In this episode of Health Biz Talk, host Tony Trenkle interviews Justine Handelman, founder and president of Handelman Strategies, LLC, a government affairs consultancy focused on healthcare policy. Previously, she served as Senior VP of Policy & Advocacy at Blue Cross Blue Shield Association (BCBSA), advocating before Congress and government agencies.
Transcript Of the Podcast
00:00:00- Tony
Welcome to Health Biz Talk, the industry’s leading podcast that brings you today’s top innovators and leading voices in healthcare technology, business and policy and here’s your host, Tony Trenkle, former CMS CIO and health IT industry leader. Good afternoon, Justine. How are you today?
00:00:19- Justine
Great, Tony. Great to see you.
00:00:21- Tony
Great to see you, too. I want to introduce everyone to Justine Handelman. Justine is the founder and president of Handelman Strategies LLC, which is a government affairs and political strategy consultancy focused on supporting major corporations on key health care interactions with the federal government and state agencies and I said that all in one breath and prior to founding Handelman Strategies, Justine served as the senior Vice president of policy and advocacy for the Blue Cross Blue Shield association, otherwise known as BCBSA. And in that role, she oversaw BCSA’s policy, lobbying, public affairs activities and represented Blue Cross Blue Shield association and the Blue Cross Blue Shield companies before the administration, Congress, government agencies, and other national associations.
So, Justine, I’m going to just ask you a few questions. Like I say, these are more guiding questions. We may get off on tangents or whatever, but we’ll try to keep somewhat to the script.
So, the first question I always ask people is, how did you get to where you are today? Background interests, major career decisions. What are the things that got you into this field today? Sure.
00:01:45- Justine
No, it’s always a great question and I think how I got to where I am. I came to Washington, D.C. for college, and I always had an interest in the medical field and healthcare, but it was more thinking I might go into the provider side of healthcare. And when I came to Washington, not to date myself, but it was an election year, Reagan was just leaving office and so I decided, well, let me take a political science class. I’m here. It’s an election year. You know, there’s a lot of excitement around that and I got hooked on that political science class. And so that led me down my college career of majoring in political science. But you know, one thing I tell people, my first job out of college I got because I put on my resume, I had studied my junior year abroad and I somehow got a job as a DJ in a cafe in Belgium. That’s terrible but, that got me noticed on my resume. And I got that first job in a small lobbying firm that focused on health care.
So that’s how it kicked off. And then I’d say as I moved and went to Blue Cross, I went in on a. A lower level job than where I ended up, but I was really working hard and my focus was always on being an honest broker, making sure I had the data and the facts behind me, the research, knowing my issues, especially when I went in to talk to folks, whether on the government, as you know, it’s important to have your facts or Congress.
00:03:15- Tony
That’s right.
00:03:15- Justine
And I always took to hard advice someone gave me. It’s really great to be passionate about. You do, but be careful of becoming emotional and it can be a fine line. And so I think how I got to where I was really just working hard, being an honest broker. And I was at Blue Cross for just a little over 20 years and I worked my, my way up there, but tried to make sure I always was honest and open with those I talked to.
00:03:40- Tony
Yeah. And I can speak from personal experience. It was always great working with you because you did always take a very pragmatic but informed way of looking at things and of course we could go down the litany of things we worked on together over the years, but we only have an hour for this. So one of the areas that you’ve been very involved in for many years is of course beyond the policy is, is the health plans and of course we’ve seen them evolve a lot over the years. I mean, they, you know, have become a situation where over the last number of years, probably last 10, 15, they’ve been increasingly been dominated by a few large players.
We don’t have to mention their names, but you know, they’ve not only become large in the traditional health care market, but they’ve also become more involved in other parts of the market that we thought was more traditionally for other pieces of the ecosystem, you know, providers, home health, etc. And the other thing that I’ve seen is the fact that the government has now become such a major part of the growth of these, particularly these large health plans.
So you’ve seen this, like you said, you’ve been involved in the space for many years and you’re with Blue Cross for 20 years. So, what do you think? Is this something that you think is going to continue to, to go this way? Is it going to continue to become more of an oligopolistic type of environment? Or do you see it changing, you know, without getting into politics? I mean, obviously there’s a new administration with some different ideas. So what, what are your thoughts? Are we going to have this same conversation five, ten years from now?
00:05:30- Justine
Yeah, no, good question and I hope this trend does not continue monopolies in healthcare and you can look across industries, health insurance to hospitals and Others, it’s just not good because what it does is it drives up costs and it diminishes choice for consumers. And you know, as we’re seeing in the Medicare Advantage market, and I think your folks know Medicare Advantage, but I’ll refer to it as ma. The enrollment in it is highly concentrated in just a handful of national for profit health plans. I mean collectively, when you look at them, and I can name names or not, I don’t know if that’s a preference, but you know, 85% of the MA enrollees are really in just about four or five large national insurers.
00:06:18- Tony
Right.
00:06:19- Justine
And when you look by comparison to some of the smaller nonprofit plans, their enrollment in Medicare Advantage has decreased. And collectively those nonprofit, smaller regional based plans, state based, cover a mere 16% of the MA market. So, one thing I’d say, you know, MA enrollment is going to continue to grow. It’s over 50% of enrollees are in a Medicare Advantage plan right now.
00:06:44- Tony
Right.
00:06:44- Justine
And I think what’s important is the government really has to do its due diligence in making sure that they’re protecting the program’s integrity, ensuring that there’s accurate payments are made so that there’s a viable MA program for years to come and I’ll say while I’m a strong supporter of ma, I think the program offers tremendous benefits to the beneficiaries. But there needs to be barriers that get broken down that are making it difficult for smaller plans to get into the market. As you said, you’ve got plans that are buying physician practices, they’ve got their own PBMs and in that, you know, and I think we’ll talk a little bit more later.
But there are ways that they can legally game the system, if you will, because of their size and their power and the playing field isn’t level and that’s preventing the competition. So I think there are some steps that can be taken to level that playing field, create some more competition. Again, it’s a good program, but we just need to make sure that everyone’s playing by the same roles and there aren’t barriers to entering that market.
00:07:52- Tony
Well, if you had to take one step, you said there’s steps that could be taken. What would be the first step you would take if you were the head of CMS, for example?
00:08:03- Justine
Sure. Well, I think one thing you’ve seen CMS take a good step is around the risk adjustment and changing how that works. You know, there’s been so much focus put on the codes. So then you see upcoding especially if you’ve got plans that have providers and they can instruct their providers it’s okay to go to the higher code, you know, on instances and really look at that encounter data. I also think it’s important. The other thing I would say is to look at the whole business, not just the health plan business, but what else does the entity own and where are those profits or dollars going?
Just to make sure, you know, if you own physician practices in Medicare, and I know stat new system, some stories where the physicians that are owned by health plans are being paid more in the Medicare program than others that are contracting with physicians directly, they don’t own them. And so I think greater transparency into the different lines of business, the ownerships, to understand where dollars are flowing and making sure the payments are accurate based upon the severity of someone’s help.
00:09:20- Tony
Okay, just kind of pushing a little bit more on the Medicare Advantage. Like you said, it’s now over 50% of folks enrolled in Medicare. But one of the criticisms that I’ve heard, and I don’t have the statistics to back it up with me, but the fact that some people say that, you know, as people get sicker, older, sicker, they end up kind of almost being forced to go back on traditional Medicare, which kind of obviously is something that impacts the risk adjustment and the whole, you know, spreading the risk across the larger, you know, population. Is that a fact from your perspective or is that something that’s more anecdotal than actual?
00:10:07- Justine
You know, I haven’t looked at the data, but I do think what you’re seeing is those that are coming into Medicare, the younger side of the younger Medicare eligibles, they’re more comfortable with the managed care arrangement. So that’s why we’re seeing the growth in ma. Those that are in traditional Medicare often have to buy a wraparound policy, a medigap policy to cover the things that Medicare doesn’t or to cover some of the out of pocket costs.
So, you know, I think some people there might be the perception if I want to get see any doctor or get any service, traditional Medicare is better because it is more of a fee for service type environment. But I don’t think the care is any less. And in many instances you get more benefits in an ma, you just might have a network that you have to stay in versus a wide open network that you see more in the traditional. So again, I haven’t seen the data, but I think Medicare, traditional Medicare is here to stay. It may shrink. It offers a value that some people want.
But I don’t think people have to be forced into that to get the care they need. It might just be making sure. And I think the networks, even though they might not be as broad as traditional because they’re just not open ended, I think they are still fairly comprehensive. And just got to know when you go in, are my doctors covered?
00:11:33- Tony
Right. Yeah. We could talk a lot about more about Medicare Advantage. But one thing I do want to ask before we switch off that topic. You know, one of the major issues that’s come up around Medicare Advantage has been the use of prior authorizations that that amounts continue to increase over the years and a lot of people have said, you know, obviously slows down the process, it creates a disincentive for people to seek certain types of care and other types of issues that have come up on it.
Of course CMS started looking at some of that when they passed regulate, came out with the regulation January a year ago with the prior auth. Electronic prior auth and trying to move more towards a faster way of doing prior Auths. But what, but a lot of that criticism seemed to be directed at the Medicare Advantage plans. There’s a lot less prior auth done under traditional Medicare as you know. So what, what are your thoughts around that? Obviously some it’s related to networks and things of that sort.
00:12:41- Justine
But yeah, and certainly this is a place where you see AI come in and play a role in that space. As you mentioned, the electronic prior auth. There is a role for prior auth and I’ll get to that in a moment. But I think when an insurer is then approving it or overturning 90% of the time you don’t need prior auth on that service. And so I think looking at your systems, looking at your processes and making sure you’re not just creating an extra administrative burden because it’s getting approved to the vast majority. Where it comes into play is there may be therapies that are cheaper, have lower risks that you try first before going to something expensive that comes with more potential complications.
So there is a role, a medical reason for prior op, but I think there needs to be a look at how it’s used and when it’s used and even looking at the systems that are put in place to see when you know where it’s needed and where we got to say, you know what, we’ve got to remove some of these administrative burdens.
00:13:47- Tony
Right, Right. So kind of tied to that or tangentially to that is the whole world around personalized Medicine and designer drugs. Of course, we’ve seen the Ozempic and some of the, you know, weight loss drugs, but they’re not as much designer drugs. But I’ve seen in cases with people who’ve had some very severe cancer that they’ve been kept alive basically by very expensive therapies that they have to do. And as we get more and more into genetic testing and use of AI and the use of more personalized treatments, obviously that gets into issues around risk adjustment and spreading the risk, but it also gets into a, a cost and equity type of thing.
So, so what do you think? Because this is obviously we got quantum computing, we got a large amount of AI investment that’s going on. Much of it directed the healthcare space. So we’re going to see a lot more in this space and it’s just, we’re just seeing the tip of the iceberg. But how do you, how do you run an insurance plan and, or whether it’s government or private and deal with these type of issues without either bankrupting the system or creating such high premiums or other costs that the average person is going to have a hard time having, you know, be able to take advantage of these new treatments and medications?
00:15:24- Justine
Yeah, no. We are on the cusp of some incredible breakthroughs, many of them which could potentially cure diseases. You know, and you know, the personalizing to make sure that you can beat or be managed and treated better or you know, imagine carrying Alzheimer’s or ALS or hemophilia. But I don’t think there’s a one size fits all or a single answer. I think you have to look at the markets as a whole. I think the most important thing is to make sure that when there’s access, when there is a treatment or therapy that can be transformative and save a person’s life, that person has to be able to access that and so obviously cost is a factor and you can’t bankrupt the health insurance because of this.
So, I think you have to look at how many people will this be for and at what cost. And we actually, I started thinking about this back in about 2018. I think it was knowing things were coming down the pike. And we actually, I can give to you for the link convened a number of players and we had it co chaired by two former FDA commissioners, a Republican and a Democrat, Scott Gottlieb and Peggy Hamburg and we called it breakthrough drugs, blockbuster costs. To really look at what do we do and it might be an instance where you need to create some sort of stop Loss insurance or reinsurance program. If you’re in a market like Medicare Advantage or the Affordable Care act or even the Federal Employees Health Benefit Program, people have the option to switch insurers every year.
00:17:04- Tony
Right.
00:17:04- Justine
If you’re with one insurer and you get a $3 million drug and the next year you switch, the losses can pile up and the cost and the affordability. So that’s why do you create some sort of more general risk or a stop loss that if there’s a threshold, there’s funding, you know, does the government contribute to that funding? Are there other ways to contribute, you know, the, the drug makers that, that manufacture it? I don’t have the right answer.
00:17:31- Tony
We’ve looked at right now, I understand.
00:17:33- Justine
But alternative payment models too. And really looking at do we know this drug, this therapy is going to work? Do we know the quality and the improvement? So I think it needs to be looked at very carefully and I think across the markets and, and there’s a role to be played by a number to see what makes sense. How do we fund this and make sure it’s equitable and in the long term affordable.
00:17:58- Tony
Yeah. And you know, we’ve, we’ve looked at this area for, for many years. I mean, when you look at the last year of a person’s life, the amount of money that’s spent to prolong someone’s life for a short period of time, you know, the length of life as opposed to the quality of life, and it’s same with some of these drugs that are coming out. I remember a couple years ago when Medicare actually it was a new drug to delay the onset of Alzheimer’s. I can’t remember the name of the drug, but I remember they raised the premium to cover it and then they did more research into it, found it wasn’t as effective as they thought and they, they scaled it back.
But I think the, the challenge is going to be just like anything else is how much do you value certain, I mean, if it’s someone in your family or obviously you think about it more on a personal stage. But if we’re looking at it across, you know, a country of 300 plus million people, it’s harder to kind of figure out where these major coverage and risk allocations tend to be made. But, but yeah, I could see where you could talk about some kind of pool where people bring it together to cover higher risk treatments, but at the same time make sure that the population as a whole, or certainly a large part of the population can get access to it rather than you know, just a few who can afford it.
00:19:31- Justine
Yeah, one thing I’d say just real quick on that point too, is having transparency into the cost of creating that treatment. You know, often things might start with the government, it might start at National Institutes of Health, or it might be a small molecular company that, you know, when it’s about to break through, gets bought. So I think having greater transparency into who bears the cost along the way is important as well.
00:19:58- Tony
Yeah, there’s a lot of, and we could talk about that for a long time, but there’s a lot, not just in health care, but there’s a lot of areas where the government has provided a lot of upfront money to get certain technologies and medical advances, but then the profits get taken by the, the private sector. It’s not only the healthcare space. I saw it in the, in the IT space as well. So, yeah, that’s a, that’s, that type of transparency would be, would be helpful to, as we, you know, because these things are just going to keep coming along so fast that it’s going to be hard to keep, to measure the effectiveness quickly enough and when they start hitting the market and start making changes.
But, but, you know, kind of tied to that is this whole area of the risk adjustments and the, you know, as we look across the whole area around that, you know, when I was with IBM, we got very involved working with both the provider side and the, the plan side to look at ways we could help with, with the risk adjustments, let’s put it that way. But I think CMS obviously has gotten a lot more concerned about that. And you know, now that they’re going pretty much entirely on Encounter data, that creates a different mindset. But, but where do you see that going? I mean, we’ve talked a little bit about this already with the change in medications and the growth of personalized medicine. But where do you see the whole risk adjustment area going in the next few years? Particularly right back, because I guess we’re talking more about Medicare Advantage, but really even beyond that.
00:21:40- Justine
Yeah, no, I think as you mentioned, CMS has taken some steps to more accurately represent the actual healthcare costs that are associated, you know, with various treatments conditions. And so I do think, especially as technology continues being able to really look at the actual costs that are happening, the Encounter data and others, not just relying on ICD10 codes is really important. And you have risk adjustment across other markets in the Affordable Care act as well. So I think will continue to see a movement towards, especially when you have the technology to do it towards Having real data that appropriately captures the encounter and the costs associated with that.
So, I think that’s where the move needs to go. Obviously, you’re going to have resistance as you go down this. But I also get back to the competition argument I made before is breaking down the barriers. You know, when you’ve got, you see 85% of the MA market and just a handful, what are the technologies and things they’re using? Not that they’re bad, but, you know, how do you make sure that there’s a level playing field and how that’s used and that others are able to have systems to appropriately capture that as well, and that there’s safeguards around it? So I think this will continue to evolve because obviously there’s a lot of dollars behind it, too.
00:23:11- Tony
Right, right. And we’ll continue to see, as AI becomes more present, I’m sure we’re going to see the use of AI a lot more, both on the. The, you know, the health plans and provider side, but also on the government side too, which, you know, all sides are already using it, but it’ll become a lot more prevalent in the future, I’m sure, to kind of work the system. But like you said, transparency certainly would help out a lot on all sides.
00:23:41- Justine
Yeah, I agree. And I think systems will evolve, too. I know there’s standard formats and, you know, ways to exchange data, which, you know way better than I do. But I think you’ll continue to see that evolution and have it refined to the point that the data you’re getting is much more accurate and so you can compare to more more efficiently and effectively.
00:24:04- Tony
Do you think that we’ll start seeing more? Well, of course, we’ve seen in. In Medicaid, we’re seeing the whole. We’ve seen the things about, you know, social determinants. Obviously, people have wearables so they can give you more of a longitudinal look at some of your health conditions. Do you see those things playing a bigger factor as time goes on, or do you just see them as pieces of a whole puzzle or.
00:24:32- Justine
Yeah, you know, I think, again, it gets to access. And who’s paying for it? Who can. You know, I have my Apple watch that can do a whole host of things. And I wore it one night because it would tell me how I slept and I’m like, almost. It’s almost a little creepy to tell me how it gets a little.
But there are things that are really beneficial, like real time, knowing what your blood glucose is or your blood pressure and how that can tap in even to health systems. So I do think it’s going to evolve, but I think as the technologies evolve, it has to be tied to is there a positive outcome and an improvement. You just don’t want to add costs or create a divide between who has and who doesn’t really looking at what is the benefit and does it make sense and not just being something flashy in the moment.
So, I think maybe it’ll be less that we’re seeing, you know, now there’s lots of, I know there’s the ring, I forget what it’s called and on a personal level that’s great. But I think when it comes to what should be covered by insurance, I think they’ll have to just be really smart thinking of does this make sense? Is it really going to make an improvement in someone’s health and in the long term, does it create a more affordable market, you know, if you can catch something early? So I think it’s still evolving. I, I don’t think we know 100% yet what works and what doesn’t, which.
00:25:59- Tony
You’Re, you’re kind of tiptoeing along the line of value based payments and, and I’m not going to get into the innovation center at this point, but the whole issue around value based payments was it was going to improve, you know, the quality of care and also bend the cost curve. Here we are years later after, you know, CMMI was started, the center for Medicare and Medicaid Innovation. And we’ve also talked about various programs that CMS has done, some within the center and some outside. And of course you, you got involved in a lot of that when you’re working with Blue Cross.
But do you think these, these programs as a whole, if you were talking to yourself from 2010, 15 years later, do you feel that they, they’ve been successful? Because we still talk about, you know, the cost of health care. We talk about the fact that we don’t rank as high in overall world health ratings as we should. I mean, so here we are 15 years into this grand experiment, but maybe longer if you go back because we really started value based even before 2010. But so what’s your thoughts on that?
00:27:14- Justine
You know, I think we need to move more and more into value based care. You know, there’s, there’s been movement and a lot of good progress, but more needs to be done. And I think when we still sit on a fee for service, chassis and Medicare. Yeah, you know, that creates its issue. And I, I don’t know how many years we’ve been having the stock fix where we’ve had to keep making a fix. But again, it’s not evolving to a different payment model that is going to reward, you know, outcomes. And when you think of it, I think in health care it might be one of the only places where you know you have a lot of fee for service and you’re paying for what you get whether the outcome’s good or bad. And you know that’s not how it should work. I’m a big proponent of some of the models, the accountable care and the global budgets. Where you’re given a budget, again you’ll risk adjust to make sure based on the severity.
But you have to best manage that and be smart about how you utilize that care. And I believe in our country we undervalue primary care. Yes, I view the primary care physician as the quarterback calling the plays, you know, really managing that whole person when they need to go see a specialist, making sure they’re, they’ve got a sense of all that’s going on to help them navigate through the system and get the best care and the best appropriate setting and I don’t think we do enough to put that at the center and pay primary care providers appropriately when you look at the disparity between a primary care and certain specialties.
So I do think we need to relook. I do think the Medicare fee for service program needs to evolve. I know it’s difficult and the interests on all sides can fight, but I think there’s promise in those value based arrangements. You see a lot of the large employers have migrated with success. Is that the overall answer? No, I think it needs to be coupled. The real problem in our country is the costs of goods and services. Our healthcare prices are the highest in the world, I believe and that’s what really drives things up. So I think we have to address the high costs but I do think more alternative payment models is the right direction with primary care at the center.
00:29:36- Tony
Now you mentioned that and probably almost as long as I’ve known you, we’ve been talking about the promoting the primary care docs and there was the patient centered medical homes and a lot of other efforts over the years, some done within the innovation center, some done outside, but it doesn’t seem to have really changed change that much. What do you think still needs to be done in that area to make it more attractive for students to go into the primary care rather than to the specialties? And are there things that the government needs to do more of or what’s holding back Progress, because God knows we’ve been talking about it for a long time now.
00:30:19- Justine
Yeah, we really have. And again, I’m going to bring the competition argument in because I think it’s important across our system. In my view, there’s not a level playing field. If you’re a primary care doctor and you go into that coming out with medical debt, what you get paid compared to an anesthesiologist is huge. And I get an anesthesiologist may have some additional residency for that.
But I really think we need to look at how we pay those primary care physicians and having an appropriate model that allows them to provide the care they need to care. You can’t just be trying to stack patients in every 15 minutes to more people, more pay. I really think that needs to be looked at and that has to change probably across the system. I also think we have to stem the tide of independent practices being bought in hospital systems and that it’s not easy, not only on the payment side, but reducing some of those administrative burdens that make it difficult to stay in an independent practice. So I don’t have all the answers. It has been a challenge, but I think it goes to making sure that they’re paid more for the value that they bring to the system. Because I really do believe if we had a robust primary care system that would help not only manage people better, but in the long run help lower the overall cost of providing healthcare.
00:31:53- Tony
Yeah, I am going to have, in future episodes have some providers to have their own opinions, but some of them have talked to me and these are some of the, you know, they’re fairly conservative people, but they’ve talked to me about the need for a, a single payer type of system. Obviously we’re way down the road with the system we’ve got today. You can’t just blow it up and start over again. But they say that the administrative burden of, of trying to deal with multiple payers and systems and things of that sort is a, has been something that’s driven a lot of them out of primary care or even out of, you know, becoming concierge doctors instead. I don’t want to travel too far down that road, but I don’t know if you had any quick thoughts about that.
00:32:45- Justine
Yeah, I mean, I think if we weren’t where we were and we went back and redesigned our healthcare system, would it look differently? Different? I’m sure it would, but the vast majority of people do get their coverage through the employer based system and the other markets are really important. But I Think we can continue with the system we have and make improvements. We have the lowest uninsured rate in our nation’s history, so we’ve made great strides.
But I do think we’ve got to make sure we’ve got the right workforce. And when I say primary care, it doesn’t always have to be physicians too. You have nurse practitioners and others really letting people practice to the top of their license. We’ve evolved Covid really ballooned telehealth, which is appropriate for so many things, but we might still have state licensure laws that can provide barriers. I know my kid’s in college in Nashville, so if he needs to see a primary care physician, there can be some issues. Some of the waivers have gone away.
So I think harnessing the power of technology where it can bring efficiencies, we need to look at absolutely changing how we pay for healthcare. But at the end of the day, I think what’s going to improve our system, I mean, single-payer will bring down costs because it’s a fee schedule, right? They’re going to say this is what you get paid. It’s a Medicare fee schedule. Most providers on the commercial market get paid more than Medicare, often three or four times. So I think we have to really tackle what’s driving health care costs and, and make that more affordable. And I certainly think consolidation in the health care market, in hospitals and drugs and physician practices is having a huge impact. And we have to, we have to bring competition back.
00:34:36- Tony
You know, I was going to move on to my next question, but this kind of sparks some other question. I interviewed Judy Murphy a while back, and one of the things I was talking to her about is, you know, over the years we’ve seen the growth of a lot of different models of delivering health care. And one of the. You talked about technology. We had the Amazons got involved in it. Then we had CBS get very heavily involved, Walgreens, Target. So you had this combination of retail technology companies and other players in the health system trying to set up these quote unquote storefronts and other ways to change the model of health care. And like you said, not just the primary care of the physician, but also bringing in nurse practitioners and others.
But a lot of these places have scaled back or gotten out of the business altogether and why do you think that is? Because it would seem like on the surface it provides some things that would be attractive the consumer, you know, expanded hours, places that are easy and convenient to get to, a variety of, of ways to get your treatments. You Mentioned telehealth, obviously that’s one area as well.
But also just having these places pop up if you’re going to Walmart, you know, being able to go in and see a provider while you’re there or you. Or just getting your care through that Amazon had with their health clinics and stuff. But a lot of these have gone by the wayside. So do you think that model is dead or just needs to evolve? And it seems to me that was touted as one of the ways to deal with the primary care shortage as well.
00:36:27- Justine
Yeah, I think part of what it shows is people are comfortable with their own doctor. And so some of these are set up where you can walk in but you might not see someone that knows you, that you have a relationship with, that knows your whole history. So I think making it more convenient for people is great. But I think the importance of establishing that doctor patient relationship is really important. Again, primary care at the center quarterback and then directing. So I think that’s part of the reason. And it’s just complicated healthcare in general. You have different markets that you have to build to and.
00:37:05- Tony
Right.
00:37:06 Justine
Maybe not as simple as they thought going in. So I think they’re really, as I think about it, at least that connection where people have a trusted relationship and how you build care around that, that’s where I like the primary, you know, primary center care. But there’s no easy answer. But I think it just shows that not only the complexity of healthcare but the trust in the healthcare system of where people want to get their care.
00:37:37- Tony
Yeah, I think you make an important point. It is, it is a trust factor and there’s a low level of trust for the health plans, but there seems to be a high level of trust for the providers. And of course we saw the, the murder of prominent healthcare executive a couple months ago and part of the shock afterward was that a lot of people were more. Seem to be more sympathetic to the person who did the shooting rather than the actual executive themselves, which kind of reflects a lot of rage at the system. So what are your thoughts about that? Why do you think people feel the way they feel? And are there solutions you can think of that would deal with that? Because it was really quite amazing how the people reacted.
00:38:29- Justine
Yeah, it really was. And what happened was terrible. I think as we both know, and violence should never be the answer, but our healthcare system, it is too complicated and it lacks transparency, as I mentioned. And I think from the health insurer point of view, yes, a lot of the anger and animosity is towards the health insurers, because they’re the ones that provide the health insurance coverage.
But I think what most people don’t know is that health plans actually have a profit cap. I think they’re one of the only industries, not only definitely in health care, but, you know, pretty much across sectors where you’ve got a profit cap and it’s called the medical loss ratio. And what that means is the insurer has to spend at least 80 or in some cases, 85 cents of every dollar on healthcare services and the remaining four administrative.
So I do think insurers need to do a better job educating about what they do, how they do it, how they’re regulated. I also think, as we talked about prior earlier, you know, if it’s getting approved 90% of the time, do you need it? They have to make the system more accessible. But I also think, as I’ve said, I know I don’t want to sound like a broken horse, but there needs to be more education. What is driving those premiums? Those premium increases are based on the cost of health care, largely driven by hospitals and pharmaceuticals make up the biggest component. I think it’s nearly 60, maybe even getting close to 70% of the healthcare dollar is in the hospital and inpatient, outpatient and pharmaceutical space.
So we’ve really got to get at that. And what’s causing those prices to go up? Address consolidation. So, yeah, again, I think the health insurers can educate, they can simplify, remove some of the burdens where, you know, it’s not necessary because it’s getting covered anyway, so why have that extra burden there? But I think people need to understand how our system works and what really drives costs, and then let’s tackle what’s driving costs up.
00:40:38- Tony
So how do you, how do you do that? I mean, Medicare has their handbook. And, you know, I, you know, it’s, it’s a good introductory, I guess it explains a number of things, but it really doesn’t get into how costs are derived and things of that sort. So what would the help? What could the health plans do that. Because most people, the only time they really care about it is when they want to get something done or something happens, they need to get something done.
00:41:06- Justine
Yeah, you know, there’s various ways, and some might require Congress or regulatory intervention. But you have seen health plans set up often called centers of excellence. I know in the Blue Cross Blue Shield world they have blue distinction centers. So if you’re getting a hip or knee replacement or you’re having bariatric surgery or certain Cancer care. They may designate certain institutions around the US that provide high quality care. Better outcomes, lower costs. And some employers may actually fly people to these centers and even pay for a loved one, a caregiver to attend because they know the outcomes would be better. Lower readmission. So there are things plans can do.
But also I think there’s policies that can be put in place as more and more hospitals buy up physician practices and consolidation. You know, let’s say my physician practice is bought by a hospital and now the only thing that changes is the name on the door. So same location. That hospital can now charge a facility fee. So I’m not paying $100, I’m paying 125 because it’s owned by a hospital and it has a facility fee, you know, site neutral payments, same, same service, same price. And that makes sense. So there’s common sense things in the drug space. You can see some gaming around the patents to extend the life and pay for delays.
So generics don’t come to the market. Looking at who actually paid for that, was it the government or was it we need innovation but at the same time we need to make sure we’re bringing generics to the market quickly and appropriately. So I think there are policies that can be put in place that’ll help get at some of the things that are driving up costs and make the system work better.
00:42:57- Tony
So I’m kind of sliding into the next question. So it’s obvious then you still see a point place for employer based health insurance. And then the tied to that would be the role of the employer in helping to educate their employees about health care, maybe working together with a health plan.
But you know, one of the goals of the Affordable Care act with the, you know, the marketplace, Obamacare, whatever you want to call it, was to move people out of the insurance, I mean employer sponsored insurance because the idea was then you have more of a portable health care and it’s not tied as much to employment, which would tend to improve competition and bring down costs, et cetera, some of the things that were talked about. But you don’t sound like you think the employer insurance is going to employer funded insurance is going to go away anytime soon.
00:43:53- Justine
I don’t, I think again it really is where the vast majority of people get their coverage today. I think it’s upwards of 80% and it’s a great way for employers to attract and retain talent. So I don’t see it going away. I think it’s here to stay.
Also you can see large employers really drive systematic Change. Those blue distinction centers I mentioned were really driven by large employers saying we need higher quality, more cost effective care for our employees. But the ACA has actually been a tremendous success. I think we both know it had a difficult start in early years, but it’s enabled those that don’t get coverage from their employer to get coverage. And so it gives options to people. So you no longer have to be tied to a job if you want to leave because you’ve got an option to get covered no longer pre existing conditions. But I do think the employer market is here to stay. On the smaller employer side, you may certainly see changes, especially with individual healthcare reimbursement arrangements. And that’s something I think with the new administration you might see more emphasis on. And it gives an option for small employers to provide some funding through these health reimbursement accounts where they can then go to the Affordable Care act to get coverage. Their employees so may see some changes in the small employer market. I think we already have seen evolution there, but I think the large employer market is here to stay.
00:45:30- Tony
Part of the issue around the Affordable Care act was it wasn’t really affordable to people except for large government subsidies that kind of brought a lot of the costs down for people. I’ve known a number of people who weren’t eligible for those subsidies felt it was a very expensive way to get insurance and they actually found other options besides going through that. Now with a new administration coming on, it’s questionable whether some or all these subsidies might be taken away. So what do you see as the future of the healthcare markets with or without subsidies? I mean, obviously as you said, we’ve come a long way and tens of millions of people are now enrolled in it, but it’s been very expensive for the taxpayers to support the system. So what do you think? We’re kind of inflection point in the way, I guess?
00:46:30- Justine
Yeah, no, I think the Affordable Care act is here to stay. It’s an incredibly important market. As we’ve seen record enrollment, I think over 24 million now. And as I look at the tax credit center, provided it’s providing people that hard working Americans who don’t get coverage from an employer an advanceable tax credit to help cover the costs and it’s based on income and that phases out. So once you’re at a higher income you might not be eligible.
As you mentioned during COVID those tax credits were enhanced and then extended and they’re set to expire at the end of 2025. What I would say is I believe the ACA and the tax credits provide a fairer system because if you don’t get coverage from your employer, you have to put the entire insurance bill on your own and employers get a tax break for, you know, 100% tax break for the coverage they provide and they subsidize the employees coverage as well and so the tax credits and the Affordable Care act are, you know, are helping those that don’t get that subsidization from an employer. In terms of cost, you know, I would say that if they are set to expire, you’re going to have millions of people lose coverage and you’re, it’s like squeezing a balloon. You know, one side might go down but another goes up because now you have more uncompensated care. And so that’s having a cost. You have people foregoing care and finding out later and more extension expensive treatments.
So, I think it’s important that those, those tax credits continue and that we continue to, to support that market because it’s really served people well.But it gets back to, you know, the point I’ve been making. We have to address what’s driving costs because those premiums go up and those taxpayer paid subsidies, tax credits because the cost of providing care. And as we talked earlier, when these groundbreaking drugs come on the market at what cost and is it sustainable? I think the ACA market over the last few years, the premium increases have not been as substantial. They’ve really, you know, as early on when it was a new market and the risk pool wasn’t robust like it is today. So I think letting them expire, you’re going to have even deeper premium increases. So I think, you know, I’m going to just go back to we have to address what’s driving those costs and that is the goods and services provided.
00:49:02- Tony
Right, right. Okay, great. Okay. Well, we’ve gotten to a lot of different topics in this short period of time, Justine, so I’m going to hit you with a couple quick questions and then I’m going to just ask you a couple of things unrelated to health. Well, somewhat related. So These are your 60 second answers for questions that you could talk about for hours, but and you’ve kind of gotten into some of these already in the discussion. But what is your biggest frustration with today’s healthcare system?
00:49:34- Justine
You know, I’m going to say two if I can. And I feel like you can go ding, ding, ding if I go over, but it’s the cost. Again, I think there are steps we can take. We talked about to lower the overall healthcare costs, the prices, and it’s the lack of transparency. I think it’s very hard as a consumer to shop and compare. If I go to this doctor for this procedure or that one, you know, let me see what it’s going to cost. What are, what, what’s the, are they getting five stars or not? You know, I can look at Yelp for my restaurants, but yeah, I think there needs to be address cost and more transparency.
00:50:14- Tony
Okay, I’m going to let that one go because we could talk about that for hours. And second is, do you think there will be original Medicare in 10 years?
00:50:24- Justine
I do. I think it’s, we’re not at a point where it’s going to go away. I think it’ll have fewer enrollees and I’m hoping we’ll have modified how we pay physicians by then and really moved away from the speaker service annual doc fix and move to a more rational system.
00:50:43- Tony
And then we talked on this a few times. But do you feel that the Innovation center has lived up to the vision of aca?
00:50:55- Justine
Well, I am a fan of cmmi. I think they’ve accomplished a lot of great things. You know, back when it was created, maybe people thought it would move faster and, you know, grow quicker. But healthcare is complicated, so it takes time. But I do think it’s really done a lot of great things. I think there’s been bipartisan support for it over the years. And so I think there have been some real accomplishments around Accountable care, around primary care. I think you’re seeing more movement. Maybe it’s not as quick as we want into these value based arrangements, but I think had it not been created, we wouldn’t be where we are. I think we’d be further behind. So I do think CMMI has done really good work and I think it has the potential to do even greater work as we go forward.
00:51:49- Tony
Okay, great. Okay, a couple just last questions. Justine, turning to the personal side, what do you like to do when you’re not thinking about healthcare policy and trying to change the healthcare world?
00:52:03- Justine
Well, I love tennis. Avid tennis player. I don’t say I’m a great tennis player, but I can get the ball over the net. But, you know, sometimes you need to hit something. And I think a tennis ball is probably the most appropriate thing. The other thing, my son, while he’s in college, he’s in a band. And since he’s the drummer and the drum kits at our house, band practices here, even when he’s in college, the band still comes and, and practices and they’ll have a sit in drummer, so I like to make sure they’re fed.
00:52:37- Tony
You don’t sit in as the drummer then?
00:52:38- Justine
Oh God no. Though my son did get me a cowbell for Christmas because I did say I, I think I could play some mean cowbell. Now I just gotta get them to write a song with cowbell in it, which I don’t think will happen anytime soon, but we’ll see. And I serve on some nonprofit boards that I, I care about again in the healthcare space and just helping people with mental health conditions get care and access that they need and support. So yeah, and lately I’ve been doing a little more traveling, so trying to keep some balance in my life.
00:53:16- Tony
Good, good stuff, Good stuff. So you. We hit on a lot of topics today. Is there certain besides, besides this podcast, there’s other places where people can go to get additional information, either specific publications or websites or any other thing that you can think of. If someone says, gee, some of those topics that Justine talked about, I’d really like to go beyond the, you know, the 2ft level that we did today and really dig in.
00:53:45- Justine
Yeah, well, one podcast in addition to yours that I’m a real fan of is what the hell, new episodes put out every week and you can certainly look through, excuse me, and see, you know, past topics. And I’m sure much of what we talked about is in that in terms of cost. The Health Care Cost Institute, I think puts out tremendous resources, really looking at what are the factors that are driving costs. Really good data. The center for Budget and Policy Priorities as well, puts out some really good data.
I’m a Washington creature, so, you know, I read all the daily tip sheets like Politico, Axios, Vitals that news to dive deeper, but that’s more to get a lay of the land of what’s happening. And then the one thing. And again, I can provide a link to you, but as I mentioned on the drug space we had worked on, I think it turned out to be a really great consensus paper, Breakthrough Cures, Blockbuster Costs that dives deeper into those issues that I thought was really thoughtful. And we had done it in conjunction with the Aspen Institute and Gottlieb and Peggy Hamburg. So I think that’s another place to go.
00:55:01- Tony
Great. Well, thank you, Justine for spending the time with us and we will catch up with you later.
00:55:07- Justine
Great, thank you.
