The Future of Health Insurance: On the Ground Considerations and Implications

PLEASE NOTE: This is an unedited transcript. Please refer to the video of this event to confirm exact quotes.

MARILYN SERAFINI: Before we head to this panel, I just want to let you know, if you do need to leave us before the end of the program, please fill out the blue evaluation form. It really helps us to understand what you would like to see and to hear from us and we really do take that into consideration.

I’m now going to turn it to Noam who is going to talk to our next panel. We’re going to hear from the doctors, the hospitals, the insurers, the patient groups to get all the information and what they’re thinking.

NOAM LEVEY: Well, thank you, Marilyn, and thank you wall for sticking with us. Before you rush for the exits, I know we’re standing before you and lunch, so I’ll make one plea that you stick around because we are very lucky to have four people who are on the front lines of what’s happening in the American healthcare system and I probably don’t need to remind this audience, but that is a perspective which is oddly missing in a lot of the healthcare debate that we have in this town. So we only have half an hour. We’re going to be lightning fast, but hopefully provocative.

So let me introduce our four speakers, working this way. Michael Aubin is President of Wolfson Children’s Hospital in Jacksonville, Florida, which is the region’s pediatric referral center and part of the multi-hospital Baptist health system. Kirsten Sloan is Vice President for Policy at the American Cancer Society’s Cancer Action Network where she leads a team of seven focused on access to care, emerging science, and prevention. Kisha Davis is a family physician at Casey Health Institute, a primary care practice in Gaithersburg, Maryland. She also serves as a consultant to the Center for Applied Research, advising on practice improvement and payment reform. And Andy Chasin is policy director for Blue Shield of California, which covers about 4 million people in the state. Previously, Andy served as Health Policy Counsel to the Senate Republican Policy Committee where he worked on the Affordable Care Act as well as on a variety of other issues.

I think maybe we’ll just dive right in here. We’re in the midst of reviewing what the fate is of this zombie healthcare bill on the Hill. It’s obviously been a very contentious debate about the current law and what the future holds. Let’s go down here and talk about what’s wrong with the debate we’re having right now about healthcare?

MICHAEL AUBIN: Well, I can tell you, one of the observations that I was making, and a lot of my colleagues, was around who we weren’t talking about. If you think about the debate, who mentioned that there were 30 million kids that are in the Medicaid program that were going to be dramatically impacted? Half of all of the non seniors in that program were going to be dramatically impacted by this program, yet they only represent about 20% of the total cost of the program. They’ll be the ones that will be squeezed out of that as the demand for senior services and other kinds of services take hold. And, quite frankly, they’re the future of taking care of all of us. If we don’t get this next batch of 50 million kids in the United States through and into health and employment, we’re all going to be challenged because there’s not going to be enough of them around to take care of us.

KISHA DAVIS: I think that’s a great point. We’ve definitely left the patient out of the healthcare debate. We also haven’t talked about what makes healthcare expensive, and we’re talking of cutting this and cutting that, but we haven’t really gotten at the root cause of why it’s so expensive and the specialty care and the drug pricing and all of those things that really factor into making healthcare expensive.

ANDY CHASIN: Thank you for having me, and I’d like to say, for everybody who stayed through three hours of health policy conversation that the scouts gave out a wonk badge. They should be eligible for that.

So, in California, we’ve reduced the uninsured rate from 17% down to 7% and I think that’s real progress that we need to maintain, and then all of the political to and fro, and there’s a lot of to and fro with the zombie bill these days, that I think we’re losing sight of what’s important. And both sides really have talked about it but that’s cost. Like, how do we get cost under control. And so, for us, we like to think about cost in three buckets, although Trump doesn’t like buckets, he likes phases, so three phases. So the first phase would really be what do we do to provide stability to the market and the exchanges. And for that, it really is to not make things worse and that seems strange that you would have to say that except in D.C. you do. So one of the key areas that we need stability on is these cost sharing reduction payments. You heard the other panelists talk about that, but since we’re the On the Ground panel, I wanted to talk about what they mean. And this is a consumer benefit that helps make coverage more affordable for low income enrollees. It reduces their deductible and out of pocket expenses. About 60% of our enrollees, six and a half million people nationwide, receive this important benefit. And so, in California, if you pulled that CSR benefit from what it is, somebody at 150% of federal poverty level, a family right now, has a deductible of only $150 because of the CSR program. If you eliminate that, their deductible goes up to $5,000, so it’s a 3000% increase. So when we’ve had this debate talking about deductibles are too high, it seems like we’d definitely be going the wrong direction by taking that program away.

And I’d also like to make a wonky point about this, which is, you know, I understand there’s the Constitutional issues that the House is standing on and the lawsuit which are important, and they’ve won that case, but from a budgetary standpoint, this is already allocated in the budget. It’s in the baseline. So there’s no new money that needs to be appropriated to do this. All you need to do is pass on the funding that’s already there. And if you don’t, as Peter Lee pointed out, it costs the federal government more. So it would seem, as a matter of policy, it really makes sense to continue this.

In the medium term for us on the exchanges, you really need to address what’s driving premiums. It does vary somewhat state by state, but nationwide, one alarming trend we’ve seen are third party payments, particularly the American Kidney Fund and what they’re doing is moving people from public coverage—Medicare and Medicaid—into commercial coverage because we pay higher rates. So that’s good for them, but it’s bad for the overall health of the exchanges and it’s driving up premiums. So that’s something that we really need to address.

And, finally, when we look at the longer term issues, certainly our primary concern is pharmaceutical spending, pharmaceutical costs, you’ve all read the stories, are now the biggest part of the healthcare dollar and going up the fastest—22 cents of every dollar now, when you include drugs administered by physicians, goes towards drug spending, so that’s more than we spend on doctors, more than we spend on hospitals. We are working hard at the state level to bring more transparency to this, but we agree with President Trump that we really need to bring more balance to this market.

KIRSTEN SLOAN: So, I would agree with many things that my panel mates have said, but I think what’s really been missing from this debate is the fact that the need for healthcare isn’t going away. Several years ago, the American Cancer Society did a study that looked at what happens to a person who’s diagnosed with cancer but doesn’t have insurance. And the problem is that diagnosis comes at stage 3 or stage 4 when your prognosis is not as good and your costs are much higher. So the fact is, there is a need for healthcare that isn’t going anywhere, in fact, it’s increasing. And so access is still one of the primary issues that people worry about. Predictability is another one, and affordability is the third one.

NOAM LEVEY: So let’s dig down on a couple of these specifics. You talked about several specific things that Blue Shield needs to make the marketplaces sustainable. Let me ask the three of you, I guess, starting with Kirsten, specifically you’re talking about ensuring the cancer patients have access to needed treatment. So specifically, I assume you’re saying one of the things we don’t want to jeopardize the coverage that exists right now, but if there is specific things that need to happen to ensure that that access remains, what would they be?

KIRSTEN SLOAN: Well, I think first and foremost would be subsidies, is making sure that people can afford the coverage that they get. A lot of times, people will choose a health plan based on the premium because it’s that predictability issue: I need to know what my healthcare is going to cost me. The problem is, oftentimes if you have cancer or another chronic condition, your back end costs can be really prohibitive because you’ve purchased a cheaper plan at the front end without thinking about what the co-pays or deductibles or co-insurance might be. So, one, making sure there’s premium subsidies; two, making sure that other out of pocket costs are affordable; and, three, that predictability issue, knowing that the package of benefits that I purchase are actually going to meet my needs. You hear the words “you have cancer,” in your future is likely going to be a lot of physician visits, surgery, potentially radiation, chemotherapy, drug therapies, and a lot of healthcare visits in the future. You want to make sure that that insurance plan covers those services that you need so that you can budget for those.

NOAM LEVEY: Kisha, when you think about it from the primary care perspective, what are you seeing out there that bothers you the most and that you think, if you could wave a magic wand and make people up the Hill here do it, what would you ask them to do?

KISHA DAVIS: Well, you know, I think a lot of it has to do with access and how do we make sure that patients who have insurance are actually being able to access their doctor. And when you think about access there’s issues on the Medicaid side and there’s issues on the private insurance side as well, right, so on the Medicaid side, if you have created an administrative burden and pricing structures for doctors that makes them less willing to accept the program, well, patients have insurance but they can’t find a doctor who’s willing to treat them and so you’ve created a patient with a false sense of security in that they don’t have access to medical care to actually be able to obtain it.

On the flip side, in the individual market, if you have created deductibles that are so high that patients have insurance but are afraid to use it, then they’re still coming to the doctor too late, right, so the patient finds a lump but can’t afford that doctor visit or that now non screening mammogram that’s not covered. The screening mammogram is, but now that diagnostic one, they have to pay out of pocket for until they met their deductible. Well, they’re waiting until it’s worse. They’re now going to the emergency room and they’re still not accessing care. So you’ve created a wedge between people being able to access primary care and get those preventative services that would allow them to treat things earlier, which was the point in the first place.

NOAM LEVEY: And what about from the hospital perspective? What is your big concern that you wish [Cross talk].

MICHAEL AUBIN: Well, you know, taking off on the primary care side, essentially we still have a sick care program. We don’t really have a program that is prevention oriented, and that’s our greatest challenge is, in our system, we’re a relatively small system, five hospitals, we see 400,000 emergency visits a year at our hospitals. Twenty percent of them are primary care visits, people who now have insurance but can’t get access to primary care because nobody has that plan. There’s just not enough primary care providers that want to take care of that.

The other big component is the patients with chronic and complex conditions. They’re a small subset. In kids it’s about 6%, in adults it’s probably 10%, but the reality of that subset is for kids it’s 40% of all of the cost in the Medicaid program, and for adults it’s a significant amount of cost in whatever insured program that they’re in. If we don’t figure out how to focus on those patients in a very different fundamental way with medical homes that manage all of their care and coordinate it, we’re going to spend a lot of time trying to deal with the masses when a lot of the cost fix is really going to be here in better care.

NOAM LEVEY: You mentioned, when we talked a couple days ago, that one of your frustrations was that you have so many different payers paying you in different ways, and that you want to try to have a value based system that rewards you for doing the right thing, for not just filling your hospital beds and that, as a long term strategy, that’s where the future ought to be, but it’s very hard in the current environment to do that. Talk a little bit about why that’s such a problem.

MICHAEL AUBIN: Well, it’s not unusual for a complex health system like ours to have 50, 60, 70 different managed care plans and managed care models. Everyone is administered differently, so in our system, about half of all of the patients are Medicare patients. We have about one-quarter of our work force that deals with just billing and contract compliance, dealing with that half of the population. The other three-quarters of our work force that deals with billing and collection and insurance and compliance—and this is not a small number; this is 400 people in our health system. Those 300 people spend their time just trying to figure out how to get us paid and how to actually get paid correctly. It’s a total waste to think about how much we spend in terms of the bureaucratic overhead. That gets combined with we provide the service but, at the end of the day, we spend a lot of time arguing about getting paid for the service that was authorized.

NOAM LEVEY: So, Michael, you’re paying some of these bills not directly but, in a manner of speaking—

ANDY CHASIN: Andy.

NOAM LEVEY: Andy. Sorry. Excuse me. Andy, you’re paying bills to hospitals and doctor’s offices. What do you make of this challenge and how could you guys work this out so that everybody could streamline this a bit?

ANDY CHASIN: Yes, I agree. I don’t think there’s anybody in the healthcare system who would argue that the fee for service process is economically efficient or it leads to good patient outcomes. So we’ve had great success in California, you know, moving to our ACO program, which has resulted in higher quality care with lower cost and it requires a great deal of partnership between hospitals, physicians, and ourselves, and a lot of transparency. So far we’ve saved 440 million dollars for our customers through our ACO program, and we’re the first insurer to offer an ACO on the exchange, so we’re really excited about the progress. But we do need to keep pushing forward in this move from volume to value. And so we have our new ACO 2.0 program, and what we’re doing with that is, we’re actually working with our provider partners to identify the gaps in care and we’re investing in those providers. So whether it’s a piece of technology, whether in some cases it’s a person in an office who can help fill those gaps in care so that they can provide the higher quality lower cost care, then we’re going to do that. That happens to improve the delivery system for our competitors as well, but we really think that’s how you move the delivery system forward as a whole.

NOAM LEVEY: And Kisha, from a primary care perspective?

KISHA DAVIS: Yes, I think you have providers who are very much interested in moving to more of a value based care model and getting away from the fee for service and the value hamster wheel, but for a provider trying to implement those changes is very difficult, and so you have providers who are taking multiple insurances—Medicare, Medicaid, maybe involved in an ACO—and as you’re trying to make those changes, for team based care to operate in a value based system, the question of whether that funding is going to remain available is really up in question, even on the panel this morning where we talked about MACRA is here, it’s in place, well, that’s great for the Medicare population. Well, what about those value based reimbursements that we’d like to move to for the rest of our patient panel, and if the conversation now is well, that might be on hold, there’s other priorities, how does a practice make that investment for all of their patients and not just for the 10% that are Medicare?

NOAM LEVEY: Does that benefit patients, as well, moving to a system that is more in line with—?

KIRSTEN SLOAN: It absolutely does. In fact, one of the most important provisions of the ACA was the creation of the Innovation Center. So we have the ability now to test new models of care that we’ve never been able to test before. Patient centered medical homes, accountable care organizations that you referred to, there’s even an oncology bundled payment project that’s now up and running. And it enables the government to test and bring to scale new models. And I think what’s really important about that is it involves all the stakeholders—plans and insurers and physicians and consumers and patients—in a way that everybody’s coming to the table and talking about what are the most important elements of a design that enables patients to be at the center of that and their experienced to be something that guides the way that care is provided. So I think it’s critical.

NOAM LEVEY: So what I hear all of you saying is that we ought to be moving at double speed away from fee for service toward a different method of payment that rewards the outcomes that we want, that makes the job of providers easier so they can align what they do. I don’t hear almost any talk about that here in Washington. Instead, we’re sort of talking about how do we cut money because we’re paying too much money right now and I think all of us would agree that that underlying idea is not without merit, but unable to move in that direction fast enough, we seem to be doing these other things, which is shifting more cost onto patients and that’s a lot of the discussion we seem to be having here now. How can we move the discussion here to more of what all four of you are talking about and stop talking about higher deductibles or shifting costs onto Medicaid patients, all of which providers seem to agree doesn’t make a lot of sense for anybody?

MICHAEL AUBIN: I can tell you that, mentioning the Innovation Center, we’re participating in one of those multi sites with other children’s hospitals around medical homes for chronic complex kids. We’ve seen dramatic improvements in the service, dramatic improvements in the outcomes, and tremendous improvements in the cost reduction. It’s a program and it’s a model that makes sense. There is actually an act that was introduced last session and is introduced in the Senate at this point, it’s called the ACE Kids Act, which really would create a network of major providers for pediatrics that take care of chronic complex kids across the country, with the medical home model as kind of the foundation for that. Again, attacking the 40% of the cost that happens to be in the Medicaid program, but in other programs as well. I think there’s a will, a matter of fact, the unique thing about that bill is we had bipartisan support. Almost half of it was Republican, half of it was Democratic support. We need to move those kinds of ideas that are kind of laser focused as opposed to trying to reinvent the entire system, but let’s focus on the things that we can change and manage better.

NOAM LEVEY: Kisha?

KISHA DAVIS: Yes, you know, I think part of it also, you know, I don’t know the politics of it, but you know, a lot of it is changing the conversation, right, and so maybe it’s that we start to think about primary care differently, and maybe we start to think about how we pay for primary care in those preventive services differently, carving those out, looking at changing costs and how that’s evaluated because otherwise we remain in the same conversation and the same hamster wheel. And I think the conversation has to shift to just being about, you know, who’s getting paid what, how we’re paying for it, and how are we having a value proposition that we’re actually thinking about how the entire country gets covered and not just how this person gets paid.

NOAM LEVEY: Andy, you have been in these politics up on the Hill.

ANDY CHASIN: For too long.

NOAM LEVEY: So how do we get there?

ANDY CHASIN: I think it’s a great question. I think it’s important to recognize that the private market is moving forward regardless of what’s happening in Washington but where I think Washington can help move the conversation forward, unfortunately, we know we need to do more of it on our own because we’re stuck in this conversation that we’ve been having, you know, for me, nine years on the Hill, since before Obama came, and we’re here again, so I think you’ve netted in your writing, but I think this process of, you know, coming to terms with what the healthcare reform repeal does and does not mean, hopefully it’s been educational to members about what the reality is, what’s the fault of the ACA, what’s not the fault of the ACA and that regardless of what happens we still, for 90% of the rest of the market that gets their coverage in different ways, we have to move to a better system.

KIRSTEN SLOAN: I think Kisha’s absolutely right. I think it’s changing the conversation. We tend to focus on the immediate and the crisis of the day and short term savings and what we’re really talking about is changing the system, so that we’re talking about long term savings and also improvements in a quality of care that’s delivered. Some of the changes in delivery that we’re talking about now may not actually result in a lot of savings, but may actually improve the quality of care and improve lives, the lives of practitioners who deliver that care.

NOAM LEVEY: So I want to leave a few minutes here at the end for questions from the audience, so raise your hand if you want to get in on the conversation? Oh, maybe we’ve exhausted everybody. Oh, there’s one up here.

AUDIENCE MEMBER: I’m the policy director at the DC Primary Care Association, and one of the issues for us is looking at how to utilize the healthcare system on addressing social determinants of health. When we’re in this environment of scarcity of resources for fundamental health care, but knowing that really we need to be looking at these social issues that are impacting health, and I haven’t heard anybody really talk about what do we change that gives us the resources to address the things we know are really impacting people’s ability to get and stay well? So that’s a little bit of an unfair question, it’s so big, but just really open to your thinking on that.

NOAM LEVEY: Two minutes or less.

KISHA DAVIS: I can give a short on the ground answer about how some things of that have changed. Thinking about a provider who was at a community health center and they had what they called care coordinators, and before the ACA, what their job was mostly was to help the patients who didn’t have insurance to find resources to get their care covered. And so they would call the hospitals and they would call the specialists and see who would be able to give them a discount or a cash price or, you know, how could they work that out. Now that most of those people have been able to move to Medicaid, those people are redeployed to work as coaches. Call them to see how they’re doing on their tobacco cessation, follow up and make sure that they went for the appointments that they were supposed to go to. And so sometimes it’s freeing people up, the same people to work in a different role within the health system.

MICHAEL AUBIN: I think the other element of it is that, take asthma patients, which we have a lot of in children’s hospitals, we have been able to redeploy personnel that used to spend a lot of time taking care of them in the hospital to now taking care of them in their homes, doing assessments, and getting at some of the risk factors that exist in their community that are contributing to their conditions.

NOAM LEVEY: But to be clear, I mean, part of your ability to do that is dependent on you being paid in a way that you can recoup some of the savings from addressing those underlying social determinants, right?

MICHAEL AUBIN: Exactly. So we’re having to repurpose – when you take the restrictions of how we have to – every patient doesn’t need to see a doctor, every patient doesn’t need to see the nurse, there are lots of things, even in a lot of our practices, where other personnel can do that work at a much lower cost, freeing up funds for us to do some other things, and I think that’s what we’ve been trying to do, is just repurpose that kind of fixed pot that we have but directing it more on the front end.

NOAM LEVEY: Andy, as a payer, has Blue Shield dived into some of these social determinants?

ANDY CHASIN: So we recently entered the Medicaid business. I think it’s really important, so this is an issue that you have to confront when you’re working with our population, so it’s certainly something that we’re expanding into and thinking about more. You know, one issue, too, I think we need to think about is just the health information technology and the ability to look at patients, you know, no matter where they’re getting their care who insures them, so we’ve invested in Cal INDEX, which is an effort to share with Anthem 9 million patient records, working with providers so when somebody goes to the doctor you have a comprehensive view of that patient, who they’ve been seeing, what their history is, and I think that’s another way we need to move the delivery system forward together.

KIRSTEN SLOAN: We are great fans of patient navigators. We support them and train patient navigators in hospitals. But I also think there’s something very simple, which is asking patients what they need here and I know that sounds like the obvious, but I think, in the past, we’ve created a lot of programs to try and help patients with some of these social determinants of health and we found that it doesn’t work because we’re not getting at the right things. And so, building into our programs the simple art of asking the questions to patients about what they need as part of their care or their care plan.

NOAM LEVEY: Anybody else? Alright. I guess we’re done – oh, no. Another question. Under the wire.

AUDIENCE MEMBER: Hi. My name is Julia Rozier. I’m a medical student at GW as in fourth year. My question is kind of granular and I might not fully understand the specifics of what I’m saying, but as I understand it, there’s a committee as part of the AMA called the RUC that’s actually responsible for determining the CMT reimbursement codes and also, as I understand it, there’s not any primary care physicians on that committee, so a lot of the reimbursements for medical care are being determined primarily by specialists, so I guess could any of you speak to just the potential role of organized medicine to better represent primary care on that level?

NOAM LEVEY: So, Kisha do you want to take that one?

KISHA DAVIS: Sure. I can take that a little bit. So there are primary care, including family physicians, on the RUC, so the RUC, for folks who don’t know, the Relative Value Scale Update Committee, that helps set the fees for everything that providers do when they do a billing code, that’s how they’re reimbursed and paid, but it is skewed toward specialists, so primary care does have a voice on the committee but it’s a smaller voice relative to everything else. I think when you think about shifting costs in healthcare and how people are paid, there’s a lot that that committee can do to change how people are reimbursed.

MICHAEL AUBIN: I can tell you that the latest survey that just came out on physician compensation and it showed that really the areas that are not growing are those in primary care, and the only one that went down, general pediatrics. So, we’re paying them less and they really can’t – we don’t get anybody who really gets excited about, oh, I want to be a pediatrician when everything is down, down, down.

NOAM LEVEY: Well, on that happy note, thank you very much, all four of you.

MARILYN SERAFINI: Great, so we would like to thank you all for being here. We know this has been a long morning. We hope you found the conversation helpful. Once again, we’d like to ask that you fill out the blue evaluation forms before you leave, and a special thank you to our 25th anniversary sponsors: Anthem, Ascension, Health is Primary; and also to our insurance summit sponsors: Blue Cross Blue Shield Association, DaVita, ACAP, The Children’s Hospital Association, and CVS Health.