which drug to choose, you know, predated this concept to precision medicine, because when you had multiple drugs and there was no biologic way to tell which patient was gonna respond to which drug, it made sense to make that decision from an economic perspective, since you couldn’t make it from a clinical perspective. Now we know that we have the tools to figure out which patients are gonna respond to which drugs. So you could ask why we would want to use the economics instead of the clinical. So, you know, if you take, if you take an example like rheumatoid arthritis, rheumatoid arthritis is an autoimmune disease where you have multiple classes of drugs that work through different mechanisms of action. And then with E within each class of drugs, you have multiple drugs.

Hannah Mamuszka:

So you have, if you’re a, if you’re a rheumatologist treating patients with rheumatoid arthritis, you have a whole variety of drugs to choose from. And right now, most of that choice is dictated based on the formulary tiering of your pharmacy benefit manager. However, now there are diagnostic tools on the market that would allow you to figure out if your patients should go on a, say, a TNF inhibitor, which is the predominant class of drugs that’s used in rheumatoid arthritis, which works in about 30% of patients who are prescribed to them, or if your patient should go on a Jack inhibitor or an interleukin drug. But the problem is, is that the rebates for the TNF inhibitors in rheumatoid arthritis are so substantial that when payers take a look at what it would take to implement using a diagnostic in rheumatoid arthritis and shifting some of those patients from TNF inhibitors to Jack inhibitors, or to other classes of drugs, from an economic perspective, they realize they’re gonna lose their rebates because they are going to dip down below the threshold of volume under which they get those rebates and the drug is gonna become much more expensive.

Hannah Mamuszka:

And so, even though they now know that they have a tool where they could place patients on a drug, that was, they were most likely to respond to where they, their symptoms would decrease, where they’d be less likely to be in the hospital where they’d be more likely to be functional and feel better and be productive at work from an economic perspective, they can’t make it work. And we’ve talked to PBMs about this. We’ve actually also talked to some employers about it, and some of the employers have essentially admitted that their economic structure of their health plan is so dependent on the rebates that they can’t make the decision to add in a diagnostic, knowing that it would, would improve the outcomes for their employees, because the rebates are so substantial from the PBMs. And that’s a problem because in, in 2022, we have the technical capability to do this, but now we’ve created this economic problem. So we’re putting the economics ahead of the clinical improvements for patients.

Joe Selvaggi:

So I, I find this hard to believe I’m gonna kick it back to Blake, cuz he’s the doctor in the room. And I’m gonna say in this model, if I’ve got it straight from what Hannah’s just told us, we could offer a patient, a diagnostic test that would tell them, which is the right drug to take first. And by so doing, we may actually discover that it’s a lower price drug or a drug that offers a lower rebate Argo. I’m not gonna do the test and I’m going to give the maximum rebate drug to all my patients, knowing that I could avoid the time and the, you know, I’ll call it suffering that giving the sort of ineffective drug first will, will incur on my patients. How, how does that ring in a doctor’s ear?

Dr. Blake Long:

Back to my intro, not well <laugh> exactly. It’s so again, it’s, if you sort of think about it, I’ll answer it sort of academically and then sort of a little bit more to the patient level. As Hannah described, we have this decision making based on the economics for what is chosen and that is decided by a volume thing in retrospect. And so the ideas that you look back and say, this is how much drug I need to, we need to use the volume. And then I use all, all those tools of tearing step therapy, which is really hard for patients. I have to try a drug, make it fail before I go to the next one, very difficult for patients. In prior authorization, you can’t get the drug approved with, until you do all these steps, they use all these tools to make sure they hit those volume targets.

Dr. Blake Long:

Whereas we are thinking about using a diagnostic tool and if you look at it from the PBM perspective as a potential advantage, you could say, I have certain number of patients and I know who is gonna be on the drug and who will respond and I can guarantee the volume prospectively. And then you negotiate a rebate on that rather than in retrospect, as which is how it’s doing, what that’s doing for con consumers or patients is most patients now in the marketplace are on high deductible health plans. So they are exposed to a large co-insurance. So the higher, the price of the service or drug, the more they have to pay and in the specialty pharmacy area and in Medicare part D for example, in cancer average copays now, or 12 month prescription or 10 to $15,000, and that results in a non initiation rate of 30%. So it, it has a significant out of pocket cost to the consumer getting exposed to these rebate driven co-insurance problems and lack of utilization. So I can’t pick the right, the patient doesn’t has to go through drugs that don’t work to get there. And then they’re exposed to the significant cost. It’s a real problem in the clinic.

Joe Selvaggi:

So the PBM is both making that drug, that they need more expensive. It’s making it less likely they’ll be prescribed the better drug regardless of cost, because it’s lower on the formulary. And when they ultimately do have to pay they do, I have it right. They don’t enjoy the, the discount or the rebate. They, they have to pay retail flush that out for our listeners a little more. Again does do I, the cancer patient, you, there’s a remarkable 10, 15,000 cost per year. Of course, as you mentioned, that means they’re percent of people with cancer don’t take their drugs. How, how does that work? How does it how am I not benefited by the, the discount that the PBM negotiated on my behalf?

Dr. Blake Long:

Yeah, that’s a, that’s a great question. And that’s really, the complexities is the, the co-insurance is at the price at the point of sale. So you get exposed to the full price and then the discount happens after the sale. So all that money gets flowing around after I’ve already paid the price at the counter, so to speak or the point of sale. And so that rebate then goes back into the PBM and doesn’t necessarily come back to me. I don’t see that discount at the point of sale. So the co-insurance gets exposed to the higher price. That’s why it’s so problematic for the patient.

Joe Selvaggi:

You know one of the reasons we’re addressing this question now, as you say, the PBMs been around for a while and they’ve been getting worse, but it’s, it’s a, seems like a, a, a substantial problem. I I’ve read that. There’s some attention of on this issue, PBMs by the federal trade commission, these are the people who are supposed to protect us from unfair trade practices, such is monopolistic behaviors, I guess this would be called monos. We’ve got a few buyers of, of, of big buyers of, of drugs. Is anything being discussed at the high level? You guys I’m sure are up on this, what’s going on with the federal trade commission, are they looking at this and do they see it as the problem that, that we do?

Dr. Blake Long:

So yes, the federal trade commission just recently dealt with this issue and the focus primarily was on the pharmacy clawback issue as being Andy. But they voted in a two to two to not actually have the FTC TC explore that issue. But the, the study that was planned was more encompassing to look at the rebate side of the market, which is between the PVM and the pharmaceutical and other anti-competitive practices, including spread pricing and some of the other things and the thought was, is that is not the objection to pursuing the study were that it was not clear how it was going to affect consumer welfare, which is a, a little bit interesting given the discussion we’ve had just previously.

Joe Selvaggi:

Yeah, I, I did read something about the head of the FTC a woman named Lena Conn recently appointed by the Biden administration. She sees pretty tough on anything that looks like monopoly, but here, I think they’ve sort of lost the, the, the main point of our conversation. I think they, as you say, we’re more concerned about what PBMs do to little pharmacies in, in, in prefer or privileging the CVSs of the world in at the expense of the mall. Pharmacists. I think the bigger question as you point out, it seems like they overlooked the huge distortionary effects as in a half a trillion dollars siphon off the system that interfere both with the price of drugs, the availability of proper drugs, the prevalence of tests all the distortions. Why do you think they’ve overlooked this half a trillion dollar elephant in the room, Hannah,

Dr. Blake Long:

And you wanna tackle that one? <Laugh>,

Hannah Mamuszka:

You know, I, I find it fascinating because there’s so much of a discussion right now as there is this time, every election cycle around drug pricing and on Medicare’s ability to influence drug pricing about the government’s ability to influence drug pricing and about, you know, should we be importing drugs from other countries and how do we not stifle innovation? And that’s, that’s all fun. And that’s an interesting conversation to have every two years, but it, it stymies me. And I don’t know if it’s because the industry is so opaque, it’s so difficult to figure out a lot of these contracts are secret. A, you know, if you talk to payer, a lot of them don’t even know what are in at, at very senior levels. They’ll describe that these contracts are so secret that they haven’t seen them. They’re not allowed to discuss the rebates. They’re not allowed to share them. None of this is publicly available. It’s, it’s essentially impossible to figure out how valuable they actually are other than the fact that, you know, these are publicly traded companies and, and you figure out at the end of the year, what they’ve been up to. But it’s, it’s a real question as to why there’s so much focus on the pharma industry who is doing research and actually developing drugs, but makes less profit off of them than the PBMs do.

Joe Selvaggi:

Yes, indeed. We’ve had shows on Hubwonk, talking about the fact that drug prices though, the, the popular narrative is that they’re going up, they’ve seem to have stayed with inflation or, or, or not kept up with inflation. So the booking man on the political level is definitely the drug companies, but PBM seem to miss any kind of scrutiny, even though, as you say, they’re not even making the drugs, they’re not, they’re not healing us. They’re doing essentially nothing but acting as intermediaries. All right. So the FTC, so took a pass on this. I, I, I do though think that I I’ve read somewhat on this, that senators from both sides of the aisle Republicans and Democrats have both said, look, let’s, let’s, let’s keep this on the, on the front burner. Let’s, let’s take another look at this. I think there’s more to the eye more to the issue than the I can see right now. So let’s hope that this remains top of mind, but if the federal government can’t be relied upon to, in a sense, go out there and figure out what’s going on with this system, what what can consumers our listeners, business owners interested policy makers, what can those people who really want to tackle this issue? What can they do?

Hannah Mamuszka:

You know, I think, I think we’ve seen changes in terms of employers starting to realize, especially smaller employers and employers that self-insure starting to think about out the consequences of PBMs and of the rebates of PBMs and how that impacts both their healthcare costs, their employees’ ability to work. We’re seeing more and more market entrance of smaller, more innovative PBMs that have a different business model, where their business model is, you know, they contract with your employer on a, you know, a per employee or a per member basis. So they are not incentivized by the rebates they’re incentivized to grow their business. Some of them have other more interesting value based arrangements around performance in terms of how your employees, your patients are doing. So I think that there is a, a starting to be some market pushback, but as Blake said, you know, the dominant mechanism for PBM business relationships right now is the rebates. And most companies, most employers are using a PBM that is using the rebates as an incentive to drive business. And it, it, it greatly affects how employers make decisions about their employees healthcare. And I think it’s really important for employees to start to think about that and to start asking questions, particularly, you know, as benefit selection, season rolls around, you know, think about what that means for your benefits program, for what your employer is offering you, because, you know, it might have some consequences that maybe unintended.

Joe Selvaggi:

So there are PBMs. We don’t wanna paint everybody with the same brush. There are PBMs who do have incentive structures aligned with the benefits of consumers and, and businesses. We just gotta go out there and find them is it the case that I do, we’re, we’re blaming these kickbacks, if you will. These discounts that are negotiated as sort of the the, the mechanism by which PBMs, I think exploit the system or distort the system, is, are there PBMs that have no do not use that at all? How do they, in a sense negotiate for better prices and what metric do they use instead?

Hannah Mamuszka:

Yeah, I mean, there are ones like Costco health, like empire RX health RX sense, well done, just to name a few that are on, on some sort of a fee based model where, you know, they’re really trying to grow their business, their own business based on aggregated volume and not participate in the, in the rebates, because I think that there there’s a growing trend in that direction of understanding that at some point we’ll have to change how we pay for drugs.

Joe Selvaggi:

So, Blake I’ll, I’ll say to you, again, with the economics background as companies, insurance firms, you know, say way and slowly start to shift toward this newer model, this fixed fee or fee for per unit or something like that. This must then if we take some of these half a trillion dollars of intermediary fees out that should reduce premiums and save consumers money in the long run, shouldn’t it?

Dr. Blake Long:

It should, it should because that’s money that really in sort of in the middle and it’s not actually moving back to creating value. And I, I think one of the key things that Hannah said for this precision medicine is we can move to more fee based, but also as the pharmacy benefit with, which has historically been markedly separated from the medical benefit is those things start to blend together and the pharmacy actually affects your ethical outcomes and your costs, and therefore your premiums, as well as the point of sale costs that we talked about for paying for the drug that as you start blending those together, you, and then we move to value based care, moving to risk based contracts would be another interesting way to say a, how you manage your pharmacy benefits. So there are a lot of ways to use more clinical tools and to use more risk based contracting and move away from the rebate model and just a, a fee on a transaction in looking more for outcomes. I, I think there’s a lot opportunity to move in directions that can be really beneficial for patients and actually reduce total cost of care on top of reducing specialty pharmacy care.

Joe Selvaggi:

Yes, this seems like it’s a potential for win, win, win. As you say, you never wanna be making decisions with people’s health based, purely on economic reasons. You wanna use clinical reason. You want people to get better. And this seems to be just gratuitously distortionary and one hopes fixable without causing harm to anyone. Well, this is a very complex issue. I, I hope I’m gonna say let’s watch this space because I think this should come up and I’ll have our I’ll invite our listeners to call their Congressman or Senator and say, you know, what, what are you doing about this? And let’s see if this can’t come back into the forefront of of our attention. So thank you very much. Both of you for joining me on hub won. I hope if it does come back onto the public’s eye, you will come back and join me and explain what’s going on. And if we’re moving forward in the right direction, for sure

Dr. Blake Long:

Will do.

Joe Selvaggi:

Thank you. Thank you both.

Dr. Blake Long:

Thank you. Thank you, Joe.

Joe Selvaggi:

This has been another episode of Hubwonk, a podcast of Pioneer Institute. If you enjoy today’s episode, there are several ways is to support the show. It would be easier for you and better for us. If you subscribe to hub wonk on your iTunes podcast, catcher, if you wanna make it easier for others to find Hubwonk, it would be great. If you offer a five star rating or a favorable review, we’re always grateful. If you want to share Hubwonk with friends, if you have ideas or comments or suggestions for me about future episode topics, you’re welcome to reach out to me hubwonk@pioneerinstitute.org. Please join me next week for a new episode of Hubwonk.

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Read a Transcript of This Episode

Please excuse typos.

[00:00:00] Cara: Well, hello, Learning Curve. This is Cara Candal and the great Gerard Robinson coming at you for some wonderful conversation. We’re going to be hosting today. Our friend Denisha Merriwether, always fun to have friend of the show and a friend on the show. And I’m speaking to my good friend, Gerard Robinson right now.

[00:00:42] How are you?

[00:00:43] GR: Doing well, as you know, I had a chance to travel to California, to see the oldest daughter and to hang out with her and do fun things for the two younger daughters spring break. So it’s always good to have the Robinson ladies altogether

[00:00:59] Cara: [00:01:00] vacation. I didn’t re spring break yet. Our spring break is coming up.

[00:01:02] Well, you know, what’s happening here to kick off spring break for kids in this area is, Patriot’s day. Do you know what that is? True.

[00:01:11] Gerard: Yeah, cause you must not be much of a Patriot, right.

[00:01:15] Cara: Patriot’s day is really something that’s just celebrated in new England. And now I’m speaking at, I realizing that our producer, Jamie Gass is probably in the background and if I mess up what Patriot’s day is all about, I’ll get in deep trouble, but just going to say more importantly.

[00:01:28] It is known as marathon Monday. It shouldn’t be more important, but that’s the reality. So the Boston marathon is run annually. Well, save for a couple COVID years, little COVID respite there, , run annually, on Patriots day, this new England holiday, and it also picks up spring break for most kids in this area.

[00:01:47] Now I live very, very. The marathon route. I actually, in fact, I used to live right on the marathon route for all you runners out there and live really close to heartbreak hill, which is super fun. for runners, I guess it’s much more fun [00:02:00] for spectators. , but you know, Gerard, my marathon Mondays are always played with the following people just randomly stopping by me.

[00:02:07] Well spectating to use the bathroom and grab something out of the fridge. So we’re looking forward to just because I live so close to the route, we’re looking for it though, to seeing some friends maybe that we haven’t seen in a long time into cheering on the runners. I’m glad you had a great trip Girard, to sort of open my story of the week.

[00:02:26] wanted to ask you to reflect for just a moment. And I wanted to ask you you’re former teacher, I’m a former teacher. we’re all still teaching, right? Gerard. This is what we do, but you’ve taught in schools at one point in your career. Can you just like, give me one sentence to describe the quality of your teacher education, whatever training you did to become a teacher?

[00:02:49] GR: I can’t answer that one because my degree was in policy at the master’s level. And my undergrad degree was in philosophy. So I never went through a program to become a [00:03:00] certified or licensed teacher. So I’m no good on that. And I taught in private school, uh, when I started and I also worked in a Saturday program and summer program for two years for public school students in Newark and New Jersey, but that was.

[00:03:15] Full time.

[00:03:16] So how

[00:03:17] Cara: interesting, so you and I have a similar story. I have a certification in teaching English as a second language, but I don’t have a certification to like teach English literature yet. I did, right when I was in my twenties, it sounds like you and I had very similar roots, but a lot of talk going on about teacher certification these days, how to get teachers emergency certified and who should be able to be in the classroom.

[00:03:40] Right. We’re seeing legislation and a ton of states we’re seeing, in all things. A real or imagined teacher shortage. I think teacher shortages are local. We’re seeing some pretty cool programs in my estimation, out of places like Tennessee and Texas, that involve teacher apprenticeships. I think a great model if you can do it well, but my story that week is out of house.

[00:03:59] Right [00:04:00] down the street here because, they have done a way with their undergraduate path to teaching certification. So Harvard doesn’t have a traditional what we would think of as undergraduate school of education. But of course they have a master’s program in education and a doctoral program in education, but they have just decided to do away.

[00:04:21] With these courses that undergraduates can take, that lead them to be able to get their teaching certification, , before graduating, so that they’re prepared to teach upon graduation. It would usually be at Harvard, like just a three or four months course that they could take. And I chose history the week.

[00:04:38] Cause I think it’s really interesting indicator Of sort of. Where things are going with imagining who can become a teacher, how should they become a teacher? Do we really have to keep emphasizing these traditional routes, undergraduate schools of education, continue to, really train the lion’s, share of people that go on to become teachers in this country.

[00:04:57] But, if COVID is any [00:05:00] indicator in this upheaval that we’re seeing in the profession, just in terms of turnover, if not an exit. I think, , indicates to us that we really need to be thinking seriously about what it takes to help people, become

[00:05:12] certified or qualified in certification.

[00:05:15] Doesn’t actually

[00:05:16] Cara: equal qualification all the time. If you read the research, but qualified teach in classrooms in one, what it takes to get people qualified. in a timely manner and in a way that’s going to ensure that they’re doing right by kids. So this article just had me thinking a lot about something, a theme that’s been wrong for a while, which is, , do we really need schools of education per se?

[00:05:39] Maybe we do in some places, but what does it look like if more and more people. Aren’t educated in a traditional undergraduate pathway. And if more people are entering the teaching profession at different points in their career, how do we imagine that and how should states in particular be thinking about it and how should we measure quality?

[00:05:59] [00:06:00] I have no answers to any of those questions, Gerard, but , these are wonderings that I pose for you and or our listeners. But anyway, that’s surprising news out of Harvard and. It’s not like perverts training, a ton of the nation’s teachers or even the Commonwealth’s teachers. So I’m not in the category of some of the people quoted in this article that think it’s like dastardly in a huge disaster.

[00:06:20] It’s probably a smart move on Harvard’s part, but an interesting move

[00:06:25] GR: Interesting. So I am a graduate of Hughsey, as I like to call it, the Harvard graduate school of education in policy ton of my friends were in teacher education. So what Harvard is doing or just did in 2022 was a topic debated by deans and researchers in the 1980s.

[00:06:48] And there was a report that was published. I believe it was called today, tomorrow. Report or committee. It was a group of deans who said one way to improve teacher education and to [00:07:00] improve outcomes with the students who work under these teachers is to abolish a undergraduate degree in education that instead you earn something in the humanities, social sciences, liberal arts, fine arts.

[00:07:13] Earned a degree, and then you can earn a master’s degree or credential, but their whole piece was to abolish it. And so there was a move for that at the same time you had. Dean who said, no, we need to keep that program in place. So I am in Charlottesville, affiliated with UVA. In fact, I attended UVA school of education.

[00:07:31] We have a program here where you can major and let’s say philosophy, which was my undergraduate degree. You can earn master’s degree from the Harvard ed school you can do so in five years. At times, depending upon how many credits you take, maybe even shorter, but here in you, the outgoing Dean, and we’re waiting to see who our new Dean will be.

[00:07:53] There was a push that we think it matters, and I have a thumbs up for that, but I also have a thumbs up for Harvard [00:08:00] if they decide that this is what they want to do. So for me, it’s not either, or. it’s an, and it really depends upon a commitment from the president, a commitment from the Dean and research to support why this makes sense.

[00:08:14] This is part of a larger conversation that’s been taking place even within the last two years of the pandemic. So just think about the American association of colleges for teacher education. Earlier this year, they released its second comprehensive report about the state of teacher preparation. And what they identified is that between 2008 and 2019, the number of people completing a teacher education program declined by almost a third and traditional teacher preparation programs saw the largest.

[00:08:45] 35%, but alternative programs also experienced a drop as well. So this is something that’s just part of the teacher education dynamic and the conversation that we’ve had for a [00:09:00] while. I can understand why people have an outcry at any point, you decide to get rid of something. People often don’t like it, unless it’s for taxes.

[00:09:09] Yeah, besides that when it’s a program, it’s a different story. So I give a thumbs up to my Alma mater. They’ve obviously looked into this. If it makes sense for them, they should move forward. But I’m also glad to see a place like UVA and other schools do the same thing, but this isn’t a Harvard UVA dynamic.

[00:09:27] This is really a dynamic about teacher education. So for our listeners, take a look at the American association of colleges for teacher education report released, earlier this year.

[00:09:36] my teacher story comes from the other side of the pond and my story comes from the guardian and the title. And just get this, everything you need to know is actually in the title.

[00:09:48] Cara: Can you do it in a British accent, the title? Oh, I’m not that good.

[00:09:53] GR: And I’m sure if I did, I would offend someone.

[00:09:54] So I don’t want to go that route 44% of teachers in [00:10:00] England plan to quit within five years. So. Many of our listeners know that I traveled to Birmingham, England, not too long ago to meet with scholars and practitioners who work in the field of K-12 education. I have a chance to visit a school and to talk to educators.

[00:10:15] Well, you and I are big fans of polling data because it gives us an opportunity to get a representative sample of the profession. Well, here’s a survey of 1,788 teachers. and a fifth of them, 22% said they will leave the profession within two years. But by the time we get to five years, 44% said they would likely leave.

[00:10:36] Now, if that is a representative sample, that’s going to be a major hit for England. And here’s why right now you have 461,000 teachers who work in across England today. That’s 20,000 more than 2010. So there’s at least an increase. But if approximately 44% decide to leave in five years, it’s going to be a big hit [00:11:00] on the economy, but also on the profession.

[00:11:02] So what are some of the factors as to why teachers were leaving? Well, you’re not going to find some of this to be shocking. , teachers find that it’s the workload. Is unbearable. , the number of hours they’re expected to work. I’ve been really tough. There’s also a problem with finding substitutes and staff.

[00:11:19] Teachers said, schools are finding it really difficult to feel big and seas, which is leading to teachers having to double up in their roles. And they said, when people leave, it’s tough to have some more. Come in two thirds of secondary school teachers say the issue of vacant teaching assistance and support has worsened since 2020.

[00:11:39] And so when we try and figure out what’s the cause of this, I turned my attention to Dr. Mary Boston, the joint general secretary of the national education union. It is the largest union. And England for teachers. So the national education union was created in [00:12:00] 2017. It followed the amalgamation of the national union of teachers and the association of teachers and lecturers.

[00:12:07] And they got together in 2017. This group. And so when I talked to the president that, you know, they say, well, what’s the problem. And she said, quote, we remain a profession with almost the highest number of unpaid working hours. And we’re still well above the international average for hours worked by teachers.

[00:12:25] This simply is on sustainable. She goes on to talk about the problem, trying to recruit teachers and to retain them in a profession. So when asked, what do you think, who do you think, or what do you. let all of this. And she said, listen, the state department of education or the department of education, these are take steps to quote unquote right, the wrong.

[00:12:46] And she, I particularly identified education secretaries over the years, simply have missed the targets. And so similar to what we hear here in the United States, she’s saying it’s an issue with policy makers. [00:13:00] Education secretaries and government in general. And in the article, she also took a note and it’s worth noting this for our listeners.

[00:13:08] she also found a problem with the, what they call Offstead, which is the office for standards in education. And it created a national, inspectorate whose job was to follow publicly funded schools K-12 and higher ed to see how well they’re doing. And. What the doctor is saying is, you know what, this is a problem as well, because it’s not really doing its job.

[00:13:29] So here are a few takeaways for me. Number one. I grew up in a union home. I am a supporter of unions. I understand why we have unions for educators because they formed a union to make sure their rights are protected. And so when the teacher said we’re burned out and we’re. I believe them. And I believe there’s a role for the government to play in trying to fix some of those challenges or as Mary said to ripe the ship.

[00:13:58] But I would also ask union [00:14:00] members to ask tough questions of their union members or the union leadership as well. So for example, if you’re overworked and if you’re not paid enough, What is a union done for that? Or what negotiations or trade-offs has your union made? that led to some of that.

[00:14:16] I just think there’s a role that members should play or look at when trying to figure out, who’s the culprit. I think there’s a lot of blame, but also a lot of benefit to go around, but often. Finger pointing outward it’s government. It’s the secretary. So, that’s one challenge, but it was also worth noting that I went to the national education union webpage and I would recommend our listeners do the same.

[00:14:39] When you look at the web page, I see support black members. Lives matter. I agree. And if you take a look at the educational outcomes, both college and K12 for black students in England, it’s not great. And if you go further down, you’ll see a number of things about, , an active zone at the end of the conference to replace Offstead.[00:15:00]

[00:15:00] And you’ll also see educators have lost 17% of their patients. Since 2010. So is a lot going on with the webpage and what they want to do. 44% is a lot. I don’t think it’s going to take the government alone, but I think there should be some internal looking as to what unions can and cannot do and what role they’ve played in leading to this.

[00:15:21] And that’s not only on the other side of the pond. I think there’s some relevant conversation for this as well on this side.

[00:15:27] Cara: Oh, well, you are not going to get any pushback from me on those comments. My friend, not that I think you normally do, but share a little Andrew, go here. I was, at a panel, , maybe a week or two ago, hosted by Boston university, Wheelock education policy center, shout out.

[00:15:43] Um, I am a member of their advisory board and it’s a wonderful, it’s a wonderful institution, new institution. But there was a panel that included a former teacher of the year, the current head of Boston teachers, union, Kate Walsh of NCTQ and the superintendent here of a community called fall [00:16:00] river.

[00:16:00] And one of the comments that was made that. Tons of snaps from, folks in the audience as we didn’t snap when I was a teacher. So I’m always going to play, I’ve done teacher training and teacher development, the snapping phenomenon. If you know what that is, I think my kids do it in school to give people props or say, I agree, but what received tons of stamps was somebody saying, well, you know, what would really just fix everything with the teacher crisis?

[00:16:20] And the teacher shortage and teacher burnout is if we could please just move to a four day school week. So teachers actually had planning time and we weren’t working until 10 o’clock at night. And I think.

[00:16:34] Because

[00:16:35] Cara: what’s lacking in that comment is a complete number while there are many things. One is, if you are to the point you’re making about the website and, outcomes for students, particularly black students from the union wants to support. What are you going to do with taking, the school time away?

[00:16:50] Right. And number two, there’s a complete and utter lack of an, impetus to re-imagine what the school day could look like. So I’ll give you an example of many, many of us who have worked in private schools know [00:17:00] that, to accommodate teachers with more planning time, one of the things you do is you fix your schedule and you move things around and yeah, you might have to hire more staff that.

[00:17:09] Might not be unionized such as staff and other people, so that students are doing enrichment and other supplemental activities while they’re subject matter experts. I have planning time and they should, they need it. All of those things are super, super important, but I just wanted to share that I was really taken aback by this comment that was so teacher centered versus student centered.

[00:17:30] And I think that if we would do a better job of leading with what students and families need in the first year, Then that might bubble up to giving teachers what they need because what students and families need is consistency thing. Teachers who are going to be with them for a long time, teachers who are happy in their jobs, that they’re going to be happy in their teaching, and they’re going to be more effective.

[00:17:47] All of those things, I was taken aback by this suggestion of a four day workweek. So I greatly appreciate Gerard your call for more introspection on both

[00:17:58] sides of the.

[00:17:59] GR: [00:18:00] one thing just came to mind as well. The article talked about the mental fatigue and health of teachers, you and I know that’s real.

[00:18:10] We’re going to make that something we need to invest in while these children are going home to parents who are equally fatigued and a number of them have mental challenges. So I’m saying if we do one for one group and that’s a factor leading to. Let’s talk about families and teachers as well. That’s it?

[00:18:26] Cara: Thanks so much. Cause this burned out mama would love that. And at any rate I have, one thing to say before we introduce our phenomenal guests. Dinetia Merriweather of American Federation for children and founder of black minds matter. But this is really important because as I said, Jamie gas, our producer was going to make sure I got this right.

[00:18:45] So for everybody who is dying to know Patriot’s day, I said it was the annual event, but it commemorates the battles of Lexington, Concord and monotony. And somebody is going to call and say, I said that wrong and that’s okay because I’m from Michigan. I [00:19:00] just want that to be clear. And some of the. Battles of the American revolutionary war.

[00:19:06] but for those of you, who’ve never had a chance to visit places like Lexington and Concord walk the wonderful trails here that we have in Boston, the freedom trail, et cetera, can’t recommend it enough, a learning experience for all

[00:19:17] agents,

[00:19:18] Cara: but we will be back with Denisha Merriweather right after this.

[00:19:40] Learning curve listeners. We are back with a woman that many of you know, Denisha Merriweather is the director of public relations and content marketing at the American Federation for children and families. Of black minds matter. Denisha previously served as school choice and youth liaison to the secretary of education at the U [00:20:00] S department of education.

[00:20:01] She has a Florida tax credit scholarship graduate year, and now sits on the board of directors for step up for students and other yay for step up for students. Denisha received her master’s degree in social work from the university of south Florida and bachelor’s degree in interdisciplinary social science.

[00:20:19] Along the way Denisha has become a national symbol for school choice, headlining events with president Trump, Florida governors, and other advocates for school choice. Denisha has shared her story across the country and has been featured in the wall street journal Prager U the Washington examiner education week and Fox news among other things.

[00:20:37] Denesha you and I met, I think it must’ve been two and a half, three years ago now at, the international school choice and reform conference. But even then it was clear that you were just a leading spokesperson for school choice and you. So you speak about your own experience and the possibilities that choice brings for other people with , such power.

[00:20:59] Could [00:21:00] you talk to us a little bit about your story and, , your school experiences and did that brought you to where you are?

[00:21:08] Denisha: Yeah. I know it wasn’t, it, it has to be longer than two, three years. Cause I think pandemic was like, I try not to remember how old? yes, but I, came into this, I always tell people that I was thrust into the education reform space because I benefited from school.

[00:21:30] In grade school. And before I received a private school scholarship, I really had a bad experience. That was , my experience in the public school system. I went to my local zone school. and my family situation was not that great. So I moved around a lot, which meant that I went to about five or six different elementary schools, and all of the schools that I went to.

[00:21:58] Not a good fit for me.[00:22:00] , I remember early on my earliest memory of school was like in the second grade of just being drug out of class by one of my teachers, because I was being disruptive and. , I failed the third grade twice because I couldn’t read. just knew I was stupid. I thought I was dumb in my self esteem was really low.

[00:22:25] and there was not a lot of assistance I would say, or help to. Helped me to get up to great level. in the fourth grade, I, my mother, , did enroll me into this program called the star program. I remember it so vividly. It was a program to help other kids, other students who were in elementary school to get caught up to their right grade.

[00:22:48] So I was in a classroom with other kids who were two grade levels behind three, four grade levels behind in elementary. Right. And I [00:23:00] didn’t pass that program. , and it really created just a spirit of despondence. I, hated school. I felt like there was no need for me to go to school. I would wear pajamas to school.

[00:23:12] didn’t care. I remember a teacher Scion when I came through the door, like when I would walk classroom door, teachers would hear, comes to Nisha. And that weighed on me. And so for the early part of my, life, it was, I did not have a great relationship with learning with education.

[00:23:33] It was not a place where I felt, that I could succeed or even that I wanted to succeed my family. my biological family come from a long line of people who’ve dropped out of high school. People who’ve had children at early ages have had, babysit as teenagers. And so for me, I thought that was gonna be my, narrative, my life’s narrative.

[00:23:55] I would, I would have a job. I would not follow that path. Cause I, I had, no, I like [00:24:00] to money too much. I would have a job and I would, but I will have a baby. as a teenager, And so, yeah, that was for me early on my early education was not, it was not a positive association with learning. in the sixth grade, I began to lift permanently with my godmother the summer before my sixth grade year.

[00:24:22] I moved in with her and that’s when everything changed. She wanted me to attend the private school that her, church had started and it was a private school. So she didn’t have a way to pay for her family. Her income was not that much greater than my biological families. And she found out about the Florida tax credit scholarships.

[00:24:41] Step up for students. She applied for. The scholarship and literally everything with education became night and day. When I first started to come to this school teachers instead of sign, like they would greet me with smiles, hugs, [00:25:00] prayer. At first I’m like, okay, it’s going to wear off the first day of school.

[00:25:04] You know, like everybody’s first week of school, they are happy and cheery, and never wore off. I promise you from sixth grade to 12th, every single day, there was someone welcoming us into the school with open arms, with smiles and hugs. And that was , my first experience everyday walking into the classroom doors and.

[00:25:27] Teachers. And I had two teachers who even met with me one-on-one the summer before I got started, because my reading was so low and I didn’t know how to do my times tables. I didn’t know them, not even my memory. And so that showed me that they cared and they, did. I ended up making, D’s and F’s consistently to making a B honor roll my first nine weeks at this new school.

[00:25:52] And. For me, it was like, wait a minute. So I’m not dumb. I’m not stupid. I’m not a failure. and [00:26:00] so ever since graduated from high school, I began to share about my experience because also along this time, I have siblings, biological siblings who are still in the public school system. I have biological siblings who have not graduated from high school.

[00:26:15] It really showed me that. Education really does make a difference. , and so I began to share my story. I became an advocate and kind of live this alter ego. So that’s, how it got started. I became an advocate for school choice, , because education really. Changed my life in the trajectory of my life.

[00:26:35] I went from making D’s and F’s to AB honor roll to graduating with honors from high school, going into college, earning a master’s degree. And I don’t think that would have been possible if I hadn’t been given a different opportunity. Yeah.

[00:26:51] Cara: You know, one of the things I, appreciate about the way you described that first day of school is every research schools, for a lot of my career.

[00:26:59] And [00:27:00] one of the things that I noticed, and I look for in schools for my kids, it’s a place. It feels like the adults really see the kids like every kid. , I appreciate that part. Now Denisha for our listeners, you mentioned that you were a recipient of the Florida tax credit scholarship, and Florida is known for having really the most robust school choice environment in the whole country.

[00:27:23] I think that a couple other states would like to quibble with that maybe Arizona looking at you, but , between tax credits and. education savings accounts, options. And now actually the Florida tax credit scholarship, and much of that has been turned into a more traditional voucher so that money’s not having to be raised all through donations, which is how it was when you attended.

[00:27:42] so you talked about how that changed your life. Could you tell us a little bit more about this idea that you mentioned that your first public schools didn’t work for you? that implies to me that maybe they were working for some kids, but one of the things, folks talk about advocates of choice.

[00:27:58] Talk about a lot [00:28:00] is. And that, every kid needs to find the right fit. Can you talk a little bit more about what we mean when we say fit and specifically with regard to academics and how you went from being a kid who thought of herself as a failure to somebody who was cheating high grades, and obviously given where you are now, they weren’t just giving you A’s and B’s to pass you on.

[00:28:20] can you talk a little bit about what fit means and what it meant for you at your school is.

[00:28:26] Denisha: Yeah, I think that is such a great question because that’s what, we, as reformers in education want for every student, for them to find the right school that fits their needs and abilities and interests, et cetera.

[00:28:42] And for me, that means, exactly that, that it’s a school environment where You know, it’s like a glove, you know, I don’t know what other words you use other than fit, but it caters and it, encourages their needs, their interests, their abilities. , and that could be [00:29:00] anywhere from, , a private Christian school to district school, to a charter school.

[00:29:06] To a Montessori school, to an outdoor tree house school, you know, forums. A zoo school I’ve been to so many types of schools. there are so many different types of innovative models that really, gets to. how to get a kid to learn and be interested in education.

[00:29:25] And for me, experi, to core you, what, you know, w what was that like for me? one, it was the nurturing environment that, yeah. They saw me as a person that not only as a person who. Came to school with a lot of baggage and not the, not the best, outlook or even disposition. at first, when I came to the school, I was a challenging student.

[00:29:48] Like I, I spend time in, in school suspension. they didn’t believe in, suspension or out-of-school suspension. It was all in school. And I was one of the students who attend. So it wasn’t like, I, you know, like you said, they [00:30:00] were just giving me A’s or that I just changed dramatically. I was a challenging student when I first came in, but them being so nurturing and consistent was something that changed.

[00:30:11] And that was the type of environment that I needed. it was a very rigorous school. So we were hopping from subject to subject to subject every day. We, we didn’t stay, stagnant, I would say spending a whole week or a whole month on one lesson, everything was, , rapid fire. I’ve never been diagnosed with ADHD, but I kinda think I am so like, that type of learning environment was so important because it kept me interested.

[00:30:43] Like it was a new challenge every day that okay. I had to, solve and, also I was pretty mouthy. Like I work in communications And I was pretty mouthy as a kid. And, , that would not sit well with a lot of adults, but at this school they encouraged it. , , instead of seeing that as a [00:31:00] deficit, it was just like, okay, use your voice, the vocal.

[00:31:03] And we’re going to give you these outlets in order for you to do that. so I do think every kid has. different, , , uniquenesses about them and they should be encouraged and not, stifled, Hey

[00:31:15] GR: Danesha, how are you? Hey, good to see you. Let’s go back to because you and I have been on panels together.

[00:31:24] We testified together. We’ve advocated together. Let’s go back to. Y you talk about this through the lens of public policy. I know one of the things that we often hear when we say we support school choices, that somehow we are anti-public education. When you hear that, how do you respond to those who bring it up either in policy discussions or elsewhere?

[00:31:48] Denisha: Yeah, that’s totally not the case. how respond is? No, it’s all about what is the best environment, whatever is the best environment for, , a kid. Yeah. There is a lot of,[00:32:00] development, a lot of things we need to change within the traditional public school system, just because, , they’ve been in the game for a long time, you know?

[00:32:10] We do want to hold them accountable. We do want to hold district schools accountable for students because over 90% of our kids go to district school. So it’s impossible to say that we want all of these students to leave our district schools are zoned schools and go to schools of choice because we don’t have that market, , yet.

[00:32:31] but that’s not the idea. We want our, public schools to. educate kids appropriately. and we want parents to be able to choose their public schools. I don’t think it should be a, just a default where you are mandated to go to, this particular school, just because you live. In an area.

[00:32:48] I think parents should have that opportunity to pick and many states do they have open enrollment policies where parents don’t just have to go to the school that they’re [00:33:00] zoned for. They can pick amongst all the schools in their. through open enrollment policies or they can go to a magnet school.

[00:33:07] So there is choice within the public school space, but yeah, for those who, claim like, oh, the school choice fight or the education reform fight is just to uproot everyone out of public school. would be impossible, first of all, to do that. And that’s not the goal. The goal is for parents to be empowered within a system while also holding district schools accountable for academic outcomes and, in students.

[00:33:36] GR: So glad you mentioned magnet schools because they existed before the creation of the first charter school law in Minnesota, or since we’re here at pioneer, they, one of the early states, with, , . Open enrollment procedures. Charter schools, part of a, you know, part of the open enrollment and even in places like the state of Washington, which several years ago, it’s Supreme court rule that is charter programs [00:34:00] unconstitutional, even though they allowed students in Washington to cross borders, to go over for parental choice, let’s take a look at the work you’re doing right now with black minds matter.

[00:34:11] we know that black lives matter is a part of the American conversation right now. Good bad, ugly, hopeful, and everything in between you created this group to do some good work, talk to our listeners about it.

[00:34:25] Denisha: at the height of the social unrest in our country in 2020 with the murder of George Floyd amongst others, like you said, the entire country was looking at, our systems, you know, we were thinking about how can we become more equitable from companies, who were in charge of certain bottles and pancake mixture, changing logos.

[00:34:49] And one of the things that I did I found frustrating was that we didn’t pay as a country enough attention to the education system. And. [00:35:00] To the inequities that exist in that system, , in some of the reforms and changes that really could make a difference in the lives of students. in particularly black students, minority students who, who are oftentimes.

[00:35:15] most of the time, I won’t even sugar coat. It lagging behind their peers in every academic subject, across, national statistics, state statistics, , , , the academic outcomes for black students nationwide, according to the NAPE are really a dismal. And it’s, depressing to look at, over five-year 10-year span how there’s been little.

[00:35:39] to close that achievement gap. And so, that’s why, I started Black Minds Matter to say we need to bring attention to the inequalities in the education system, into champion for more options, because there’s a lot of research, that shows that when school choice, when particularly [00:36:00] black students have choice in education, their academic outcome, Improve drastically.

[00:36:06] and here in Florida, we’ve had a number of research studies, in Milwaukee where the oldest program is founded in even, not just academics, but crime and teen pregnancy and all of these other issue areas. They’ve seen improvement. when students have school choice. And so that, that’s why it was founded.

[00:36:28] We also celebrate, , , black owned schools, which is another form of choice and education. , because in order to found a school that’s a different type of school. So it’s a homeschool co-op or micro school. School charter private. And, these folks are amazing. I’ve done interviews with them, have talked with them on panels and these school founders are just, can’t explain them enough.

[00:36:55] They have the passion and they also are putting their passion to [00:37:00] practice. With founding the schools and it’s, so amazing. So that’s, yeah, that’s a little bit about black minds matter

[00:37:07] GR: and it’s so good. You focused on minds because in the political work that we do, we forget that this is also things.

[00:37:15] And that when bills were signed and the ink is dry and regulations are put in place, they’re actually real people who are doing the work. And so glad you also give a shout out to black homeschoolers and founders, you know, during the pandemic, the black homeschool population grew faster than any other group in the United States.

[00:37:33] Here’s the last question for you. And it relates to stuff that you mentioned with Milwaukee. I had a chance to travel to Milwaukee last fall for the 30th anniversary of the Milwaukee parental choice program. The oldest urban based program in the country. You had Dr. Howard fuller. You had Susan Mitchell.

[00:37:48] you had former governor, Tommy Thompson. You had a former speaker and others there to celebrate. So that’s one. You also had the 30th anniversary of the charter school [00:38:00] movement. Third. Years into the game. We have a lot of wins. The one thing that we really haven’t focused on is the alumni of these programs, whether it’s tax credit, whether it’s tuition, tax credit, where they’re, I guess coming soon ESA a charter schools as a graduate of a program before.

[00:38:22] As you work across the country with people who have children in the program, enough for you are now old enough to have not only been college graduates, but you now are employers you’re entrepreneurs and you’re doing great work. What can we do for the alumni to become the Vanguard of the next phase of this

[00:38:41] Denisha: work?

[00:38:42] Yeah. What an awesome. And yeah, I think that. It is, it’s so important and it’s so amazing to, yeah. We need more alumni, but to see just the drop of students, , in parent beneficiaries who are taken on the reins [00:39:00] of the fight, one, I, yes, I think it’s extremely important because not only do you have someone who can.

[00:39:07] speak to the need, just writ large of more options of more, school choice, choice, and education, but they also have that personal story, that personal narrative of how they benefited from choice and education, how they were empowered. I think it is, it’s so amazing. And we do, we need wait, some, so many more students, at the American Federation for children, we do have a fellowship program.

[00:39:38] Um, beneficiaries, and we’re on our third cohort. And so about 30 students nationwide who benefited from school choice, , in some form. And these are, , charter school alum. These are private school alum, and we also have some homeschool alumni who. Participate in the fellowship to learn about the policy, to couple that [00:40:00] with their personal stories, , to go to legislatures, to go to, events, to just speak candidly about their experience.

[00:40:09] We do. We have so many students now who’ve benefited from choice. So we do need to all do a better job of finding them, nurturing them and empowering them to share their story because I believe they’re the ones that’s going to make the difference. You know, I think that I’m a little biased, obviously I’m a beneficiary of choice.

[00:40:29] but when you put somebody on. And they can talk to the policy aspect and they can talk to their personal story. It’s kind of hard to, refute them. I know I’ve been many conversations where people will be like, oh, I don’t believe in this, this does this. And it does that. , I don’t believe that people should have a choice in the education and.

[00:40:50] I share my experience like, Hey, this was my trajectory. This was what was going to happen to me. But something changed. And then people are kind of like, well, [00:41:00] I’m happy it worked for you. That’s awesome that it worked for you. but, uh, so it’s, it’s, it becomes hard, kind of review a person’s personal story.

[00:41:08] It becomes hard. So that’s what we need more.

[00:41:11] GR: Well, so glad that not only are you taking your story to the public arena, but you’re also doing it with philanthropy, you’re also doing it with the private sector. Glad you had an opportunity to, work in the U S department of education. And, , in the future, when you become us secretary of education, you can take this conversation to the next level.

[00:41:32] Denisha: Yeah, yeah. Ha we will be waiting in court in Asia. Yeah, waiting keyboarding. No, it was

[00:41:43] Cara: such a pleasure to have you on. Thanks so much coming on. Talk to us. They thank you for your time and for your work.

[00:41:48] Denisha: Thank you. I know. And it’s so great to reconnect with you guys.[00:42:00]

[00:42:07] Cara: And this week’s tweet of the week, listeners, is from Lauren Camera. It was tweeted on April. Cross-party agreement among younger generations in a significant generational split within the GOP is telling the story of education policy in a way that made benefit Democrats suffice it to say, I really, I strongly suggest that folks go, and this is from us.

[00:42:31] Go to U S news and look for this tweet from Lauren and read this article because it’s really interesting. Cause guess what folks turns out. there are divides among Republicans, especially younger Republicans on issues like, should we be teaching critical race theory or something that looks like it in the classroom?

[00:42:48] And surprisingly, some Republicans say, yes, it’s not monolithic among Democrats, especially under. Surprisingly support for school choice. So for [00:43:00] me, what was really promising in the findings of this poll from murmuration are that like, people are people and there can be differences of opinion, even within the same party.

[00:43:11] So we are not hopelessly split along party lines and. Gerard, maybe the kids have something to teach us because neither of us fall into the category of people who were pulled here. , anyway, we are going to be back listeners next week. We will be speaking to professor Robert alter. He is the definitive translator of the Hebrew Bible.

[00:43:31] Gerard. We’re going to get, biblical next week. I’m going to look forward to having more conversation with you and with our guests until then be, well, my friend

[00:43:41] Cara: look

[00:43:41] GR: forward to seeing you again.[00:44:00]

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https://pioneerinstitute.org/wp-content/uploads/TLC-template-6-1.png 512 1024 Editorial Staff https://pioneerinstitute.org/wp-content/uploads/logo_440x96.png Editorial Staff2022-04-13 10:09:232023-08-26 09:41:04AFC’s Denisha Merriweather on School Choice Advocacy & Black Minds Matter

Pharmacy Benefit Profiteers: Distortions and Costs of Half-Trillion Dollar Drug Middlemen

April 12, 2022/in Featured, Healthcare, Podcast Hubwonk /by Editorial Staff

https://www.podtrac.com/pts/redirect.mp3/chtbl.com/track/G45992/feeds.soundcloud.com/stream/1248906436-pioneerinstitute-hubwonk-ep-100-pharmacy-benefit-profiteers-half-trillion-dollar-drug-middlemen.mp3
Hubwonk Host Joe Selvaggi talks with ALVA10 CEO Hannah Mamuszka and Chief Medical Officer Dr. Blake Long about the perverse incentives imposed by Pharmacy Benefit Managers adding nearly $500 billion to U.S. drug costs.

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Guests:

Hannah Mamuszka is Founder & CEO of ALVA10, a healthcare technology firm. Hannah has spent her 20+ year career in diagnostics – both in pharma and at diagnostics companies, in the lab and on the business side. She believes that the challenges of diagnostic technology fully impacting patient care are more commercial than technical, and conceived of ALVA10 to create a mechanism to pull technology into healthcare by aligning incentives through data. She regularly speaks on issues regarding advancement of technology in healthcare, is on the Board of Directors for two diagnostic companies and writes a column on the value of diagnostics for the Journal of Precision Medicine.

Blake Long MD.

Dr. Blake Long is the Chief Medical Officer of ALVA10.   Blake was previously the Chief Medical Officer for Sapere Bio and for Echo Health Ventures, the venture investment group of BlueCross BlueShield of NC and Cambia Health Solutions. Prior to Echo, Blake served for 20 years as a practicing pediatric cardiologist at Savannah Children’s Heart Center and as a clinical professor at Mercer University School of Medicine. He earned his BA and MD from Duke University, and then completed his clinical training at Walter Reed Army Medical Center and Duke Medical Center. He received his MBA from Duke’s Fuqua School of Business in 2015, and now is an Adjunct Professor at Fuqua in the Health Sector Management Program.

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Please excuse typos.

Joe Selvaggi:

This is Hubwonk, I’m Joe Selvaggi.

Joe Selvaggi:

Welcome to Hubwonk, a podcast of Pioneer Institute, a think tank in Boston. The high cost of healthcare is often blamed on the high cost of drugs, but a careful look at our healthcare system reveals that costs charged by drug manufacturers are less than the cost of the intermediaries known as pharmacy benefit managers, which neither make drugs nor provided insurance, pharmacy benefit managers, or PBMs, as they’re known, were designed to negotiate drug discounts on behalf of health insurance providers, and then take their earnings from a portion of the negotiated discounts. Incredibly the PBM industry itself today owing to the complexity and opacity of the healthcare system. Now cost the us healthcare system more than either the cost of drugs or the cost of insurance with PBMs. Now enjoying more than 400 billion in revenue annually, where still the incentive structures within PBMs combine doctors to prescribe drugs, not based on optimal clinical benefit, but on the price structures of the PBMs.

Joe Selvaggi:

How have organizations built to reduce the cost of drugs become bigger than the drug companies or the insurance companies themselves, and what can regulators and consumers do to reform the system to better align incentives in a way that encourages lower costs and greater freedoms for doctors to care for their patients. My guest today, our Alva 10 CEO Hannah Mamuszka and her firm’s chief medical officer, Dr. Blake Long as advocates for the use of testing to determine proper medical therapies known as precision medicine. Hannah and Blake have studied the costs of the distortions created by PBMs incentive structures. They will share with us how pharmacy benefit managers work, why they have grown to nearly half a trillion dollar industry and what consumers and policy makers can do to encourage reform. They can lower costs while encouraging more effective drugs and therapies for how healthcare consumers, when I return, I’ll be joined by Alva 10 Hannah Mamuszka and Dr. Blake Long. Okay. We’re back. This is Hubwonk I’m Joe Selvaggi, and I’m pleased to now be joined by Alva 10’s chief executive officer Hannah Mamuszka and Alva 10’s chief medical officer, Dr. Blake Long. Welcome back to Hubwonk, Hannah, and welcome to Hubwonk, Blake.

Dr. Blake Long:

Thank you so much, Joe. Yeah. Thank you, Joe. Pleasure to be here.

Joe Selvaggi:

Okay. We’re gonna be talking about pharmacy benefit managers or PBMs as they’re known and their effect on the cost of drugs and the availability of particular drugs in our healthcare system. Our listeners, remember you Hannah, I’m sure as an expert in precision medicine an advocate for precision medicine. So I’d like to have Blake introduce himself and share some about, of his background and how he came to precision medicine and alpha 10 and where he comes at this issue of PBMs.

Dr. Blake Long:

Oh, well thank you, Joe. So my background, I initially studied health economics and then completed medical training and practice as a pediatric cardiologist for about 20 years. And over that time, I became increasingly frustrated with the complexity of the healthcare system and its effect on patients and physicians. And so decided to make a career pivot and work on healthcare system change through innovation and investing. And I joined the alpha 10 team and Hannah they’ve been working on that about two and a half years ago.

Joe Selvaggi:

So your voice is coming from someone from the inside who sees that you have patients who need care. You have doctors who want to help them, but a system that somehow interferes with that, with that process.

Dr. Blake Long:

Indeed I did. I experienced it on a regular basis. There are a lot of distortions particularly with choices for therapies or diagnostics, whether it be testing or imaging. A lot of times those things were dictated to me and not in the best interest of patient care or as I saw fit.

Joe Selvaggi:

Okay. So now Hannah, I wanna dig into our topic of pharmacy benefit managers by first defining what they do. I mean, who, who created these things and, and what were they supposed to do, or what are they supposed to do for our healthcare system?

Hannah Mamuszka:

So PBMs have been around for a while. They’ve actually been around since the 1960s. They started to kind of creep into healthcare system in the, and nineties when the first ones were, were actually spun out of payers. The idea is that there needs to be some kind of an intermediary that works between the insurance company and the pharmaceutical company, the drug manufacturer who’s manufacturing the drug. So even though the name pharmacy benefit manager makes you think of pharmaceutical a and benefit manager is much more closely related to the insurance company than it is to the pharmaceutical company. The idea with the PBMs pharmacy benefit managers is for them to negotiate best drug prices and then pass that along to payers in theory, enabling a better competition in the market, better pricing and theoretically better value.

Joe Selvaggi:

So Blake and you study this, you have the background in the economics, how do PBMs make their money in the system?

Dr. Blake Long:

They’re, it’s, they’re in the middle of a multi-sided market. And so they have essentially four different ways they make money. The first is fees that they receive for, from predominantly from the health plan for managing transaction costs and medication management for patients. The second is what’s called spread pricing where they collect a, a price from the payer and then actually charge a different price to the pharmacy and keep the difference. The third is what’s called call callbacks, and these are contractual relationships with the pharmacists that if they need certain metrics, don’t meet certain metrics, they can reclaim some fees. And the lab last one is sort of the big one, which is rebates in that. The pharmaceutical company gives a discount to the PBM for guaranteed volume. And so they set a high price. And if that volume is met, they’ll give a discount. What’s key is that all these things are done after the point of sale. So those are the four real avenues of PBMs making money.

Joe Selvaggi:

So in theory they’re paid out of the discounts. They fight for on behalf of insurance companies, which ultimately where the consumers who pay those insurance rates, clawbacks, how do these work do consumers when they, when we get these dis presumably we get cheaper drugs do these clawbacks ultimately are down to the benefit of, of someone out there buying a drug.

Dr. Blake Long:

The clawbacks have less effect on sort of the consumer point of sale. They’re really affecting the margins of the pharmacist. And that is gonna be a less of a C the more important one is the, is the rebate issue. And that’s the big one. And just some general sense about the scale of this the contracts between the PBM and the pharmaceutical manufacturers, which is where the rebate is. The effect is very, but some published studies have shown how significant they are. For example, in 2016, 13 major pharmaceutical companies had gross revenues of approximately 300 billion and they paid 100 billion in rebates back to the system for a net revenue of 200 billion. So in other words, the pharmaceutical manufacturers paid 30% of their gross revenues back to the system in rebates or about 50% of their net revenue. In other words, the money they keep. And that’s been increasing sign over the last several years.

Joe Selvaggi:

That that seems like a lot of money. We’re talking about big bucks even in, in relation to the size of our healthcare system, how large is the PBM industry itself, meaning not the drug companies money to them though I’m doing the math. If they’re paying a hundred billion, we’re saying a hundred billion goes to the PBM or that that money goes some to the PBM and some to the back to the insurance company.

Dr. Blake Long:

The an yes, some goes to the PBM and some goes back to the insurance company. So just to, you know, a couple of other things on that issue the top five PBMs in 2021, their gross revenues were 422 billion, which is 9% higher than in 2020. So there’s been growth and it’s 56% higher than in 2015. So that, that revenue growth for PBMs has been dramatic. They have profit margins about four to 5%. So that’s a lot of profit it’s, it goes into the PBMs. And just to compare the top five pharmaceutical companies had gross revenues in 2019 of half of that, or 240 billion. And the top five insurers had 72 billion in gross revenue. So just to give you a sense of, of relation and scale.

Joe Selvaggi:

So if I get those numbers, right, the, the quote, unquote middleman, if I’m entitled to call PBMs, middleman are much larger, then the people that are standing in the middle, which are the drug companies and the insurance companies, they’re, they’re relative giant compared to the people that they’re theoretically intermediaries for

Dr. Blake Long:

That’s that’s correct. Yes.

Joe Selvaggi:

What, what percentage of, of drugs pass through these PBMs? And frankly with that much money I believe in markets, I hope we all believe in markets and the power of markets, shouldn’t that amount of money encourage competition. And we all know of basic economics in the long run profits go to zero, what’s going on here. You know, is do they compete with each other?

Dr. Blake Long:

There are three large PBMs and they own 90% of the market share. So they’re competing against each other, but they have, you know, quite a bit of market. That’s a significant concentration. And they, we know them as, you know, CVS care marks, Cigna express scripts, and United health group OptumRx of note, a lot of those are recent horizontal consolidation or with insurers. And then finally there are roughly about 70 PBMs, including those top three, and there’s been several, a few recent entrants. So there’s a lot of smaller ones that are competing against each other and against those big three.

Joe Selvaggi:

So presumably this is a, a industry that’s perhaps ripe for disruption. We will talk a little bit later in our conversation, whether any of that’s actually happening and how that would happen. But so far, I mean, at a high level, despite the fact that they seem to be collecting new nearly half a trillion dollars in revenue they do seem to be somewhat useful. They advocate for cheaper drugs and, and in theory, more competition, if a drug is too expensive, presumably they’ll choose a, a less expensive drug, but let’s, let’s talk about how a, a PBMs, how they were originally designed to negotiate on our behalf. And I presume encouraged competition of cheaper drugs where have distortions begin to where have they started to appear. Let me just throw out an idea here.

Joe Selvaggi:

I mean, you’ve, you sort of implied that if PBMs are driven by their own profits, 422 billion, a lot of profit, and those gen the profits you said are generated primarily by the discounts. They negotiate on our behalf with the drug companies and the more expensive a drug is the bigger, the potential for a discount. There seems to be clear initiative to or an incentive to include more expensive drugs on a formula instead of cheaper generic drugs, right? If a, if a drug costs almost nothing, the discount is almost nothing. So to me, you know, as, as a layman, this seems like an incentive for really expensive drugs.

Hannah Mamuszka:

Yeah. And that’s exactly how we’ve ended up with the hell healthcare system that we have. You know, if you look at what happens to new entrants, to drugs that get approved in indications where there are already drugs in other markets, you would expect a new entran to come in at a low price, right? To try to induce customers, to try a new drug to try and do physicians try to induce the PBMs and the payers, it’s actually the opposite in our system. Now if a new drug comes into the market and isn’t priced high enough to confer those discounts, that drug won’t be placed on the, on the formulary, the only way that you can get access to formulary tiering. And, and just to clarify, you wanna be as high on the formulary as possible because that’s the order in which physicians are allowed to order and, and try drugs on their patients. You wanna be as high up on that formulary, tearing as possible. It’s actually pricing your drug higher. That gets you there. It’s not pricing your drug lower that gets you there because that’s exactly what you said, Joe. That’s how you get that discount and that how that’s, how they make their money.

Joe Selvaggi:

So, so this would seem to be exactly counter to the notion of markets that, you know, a high price would invite lower cost competitors to enter the market. So the PBM looks at this lower cost alternative. I got drug a that’s expensive in drug B that’s cheaper. My mandate is to find cheaper drugs. And yet I may overlook the cheaper drug because there’s less discount for me to negotiate Argo. I choose the more expensive drug,

Dr. Blake Long:

Right? Yeah. That’s that, that that’s referred to as the rebate trap or the rebate wall. And so again, that established expensive incumbent, you know, gives a big discount. And so the new entrant w even might be a better drug for a patient or less expensive, but the savings that the health plan would realize from using that less expensive drug gets overwhelmed by the loss of the rebate for the more expensive one. So even though they may want to do that, they would lose money in the, in the aggregate because they would lose this massive rebate on the more expensive one.

Joe Selvaggi:

Yes. I can imagine all the drugs, some in the future go to generic, they’re all, you know, a dollar, I don’t know how one would earn 422 billion with a formulary full of very inexpensive generics. So we can see a problem right there as something working against, against the consumer. So I wanna Dr map our, our conversation directly onto your work with alpha 10 advocating for precision medicine for our listeners who haven’t heard our earlier episodes together, precision medicine, if you’ll, let me sort of generalize is, is the idea that different drugs and therapies work differently for different people and with better testing, we could bring to bear more effective drugs right away. We don’t have to give everybody drug one what works and then give those who didn’t, it didn’t work for drug two on and on, on, we test everybody and give everybody the right drug the first time. Again, I’m, I’m generalizing, but that’s how I see precision medicine. How, how might the dynamics of PBMs ate against the idea of precision medicine? How, how would it work against what you’re trying to do?

Hannah Mamuszka:

Yeah. You know, in some ways I think that the concept of having a PBM to help a physician figure out which drug to choose, you know, predated this concept to precision medicine, because when you had multiple drugs and there was no biologic way to tell which patient was gonna respond to which drug, it made sense to make that decision from an economic perspective, since you couldn’t make it from a clinical perspective. Now we know that we have the tools to figure out which patients are gonna respond to which drugs. So you could ask why we would want to use the economics instead of the clinical. So, you know, if you take, if you take an example like rheumatoid arthritis, rheumatoid arthritis is an autoimmune disease where you have multiple classes of drugs that work through different mechanisms of action. And then with E within each class of drugs, you have multiple drugs.

Hannah Mamuszka:

So you have, if you’re a, if you’re a rheumatologist treating patients with rheumatoid arthritis, you have a whole variety of drugs to choose from. And right now, most of that choice is dictated based on the formulary tiering of your pharmacy benefit manager. However, now there are diagnostic tools on the market that would allow you to figure out if your patients should go on a, say, a TNF inhibitor, which is the predominant class of drugs that’s used in rheumatoid arthritis, which works in about 30% of patients who are prescribed to them, or if your patient should go on a Jack inhibitor or an interleukin drug. But the problem is, is that the rebates for the TNF inhibitors in rheumatoid arthritis are so substantial that when payers take a look at what it would take to implement using a diagnostic in rheumatoid arthritis and shifting some of those patients from TNF inhibitors to Jack inhibitors, or to other classes of drugs, from an economic perspective, they realize they’re gonna lose their rebates because they are going to dip down below the threshold of volume under which they get those rebates and the drug is gonna become much more expensive.

Hannah Mamuszka:

And so, even though they now know that they have a tool where they could place patients on a drug, that was, they were most likely to respond to where they, their symptoms would decrease, where they’d be less likely to be in the hospital where they’d be more likely to be functional and feel better and be productive at work from an economic perspective, they can’t make it work. And we’ve talked to PBMs about this. We’ve actually also talked to some employers about it, and some of the employers have essentially admitted that their economic structure of their health plan is so dependent on the rebates that they can’t make the decision to add in a diagnostic, knowing that it would, would improve the outcomes for their employees, because the rebates are so substantial from the PBMs. And that’s a problem because in, in 2022, we have the technical capability to do this, but now we’ve created this economic problem. So we’re putting the economics ahead of the clinical improvements for patients.

Joe Selvaggi:

So I, I find this hard to believe I’m gonna kick it back to Blake, cuz he’s the doctor in the room. And I’m gonna say in this model, if I’ve got it straight from what Hannah’s just told us, we could offer a patient, a diagnostic test that would tell them, which is the right drug to take first. And by so doing, we may actually discover that it’s a lower price drug or a drug that offers a lower rebate Argo. I’m not gonna do the test and I’m going to give the maximum rebate drug to all my patients, knowing that I could avoid the time and the, you know, I’ll call it suffering that giving the sort of ineffective drug first will, will incur on my patients. How, how does that ring in a doctor’s ear?

Dr. Blake Long:

Back to my intro, not well <laugh> exactly. It’s so again, it’s, if you sort of think about it, I’ll answer it sort of academically and then sort of a little bit more to the patient level. As Hannah described, we have this decision making based on the economics for what is chosen and that is decided by a volume thing in retrospect. And so the ideas that you look back and say, this is how much drug I need to, we need to use the volume. And then I use all, all those tools of tearing step therapy, which is really hard for patients. I have to try a drug, make it fail before I go to the next one, very difficult for patients. In prior authorization, you can’t get the drug approved with, until you do all these steps, they use all these tools to make sure they hit those volume targets.

Dr. Blake Long:

Whereas we are thinking about using a diagnostic tool and if you look at it from the PBM perspective as a potential advantage, you could say, I have certain number of patients and I know who is gonna be on the drug and who will respond and I can guarantee the volume prospectively. And then you negotiate a rebate on that rather than in retrospect, as which is how it’s doing, what that’s doing for con consumers or patients is most patients now in the marketplace are on high deductible health plans. So they are exposed to a large co-insurance. So the higher, the price of the service or drug, the more they have to pay and in the specialty pharmacy area and in Medicare part D for example, in cancer average copays now, or 12 month prescription or 10 to $15,000, and that results in a non initiation rate of 30%. So it, it has a significant out of pocket cost to the consumer getting exposed to these rebate driven co-insurance problems and lack of utilization. So I can’t pick the right, the patient doesn’t has to go through drugs that don’t work to get there. And then they’re exposed to the significant cost. It’s a real problem in the clinic.

Joe Selvaggi:

So the PBM is both making that drug, that they need more expensive. It’s making it less likely they’ll be prescribed the better drug regardless of cost, because it’s lower on the formulary. And when they ultimately do have to pay they do, I have it right. They don’t enjoy the, the discount or the rebate. They, they have to pay retail flush that out for our listeners a little more. Again does do I, the cancer patient, you, there’s a remarkable 10, 15,000 cost per year. Of course, as you mentioned, that means they’re percent of people with cancer don’t take their drugs. How, how does that work? How does it how am I not benefited by the, the discount that the PBM negotiated on my behalf?

Dr. Blake Long:

Yeah, that’s a, that’s a great question. And that’s really, the complexities is the, the co-insurance is at the price at the point of sale. So you get exposed to the full price and then the discount happens after the sale. So all that money gets flowing around after I’ve already paid the price at the counter, so to speak or the point of sale. And so that rebate then goes back into the PBM and doesn’t necessarily come back to me. I don’t see that discount at the point of sale. So the co-insurance gets exposed to the higher price. That’s why it’s so problematic for the patient.

Joe Selvaggi:

You know one of the reasons we’re addressing this question now, as you say, the PBMs been around for a while and they’ve been getting worse, but it’s, it’s a, seems like a, a, a substantial problem. I I’ve read that. There’s some attention of on this issue, PBMs by the federal trade commission, these are the people who are supposed to protect us from unfair trade practices, such is monopolistic behaviors, I guess this would be called monos. We’ve got a few buyers of, of, of big buyers of, of drugs. Is anything being discussed at the high level? You guys I’m sure are up on this, what’s going on with the federal trade commission, are they looking at this and do they see it as the problem that, that we do?

Dr. Blake Long:

So yes, the federal trade commission just recently dealt with this issue and the focus primarily was on the pharmacy clawback issue as being Andy. But they voted in a two to two to not actually have the FTC TC explore that issue. But the, the study that was planned was more encompassing to look at the rebate side of the market, which is between the PVM and the pharmaceutical and other anti-competitive practices, including spread pricing and some of the other things and the thought was, is that is not the objection to pursuing the study were that it was not clear how it was going to affect consumer welfare, which is a, a little bit interesting given the discussion we’ve had just previously.

Joe Selvaggi:

Yeah, I, I did read something about the head of the FTC a woman named Lena Conn recently appointed by the Biden administration. She sees pretty tough on anything that looks like monopoly, but here, I think they’ve sort of lost the, the, the main point of our conversation. I think they, as you say, we’re more concerned about what PBMs do to little pharmacies in, in, in prefer or privileging the CVSs of the world in at the expense of the mall. Pharmacists. I think the bigger question as you point out, it seems like they overlooked the huge distortionary effects as in a half a trillion dollars siphon off the system that interfere both with the price of drugs, the availability of proper drugs, the prevalence of tests all the distortions. Why do you think they’ve overlooked this half a trillion dollar elephant in the room, Hannah,

Dr. Blake Long:

And you wanna tackle that one? <Laugh>,

Hannah Mamuszka:

You know, I, I find it fascinating because there’s so much of a discussion right now as there is this time, every election cycle around drug pricing and on Medicare’s ability to influence drug pricing about the government’s ability to influence drug pricing and about, you know, should we be importing drugs from other countries and how do we not stifle innovation? And that’s, that’s all fun. And that’s an interesting conversation to have every two years, but it, it stymies me. And I don’t know if it’s because the industry is so opaque, it’s so difficult to figure out a lot of these contracts are secret. A, you know, if you talk to payer, a lot of them don’t even know what are in at, at very senior levels. They’ll describe that these contracts are so secret that they haven’t seen them. They’re not allowed to discuss the rebates. They’re not allowed to share them. None of this is publicly available. It’s, it’s essentially impossible to figure out how valuable they actually are other than the fact that, you know, these are publicly traded companies and, and you figure out at the end of the year, what they’ve been up to. But it’s, it’s a real question as to why there’s so much focus on the pharma industry who is doing research and actually developing drugs, but makes less profit off of them than the PBMs do.

Joe Selvaggi:

Yes, indeed. We’ve had shows on Hubwonk, talking about the fact that drug prices though, the, the popular narrative is that they’re going up, they’ve seem to have stayed with inflation or, or, or not kept up with inflation. So the booking man on the political level is definitely the drug companies, but PBM seem to miss any kind of scrutiny, even though, as you say, they’re not even making the drugs, they’re not, they’re not healing us. They’re doing essentially nothing but acting as intermediaries. All right. So the FTC, so took a pass on this. I, I, I do though think that I I’ve read somewhat on this, that senators from both sides of the aisle Republicans and Democrats have both said, look, let’s, let’s, let’s keep this on the, on the front burner. Let’s, let’s take another look at this. I think there’s more to the eye more to the issue than the I can see right now. So let’s hope that this remains top of mind, but if the federal government can’t be relied upon to, in a sense, go out there and figure out what’s going on with this system, what what can consumers our listeners, business owners interested policy makers, what can those people who really want to tackle this issue? What can they do?

Hannah Mamuszka:

You know, I think, I think we’ve seen changes in terms of employers starting to realize, especially smaller employers and employers that self-insure starting to think about out the consequences of PBMs and of the rebates of PBMs and how that impacts both their healthcare costs, their employees’ ability to work. We’re seeing more and more market entrance of smaller, more innovative PBMs that have a different business model, where their business model is, you know, they contract with your employer on a, you know, a per employee or a per member basis. So they are not incentivized by the rebates they’re incentivized to grow their business. Some of them have other more interesting value based arrangements around performance in terms of how your employees, your patients are doing. So I think that there is a, a starting to be some market pushback, but as Blake said, you know, the dominant mechanism for PBM business relationships right now is the rebates. And most companies, most employers are using a PBM that is using the rebates as an incentive to drive business. And it, it, it greatly affects how employers make decisions about their employees healthcare. And I think it’s really important for employees to start to think about that and to start asking questions, particularly, you know, as benefit selection, season rolls around, you know, think about what that means for your benefits program, for what your employer is offering you, because, you know, it might have some consequences that maybe unintended.

Joe Selvaggi:

So there are PBMs. We don’t wanna paint everybody with the same brush. There are PBMs who do have incentive structures aligned with the benefits of consumers and, and businesses. We just gotta go out there and find them is it the case that I do, we’re, we’re blaming these kickbacks, if you will. These discounts that are negotiated as sort of the the, the mechanism by which PBMs, I think exploit the system or distort the system, is, are there PBMs that have no do not use that at all? How do they, in a sense negotiate for better prices and what metric do they use instead?

Hannah Mamuszka:

Yeah, I mean, there are ones like Costco health, like empire RX health RX sense, well done, just to name a few that are on, on some sort of a fee based model where, you know, they’re really trying to grow their business, their own business based on aggregated volume and not participate in the, in the rebates, because I think that there there’s a growing trend in that direction of understanding that at some point we’ll have to change how we pay for drugs.

Joe Selvaggi:

So, Blake I’ll, I’ll say to you, again, with the economics background as companies, insurance firms, you know, say way and slowly start to shift toward this newer model, this fixed fee or fee for per unit or something like that. This must then if we take some of these half a trillion dollars of intermediary fees out that should reduce premiums and save consumers money in the long run, shouldn’t it?

Dr. Blake Long:

It should, it should because that’s money that really in sort of in the middle and it’s not actually moving back to creating value. And I, I think one of the key things that Hannah said for this precision medicine is we can move to more fee based, but also as the pharmacy benefit with, which has historically been markedly separated from the medical benefit is those things start to blend together and the pharmacy actually affects your ethical outcomes and your costs, and therefore your premiums, as well as the point of sale costs that we talked about for paying for the drug that as you start blending those together, you, and then we move to value based care, moving to risk based contracts would be another interesting way to say a, how you manage your pharmacy benefits. So there are a lot of ways to use more clinical tools and to use more risk based contracting and move away from the rebate model and just a, a fee on a transaction in looking more for outcomes. I, I think there’s a lot opportunity to move in directions that can be really beneficial for patients and actually reduce total cost of care on top of reducing specialty pharmacy care.

Joe Selvaggi:

Yes, this seems like it’s a potential for win, win, win. As you say, you never wanna be making decisions with people’s health based, purely on economic reasons. You wanna use clinical reason. You want people to get better. And this seems to be just gratuitously distortionary and one hopes fixable without causing harm to anyone. Well, this is a very complex issue. I, I hope I’m gonna say let’s watch this space because I think this should come up and I’ll have our I’ll invite our listeners to call their Congressman or Senator and say, you know, what, what are you doing about this? And let’s see if this can’t come back into the forefront of of our attention. So thank you very much. Both of you for joining me on hub won. I hope if it does come back onto the public’s eye, you will come back and join me and explain what’s going on. And if we’re moving forward in the right direction, for sure

Dr. Blake Long:

Will do.

Joe Selvaggi:

Thank you. Thank you both.

Dr. Blake Long:

Thank you. Thank you, Joe.

Joe Selvaggi:

This has been another episode of Hubwonk, a podcast of Pioneer Institute. If you enjoy today’s episode, there are several ways is to support the show. It would be easier for you and better for us. If you subscribe to hub wonk on your iTunes podcast, catcher, if you wanna make it easier for others to find Hubwonk, it would be great. If you offer a five star rating or a favorable review, we’re always grateful. If you want to share Hubwonk with friends, if you have ideas or comments or suggestions for me about future episode topics, you’re welcome to reach out to me hubwonk@pioneerinstitute.org. Please join me next week for a new episode of Hubwonk.

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In this public comment, Pioneer Institute examines the Massachusetts Department of Housing and Community Development’s guidelines on how localities can comply with new zoning mandates around MBTA stations. While some of the compliance criteria and goal-setting language need further clarification and adjustment, overall Pioneer Institute is supportive of the vision for sustainable, transit-oriented development which, if properly implemented, will expand economic opportunity to a new generation of the state’s residents.

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Watch: Catholic education forum highlights

Help preserve Catholic education!

Big Sacrifices, Big Dreams:
Ending America’s Bigoted Education Laws

In Massachusetts, the Know-Nothing amendments prevent more than 100,000 urban families with children in chronically underperforming school districts from receiving scholarship vouchers that would allow them access to additional educational alternatives. These legal barriers, also known as Blaine amendments, restrict government funding from flowing to religiously affiliated organizations in nearly 40 states and are a violation of the first and fourteenth amendments.

The U.S. Supreme Court will hear a case this year, Espinoza v. Montana Department of Revenue, that could end these amendments. In 2018, Pioneer produced a 30-minute documentary on the impact of the Blaine amendments on families in Massachusetts, Georgia, and Michigan.

“She’s a good girl. She helps me a lot. She has big, big dreams. I don’t have the money, but she has big dreams. I hope she’s going to get everything, but she works so hard. She works so hard in school.”

Arlete do CarmoFramingham, MA

“Our family is needing to make some really big sacrifices because we believe this is important, and so, we’re basically going to do whatever it takes… Sometimes we look at each other and go ‘I don’t know if I can do it again another month…’”

Nate and Tennille CostonMidland, MI

“A lot of the families have to sacrifice and work multiple jobs… And just scraping together enough money to just make tuition, just the basics.”

Sarah MorinFall River, MA

“It is discriminatory, that parents who want to choose an alternative to public school for their children, would not in any way receive any compensation for that, whether it be tax credit, whether it be a voucher…”

Father Jay MelloPastor, St. Michael and St. Joseph Parishes
Watch the Film

History of Blaine Amendments

Nativist sentiments were, like slavery, a part of the original fabric of the United States.

In the 1840s, nativist movement leaders formed official political parties and local chapters of the national Native American Party (later the American Party), although they continued to be commonly known as the Know-Nothing Party. Politicians sought to insert provisions into state constitutions against Catholics who refused to renounce the pope. The Know-Nothing movement brought bigotry and hatred to a new level of violence and organization.

The party’s legacy endured in the post-Civil War era, with laws and constitutional amendments it supported, still today severely limiting parents’ educational choices. A federal constitutional amendment was proposed by Speaker of the House James Blaine prohibiting money raised by taxation in any State to be under the control of any religious sect; nor shall any money so raised or lands so devoted be divided between religious sects or denominations. These were then named the Blaine Amendments of 1875.

in recent decades, often in response to challenges to school choice programs, the U.S. Supreme Court has demonstrated great interest in examining the issues of educational alternatives and attempts limit parental options. Massachusetts plays a key role in this debate. The Bay State was a key center of the Know-Nothing movement and has the oldest version of Anti-Aid Amendments in the nation, as well as a second such amendment approved in 1917. Two-fifths of Massachusetts residents are Catholic, and its Catholic schools outperform the state’s public schools, which are the best in the nation.

Make Your Voice Heard Now!

Help families like the Costons in Michigan to end the bigoted Blaine amendments in their state that are blocking tuition scholarships and other types of financial support that would make it possible for families to send their children to high-quality schools that are best suited for their children.

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AFC’s Denisha Merriweather on School Choice Advocacy & Black Minds Matter

April 13, 2022/in Civil Rights Education, Civil Rights Podcasts, Featured, Podcast, School Choice /by Editorial Staff

https://chrt.fm/track/4655F8/api.spreaker.com/download/episode/53285016/thelearningcurve_denishamerriweather.mp3
This week on “The Learning Curve,” Cara Candal and Gerard Robinson talk with Denisha Merriweather, the director of public relations and content marketing at the American Federation for Children and founder of Black Minds Matter. They discuss Denisha’s inspiring personal narrative, from a struggling student to a leading national spokesperson for school choice. She shares her experience of receiving a Step Up for Students education tax credit to attend the Esprit de Corps Center for Learning, a small private school in Florida, and how it differed from her public school experience and changed her life. They delve into the organization she founded in 2020, Black Minds Matter, “a national movement to celebrate Black minds, support excellence, and promote the development of high-quality school options for Black students,” and Denisha explains the group’s long-term goals.

Stories of the Week: Results from a survey of 1,788 teachers in England revealed that 44 percent plan to leave the profession by 2027, citing the stressful workload and lack of public trust. Harvard is receiving criticism for its decision to end its undergraduate teacher education program and instead require candidates to enroll in the Graduate School of Education’s new Teaching and Teacher Leadership master’s program.

Guest

Denisha Merriweather is the Director of Public Relations and Content Marketing at the American Federation for Children and Founder of Black Minds Matter. Denisha previously served as School Choice and Youth Liaison to the Secretary of Education at the U.S. Department of Education. Denisha is a Florida tax-credit scholarship graduate, and now sits on the Board of Director for Step Up for Students. She received her Master’s degree in Social Work from the University of South Florida and bachelor’s degree in interdisciplinary social science. Along the way, Denisha has become a national symbol for school choice, headlining events with President Trump, Florida governors, and other advocates for school choice. Denisha has shared her story across the country and has been featured in the Wall Street Journal, PragerU, the Washington Examiner, EducationWeek, and Fox News among other outlets.

The next episode will air on Weds., April 20th, with Dr. Robert Alter, Professor in the Graduate School and Emeritus Professor of Hebrew and Comparative Literature at the University of California at Berkeley, and author of the landmark three-volume book, The Hebrew Bible: A Translation with Commentary.

Tweet of the Week:

Cross-party agreement among younger generations – and a significant generational split within the GOP – is telling the story of education policy in a way that may benefit Democrats. https://t.co/O8v9eApcvn

— Lauren Camera (@laurenonthehill) April 6, 2022

News Links:

The Guardian: 44% of teachers in England plan to quit within five years

https://www.theguardian.com/education/2022/apr/11/teachers-england-plan-to-quit-workloads-stress-trust

Harvard Crimson: Harvard Ends Undergraduate Teacher Education Program, Closing Off a Path to Teaching for College Students

https://www.thecrimson.com/article/2022/4/7/UTEP-shut-down-HGSE/

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Read a Transcript of This Episode

Please excuse typos.

[00:00:00] Cara: Well, hello, Learning Curve. This is Cara Candal and the great Gerard Robinson coming at you for some wonderful conversation. We’re going to be hosting today. Our friend Denisha Merriwether, always fun to have friend of the show and a friend on the show. And I’m speaking to my good friend, Gerard Robinson right now.

[00:00:42] How are you?

[00:00:43] GR: Doing well, as you know, I had a chance to travel to California, to see the oldest daughter and to hang out with her and do fun things for the two younger daughters spring break. So it’s always good to have the Robinson ladies altogether

[00:00:59] Cara: [00:01:00] vacation. I didn’t re spring break yet. Our spring break is coming up.

[00:01:02] Well, you know, what’s happening here to kick off spring break for kids in this area is, Patriot’s day. Do you know what that is? True.

[00:01:11] Gerard: Yeah, cause you must not be much of a Patriot, right.

[00:01:15] Cara: Patriot’s day is really something that’s just celebrated in new England. And now I’m speaking at, I realizing that our producer, Jamie Gass is probably in the background and if I mess up what Patriot’s day is all about, I’ll get in deep trouble, but just going to say more importantly.

[00:01:28] It is known as marathon Monday. It shouldn’t be more important, but that’s the reality. So the Boston marathon is run annually. Well, save for a couple COVID years, little COVID respite there, , run annually, on Patriots day, this new England holiday, and it also picks up spring break for most kids in this area.

[00:01:47] Now I live very, very. The marathon route. I actually, in fact, I used to live right on the marathon route for all you runners out there and live really close to heartbreak hill, which is super fun. for runners, I guess it’s much more fun [00:02:00] for spectators. , but you know, Gerard, my marathon Mondays are always played with the following people just randomly stopping by me.

[00:02:07] Well spectating to use the bathroom and grab something out of the fridge. So we’re looking forward to just because I live so close to the route, we’re looking for it though, to seeing some friends maybe that we haven’t seen in a long time into cheering on the runners. I’m glad you had a great trip Girard, to sort of open my story of the week.

[00:02:26] wanted to ask you to reflect for just a moment. And I wanted to ask you you’re former teacher, I’m a former teacher. we’re all still teaching, right? Gerard. This is what we do, but you’ve taught in schools at one point in your career. Can you just like, give me one sentence to describe the quality of your teacher education, whatever training you did to become a teacher?

[00:02:49] GR: I can’t answer that one because my degree was in policy at the master’s level. And my undergrad degree was in philosophy. So I never went through a program to become a [00:03:00] certified or licensed teacher. So I’m no good on that. And I taught in private school, uh, when I started and I also worked in a Saturday program and summer program for two years for public school students in Newark and New Jersey, but that was.

[00:03:15] Full time.

[00:03:16] So how

[00:03:17] Cara: interesting, so you and I have a similar story. I have a certification in teaching English as a second language, but I don’t have a certification to like teach English literature yet. I did, right when I was in my twenties, it sounds like you and I had very similar roots, but a lot of talk going on about teacher certification these days, how to get teachers emergency certified and who should be able to be in the classroom.

[00:03:40] Right. We’re seeing legislation and a ton of states we’re seeing, in all things. A real or imagined teacher shortage. I think teacher shortages are local. We’re seeing some pretty cool programs in my estimation, out of places like Tennessee and Texas, that involve teacher apprenticeships. I think a great model if you can do it well, but my story that week is out of house.

[00:03:59] Right [00:04:00] down the street here because, they have done a way with their undergraduate path to teaching certification. So Harvard doesn’t have a traditional what we would think of as undergraduate school of education. But of course they have a master’s program in education and a doctoral program in education, but they have just decided to do away.

[00:04:21] With these courses that undergraduates can take, that lead them to be able to get their teaching certification, , before graduating, so that they’re prepared to teach upon graduation. It would usually be at Harvard, like just a three or four months course that they could take. And I chose history the week.

[00:04:38] Cause I think it’s really interesting indicator Of sort of. Where things are going with imagining who can become a teacher, how should they become a teacher? Do we really have to keep emphasizing these traditional routes, undergraduate schools of education, continue to, really train the lion’s, share of people that go on to become teachers in this country.

[00:04:57] But, if COVID is any [00:05:00] indicator in this upheaval that we’re seeing in the profession, just in terms of turnover, if not an exit. I think, , indicates to us that we really need to be thinking seriously about what it takes to help people, become

[00:05:12] certified or qualified in certification.

[00:05:15] Doesn’t actually

[00:05:16] Cara: equal qualification all the time. If you read the research, but qualified teach in classrooms in one, what it takes to get people qualified. in a timely manner and in a way that’s going to ensure that they’re doing right by kids. So this article just had me thinking a lot about something, a theme that’s been wrong for a while, which is, , do we really need schools of education per se?

[00:05:39] Maybe we do in some places, but what does it look like if more and more people. Aren’t educated in a traditional undergraduate pathway. And if more people are entering the teaching profession at different points in their career, how do we imagine that and how should states in particular be thinking about it and how should we measure quality?

[00:05:59] [00:06:00] I have no answers to any of those questions, Gerard, but , these are wonderings that I pose for you and or our listeners. But anyway, that’s surprising news out of Harvard and. It’s not like perverts training, a ton of the nation’s teachers or even the Commonwealth’s teachers. So I’m not in the category of some of the people quoted in this article that think it’s like dastardly in a huge disaster.

[00:06:20] It’s probably a smart move on Harvard’s part, but an interesting move

[00:06:25] GR: Interesting. So I am a graduate of Hughsey, as I like to call it, the Harvard graduate school of education in policy ton of my friends were in teacher education. So what Harvard is doing or just did in 2022 was a topic debated by deans and researchers in the 1980s.

[00:06:48] And there was a report that was published. I believe it was called today, tomorrow. Report or committee. It was a group of deans who said one way to improve teacher education and to [00:07:00] improve outcomes with the students who work under these teachers is to abolish a undergraduate degree in education that instead you earn something in the humanities, social sciences, liberal arts, fine arts.

[00:07:13] Earned a degree, and then you can earn a master’s degree or credential, but their whole piece was to abolish it. And so there was a move for that at the same time you had. Dean who said, no, we need to keep that program in place. So I am in Charlottesville, affiliated with UVA. In fact, I attended UVA school of education.

[00:07:31] We have a program here where you can major and let’s say philosophy, which was my undergraduate degree. You can earn master’s degree from the Harvard ed school you can do so in five years. At times, depending upon how many credits you take, maybe even shorter, but here in you, the outgoing Dean, and we’re waiting to see who our new Dean will be.

[00:07:53] There was a push that we think it matters, and I have a thumbs up for that, but I also have a thumbs up for Harvard [00:08:00] if they decide that this is what they want to do. So for me, it’s not either, or. it’s an, and it really depends upon a commitment from the president, a commitment from the Dean and research to support why this makes sense.

[00:08:14] This is part of a larger conversation that’s been taking place even within the last two years of the pandemic. So just think about the American association of colleges for teacher education. Earlier this year, they released its second comprehensive report about the state of teacher preparation. And what they identified is that between 2008 and 2019, the number of people completing a teacher education program declined by almost a third and traditional teacher preparation programs saw the largest.

[00:08:45] 35%, but alternative programs also experienced a drop as well. So this is something that’s just part of the teacher education dynamic and the conversation that we’ve had for a [00:09:00] while. I can understand why people have an outcry at any point, you decide to get rid of something. People often don’t like it, unless it’s for taxes.

[00:09:09] Yeah, besides that when it’s a program, it’s a different story. So I give a thumbs up to my Alma mater. They’ve obviously looked into this. If it makes sense for them, they should move forward. But I’m also glad to see a place like UVA and other schools do the same thing, but this isn’t a Harvard UVA dynamic.

[00:09:27] This is really a dynamic about teacher education. So for our listeners, take a look at the American association of colleges for teacher education report released, earlier this year.

[00:09:36] my teacher story comes from the other side of the pond and my story comes from the guardian and the title. And just get this, everything you need to know is actually in the title.

[00:09:48] Cara: Can you do it in a British accent, the title? Oh, I’m not that good.

[00:09:53] GR: And I’m sure if I did, I would offend someone.

[00:09:54] So I don’t want to go that route 44% of teachers in [00:10:00] England plan to quit within five years. So. Many of our listeners know that I traveled to Birmingham, England, not too long ago to meet with scholars and practitioners who work in the field of K-12 education. I have a chance to visit a school and to talk to educators.

[00:10:15] Well, you and I are big fans of polling data because it gives us an opportunity to get a representative sample of the profession. Well, here’s a survey of 1,788 teachers. and a fifth of them, 22% said they will leave the profession within two years. But by the time we get to five years, 44% said they would likely leave.

[00:10:36] Now, if that is a representative sample, that’s going to be a major hit for England. And here’s why right now you have 461,000 teachers who work in across England today. That’s 20,000 more than 2010. So there’s at least an increase. But if approximately 44% decide to leave in five years, it’s going to be a big hit [00:11:00] on the economy, but also on the profession.

[00:11:02] So what are some of the factors as to why teachers were leaving? Well, you’re not going to find some of this to be shocking. , teachers find that it’s the workload. Is unbearable. , the number of hours they’re expected to work. I’ve been really tough. There’s also a problem with finding substitutes and staff.

[00:11:19] Teachers said, schools are finding it really difficult to feel big and seas, which is leading to teachers having to double up in their roles. And they said, when people leave, it’s tough to have some more. Come in two thirds of secondary school teachers say the issue of vacant teaching assistance and support has worsened since 2020.

[00:11:39] And so when we try and figure out what’s the cause of this, I turned my attention to Dr. Mary Boston, the joint general secretary of the national education union. It is the largest union. And England for teachers. So the national education union was created in [00:12:00] 2017. It followed the amalgamation of the national union of teachers and the association of teachers and lecturers.

[00:12:07] And they got together in 2017. This group. And so when I talked to the president that, you know, they say, well, what’s the problem. And she said, quote, we remain a profession with almost the highest number of unpaid working hours. And we’re still well above the international average for hours worked by teachers.

[00:12:25] This simply is on sustainable. She goes on to talk about the problem, trying to recruit teachers and to retain them in a profession. So when asked, what do you think, who do you think, or what do you. let all of this. And she said, listen, the state department of education or the department of education, these are take steps to quote unquote right, the wrong.

[00:12:46] And she, I particularly identified education secretaries over the years, simply have missed the targets. And so similar to what we hear here in the United States, she’s saying it’s an issue with policy makers. [00:13:00] Education secretaries and government in general. And in the article, she also took a note and it’s worth noting this for our listeners.

[00:13:08] she also found a problem with the, what they call Offstead, which is the office for standards in education. And it created a national, inspectorate whose job was to follow publicly funded schools K-12 and higher ed to see how well they’re doing. And. What the doctor is saying is, you know what, this is a problem as well, because it’s not really doing its job.

[00:13:29] So here are a few takeaways for me. Number one. I grew up in a union home. I am a supporter of unions. I understand why we have unions for educators because they formed a union to make sure their rights are protected. And so when the teacher said we’re burned out and we’re. I believe them. And I believe there’s a role for the government to play in trying to fix some of those challenges or as Mary said to ripe the ship.

[00:13:58] But I would also ask union [00:14:00] members to ask tough questions of their union members or the union leadership as well. So for example, if you’re overworked and if you’re not paid enough, What is a union done for that? Or what negotiations or trade-offs has your union made? that led to some of that.

[00:14:16] I just think there’s a role that members should play or look at when trying to figure out, who’s the culprit. I think there’s a lot of blame, but also a lot of benefit to go around, but often. Finger pointing outward it’s government. It’s the secretary. So, that’s one challenge, but it was also worth noting that I went to the national education union webpage and I would recommend our listeners do the same.

[00:14:39] When you look at the web page, I see support black members. Lives matter. I agree. And if you take a look at the educational outcomes, both college and K12 for black students in England, it’s not great. And if you go further down, you’ll see a number of things about, , an active zone at the end of the conference to replace Offstead.[00:15:00]

[00:15:00] And you’ll also see educators have lost 17% of their patients. Since 2010. So is a lot going on with the webpage and what they want to do. 44% is a lot. I don’t think it’s going to take the government alone, but I think there should be some internal looking as to what unions can and cannot do and what role they’ve played in leading to this.

[00:15:21] And that’s not only on the other side of the pond. I think there’s some relevant conversation for this as well on this side.

[00:15:27] Cara: Oh, well, you are not going to get any pushback from me on those comments. My friend, not that I think you normally do, but share a little Andrew, go here. I was, at a panel, , maybe a week or two ago, hosted by Boston university, Wheelock education policy center, shout out.

[00:15:43] Um, I am a member of their advisory board and it’s a wonderful, it’s a wonderful institution, new institution. But there was a panel that included a former teacher of the year, the current head of Boston teachers, union, Kate Walsh of NCTQ and the superintendent here of a community called fall [00:16:00] river.

[00:16:00] And one of the comments that was made that. Tons of snaps from, folks in the audience as we didn’t snap when I was a teacher. So I’m always going to play, I’ve done teacher training and teacher development, the snapping phenomenon. If you know what that is, I think my kids do it in school to give people props or say, I agree, but what received tons of stamps was somebody saying, well, you know, what would really just fix everything with the teacher crisis?

[00:16:20] And the teacher shortage and teacher burnout is if we could please just move to a four day school week. So teachers actually had planning time and we weren’t working until 10 o’clock at night. And I think.

[00:16:34] Because

[00:16:35] Cara: what’s lacking in that comment is a complete number while there are many things. One is, if you are to the point you’re making about the website and, outcomes for students, particularly black students from the union wants to support. What are you going to do with taking, the school time away?

[00:16:50] Right. And number two, there’s a complete and utter lack of an, impetus to re-imagine what the school day could look like. So I’ll give you an example of many, many of us who have worked in private schools know [00:17:00] that, to accommodate teachers with more planning time, one of the things you do is you fix your schedule and you move things around and yeah, you might have to hire more staff that.

[00:17:09] Might not be unionized such as staff and other people, so that students are doing enrichment and other supplemental activities while they’re subject matter experts. I have planning time and they should, they need it. All of those things are super, super important, but I just wanted to share that I was really taken aback by this comment that was so teacher centered versus student centered.

[00:17:30] And I think that if we would do a better job of leading with what students and families need in the first year, Then that might bubble up to giving teachers what they need because what students and families need is consistency thing. Teachers who are going to be with them for a long time, teachers who are happy in their jobs, that they’re going to be happy in their teaching, and they’re going to be more effective.

[00:17:47] All of those things, I was taken aback by this suggestion of a four day workweek. So I greatly appreciate Gerard your call for more introspection on both

[00:17:58] sides of the.

[00:17:59] GR: [00:18:00] one thing just came to mind as well. The article talked about the mental fatigue and health of teachers, you and I know that’s real.

[00:18:10] We’re going to make that something we need to invest in while these children are going home to parents who are equally fatigued and a number of them have mental challenges. So I’m saying if we do one for one group and that’s a factor leading to. Let’s talk about families and teachers as well. That’s it?

[00:18:26] Cara: Thanks so much. Cause this burned out mama would love that. And at any rate I have, one thing to say before we introduce our phenomenal guests. Dinetia Merriweather of American Federation for children and founder of black minds matter. But this is really important because as I said, Jamie gas, our producer was going to make sure I got this right.

[00:18:45] So for everybody who is dying to know Patriot’s day, I said it was the annual event, but it commemorates the battles of Lexington, Concord and monotony. And somebody is going to call and say, I said that wrong and that’s okay because I’m from Michigan. I [00:19:00] just want that to be clear. And some of the. Battles of the American revolutionary war.

[00:19:06] but for those of you, who’ve never had a chance to visit places like Lexington and Concord walk the wonderful trails here that we have in Boston, the freedom trail, et cetera, can’t recommend it enough, a learning experience for all

[00:19:17] agents,

[00:19:18] Cara: but we will be back with Denisha Merriweather right after this.

[00:19:40] Learning curve listeners. We are back with a woman that many of you know, Denisha Merriweather is the director of public relations and content marketing at the American Federation for children and families. Of black minds matter. Denisha previously served as school choice and youth liaison to the secretary of education at the U [00:20:00] S department of education.

[00:20:01] She has a Florida tax credit scholarship graduate year, and now sits on the board of directors for step up for students and other yay for step up for students. Denisha received her master’s degree in social work from the university of south Florida and bachelor’s degree in interdisciplinary social science.

[00:20:19] Along the way Denisha has become a national symbol for school choice, headlining events with president Trump, Florida governors, and other advocates for school choice. Denisha has shared her story across the country and has been featured in the wall street journal Prager U the Washington examiner education week and Fox news among other things.

[00:20:37] Denesha you and I met, I think it must’ve been two and a half, three years ago now at, the international school choice and reform conference. But even then it was clear that you were just a leading spokesperson for school choice and you. So you speak about your own experience and the possibilities that choice brings for other people with , such power.

[00:20:59] Could [00:21:00] you talk to us a little bit about your story and, , your school experiences and did that brought you to where you are?

[00:21:08] Denisha: Yeah. I know it wasn’t, it, it has to be longer than two, three years. Cause I think pandemic was like, I try not to remember how old? yes, but I, came into this, I always tell people that I was thrust into the education reform space because I benefited from school.

[00:21:30] In grade school. And before I received a private school scholarship, I really had a bad experience. That was , my experience in the public school system. I went to my local zone school. and my family situation was not that great. So I moved around a lot, which meant that I went to about five or six different elementary schools, and all of the schools that I went to.

[00:21:58] Not a good fit for me.[00:22:00] , I remember early on my earliest memory of school was like in the second grade of just being drug out of class by one of my teachers, because I was being disruptive and. , I failed the third grade twice because I couldn’t read. just knew I was stupid. I thought I was dumb in my self esteem was really low.

[00:22:25] and there was not a lot of assistance I would say, or help to. Helped me to get up to great level. in the fourth grade, I, my mother, , did enroll me into this program called the star program. I remember it so vividly. It was a program to help other kids, other students who were in elementary school to get caught up to their right grade.

[00:22:48] So I was in a classroom with other kids who were two grade levels behind three, four grade levels behind in elementary. Right. And I [00:23:00] didn’t pass that program. , and it really created just a spirit of despondence. I, hated school. I felt like there was no need for me to go to school. I would wear pajamas to school.

[00:23:12] didn’t care. I remember a teacher Scion when I came through the door, like when I would walk classroom door, teachers would hear, comes to Nisha. And that weighed on me. And so for the early part of my, life, it was, I did not have a great relationship with learning with education.

[00:23:33] It was not a place where I felt, that I could succeed or even that I wanted to succeed my family. my biological family come from a long line of people who’ve dropped out of high school. People who’ve had children at early ages have had, babysit as teenagers. And so for me, I thought that was gonna be my, narrative, my life’s narrative.

[00:23:55] I would, I would have a job. I would not follow that path. Cause I, I had, no, I like [00:24:00] to money too much. I would have a job and I would, but I will have a baby. as a teenager, And so, yeah, that was for me early on my early education was not, it was not a positive association with learning. in the sixth grade, I began to lift permanently with my godmother the summer before my sixth grade year.

[00:24:22] I moved in with her and that’s when everything changed. She wanted me to attend the private school that her, church had started and it was a private school. So she didn’t have a way to pay for her family. Her income was not that much greater than my biological families. And she found out about the Florida tax credit scholarships.

[00:24:41] Step up for students. She applied for. The scholarship and literally everything with education became night and day. When I first started to come to this school teachers instead of sign, like they would greet me with smiles, hugs, [00:25:00] prayer. At first I’m like, okay, it’s going to wear off the first day of school.

[00:25:04] You know, like everybody’s first week of school, they are happy and cheery, and never wore off. I promise you from sixth grade to 12th, every single day, there was someone welcoming us into the school with open arms, with smiles and hugs. And that was , my first experience everyday walking into the classroom doors and.

[00:25:27] Teachers. And I had two teachers who even met with me one-on-one the summer before I got started, because my reading was so low and I didn’t know how to do my times tables. I didn’t know them, not even my memory. And so that showed me that they cared and they, did. I ended up making, D’s and F’s consistently to making a B honor roll my first nine weeks at this new school.

[00:25:52] And. For me, it was like, wait a minute. So I’m not dumb. I’m not stupid. I’m not a failure. and [00:26:00] so ever since graduated from high school, I began to share about my experience because also along this time, I have siblings, biological siblings who are still in the public school system. I have biological siblings who have not graduated from high school.

[00:26:15] It really showed me that. Education really does make a difference. , and so I began to share my story. I became an advocate and kind of live this alter ego. So that’s, how it got started. I became an advocate for school choice, , because education really. Changed my life in the trajectory of my life.

[00:26:35] I went from making D’s and F’s to AB honor roll to graduating with honors from high school, going into college, earning a master’s degree. And I don’t think that would have been possible if I hadn’t been given a different opportunity. Yeah.

[00:26:51] Cara: You know, one of the things I, appreciate about the way you described that first day of school is every research schools, for a lot of my career.

[00:26:59] And [00:27:00] one of the things that I noticed, and I look for in schools for my kids, it’s a place. It feels like the adults really see the kids like every kid. , I appreciate that part. Now Denisha for our listeners, you mentioned that you were a recipient of the Florida tax credit scholarship, and Florida is known for having really the most robust school choice environment in the whole country.

[00:27:23] I think that a couple other states would like to quibble with that maybe Arizona looking at you, but , between tax credits and. education savings accounts, options. And now actually the Florida tax credit scholarship, and much of that has been turned into a more traditional voucher so that money’s not having to be raised all through donations, which is how it was when you attended.

[00:27:42] so you talked about how that changed your life. Could you tell us a little bit more about this idea that you mentioned that your first public schools didn’t work for you? that implies to me that maybe they were working for some kids, but one of the things, folks talk about advocates of choice.

[00:27:58] Talk about a lot [00:28:00] is. And that, every kid needs to find the right fit. Can you talk a little bit more about what we mean when we say fit and specifically with regard to academics and how you went from being a kid who thought of herself as a failure to somebody who was cheating high grades, and obviously given where you are now, they weren’t just giving you A’s and B’s to pass you on.

[00:28:20] can you talk a little bit about what fit means and what it meant for you at your school is.

[00:28:26] Denisha: Yeah, I think that is such a great question because that’s what, we, as reformers in education want for every student, for them to find the right school that fits their needs and abilities and interests, et cetera.

[00:28:42] And for me, that means, exactly that, that it’s a school environment where You know, it’s like a glove, you know, I don’t know what other words you use other than fit, but it caters and it, encourages their needs, their interests, their abilities. , and that could be [00:29:00] anywhere from, , a private Christian school to district school, to a charter school.

[00:29:06] To a Montessori school, to an outdoor tree house school, you know, forums. A zoo school I’ve been to so many types of schools. there are so many different types of innovative models that really, gets to. how to get a kid to learn and be interested in education.

[00:29:25] And for me, experi, to core you, what, you know, w what was that like for me? one, it was the nurturing environment that, yeah. They saw me as a person that not only as a person who. Came to school with a lot of baggage and not the, not the best, outlook or even disposition. at first, when I came to the school, I was a challenging student.

[00:29:48] Like I, I spend time in, in school suspension. they didn’t believe in, suspension or out-of-school suspension. It was all in school. And I was one of the students who attend. So it wasn’t like, I, you know, like you said, they [00:30:00] were just giving me A’s or that I just changed dramatically. I was a challenging student when I first came in, but them being so nurturing and consistent was something that changed.

[00:30:11] And that was the type of environment that I needed. it was a very rigorous school. So we were hopping from subject to subject to subject every day. We, we didn’t stay, stagnant, I would say spending a whole week or a whole month on one lesson, everything was, , rapid fire. I’ve never been diagnosed with ADHD, but I kinda think I am so like, that type of learning environment was so important because it kept me interested.

[00:30:43] Like it was a new challenge every day that okay. I had to, solve and, also I was pretty mouthy. Like I work in communications And I was pretty mouthy as a kid. And, , that would not sit well with a lot of adults, but at this school they encouraged it. , , instead of seeing that as a [00:31:00] deficit, it was just like, okay, use your voice, the vocal.

[00:31:03] And we’re going to give you these outlets in order for you to do that. so I do think every kid has. different, , , uniquenesses about them and they should be encouraged and not, stifled, Hey

[00:31:15] GR: Danesha, how are you? Hey, good to see you. Let’s go back to because you and I have been on panels together.

[00:31:24] We testified together. We’ve advocated together. Let’s go back to. Y you talk about this through the lens of public policy. I know one of the things that we often hear when we say we support school choices, that somehow we are anti-public education. When you hear that, how do you respond to those who bring it up either in policy discussions or elsewhere?

[00:31:48] Denisha: Yeah, that’s totally not the case. how respond is? No, it’s all about what is the best environment, whatever is the best environment for, , a kid. Yeah. There is a lot of,[00:32:00] development, a lot of things we need to change within the traditional public school system, just because, , they’ve been in the game for a long time, you know?

[00:32:10] We do want to hold them accountable. We do want to hold district schools accountable for students because over 90% of our kids go to district school. So it’s impossible to say that we want all of these students to leave our district schools are zoned schools and go to schools of choice because we don’t have that market, , yet.

[00:32:31] but that’s not the idea. We want our, public schools to. educate kids appropriately. and we want parents to be able to choose their public schools. I don’t think it should be a, just a default where you are mandated to go to, this particular school, just because you live. In an area.

[00:32:48] I think parents should have that opportunity to pick and many states do they have open enrollment policies where parents don’t just have to go to the school that they’re [00:33:00] zoned for. They can pick amongst all the schools in their. through open enrollment policies or they can go to a magnet school.

[00:33:07] So there is choice within the public school space, but yeah, for those who, claim like, oh, the school choice fight or the education reform fight is just to uproot everyone out of public school. would be impossible, first of all, to do that. And that’s not the goal. The goal is for parents to be empowered within a system while also holding district schools accountable for academic outcomes and, in students.

[00:33:36] GR: So glad you mentioned magnet schools because they existed before the creation of the first charter school law in Minnesota, or since we’re here at pioneer, they, one of the early states, with, , . Open enrollment procedures. Charter schools, part of a, you know, part of the open enrollment and even in places like the state of Washington, which several years ago, it’s Supreme court rule that is charter programs [00:34:00] unconstitutional, even though they allowed students in Washington to cross borders, to go over for parental choice, let’s take a look at the work you’re doing right now with black minds matter.

[00:34:11] we know that black lives matter is a part of the American conversation right now. Good bad, ugly, hopeful, and everything in between you created this group to do some good work, talk to our listeners about it.

[00:34:25] Denisha: at the height of the social unrest in our country in 2020 with the murder of George Floyd amongst others, like you said, the entire country was looking at, our systems, you know, we were thinking about how can we become more equitable from companies, who were in charge of certain bottles and pancake mixture, changing logos.

[00:34:49] And one of the things that I did I found frustrating was that we didn’t pay as a country enough attention to the education system. And. [00:35:00] To the inequities that exist in that system, , in some of the reforms and changes that really could make a difference in the lives of students. in particularly black students, minority students who, who are oftentimes.

[00:35:15] most of the time, I won’t even sugar coat. It lagging behind their peers in every academic subject, across, national statistics, state statistics, , , , the academic outcomes for black students nationwide, according to the NAPE are really a dismal. And it’s, depressing to look at, over five-year 10-year span how there’s been little.

[00:35:39] to close that achievement gap. And so, that’s why, I started Black Minds Matter to say we need to bring attention to the inequalities in the education system, into champion for more options, because there’s a lot of research, that shows that when school choice, when particularly [00:36:00] black students have choice in education, their academic outcome, Improve drastically.

[00:36:06] and here in Florida, we’ve had a number of research studies, in Milwaukee where the oldest program is founded in even, not just academics, but crime and teen pregnancy and all of these other issue areas. They’ve seen improvement. when students have school choice. And so that, that’s why it was founded.

[00:36:28] We also celebrate, , , black owned schools, which is another form of choice and education. , because in order to found a school that’s a different type of school. So it’s a homeschool co-op or micro school. School charter private. And, these folks are amazing. I’ve done interviews with them, have talked with them on panels and these school founders are just, can’t explain them enough.

[00:36:55] They have the passion and they also are putting their passion to [00:37:00] practice. With founding the schools and it’s, so amazing. So that’s, yeah, that’s a little bit about black minds matter

[00:37:07] GR: and it’s so good. You focused on minds because in the political work that we do, we forget that this is also things.

[00:37:15] And that when bills were signed and the ink is dry and regulations are put in place, they’re actually real people who are doing the work. And so glad you also give a shout out to black homeschoolers and founders, you know, during the pandemic, the black homeschool population grew faster than any other group in the United States.

[00:37:33] Here’s the last question for you. And it relates to stuff that you mentioned with Milwaukee. I had a chance to travel to Milwaukee last fall for the 30th anniversary of the Milwaukee parental choice program. The oldest urban based program in the country. You had Dr. Howard fuller. You had Susan Mitchell.

[00:37:48] you had former governor, Tommy Thompson. You had a former speaker and others there to celebrate. So that’s one. You also had the 30th anniversary of the charter school [00:38:00] movement. Third. Years into the game. We have a lot of wins. The one thing that we really haven’t focused on is the alumni of these programs, whether it’s tax credit, whether it’s tuition, tax credit, where they’re, I guess coming soon ESA a charter schools as a graduate of a program before.

[00:38:22] As you work across the country with people who have children in the program, enough for you are now old enough to have not only been college graduates, but you now are employers you’re entrepreneurs and you’re doing great work. What can we do for the alumni to become the Vanguard of the next phase of this

[00:38:41] Denisha: work?

[00:38:42] Yeah. What an awesome. And yeah, I think that. It is, it’s so important and it’s so amazing to, yeah. We need more alumni, but to see just the drop of students, , in parent beneficiaries who are taken on the reins [00:39:00] of the fight, one, I, yes, I think it’s extremely important because not only do you have someone who can.

[00:39:07] speak to the need, just writ large of more options of more, school choice, choice, and education, but they also have that personal story, that personal narrative of how they benefited from choice and education, how they were empowered. I think it is, it’s so amazing. And we do, we need wait, some, so many more students, at the American Federation for children, we do have a fellowship program.

[00:39:38] Um, beneficiaries, and we’re on our third cohort. And so about 30 students nationwide who benefited from school choice, , in some form. And these are, , charter school alum. These are private school alum, and we also have some homeschool alumni who. Participate in the fellowship to learn about the policy, to couple that [00:40:00] with their personal stories, , to go to legislatures, to go to, events, to just speak candidly about their experience.

[00:40:09] We do. We have so many students now who’ve benefited from choice. So we do need to all do a better job of finding them, nurturing them and empowering them to share their story because I believe they’re the ones that’s going to make the difference. You know, I think that I’m a little biased, obviously I’m a beneficiary of choice.

[00:40:29] but when you put somebody on. And they can talk to the policy aspect and they can talk to their personal story. It’s kind of hard to, refute them. I know I’ve been many conversations where people will be like, oh, I don’t believe in this, this does this. And it does that. , I don’t believe that people should have a choice in the education and.

[00:40:50] I share my experience like, Hey, this was my trajectory. This was what was going to happen to me. But something changed. And then people are kind of like, well, [00:41:00] I’m happy it worked for you. That’s awesome that it worked for you. but, uh, so it’s, it’s, it becomes hard, kind of review a person’s personal story.

[00:41:08] It becomes hard. So that’s what we need more.

[00:41:11] GR: Well, so glad that not only are you taking your story to the public arena, but you’re also doing it with philanthropy, you’re also doing it with the private sector. Glad you had an opportunity to, work in the U S department of education. And, , in the future, when you become us secretary of education, you can take this conversation to the next level.

[00:41:32] Denisha: Yeah, yeah. Ha we will be waiting in court in Asia. Yeah, waiting keyboarding. No, it was

[00:41:43] Cara: such a pleasure to have you on. Thanks so much coming on. Talk to us. They thank you for your time and for your work.

[00:41:48] Denisha: Thank you. I know. And it’s so great to reconnect with you guys.[00:42:00]

[00:42:07] Cara: And this week’s tweet of the week, listeners, is from Lauren Camera. It was tweeted on April. Cross-party agreement among younger generations in a significant generational split within the GOP is telling the story of education policy in a way that made benefit Democrats suffice it to say, I really, I strongly suggest that folks go, and this is from us.

[00:42:31] Go to U S news and look for this tweet from Lauren and read this article because it’s really interesting. Cause guess what folks turns out. there are divides among Republicans, especially younger Republicans on issues like, should we be teaching critical race theory or something that looks like it in the classroom?

[00:42:48] And surprisingly, some Republicans say, yes, it’s not monolithic among Democrats, especially under. Surprisingly support for school choice. So for [00:43:00] me, what was really promising in the findings of this poll from murmuration are that like, people are people and there can be differences of opinion, even within the same party.

[00:43:11] So we are not hopelessly split along party lines and. Gerard, maybe the kids have something to teach us because neither of us fall into the category of people who were pulled here. , anyway, we are going to be back listeners next week. We will be speaking to professor Robert alter. He is the definitive translator of the Hebrew Bible.

[00:43:31] Gerard. We’re going to get, biblical next week. I’m going to look forward to having more conversation with you and with our guests until then be, well, my friend

[00:43:41] Cara: look

[00:43:41] GR: forward to seeing you again.[00:44:00]

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https://pioneerinstitute.org/wp-content/uploads/TLC-template-6-1.png 512 1024 Editorial Staff https://pioneerinstitute.org/wp-content/uploads/logo_440x96.png Editorial Staff2022-04-13 10:09:232023-08-26 09:41:04AFC’s Denisha Merriweather on School Choice Advocacy & Black Minds Matter

Pharmacy Benefit Profiteers: Distortions and Costs of Half-Trillion Dollar Drug Middlemen

April 12, 2022/in Featured, Healthcare, Podcast Hubwonk /by Editorial Staff

https://www.podtrac.com/pts/redirect.mp3/chtbl.com/track/G45992/feeds.soundcloud.com/stream/1248906436-pioneerinstitute-hubwonk-ep-100-pharmacy-benefit-profiteers-half-trillion-dollar-drug-middlemen.mp3
Hubwonk Host Joe Selvaggi talks with ALVA10 CEO Hannah Mamuszka and Chief Medical Officer Dr. Blake Long about the perverse incentives imposed by Pharmacy Benefit Managers adding nearly $500 billion to U.S. drug costs.

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Guests:

Hannah Mamuszka is Founder & CEO of ALVA10, a healthcare technology firm. Hannah has spent her 20+ year career in diagnostics – both in pharma and at diagnostics companies, in the lab and on the business side. She believes that the challenges of diagnostic technology fully impacting patient care are more commercial than technical, and conceived of ALVA10 to create a mechanism to pull technology into healthcare by aligning incentives through data. She regularly speaks on issues regarding advancement of technology in healthcare, is on the Board of Directors for two diagnostic companies and writes a column on the value of diagnostics for the Journal of Precision Medicine.

Blake Long MD.

Dr. Blake Long is the Chief Medical Officer of ALVA10.   Blake was previously the Chief Medical Officer for Sapere Bio and for Echo Health Ventures, the venture investment group of BlueCross BlueShield of NC and Cambia Health Solutions. Prior to Echo, Blake served for 20 years as a practicing pediatric cardiologist at Savannah Children’s Heart Center and as a clinical professor at Mercer University School of Medicine. He earned his BA and MD from Duke University, and then completed his clinical training at Walter Reed Army Medical Center and Duke Medical Center. He received his MBA from Duke’s Fuqua School of Business in 2015, and now is an Adjunct Professor at Fuqua in the Health Sector Management Program.

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Read a Transcript of This Episode

Please excuse typos.

Joe Selvaggi:

This is Hubwonk, I’m Joe Selvaggi.

Joe Selvaggi:

Welcome to Hubwonk, a podcast of Pioneer Institute, a think tank in Boston. The high cost of healthcare is often blamed on the high cost of drugs, but a careful look at our healthcare system reveals that costs charged by drug manufacturers are less than the cost of the intermediaries known as pharmacy benefit managers, which neither make drugs nor provided insurance, pharmacy benefit managers, or PBMs, as they’re known, were designed to negotiate drug discounts on behalf of health insurance providers, and then take their earnings from a portion of the negotiated discounts. Incredibly the PBM industry itself today owing to the complexity and opacity of the healthcare system. Now cost the us healthcare system more than either the cost of drugs or the cost of insurance with PBMs. Now enjoying more than 400 billion in revenue annually, where still the incentive structures within PBMs combine doctors to prescribe drugs, not based on optimal clinical benefit, but on the price structures of the PBMs.

Joe Selvaggi:

How have organizations built to reduce the cost of drugs become bigger than the drug companies or the insurance companies themselves, and what can regulators and consumers do to reform the system to better align incentives in a way that encourages lower costs and greater freedoms for doctors to care for their patients. My guest today, our Alva 10 CEO Hannah Mamuszka and her firm’s chief medical officer, Dr. Blake Long as advocates for the use of testing to determine proper medical therapies known as precision medicine. Hannah and Blake have studied the costs of the distortions created by PBMs incentive structures. They will share with us how pharmacy benefit managers work, why they have grown to nearly half a trillion dollar industry and what consumers and policy makers can do to encourage reform. They can lower costs while encouraging more effective drugs and therapies for how healthcare consumers, when I return, I’ll be joined by Alva 10 Hannah Mamuszka and Dr. Blake Long. Okay. We’re back. This is Hubwonk I’m Joe Selvaggi, and I’m pleased to now be joined by Alva 10’s chief executive officer Hannah Mamuszka and Alva 10’s chief medical officer, Dr. Blake Long. Welcome back to Hubwonk, Hannah, and welcome to Hubwonk, Blake.

Dr. Blake Long:

Thank you so much, Joe. Yeah. Thank you, Joe. Pleasure to be here.

Joe Selvaggi:

Okay. We’re gonna be talking about pharmacy benefit managers or PBMs as they’re known and their effect on the cost of drugs and the availability of particular drugs in our healthcare system. Our listeners, remember you Hannah, I’m sure as an expert in precision medicine an advocate for precision medicine. So I’d like to have Blake introduce himself and share some about, of his background and how he came to precision medicine and alpha 10 and where he comes at this issue of PBMs.

Dr. Blake Long:

Oh, well thank you, Joe. So my background, I initially studied health economics and then completed medical training and practice as a pediatric cardiologist for about 20 years. And over that time, I became increasingly frustrated with the complexity of the healthcare system and its effect on patients and physicians. And so decided to make a career pivot and work on healthcare system change through innovation and investing. And I joined the alpha 10 team and Hannah they’ve been working on that about two and a half years ago.

Joe Selvaggi:

So your voice is coming from someone from the inside who sees that you have patients who need care. You have doctors who want to help them, but a system that somehow interferes with that, with that process.

Dr. Blake Long:

Indeed I did. I experienced it on a regular basis. There are a lot of distortions particularly with choices for therapies or diagnostics, whether it be testing or imaging. A lot of times those things were dictated to me and not in the best interest of patient care or as I saw fit.

Joe Selvaggi:

Okay. So now Hannah, I wanna dig into our topic of pharmacy benefit managers by first defining what they do. I mean, who, who created these things and, and what were they supposed to do, or what are they supposed to do for our healthcare system?

Hannah Mamuszka:

So PBMs have been around for a while. They’ve actually been around since the 1960s. They started to kind of creep into healthcare system in the, and nineties when the first ones were, were actually spun out of payers. The idea is that there needs to be some kind of an intermediary that works between the insurance company and the pharmaceutical company, the drug manufacturer who’s manufacturing the drug. So even though the name pharmacy benefit manager makes you think of pharmaceutical a and benefit manager is much more closely related to the insurance company than it is to the pharmaceutical company. The idea with the PBMs pharmacy benefit managers is for them to negotiate best drug prices and then pass that along to payers in theory, enabling a better competition in the market, better pricing and theoretically better value.

Joe Selvaggi:

So Blake and you study this, you have the background in the economics, how do PBMs make their money in the system?

Dr. Blake Long:

They’re, it’s, they’re in the middle of a multi-sided market. And so they have essentially four different ways they make money. The first is fees that they receive for, from predominantly from the health plan for managing transaction costs and medication management for patients. The second is what’s called spread pricing where they collect a, a price from the payer and then actually charge a different price to the pharmacy and keep the difference. The third is what’s called call callbacks, and these are contractual relationships with the pharmacists that if they need certain metrics, don’t meet certain metrics, they can reclaim some fees. And the lab last one is sort of the big one, which is rebates in that. The pharmaceutical company gives a discount to the PBM for guaranteed volume. And so they set a high price. And if that volume is met, they’ll give a discount. What’s key is that all these things are done after the point of sale. So those are the four real avenues of PBMs making money.

Joe Selvaggi:

So in theory they’re paid out of the discounts. They fight for on behalf of insurance companies, which ultimately where the consumers who pay those insurance rates, clawbacks, how do these work do consumers when they, when we get these dis presumably we get cheaper drugs do these clawbacks ultimately are down to the benefit of, of someone out there buying a drug.

Dr. Blake Long:

The clawbacks have less effect on sort of the consumer point of sale. They’re really affecting the margins of the pharmacist. And that is gonna be a less of a C the more important one is the, is the rebate issue. And that’s the big one. And just some general sense about the scale of this the contracts between the PBM and the pharmaceutical manufacturers, which is where the rebate is. The effect is very, but some published studies have shown how significant they are. For example, in 2016, 13 major pharmaceutical companies had gross revenues of approximately 300 billion and they paid 100 billion in rebates back to the system for a net revenue of 200 billion. So in other words, the pharmaceutical manufacturers paid 30% of their gross revenues back to the system in rebates or about 50% of their net revenue. In other words, the money they keep. And that’s been increasing sign over the last several years.

Joe Selvaggi:

That that seems like a lot of money. We’re talking about big bucks even in, in relation to the size of our healthcare system, how large is the PBM industry itself, meaning not the drug companies money to them though I’m doing the math. If they’re paying a hundred billion, we’re saying a hundred billion goes to the PBM or that that money goes some to the PBM and some to the back to the insurance company.

Dr. Blake Long:

The an yes, some goes to the PBM and some goes back to the insurance company. So just to, you know, a couple of other things on that issue the top five PBMs in 2021, their gross revenues were 422 billion, which is 9% higher than in 2020. So there’s been growth and it’s 56% higher than in 2015. So that, that revenue growth for PBMs has been dramatic. They have profit margins about four to 5%. So that’s a lot of profit it’s, it goes into the PBMs. And just to compare the top five pharmaceutical companies had gross revenues in 2019 of half of that, or 240 billion. And the top five insurers had 72 billion in gross revenue. So just to give you a sense of, of relation and scale.

Joe Selvaggi:

So if I get those numbers, right, the, the quote, unquote middleman, if I’m entitled to call PBMs, middleman are much larger, then the people that are standing in the middle, which are the drug companies and the insurance companies, they’re, they’re relative giant compared to the people that they’re theoretically intermediaries for

Dr. Blake Long:

That’s that’s correct. Yes.

Joe Selvaggi:

What, what percentage of, of drugs pass through these PBMs? And frankly with that much money I believe in markets, I hope we all believe in markets and the power of markets, shouldn’t that amount of money encourage competition. And we all know of basic economics in the long run profits go to zero, what’s going on here. You know, is do they compete with each other?

Dr. Blake Long:

There are three large PBMs and they own 90% of the market share. So they’re competing against each other, but they have, you know, quite a bit of market. That’s a significant concentration. And they, we know them as, you know, CVS care marks, Cigna express scripts, and United health group OptumRx of note, a lot of those are recent horizontal consolidation or with insurers. And then finally there are roughly about 70 PBMs, including those top three, and there’s been several, a few recent entrants. So there’s a lot of smaller ones that are competing against each other and against those big three.

Joe Selvaggi:

So presumably this is a, a industry that’s perhaps ripe for disruption. We will talk a little bit later in our conversation, whether any of that’s actually happening and how that would happen. But so far, I mean, at a high level, despite the fact that they seem to be collecting new nearly half a trillion dollars in revenue they do seem to be somewhat useful. They advocate for cheaper drugs and, and in theory, more competition, if a drug is too expensive, presumably they’ll choose a, a less expensive drug, but let’s, let’s talk about how a, a PBMs, how they were originally designed to negotiate on our behalf. And I presume encouraged competition of cheaper drugs where have distortions begin to where have they started to appear. Let me just throw out an idea here.

Joe Selvaggi:

I mean, you’ve, you sort of implied that if PBMs are driven by their own profits, 422 billion, a lot of profit, and those gen the profits you said are generated primarily by the discounts. They negotiate on our behalf with the drug companies and the more expensive a drug is the bigger, the potential for a discount. There seems to be clear initiative to or an incentive to include more expensive drugs on a formula instead of cheaper generic drugs, right? If a, if a drug costs almost nothing, the discount is almost nothing. So to me, you know, as, as a layman, this seems like an incentive for really expensive drugs.

Hannah Mamuszka:

Yeah. And that’s exactly how we’ve ended up with the hell healthcare system that we have. You know, if you look at what happens to new entrants, to drugs that get approved in indications where there are already drugs in other markets, you would expect a new entran to come in at a low price, right? To try to induce customers, to try a new drug to try and do physicians try to induce the PBMs and the payers, it’s actually the opposite in our system. Now if a new drug comes into the market and isn’t priced high enough to confer those discounts, that drug won’t be placed on the, on the formulary, the only way that you can get access to formulary tiering. And, and just to clarify, you wanna be as high on the formulary as possible because that’s the order in which physicians are allowed to order and, and try drugs on their patients. You wanna be as high up on that formulary, tearing as possible. It’s actually pricing your drug higher. That gets you there. It’s not pricing your drug lower that gets you there because that’s exactly what you said, Joe. That’s how you get that discount and that how that’s, how they make their money.

Joe Selvaggi:

So, so this would seem to be exactly counter to the notion of markets that, you know, a high price would invite lower cost competitors to enter the market. So the PBM looks at this lower cost alternative. I got drug a that’s expensive in drug B that’s cheaper. My mandate is to find cheaper drugs. And yet I may overlook the cheaper drug because there’s less discount for me to negotiate Argo. I choose the more expensive drug,

Dr. Blake Long:

Right? Yeah. That’s that, that that’s referred to as the rebate trap or the rebate wall. And so again, that established expensive incumbent, you know, gives a big discount. And so the new entrant w even might be a better drug for a patient or less expensive, but the savings that the health plan would realize from using that less expensive drug gets overwhelmed by the loss of the rebate for the more expensive one. So even though they may want to do that, they would lose money in the, in the aggregate because they would lose this massive rebate on the more expensive one.

Joe Selvaggi:

Yes. I can imagine all the drugs, some in the future go to generic, they’re all, you know, a dollar, I don’t know how one would earn 422 billion with a formulary full of very inexpensive generics. So we can see a problem right there as something working against, against the consumer. So I wanna Dr map our, our conversation directly onto your work with alpha 10 advocating for precision medicine for our listeners who haven’t heard our earlier episodes together, precision medicine, if you’ll, let me sort of generalize is, is the idea that different drugs and therapies work differently for different people and with better testing, we could bring to bear more effective drugs right away. We don’t have to give everybody drug one what works and then give those who didn’t, it didn’t work for drug two on and on, on, we test everybody and give everybody the right drug the first time. Again, I’m, I’m generalizing, but that’s how I see precision medicine. How, how might the dynamics of PBMs ate against the idea of precision medicine? How, how would it work against what you’re trying to do?

Hannah Mamuszka:

Yeah. You know, in some ways I think that the concept of having a PBM to help a physician figure out which drug to choose, you know, predated this concept to precision medicine, because when you had multiple drugs and there was no biologic way to tell which patient was gonna respond to which drug, it made sense to make that decision from an economic perspective, since you couldn’t make it from a clinical perspective. Now we know that we have the tools to figure out which patients are gonna respond to which drugs. So you could ask why we would want to use the economics instead of the clinical. So, you know, if you take, if you take an example like rheumatoid arthritis, rheumatoid arthritis is an autoimmune disease where you have multiple classes of drugs that work through different mechanisms of action. And then with E within each class of drugs, you have multiple drugs.

Hannah Mamuszka:

So you have, if you’re a, if you’re a rheumatologist treating patients with rheumatoid arthritis, you have a whole variety of drugs to choose from. And right now, most of that choice is dictated based on the formulary tiering of your pharmacy benefit manager. However, now there are diagnostic tools on the market that would allow you to figure out if your patients should go on a, say, a TNF inhibitor, which is the predominant class of drugs that’s used in rheumatoid arthritis, which works in about 30% of patients who are prescribed to them, or if your patient should go on a Jack inhibitor or an interleukin drug. But the problem is, is that the rebates for the TNF inhibitors in rheumatoid arthritis are so substantial that when payers take a look at what it would take to implement using a diagnostic in rheumatoid arthritis and shifting some of those patients from TNF inhibitors to Jack inhibitors, or to other classes of drugs, from an economic perspective, they realize they’re gonna lose their rebates because they are going to dip down below the threshold of volume under which they get those rebates and the drug is gonna become much more expensive.

Hannah Mamuszka:

And so, even though they now know that they have a tool where they could place patients on a drug, that was, they were most likely to respond to where they, their symptoms would decrease, where they’d be less likely to be in the hospital where they’d be more likely to be functional and feel better and be productive at work from an economic perspective, they can’t make it work. And we’ve talked to PBMs about this. We’ve actually also talked to some employers about it, and some of the employers have essentially admitted that their economic structure of their health plan is so dependent on the rebates that they can’t make the decision to add in a diagnostic, knowing that it would, would improve the outcomes for their employees, because the rebates are so substantial from the PBMs. And that’s a problem because in, in 2022, we have the technical capability to do this, but now we’ve created this economic problem. So we’re putting the economics ahead of the clinical improvements for patients.

Joe Selvaggi:

So I, I find this hard to believe I’m gonna kick it back to Blake, cuz he’s the doctor in the room. And I’m gonna say in this model, if I’ve got it straight from what Hannah’s just told us, we could offer a patient, a diagnostic test that would tell them, which is the right drug to take first. And by so doing, we may actually discover that it’s a lower price drug or a drug that offers a lower rebate Argo. I’m not gonna do the test and I’m going to give the maximum rebate drug to all my patients, knowing that I could avoid the time and the, you know, I’ll call it suffering that giving the sort of ineffective drug first will, will incur on my patients. How, how does that ring in a doctor’s ear?

Dr. Blake Long:

Back to my intro, not well <laugh> exactly. It’s so again, it’s, if you sort of think about it, I’ll answer it sort of academically and then sort of a little bit more to the patient level. As Hannah described, we have this decision making based on the economics for what is chosen and that is decided by a volume thing in retrospect. And so the ideas that you look back and say, this is how much drug I need to, we need to use the volume. And then I use all, all those tools of tearing step therapy, which is really hard for patients. I have to try a drug, make it fail before I go to the next one, very difficult for patients. In prior authorization, you can’t get the drug approved with, until you do all these steps, they use all these tools to make sure they hit those volume targets.

Dr. Blake Long:

Whereas we are thinking about using a diagnostic tool and if you look at it from the PBM perspective as a potential advantage, you could say, I have certain number of patients and I know who is gonna be on the drug and who will respond and I can guarantee the volume prospectively. And then you negotiate a rebate on that rather than in retrospect, as which is how it’s doing, what that’s doing for con consumers or patients is most patients now in the marketplace are on high deductible health plans. So they are exposed to a large co-insurance. So the higher, the price of the service or drug, the more they have to pay and in the specialty pharmacy area and in Medicare part D for example, in cancer average copays now, or 12 month prescription or 10 to $15,000, and that results in a non initiation rate of 30%. So it, it has a significant out of pocket cost to the consumer getting exposed to these rebate driven co-insurance problems and lack of utilization. So I can’t pick the right, the patient doesn’t has to go through drugs that don’t work to get there. And then they’re exposed to the significant cost. It’s a real problem in the clinic.

Joe Selvaggi:

So the PBM is both making that drug, that they need more expensive. It’s making it less likely they’ll be prescribed the better drug regardless of cost, because it’s lower on the formulary. And when they ultimately do have to pay they do, I have it right. They don’t enjoy the, the discount or the rebate. They, they have to pay retail flush that out for our listeners a little more. Again does do I, the cancer patient, you, there’s a remarkable 10, 15,000 cost per year. Of course, as you mentioned, that means they’re percent of people with cancer don’t take their drugs. How, how does that work? How does it how am I not benefited by the, the discount that the PBM negotiated on my behalf?

Dr. Blake Long:

Yeah, that’s a, that’s a great question. And that’s really, the complexities is the, the co-insurance is at the price at the point of sale. So you get exposed to the full price and then the discount happens after the sale. So all that money gets flowing around after I’ve already paid the price at the counter, so to speak or the point of sale. And so that rebate then goes back into the PBM and doesn’t necessarily come back to me. I don’t see that discount at the point of sale. So the co-insurance gets exposed to the higher price. That’s why it’s so problematic for the patient.

Joe Selvaggi:

You know one of the reasons we’re addressing this question now, as you say, the PBMs been around for a while and they’ve been getting worse, but it’s, it’s a, seems like a, a, a substantial problem. I I’ve read that. There’s some attention of on this issue, PBMs by the federal trade commission, these are the people who are supposed to protect us from unfair trade practices, such is monopolistic behaviors, I guess this would be called monos. We’ve got a few buyers of, of, of big buyers of, of drugs. Is anything being discussed at the high level? You guys I’m sure are up on this, what’s going on with the federal trade commission, are they looking at this and do they see it as the problem that, that we do?

Dr. Blake Long:

So yes, the federal trade commission just recently dealt with this issue and the focus primarily was on the pharmacy clawback issue as being Andy. But they voted in a two to two to not actually have the FTC TC explore that issue. But the, the study that was planned was more encompassing to look at the rebate side of the market, which is between the PVM and the pharmaceutical and other anti-competitive practices, including spread pricing and some of the other things and the thought was, is that is not the objection to pursuing the study were that it was not clear how it was going to affect consumer welfare, which is a, a little bit interesting given the discussion we’ve had just previously.

Joe Selvaggi:

Yeah, I, I did read something about the head of the FTC a woman named Lena Conn recently appointed by the Biden administration. She sees pretty tough on anything that looks like monopoly, but here, I think they’ve sort of lost the, the, the main point of our conversation. I think they, as you say, we’re more concerned about what PBMs do to little pharmacies in, in, in prefer or privileging the CVSs of the world in at the expense of the mall. Pharmacists. I think the bigger question as you point out, it seems like they overlooked the huge distortionary effects as in a half a trillion dollars siphon off the system that interfere both with the price of drugs, the availability of proper drugs, the prevalence of tests all the distortions. Why do you think they’ve overlooked this half a trillion dollar elephant in the room, Hannah,

Dr. Blake Long:

And you wanna tackle that one? <Laugh>,

Hannah Mamuszka:

You know, I, I find it fascinating because there’s so much of a discussion right now as there is this time, every election cycle around drug pricing and on Medicare’s ability to influence drug pricing about the government’s ability to influence drug pricing and about, you know, should we be importing drugs from other countries and how do we not stifle innovation? And that’s, that’s all fun. And that’s an interesting conversation to have every two years, but it, it stymies me. And I don’t know if it’s because the industry is so opaque, it’s so difficult to figure out a lot of these contracts are secret. A, you know, if you talk to payer, a lot of them don’t even know what are in at, at very senior levels. They’ll describe that these contracts are so secret that they haven’t seen them. They’re not allowed to discuss the rebates. They’re not allowed to share them. None of this is publicly available. It’s, it’s essentially impossible to figure out how valuable they actually are other than the fact that, you know, these are publicly traded companies and, and you figure out at the end of the year, what they’ve been up to. But it’s, it’s a real question as to why there’s so much focus on the pharma industry who is doing research and actually developing drugs, but makes less profit off of them than the PBMs do.

Joe Selvaggi:

Yes, indeed. We’ve had shows on Hubwonk, talking about the fact that drug prices though, the, the popular narrative is that they’re going up, they’ve seem to have stayed with inflation or, or, or not kept up with inflation. So the booking man on the political level is definitely the drug companies, but PBM seem to miss any kind of scrutiny, even though, as you say, they’re not even making the drugs, they’re not, they’re not healing us. They’re doing essentially nothing but acting as intermediaries. All right. So the FTC, so took a pass on this. I, I, I do though think that I I’ve read somewhat on this, that senators from both sides of the aisle Republicans and Democrats have both said, look, let’s, let’s, let’s keep this on the, on the front burner. Let’s, let’s take another look at this. I think there’s more to the eye more to the issue than the I can see right now. So let’s hope that this remains top of mind, but if the federal government can’t be relied upon to, in a sense, go out there and figure out what’s going on with this system, what what can consumers our listeners, business owners interested policy makers, what can those people who really want to tackle this issue? What can they do?

Hannah Mamuszka:

You know, I think, I think we’ve seen changes in terms of employers starting to realize, especially smaller employers and employers that self-insure starting to think about out the consequences of PBMs and of the rebates of PBMs and how that impacts both their healthcare costs, their employees’ ability to work. We’re seeing more and more market entrance of smaller, more innovative PBMs that have a different business model, where their business model is, you know, they contract with your employer on a, you know, a per employee or a per member basis. So they are not incentivized by the rebates they’re incentivized to grow their business. Some of them have other more interesting value based arrangements around performance in terms of how your employees, your patients are doing. So I think that there is a, a starting to be some market pushback, but as Blake said, you know, the dominant mechanism for PBM business relationships right now is the rebates. And most companies, most employers are using a PBM that is using the rebates as an incentive to drive business. And it, it, it greatly affects how employers make decisions about their employees healthcare. And I think it’s really important for employees to start to think about that and to start asking questions, particularly, you know, as benefit selection, season rolls around, you know, think about what that means for your benefits program, for what your employer is offering you, because, you know, it might have some consequences that maybe unintended.

Joe Selvaggi:

So there are PBMs. We don’t wanna paint everybody with the same brush. There are PBMs who do have incentive structures aligned with the benefits of consumers and, and businesses. We just gotta go out there and find them is it the case that I do, we’re, we’re blaming these kickbacks, if you will. These discounts that are negotiated as sort of the the, the mechanism by which PBMs, I think exploit the system or distort the system, is, are there PBMs that have no do not use that at all? How do they, in a sense negotiate for better prices and what metric do they use instead?

Hannah Mamuszka:

Yeah, I mean, there are ones like Costco health, like empire RX health RX sense, well done, just to name a few that are on, on some sort of a fee based model where, you know, they’re really trying to grow their business, their own business based on aggregated volume and not participate in the, in the rebates, because I think that there there’s a growing trend in that direction of understanding that at some point we’ll have to change how we pay for drugs.

Joe Selvaggi:

So, Blake I’ll, I’ll say to you, again, with the economics background as companies, insurance firms, you know, say way and slowly start to shift toward this newer model, this fixed fee or fee for per unit or something like that. This must then if we take some of these half a trillion dollars of intermediary fees out that should reduce premiums and save consumers money in the long run, shouldn’t it?

Dr. Blake Long:

It should, it should because that’s money that really in sort of in the middle and it’s not actually moving back to creating value. And I, I think one of the key things that Hannah said for this precision medicine is we can move to more fee based, but also as the pharmacy benefit with, which has historically been markedly separated from the medical benefit is those things start to blend together and the pharmacy actually affects your ethical outcomes and your costs, and therefore your premiums, as well as the point of sale costs that we talked about for paying for the drug that as you start blending those together, you, and then we move to value based care, moving to risk based contracts would be another interesting way to say a, how you manage your pharmacy benefits. So there are a lot of ways to use more clinical tools and to use more risk based contracting and move away from the rebate model and just a, a fee on a transaction in looking more for outcomes. I, I think there’s a lot opportunity to move in directions that can be really beneficial for patients and actually reduce total cost of care on top of reducing specialty pharmacy care.

Joe Selvaggi:

Yes, this seems like it’s a potential for win, win, win. As you say, you never wanna be making decisions with people’s health based, purely on economic reasons. You wanna use clinical reason. You want people to get better. And this seems to be just gratuitously distortionary and one hopes fixable without causing harm to anyone. Well, this is a very complex issue. I, I hope I’m gonna say let’s watch this space because I think this should come up and I’ll have our I’ll invite our listeners to call their Congressman or Senator and say, you know, what, what are you doing about this? And let’s see if this can’t come back into the forefront of of our attention. So thank you very much. Both of you for joining me on hub won. I hope if it does come back onto the public’s eye, you will come back and join me and explain what’s going on. And if we’re moving forward in the right direction, for sure

Dr. Blake Long:

Will do.

Joe Selvaggi:

Thank you. Thank you both.

Dr. Blake Long:

Thank you. Thank you, Joe.

Joe Selvaggi:

This has been another episode of Hubwonk, a podcast of Pioneer Institute. If you enjoy today’s episode, there are several ways is to support the show. It would be easier for you and better for us. If you subscribe to hub wonk on your iTunes podcast, catcher, if you wanna make it easier for others to find Hubwonk, it would be great. If you offer a five star rating or a favorable review, we’re always grateful. If you want to share Hubwonk with friends, if you have ideas or comments or suggestions for me about future episode topics, you’re welcome to reach out to me hubwonk@pioneerinstitute.org. Please join me next week for a new episode of Hubwonk.

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April 11, 2022/in Economic Opportunity, Massachusetts Economy, Pioneer Research, Public Testimony, Transportation /by Andrew Mikula

In this public comment, Pioneer Institute examines the Massachusetts Department of Housing and Community Development’s guidelines on how localities can comply with new zoning mandates around MBTA stations. While some of the compliance criteria and goal-setting language need further clarification and adjustment, overall Pioneer Institute is supportive of the vision for sustainable, transit-oriented development which, if properly implemented, will expand economic opportunity to a new generation of the state’s residents.

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