Coordinated Care and Beyond: Coverage and Chronic Care

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

SARAH DASH: Alright, we’re going to go ahead and get started with the next panel. Thank you all. Once again, thank you for being here, and in our introductory panel, one of the issues that came up, of course, was access to care and to coverage, and so that is what we’re going to talk about in this panel. And we are really thrilled to have with us some fantastic experts on this, and Julie Appleby, who is a Senior Correspondent with Kaiser Health News is going to be moderating this panel, so without further ado, I’m going to hand it over to Julie to introduce the panel and get it started. Thanks.

JULIE APPLEBY: So as we’ve heard from the last panel, the number of people with chronic conditions and multiple chronic conditions is only going to get larger, and I think one person said the scale of the challenge is very, very large, and there’s no question that insurers, both commercial plans and government programs and other payers, are going to play a huge role. How they design their benefits can help people with chronic conditions or cause them to pay a whole lot more in out of pocket costs. How they pay their doctors, their hospitals, and their other providers can either incentivize coordinated care or encourage excess spending.

In this panel, now, we’re going to talk about the world that payers: Medicare, Medicaid, commercial health plans, as well as the role consumers play in preventing chronic conditions, encouraging prevention, shaping the nation’s response to the growing number of people with such conditions. And, luckily, we have this excellent panel here today to help walk us through this. They’re each going to chat for four or five minutes, sort of on an opening question I’m going to give them, then we’re going to have a discussion among ourselves and I’m leaving plenty of time for questions for the audience, so if you have something, jot it down, think about it. We’re going to have some microphones and people are going to be able to ask questions.

So without further ado I’m going to introduce the panel. We have Mark Fendrick, who is a physician and a Director of the University of Michigan Center for Value Based Insurance Design; we have Congresswoman Allyson Schwartz, who is President and CDO of the Better Medicare Alliance; we have Kathleen Nolan, Managing Principal at Health Management Associates; and we have Rebecca Kirch, Executive Vice President for Healthcare Quality and Value at the National Patient Advocate Foundation.

So, Congresswoman, I want you to briefly describe the role that Medicare plays in financing care for people with chronic conditions. Folks with disabilities, folks with end stage renal disease, if you could chat a little bit about what does Medicare do now?

ALLYSON SCHWARTZ: Well, whatever Medicare does, not only for the beneficiaries under Medicare, it matters to the entire healthcare system. It really sets the stage, often in what it reimburses, what it doesn’t reimburse, and of course, there’s, well, funds a good bit of the healthcare – government funds half of healthcare, right, in this country anyway, so when people say where’s government – why is government involved in our healthcare you have to say, well, it funds 50%, it sort of has a little bit of a say about what it funds. But it also means that it has a great opportunity to really address the issues that are facing seniors and those with disabilities who are on Medicare – Medicaid also, and we’ll talk more about that – going forward. And what we know is, of course, there are already 55 million people on Medicare between 40 plus million who are seniors and others who are eligible because of disabilities and the 10,000 new eligible people on Medicare every day. So we’re going to almost double the number of people covered by Medicare in the next decade so the numbers are huge. Anyone who says we can find sort of enough money in Medicare, even though we do think we can do a better job of cost effective care, and we’ll talk more about that, it’s still a lot of people to cover – over 80 million people. So it’s going to be 20% of the population and, of course, what we know about seniors today is that, half of – 50% of adults, have a chronic condition, more than one chronic condition. In Medicare, what we also know is that the number of seniors who have six or more chronic conditions is growing, and the interesting thing about that is that more and more seniors are living with serious multiple chronic conditions than ever before. It’s kind of good news for us, right? So we all hope to be able to achieve is maybe not to get those conditions but, if so, to live with them and live with them as comfortably as we possibly can.

So what’s important about Medicare is, of course, it was set up as a fee for service system, and it was set up to basically, in the beginning, pay for catastrophic cost, hospitalizations in particular. That does matter still. You can have serious conditions. You can have episodes that are really costly. But the fact is, that the high cost now to Medicare are the beneficiaries who have multiple chronic conditions and need attention and use most of the resources. So you’re talking about 10% to 15% of beneficiaries, the cost is 50% to 60% of the cost Medicare is spent on 10% to 15% of the people on Medicare. That’s a big deal. It means we should be doing several things. We should be doing what Medicare Advantage does, which is focus on the beneficiaries who need it the most, be able to offer, because of the capitated system rather than a fee for service system, change the incentives for providers, change the incentives for through the home care delivery system, to move from episodes of care that are high cost to how do you actually lower cost, be cost effective, and be able to use dollars effectively for people with chronic conditions. It’s a very different mindset. It’s a very different delivery system. And that’s what’s exciting that is happening right now. Medicare Advantage covers about 19 million people. It’s a third of Medicare, so it’s not like a little program over there, it is a very important part of Medicare and it is changing the service delivery for seniors from attention to fee for service episodic care, to one that actually looks at the patient and the patient’s needs over time. And can rule out, to a certain extent, the dollars available – we’ll talk more about how to do that – the dollars available in a capitated system. So when you change the incentive to incentivize outcomes and not just what you do to people it really changes care for seniors with chronic conditions.

It already is showing reduced hospitalizations, reduced lengths of stay, more care in the home, and more attention to a broader definition of healthcare. I understand you talked about that a little bit this morning. It isn’t just about the clinical needs, although getting more integration across specialties is a good thing for people with chronic conditions, but understanding that your primary care physician, your specialist can tell you to do something, but if you really don’t have the capacity to do any of those things you’re not going to get better. And so having clinicians, care teams, including non physicians, including care in the home, look at what patients want and need is really important to both more cost effective and improving the outcomes for these seniors. So I think there’s a lot of important work going on in Medicare that is, I think, potentially changing, voicing the effect in fee for service, changing the way seniors and people with disabilities get care.

So it’s good news in a mix of moment where we are like all anxiously disagreeing with each other on just about everything in healthcare, so what’s exciting is that there actually is a lot of important work, innovations in care delivery. Like about VBID. You’ll hear about telemedicine. You’ll hear about care in the home. You’ll hear about involvement of different practitioners and different styles of care. Talk about risk stratification. All these things are changing healthcare for the better for our seniors and potentially for everyone else.

JULIE APPLEBY: Kathleen, Medicaid is also playing a huge role and refresh our memory. There’s something like 70 million people on Medicaid right now, and some of them are young people, some of them are children, some of them are women, a lot of them are elderly in nursing homes. Talk a little bit about how Medicaid handles chronic conditions and what they’re doing to care for folks?

KATHLEEN NOLAN: I mean, like Medicare, Medicaid has basically an outsized role when it comes to chronic conditions because we do cover disadvantaged populations. Most of those disadvantaged populations are disadvantaged by income, but they’re also disadvantaged by disease and by disability and so there are some real issues that have caused, for many years, a focus on how we handle chronic conditions in complex populations in the Medicaid program. So I think that’s really the point.

I think you mentioned it, too. It’s not just older folks. We have a very diverse population and a very diverse set of needs in chronic care when it comes to the Medicaid population. We have children with special healthcare needs who have chronic conditions that are lifelong, and we’re managing them now. We could be managing them 30, 40, 50 years from now, so the arc of that is really challenging Medicaid to be responsive and to have those models of care that you need to deal with all of the issues that folks with chronic conditions really manage.

You know, I think one of the things that has really brought Medicaid, in some ways to the forefront, is we’ve been dealing with these issues for a long time, and a lot of the conversations that we talk about now are about care coordination. They are about bringing the clinical world together to better manage chronic conditions, but we’ve also been talking for a long time about what we’ll call support systems and support services. We do this a lot in the long term care world where we provide personal care attendance, we provide transportation for individuals to get to the doctor when they need to. We provide a lot of support services. We even are getting into the field of dealing with housing. When individuals have a chronic condition and they don’t have anywhere to live, managing that chronic condition is practically impossible. So looking at this very holistic, very broad definition of care for individuals is exactly where chronic care is and where it needs to go.

I think one of the biggest challenges, though, that we face in that space is those are the most formidable services when it comes to hard physical times. Those are the challenging pieces of hanging onto those support services and to that care coordination. When you come to brass tacks in a budget crisis, you look to go to your core essential services. You make sure that you can cover the hospital and the doctor and you call it quits. So really keeping that focus over difficult dynamic times in Medicaid is going to be a real challenge but really important.

We are also seeing a lot more, I don’t want to call it mainstreaming of Medicaid, but we have this issue where we’re using a lot more of the managed care systems in order to get access for Medicaid people. That’s actually got an upside because we aren’t cordoning off Medicaid populations into just bare providers, just their systems. We’re getting more of the access to the kinds of tools and mechanisms and supports that managed care brings: care support, case managers, and other kinds of things. But we also still need to provide the supports in that environment. We’re not going to simply turn it into a regular managed care program that we would provide to everybody because Medicaid populations are different. So that’s one of the things that I wanted to mention and we can talk some more about is what does that relationship look like with managed care and Medicaid.

But one other thing I wanted to mention, too, is in the last few years of Medicaid expansion and what I would call I’m less worried about the expansion part of it than basically we have populations for longer. We have less turn off of Medicaid and what does that do for our ability to do prevention and chronic care when we don’t have individuals who are rolling on and off of Medicaid? And so what does that say for us and how do we take that conversation forward as we think about managing these populations over the years? So I think in a lot of ways, Medicaid’s doing a great job. It is doing an exemplary job in thinking about how to manage chronic conditions and even prevent chronic conditions, but I think there’s a lot of challenges that remain and we really have to have a focus in this time that we don’t recede from the progress we’ve made when the fiscal times get difficult.

JULIE APPLEBY: Okay. Thanks. And so let’s talk a little bit about benefit design. Mark, what are payers doing around benefit design and chronic conditions?

MARK FENDRICK: So, first I’d like to thank Sarah and the Alliance for inviting me to bring the only Y chromosome to this panel, and the opportunity to talk about a common sense bipartisan reform idea as we enter a new dawn of healthcare transformation in this country.

I find it very interesting as a practicing primary care physician, like my colleague over here, that the principle focus of healthcare reform in this town is cutting costs. I did not go to medical school to learn how to save people money. My nurse colleagues, my pharmacist colleagues—everyone in the healthcare system is kind of intrigued by the fact that health is no longer in this healthcare cost debate and, particularly, if I were to ask any of you about what we think we should be spending our trillions of dollars of healthcare dollars on we’re under-using all of them, whether it be prevention, whether it be diagnostic tests, whether it be management of chronic diseases—all of the things that are determined to be the quality metrics, the things that we should be buying, we’re actually underutilizing which makes it very unusual to come in this town to say we should be spending more on certain things as opposed to less with this pressure to do less of everything and lower prices on everything.

And this comes at a very interesting time in the fact that the innovation that’s coming upon us, the opportunities that I have, and my colleagues, to improve individual and population health is truly enormous and is going to come at a great cost. And I think the difference between the Star Wars science, which I hope to be able to practice in a year or two, and the Flintstones delivery system in which I practice, is actually getting further away as opposed to closer, given the issues that were discussed by both Kathleen and Congresswoman Schwartz. So this, on top of the fact that the most common and popular health policy lever in this town now is cost sharing and making my patients, and making all of you, pay more for everything, right, whether it’s the high value services or the low value services and this comes, of course, at a time where there’s great consternation about healthcare costs which we cannot deny. I think a very important point is that Americans do not care about healthcare costs. They care about what it costs them. And I think this is why I have devoted over 20 years to the issue of consumer cost sharing and benefit designs and, you know, imagine the fact that we have done studies to show that these blunt cost sharing instruments that make everything cost more, people buy less of the low value services, which is why you have cost sharing, but people stop buying the things I beg them to do. They stop buying the things that I am benchmarked on. They stop buying the things that which my shared savings bonus in a capitated system is based on. So it makes no sense to me at all. And it shouldn’t come as any surprise is that the folks that are most impacted by raising cost sharing are those who are financially vulnerable and those who have multiple chronic conditions. So, I support consumer cost sharing. I support high co-payments and deductibles on the services that we should not be buying in the first place. Fortunately for us, but really unfortunately for us, that’s $500 billion in services that are not making any American any healthier. So it gives us kind of like a little wiggle room.

So where do we come in here to support cost sharing, but most importantly, to drive better outcomes for my patients, which motivates me and most clinicians, is a smarter healthcare system of which we have something called clinically nuanced cost sharing. Let’s put cost sharing low or no amount for those services that make Americans healthier. Let’s put high levels of cost sharing on those services that don’t make us healthier, and that is implemented in something called Value Based Insurance Design, or VBID as Congresswoman mentioned. VBID very simply lowers cost sharing for the things that are important and raises them that aren’t. And it’s one of these things, and doing this for 20 years, my kids will never know what it is to sound like a broken record, but I think, Congresswoman, you know what that is. I’ve been promoting this idea of nuanced cost sharing for a very long time in 49 states and in this town for which it’s been accepted by multiple stakeholders, many of them here, and has the very, very rare designation as having bipartisan political support.

One of the most popular aspects of the Affordable Care Act that Sue Nelson mentioned, which is 2713, which makes evidence based preventive services no cost to patients, that is the VBID aspect of the ACA. Republicans and Democrats support that. We have a Medicare Advantage Value Based Insurance Design demonstration test in seven states now, 10 states next year, bipartisan, bicameral legislation to expand this demonstration to lower cost sharing for evidence based services for people with specific chronic conditions to all 50 states. A bipartisan supported demonstration in the TRICARE program for the Armed Forces will be launched this January 1st, and there is bipartisan support to reform health savings accounts, to remove the crushing deductibles on evidence based services that both Democrats and Republicans are facing as millions of Americans are rolling in these high deductible health plans. Bipartisan legislation there as well as a draft and Executive Order that actually may move this idea that has been pushed by multiple stakeholders to make these plans smarter.

So I’m hopeful that we will see a change in benefit design to make those services that are evidenced based, that the clinicians really know are important, more accessible but also focus on the waste in the system by making those services less so.

JULIE APPLEBY: But, Rebecca, what do consumers with chronic conditions need from their coverage, and also we’re hearing a lot about co-pays and that kind of thing. I’m wondering, what’s your thoughts on putting that burden on consumers as well, to decide what’s high value and what’s low value, where are they going to spend their money? So what do they need and what are some of these choices that they’re facing?

REBECCA KIRCH: That’s such a critical question. I think value based cased holds such promise if we focus it on what people want. And we first ask them, call me crazy, but you start with the consumer and what they want and in the context of healthcare, it’s a little bit of a hard frame for me to still grasp that people are consumers because usually it’s in the context of some sort of crisis and that’s not the time that you can make, go out and be a shoppable consumer.

What people ultimately want is treatment that supports them as a person beyond their disease and what I’m encouraged by with the themes of today is that quality of life and functioning were high on the radar of this move and certainly out there in different care models that are being tested and innovations in delivery that focus on the person beyond the disease. And I think one of the opportunities we have, I think it’s a mistake when we think that cost shifting and sharing with patients is going to help make them better consumers because they’re in this vulnerable place where they really can’t be out making informed decisions. But, the health system can help support what we mean by value based care.

And I think one of the fundamental foundations that we haven’t spent enough time thinking about, and I’d like to see policy around, is the communication skills that are really a learned aspect of good medical care, person centered communication skills that focus on the principles of palliative care that came up this morning. What’s important to you in the context of what’s happening to you? How can we help make you feel better while you’re working to get better? Our system is so oriented toward disease-focused care and specifically specialty care that focuses on one disease so that we’re talking about coordinated care is really important, but it’s much more than a buzz word in terms of what people need.

So I think the opportunity to think about accreditation standards and training and payment incentives that focus on the skills training that clinicians need, to focus on the person beyond the disease, but also to equip patients and families with prioritizing – they already do in their own minds, their quality of life. My mother was diagnosed with ALS a few years ago. There were no treatment options, it was all about staying ahead of the game for her. So palliative care was her best friend to make sure that she could enjoy every moment, relish every moment, and was a short term but chronic illness, and that’s what most people want. They want to stay ahead of the game and be equipped with services in their community. That’s another theme I’ve been hearing this morning already. Community based care instead of hospital oriented care. Whole person care instead of disease centric care. That’s where I think value based care can help get us there and communication skills and emphasizing those as much as we do disease specialty treatment I think will make a big difference.

JULIE APPLEBY: So a lot of talk about cost shifting and consumers paying more and having to pay higher co-pays and deductibles with the idea that hey, you know what, if you’ve got a bigger cost to go to the emergency room, maybe you won’t go there if you just have a sore throat, you’ll go to the urgent care center, etcetera, etcetera. So those kinds of things are in place, but can that work in a Medicaid program and are they trying it, and what are the specific challenges in Medicaid, given if it’s a fairly low income population? Are we seeing these attempts at cost shifting? Do they work? Is it fair in that population? I wonder if you could talk just a little bit about that.

KATHLEEN NOLAN: Yes, we are trying it in the sense that on sort of a – not the kind of granular level that Mark is talking about. It is more of a big picture thing. Emergency rooms is one of the things that has been identified as the hope of a way of getting people to behave differently. It’s not a punishment, it’s supposed to be a behavioral shaping tool, right. It’s not a very – we don’t have a lot of evidence that this is going to be the way that we’re going to reshape the system. I think much more of the focus is on the idea of doing value at the provider level and at the insurance level than at the consumer level. I think that that’s part of the package often, that maybe a state is considering doing something like a co-pay, but it’s not the only thing we’re looking at and I do think that given the limited dollars that exist in most of these Medicaid populations it’s not going to be the tool that’s going to reshape the system. It might get rid of a very targeted problem.

The value conversation is much less about the co-pays in the Medicaid space. It’s much more about how, as a purchaser, and you said this, I mean, we’ve got a lot of people in the Medicaid program. We’ve got 70 million people in the Medicaid program, that is huge purchasing power. And so one of, I think a much more critical focus in the chronic care environment is how do we use that purchasing power to do better with chronic condition management, and chronic condition prevention, and I think those are the kinds of conversations that are not the headline, they’re not making the headline, that’s what making the headline is the co-pay on emergency rooms, but the hard work of negotiating with managed care plans, of working with providers to get to that value equation is what’s going on in every state because it is the real winning opportunity is to get to the kinds of nuances that Mark is talking about. That is a very nuanced conversation. That is not an easy conversation. You can group all of these over here and everything over there and you go. It’s a real change.

So how do states use that purchasing power in Medicaid to leverage a system that’s value oriented? Consumers should be part of that, but it’s the providers, it’s the managed care plans, it’s the state itself.

JULIE APPLEBY: And, Allyson, are you seeing that?

ALLYSON SCHWARTZ: I was going to say there is also an overlay of the dual eligibles, you know, there are 11 million people who are eligible for Medicare and Medicaid. And, yes, they’re low income by the nature of Medicaid so that itself adds some additional components to think about it in the healthcare system, or medical system should. But it is a real opportunity and we’re seeing a little shift in a number of ways of looking at how you provide care for people who are dually eligible, and they often do have multiple chronic conditions. They may not have had good care for many years. They might have, they may not have, and obviously there’s some other social determinants, other issues that they have that affect their ability to actually use the healthcare system the way they might. But then there’s special needs plans within the Medicare Advantage which is geared specifically for dual eligibles, low income, or people with very serious chronic conditions, or who are already eligible for institutionalized care. And to your point, people want to stay home, okay, how do you do that if you are poor and have multiple chronic conditions and ready to go in a nursing home, or almost, how can you do that? How can you stay in the home? Where are the providers? How do make the connection?

JULIE APPLEBY: Are these special needs programs available in traditional Medicare as well as Medicare Advantage?

ALLYSON SCHWARTZ: No, they’re specific to Medicare Advantage.

JULIE APPLEBY: And so what additional services do people get if they’re in one of these plans and how does that help?

ALLYSON SCHWARTZ: That actually is a really good point. Actually they don’t get additional services. It’s about organizing the services that they have access to, so it actually isn’t paid more than somebody in traditional Medicare Advantage, it’s paid the same, but they are giving the authority to the little more leeway on how they organize it and they’re actually required to have an approved model of care that points to do you have care coordination? Are there care managers? Are there tailored benefits? Do you specialize and have an individualized care plan for beneficiaries? So the idea is to really focus on those who are duals or have chronic conditions, or as I say …

And what’s interesting is what the 2.4 million people in special needs plans. That’s a lot of people. It’s grown pretty quickly. But it shows how, also, if you can really parlay some of the benefits of Medicaid that don’t exist in Medicaid, and there are, and really coordinate those, then you can get the person to the doctor’s office and they don’t call 911 a month later being sicker. They may not even go to the urgent care center because there’s a co-pay there. And they may be not in their neighborhoods. We sort of forget about that. Who has access to care also depends on what’s available to you, but actually they can, in some cases, they want to be able to provide transportation. In some cases they do it. In fact, there’s a bill that just got voted out of Ways and Means that reauthorizes SIPs, which has to be done before the end of the year otherwise they go away, and there’s really good strong bipartisan support to do that, but also adds that there actually will be greater flexibility given to Medicare Advantage plans in the use of their supplemental benefits because they’re finding that the definition is too narrow. If they want to offer transportation, they can’t. If they want to – well, you’ll talk more about this – they’ll co-pay for medication. You know, that inhaler maybe costs a $30 co-pay, or $50. You don’t have that you end up in the ER about once a month and probably hospitalized if you’re COPD. So we know this. We know it’s a cheaper way to go and we like to be able to have that flexibility

JULIE APPLEBY: They can’t always do it.

ALLYSON SCHWARTZ: Exactly. So I think that kind of notion. Again, this is very individual – looking at the individual, what do they need. To your point, it also says you’ve got to engage the patient and you’ve got to engage the caregivers in this conversation about what does the patient want, you know, what do they expect, what do they have the capacity to do, what kind of help do they need to get it. And that discussion is, in some ways, I feel like the one that always circles around healthcare but now we’re saying, okay, you know what, it makes sense for us to pay for some of these things. Wish there were more supports broadly, but at least let’s send an aide when you leave a hospital so you don’t come back in 30 days. That’s not going to happen otherwise. Let’s do a different kind of wound care, let’s do different kind of support services as part of better Medicare Alliance. We’re an alliance of, well, it’s now 89 organizations. We have the YMCA, we have Meals on Wheels. You know, the demonstration program that showed if you delivered frozen meals, 10 of them post hospitalization for frail poor elderly, they did not come back to the hospital as often. It was something like a 30% or 40% reduction. That’s enormous. And that’s 10 frozen meals, and it’s also somebody eyeballing the patient and talking to the a little bit. But we’re seeing this with the exercise programs we thought were probably frivolous. Turns out it helps if you’re diabetic. We talked about that a bit this morning with the diabetes prevention program.

So really understanding. It’s hard to have – it’s a rare person who absolutely follows every instruction that they are given, whether you’re poor or you’re not, and so getting a little help to make sure you do it, but particularly if you don’t have those supports is really important.

JULIE APPLEBY: So, Mark, could you describe what a high value service is and who decides that and then, what are the current incentives to pursue those high value services and what are the disincentives, and are they falling mostly on the payers or on the consumers. Big question.

MARK FENDRICK: Big question. Who decides has come up from the very first time that Michael Turner and I came up with this idea: more of the good stuff and less of the bad stuff. The good news is, is that there have been organizations doing quality metrics long before we’ve been talking about value based insurance design. So this is the National Commission on Quality Assurance, the National Quality Forum – everyone, especially foundations, including the cardiologists and the dermatologists and the radiologists. They all have metrics that have been available for a long time. I hope we have a conversation very soon that we’ll be able to push beyond what I call the low-lying fruit below the ground services for which Americans are not covered well and increasingly covered less generously. Such as everyone, including on Capitol Hill, knows that diabetics need to have access to an eye doctor. So the diabetic eye exam has been on any quality metric, every one that I’ve seen for over 20 years. So first off, in commercial plans, that 90% of diabetics have the same coverage for eye exams as non diabetics and actually the coverage is getting worse, and in Medicare, because of the antidiscrimination clause, because in 1965 there were concerns in this country about ageism, sexism, racism – thankfully we don’t have those concerns anymore, but then we had this issue about one size fits all, everyone had the same design, right? So the idea of precision benefit design is critically important because when I went to CMS and said diabetic patients have access to an eye exam at low cost, they said, well, either everyone has access to low cost eye exam or no one has access. And they said, “Mark, that will take an act of Congress,” which meant go back to Ann Arbor where you’re from and we had an act of Congress and CMMI now has a demonstration – the first time ever – to allow specific populations to get specific services, like that COPD patient, that other patients may not. This is where we need to go, and I say this to Sarah at the Alliance for Health Policy, you know, the fact that clinicians need policymakers to allow us to practice the medicine that we need to practice for the constituents that are represented here is extraordinarily important.

So high and low value services, we have a few of them that we’ve been doing for decades and want to do more. We are very, very thankful to have something called the Choosing Wisely initiative where physician groups and now nursing and pharmacy groups are coming together and publicly reporting the services that we think we’re buying too much of, right? So to pay for my more diabetic eye exams, I want to have less Vitamin D testing in women. And so on. As designated by clinicians, not by policymakers or some primary care doctor from Ann Arbor.

But I want to say something quickly about this issue of skinning the game. This is a major problem for me as I embark on a bipartisan journey through this. I want my patients to know the price of their services. I want my patients to have some accountability, once they decide what is the right thing for them, to follow through on that. But I do not want my patient to take out a second mortgage or have a bake sale or go to a charity to get a drug that was designed for them. This movement, and the Star Wars science, and somebody might have heard, the FDA panel approved last week a drug that is designed from your own cells. It can only be used for you. And, if we don’t bring this Flintstone delivery up to catch up to what these amazing scientists are producing, it’s only going to get worst and I worry the most for the constituency primarily that Kathleen’s talking about because the folks with financial vulnerability, lack of healthcare literacy, is really becoming problematic and today, many of us in D.C. think that we have a new day, so we can start talking about some of these intuitive ideas that people and, most importantly, a bipartisan support it is we talk about in new healthcare reforms.

JULIE APPLEBY: What about, if you have these benefit designs that are different for every person or maybe for different groups of folks, maybe folks with diabetes, pay this much of a co-pay for an eye exam and other folks don’t, how are employers and consumers going to figure that out? Won’t it be even more confusing than the current benefit design? Walk me through how that might play out.

REBECCA KIRCH: It’s so funny because we have information overload on one hand, but not the kind of information that people need to make the decision about am I going to buy groceries or am I going to get this medication, or which plan am I going to choose? And even for those who are pretty well versed in different benefit designs, it’s really hard to choose because you also don’t know what’s coming down the pipe now.

I’m thinking, too, about we have a lot of opportunities to sort of reorient the system toward, again, what’s important to patients and families in terms of how they make their decisions, the cornerstones that they rely on, which are considering the risks, the benefits, and the tradeoffs because they want to keep functioning and they want to keep their quality of life. But we have a lot of information that they’re having to make decisions around that doesn’t support the fundamental decision making process that they go through. And I’m also thinking about an unspoken aspect, or an unquantified aspect of cost sharing, and that’s the reliance increasingly on caregivers. And so everything we talk about in terms of community based support is so essential, especially as we look at the “Silver Tsunami” coming an what that’s going to mean for the pressures on our health system. Caregivers need support to understand how to do what used to be procedures handled really in hospitals, from wound care on up and down.

JULIE APPLEBY: And by support what do you mean?

REBECCA KIRCH: They need to be trained in how to care for their loved one at home. They need to be able to have some confidence in knowing that what they’re doing is right. So there are policy initiatives now focused on helping elevate the importance of caregivers, even identifying them in the clinic visit instead of just assuming well, there must be something happening at home that will take care of this, right? It’s sort of an unspoken or unassessed assumption instead of assessing people for those needs, because there are many, increasingly, that won’t have that support to be able to stay at home. I think of Dame Cicely Saunders who started a hospice movement. She had this wonderful tuck in service to keep her at home. She was living alone but someone would come and bring a meal and then help her upstairs. That’s all she needed. Like we heard in the first panel, the dad who decided to give up driving, but there are ways we can work around this that don’t have to medicalize everything.

MARK FENDRICK: I need 30 seconds. So, the 75 million Americans, including many of you, who had your care sharing reduced, for your depression screening, your mammograms, your Pap smears, your colonoscopies – there’s now 80 things on this list – no one every complained to me that their co-pay for their Pap smear went from $25 to nothing. So I think there is an issue, Julie, on the low value care side, but in the Medicare Advantage VBID demo, we only allow, as I recommended for years, VBID should be implemented first on reducing cost sharing for high value services. See how that goes and then make a decision on where you want to go on the other side. So let’s not forget that except for fewer and grandfather plans, you all have access to now over 80 evidence based services at no cost to you and, as of today, it’s still the law of the land. It may not be the case moving forward, but that is something that I have not had any pushback on because most people want to have cost reduced for things that they may need.

JULIE APPLEBY: So do carrots work best, but what about sticks? I’m thinking about that program out in Oregon where they did raise the co-payment for some things like sleep studies and some upper GI endoscopies, some imaging services, that kind of thing, and they raised the co-pay to try to get people not to use as much of it. How does that play out?

MARK FENDRICK: So you’re pushing me into the place where I don’t want to go, but thank you for that question. VBID’s such a neat idea, everybody likes it, why isn’t it more ubiquitous in the United States is because most of the healthcare services that we all want people to use do not lower healthcare cost. The biggest myth in Washington, D.C. is that high quality healthcare, in most situations, lower healthcare costs but they don’t because people live longer, which is why I went to medical school to help people live longer, higher quality lives so we have to basically get to the situation to pay for the more diabetic eye exams and the mammography, you know, which is why we have to think about low value services and making this happen, and for 10 years I said VBID programs improve health and, in most situations, don’t raise cost very much. We can now build plans that tie carrots and sticks together, not focusing on emergency room visits, which Kathleen knows that is not a low value service, not most of the time. Why don’t we start with these things that clinicians themselves say that should not be done, that rack up billions of dollars a year, that will allow us to spend more money on the things we do.

JULIE APPLEBY: So why isn’t the incentive on the provider not to write that prescription or not to write that order.

MARK FENDRICK: Upton Sinclair said it’s difficult to get a man to understand something if his salary depends on him not understanding it. So as long – so as much as I love benefit design, and you know that, Julie, the lever that we need to pull is to no longer incent my colleagues to do as much as they do and pay them for doing it regardless if it helps.

JULIE APPLEBY: Give a couple specific examples of where that’s happening, where specifically, and then we’re also going to get some questions, but specifically give us examples of where that’s happening.

ALLYSON SCHWARTZ: In the capitated system, you don’t get paid for every visit, you don’t get paid for every procedure, you get paid a lump sum per member per month based on their health status, is one of the unique things about what happens with a lot of insurance, but in Medicare Advantage, so that everyone gets a risk score. So there’s a basic one, you know, if you’re average, you get, you know, your 1 dollar, whatever it is, you know, $100 a month, or the – if you’re really sick there’s an add on because you recognize that they’re going to use a lot more services. If you’re even healthier than average, then you even get paid a little less. But the idea is it changes the incentive to do things that you don’t necessarily have to do.

Now, you need accountability which, of course, in Medicare Advantage there is. There are quality measurements that don’t exist in the same way, comprehensive way in fee for service, so you can find out if your plan is one to five, are you a four- or five-star plan, you know, rather than a one- or two-star plan. There shouldn’t be one- or two-star plans, they should all get to be four or five. But the idea is, it changes the way the providers, the doctors talk to each other. That’s really important. We talk about care management, that is about not just managing the care for the beneficiary but it’s also managing all the providers that are providing care for that patient. And it gives the flexibility of the dollars to put some of those dollars into some of the things that will ultimately save money which, of course, Mark’s right, it’s hard to say we do think that seniors should get a flu vaccine and actually we put no co-pays on that because you can save someone from going to the hospital over flus, you should and we do. And we’ve seen huge increase in the number of seniors who get flu vaccines now. They all think it’s because their chain drug store is giving it to them for free, isn’t that nice of them, but it actually is paid for under Medicare. But, you know, I’m just saying, so there are things that seem so obvious to us when we do it. No co-pays for going to your primary care physician. So get in there and see the PCP, see your nurse practitioner, do it a lot if you need to. There are very concrete examples of how that reorganization, the care coordination that is available in a capitated system like Medicaid Managed Care when it’s done right, like Medicare Advantage when it’s done right, has a huge opportunity to improve health outcomes, to save dollars, and to be able to – the way it works is you can reuse those dollars to provide the benefits that actually keep people healthier and keep them away from those very expensive costs.

KATHLEEN NOLAN: I know we wanted to get to questions, but I really think that the whole point is we focused a little bit in this panel, I think, more on the skin in the game of the consumer side, but really what we’re talking about is everybody having skin in the game now. And when we talk about something like an Accountable Care Organization, the concept there is that everybody has skin in the game for that system working better than it does, and for doing more of the things that need to be done and less of the thing – the consumer’s part of that, but all of the providers in that system are part of it. And I think, to the point that Mark made earlier, I know you all know this, but healthcare is complex, and—

MARK FENDRICK: Who knew?

KATHLEEN NOLAN: —I think that it really is about creating systems where the best care is what is rewarded and that rally is all of these things combined: the SNIPS, the idea of accountable care, quality metrics, value based purchasing, and getting consumers more able to make the decisions, I think that’s your point, that’s what it is. And if you think about it, 90% of the conversations we’re having in healthcare reform now are really about chronic care. They’re not about anything else because that’s the thing that’s eating us up, and so I really think that all of these things, if you take them from that lens and really think about where are we putting our pressure; it’s not just on consumers’ backs to figure this out. It’s frankly, insurance design is one part of this, but if we design the perfect insurance system, in 10 minutes it’s out of date and we’d need to redesign it. So we need to be constantly able to have a system that is self feeding, self sustaining in improving care, and I think that’s really where the value based conversation is really going across the board.

JULIE APPLEBY: Great. Well, we’ve got 10 minutes or so for questions. So, I’ve got one right there and I think there’s some microphones going around, so there’s a gentleman over here – have to stand up. If you could just introduce yourself and ask a question.

QUESTION: My name is [Unintelligible] John, I’m the Executive Director of [Unintelligible] Group Central. So my question is, change in behavior takes time, especially patient behavior, and we know that vulnerable populations that are susceptible for chronic illness, they have a lot more needs. Insurance companies, they make investments, and they want to see the ROI immediately and with annual enrollments, everybody changes insurance every year, sometimes that investment is not recouped right away. So how can insurance companies balance the need for making an ROI but also creating positive behavioral change where it’s going to change the behavior of those vulnerable populations, not just a cookie cutter approach of let’s do care management but not provide education materials in multiple languages, or provide services within urban communities that may help change, you know, the fact that there was a food desert or transportation barriers?

JULIE APPLEBY: So who wants to talk about that?

ALLYSON SCHWARTZ: You know, I actually think that the idea of, you know, I don’t have to care because this person’s not going to be covered next year, or be in a different, working for a different employer, really has changed over the last decade. I mean, that is part of what moving to, having well, Americans have access to coverage is that the notion is that they’re going to have access to coverage their entire lives. Well, you sort of have a different view as the company that’s trying to keep them covered and keeping them healthy because you could have them their entire lives, or maybe when they have babies, but maybe, but you know, anyway, when you think about that – and if it’s through Medicaid, and there’s managed care through Medicare, there’s managed care, you’ve seen a lot of it in the commercial space as well, you start to see both the payers – and Medicare looks at this differently, too – but the payers and also the beneficiary investing in a different way – and the providers, of course, are important in all this, in a different way in seeing – expecting to see those patients and cover them. So just the question, is it worth my while? I remember years ago, I go back a long ways in this, years ago somebody saying, well, I don’t know that we really have to reach out for prenatal care – this is not my area anymore, but you know, it’s doing the seniors so much, but because they could be a different insurer, or go somewhere else when they have a baby, which is not so typical, but they could. And so, are you kidding me? It’s going to cost somebody something and it’s probably going to cost all of us something.

So, you know, we’re learned that that doesn’t make a lot of sense; that you need to be able to do that outreach. It’s certainly true about the early diabetic. It makes sense. We’re all going to pay for it at some point, if we’re not slowing the progression of that disease, and they end up on dialysis. That is something we all pay for. So it is a change in thinking, it’s not just on the insurers, although that’s important, it’s also on government to say it’s not just about this year’s budget, it’s about the care that we’re providing for people over a lifetime and what we do matters in slowing that disease progression, if not preventing it, and really saving costs in the right way. That’s what Medicare is looking towards, not just in Medicare Advantage, but under MACRA. Change the incentives, change the dynamic, change the value proposition of how we pay for healthcare in this country. And it does take consumers also engaging, understanding what their options are, making the right choices, you know, change those choices, and that is something that also we can do a better job of explaining what those options are for people as they’re making these choices in the purchase of insurance coverage and in the way they interact with the healthcare system more broadly.

JULIE APPLEBY: Kathleen, did you want to add to that?

KATHLEEN NOLAN: Really quickly. You know, basically – I think basically where we are is there’s no one payer who’s going to solve this problem. I think that, to your perspective, if you take that very payer-focused view, if it’s one employer, then you’re right. We’ll never make the case for them to think any farther down the road. But I do think that a lot of the things, like SIM grants and other kinds of discussions in value, even Medicare/Medicaid, really thinking instead bigger than what my problem is and what I’m trying to solve, and that’s really where I think we are right now in the whole value conversation is that we’re not going to solve healthcare with Medicaid. It’s not going to work that way. It really does have to be joint, and that’s the desire. I mean, if we’re pushing environmental regulation that’s talking about greenhouse in 75 years from now, I can tell you we’re going to get returns on this investment a lot sooner than that, right? So, but it is going to take everybody being at the table and I think private payers, to be frank, have been the slowest to show up on this one. They do really think in the shorter term, even in government, and I think that right now we’re starting to all come together and that’s going to be the way we take it beyond the what’s my return on this year’s rates and how is it going to change for next year.

JULIE APPLEBY: I think there are a bunch of questions over here. So I’m going to pick you, right there.

CAROLINE STEINBERG: Hi. I’m Caroline Steinberg with NEHI. I was just wondering like what kinds of things could be done to make Medicare Advantage more effective? Because, I mean, you were talking about it as this great risk program, but Medicare Advantage is taking, you know, risk from the government and transferring it to another insurer and very few Medicare Advantage plans actually have any kind of transfer of risk to physicians – I mean, some of them, do. And then Medicare Advantage, also, we’re not really getting the benefit of any money they save because, at least according to MedPAC, they’re overpaid and that they ought to be able to make money with, you know, one arm tied behind their back because they’re competing with a completely unmanaged system, so what are the sort of policy levers that we can use to get more out of Medicare Advantage as so much of the population shifts in that direction?

JULIE APPLEBY: Mark, do you have any thoughts on that? Have you looked at the Medicare Advantage?

MARK FENDRICK: So I have a broader point, brief – but if the Congresswoman wants to go. So it’s not just – so making Medicare more effective, whether it be Medicare Advantage or Medicare, to Kathleen’s point, why aren’t the things that are most profitable in healthcare the things that produce the most health? And I just want to tell a story about that, very briefly. What do you mean by clinical nuanced payment and benefit design? So, the most effective thing that I think, one of the things that we can do in American healthcare, is put a coronary stent – these things in someone’s heart – when they’re having a heart attack. That service is under used. I think by paying cardiologists more we could increase that a little bit. We’re also putting coronary stents in people with heartburn and muscle aches and whatever because cardiologists are paid for putting those in. And I made an argument to pay the cardiologist more, to put them in this situation, and not pay them at all for putting them in in the situation where they’re low value to which many members of Congress thought that was crazy until a very senior member of Congress said, “If we could pay farmers not to plan corn we could pay cardiologists not to put in stents.” So the policies about moving this around, the fact that we have billions of dollars of research, even though we’re imperfect, say these are the good things and these are the bad things and the incentives are still in place to do them almost equally, any policy that either moves the providers, first, and the patients following along, will build upon what we have now, which is what we hope to see from these demonstrations through CMMI.

JULIE APPLEBY: But Congresswoman, just to get to that point, though, the government does Medicare Advantage plans more than they do traditional fee for service Medicare. What are some of the levers that can be pulled, as the questioner asked, to make it so that we’re more efficient and save some money?

ALLYSON SCHWARTZ: Absolutely. So a couple things. One is MedPAC just said it’s paid the same as fee for service. They just said that this last year. Took seven years to get there and with reductions every year to the plans which is built into the ACA, so they said 100%. The reason they get a bit more – there is some more, grossly speaking – because of risk scores. And one of the cases, and I think this is something for us to look at, it’s been compared to fee for service and it has no incentive to – and does not do risk scoring in the same way at all. We tried to really compare exactly, it’s really difficult because they get paid for services. They don’t get paid for risk. So that’s an evolving situation, but it certainly has enabled Medicare Advantage to take some of these sickest patients and see what we can do to make sure that they are actually getting better care earlier. So yes, it’s at 3% to 4% because of risk scores, but otherwise, the basic payment, the benchmark, is the same as fee for service.

So that’s one answer, and I even though I know people keep saying it, it’s really not true anymore. So, just to say that. The second, I would say, it has been work and continues to be to really change the healthcare system in America. I mean, if you’re really saying I’m going to change how I pay doctors and all other providers you know it doesn’t happen overnight. So there is a very strong interest in moving to value based payment arrangements with providers. They’re very aggressive and ambitious goals that some of the big insurers have for sure. Some of the smaller insurers have a harder time doing that; they have less leverage, but it is also not easily done. And just like the beneficiaries, as been pointed out, doctors prefer an upside risk rather than the downside risk. So it’s been harder to say, okay, now we want you to take the downside risk as well, but it is a huge start to say you get to share in the savings, so some of the savings gets passed along to the doctors to incentivize them to change their practice. And that’s a big deal and it doesn’t happen overnight but I believe it is happening.

So, yes, I speak about Medicare Advantage in the potential and the possibility that doesn’t exist if we stay with the fee for service system, but we still have a ways to go to even include all the things we’ve been talking about. The community partnerships. I mean, [Unintelligible] plan talked to some senior centers and Area Agency on Aging. There are tens of hundreds of thousands of them all over the country. That’s a lot of negotiation for every service that you have to provide. Can they do it? Of course they can, but again, it doesn’t happen overnight, and it is also changing for some of the community partners who are used to getting grants, to actually becoming entrepreneurs to say I’m going to negotiate with an insurer to do that, it’s also a huge change in their culture. So I’m saying it is really changing the culture and the logistics of the way we pay for healthcare in this country. It doesn’t happen overnight, it is happening, we see it geographically more in one place than another. It’s a little tougher sometimes in rural areas because there are not as many providers, but all of these are challenges that we should meet because the potential is great for us to be wasting $2, reusing those dollars, and one of the reasons that the plans are under medical loss ratio and all of that too, they can just keep a certain amount under the ACA as well. So really the notion that they’re just able to make as much profit as they like is just not allowed anymore. So some of these things that we keep saying are just not true in Medicare Advantage anymore, and they’re accountable and more transparent about things than they ever did. So there are lessons to be learned, there are best practices to be shared, and there’s really a path forward here that I think is potentially very exciting, and cost saving, and a benefit to the government at some point, as well.

JULIE APPLEBY: So I think what we’ve heard is that there’s a lot of stuff happening. It’s going to take time. This is a huge chunk of the economy, you don’t just change that overnight.

Unfortunately, we are out of time for questions, but I think we’re going to is to break now between panels. But thank you all very much.

SARAH DASH: Thank you again for the terrific panel. So we’re going to take a very short break just to let our panelists escape here and bring on the next panel. If you need to use the restroom, of course, go ahead, but this is just a quick transition. Thank you.