America’s healthcare system is almost unanimously viewed as being unaffordable, dysfunctional, and severely in need of transformation. APG President and CEO Don Crane talks with leading healthcare executives, physicians and other visionaries to explore solutions to lower costs and improving quality of care by accelerating the movement toward value-based care models and away from fee-for-service. Want to be inspired by our nation’s foremost thought leaders in healthcare? Then this show is for you. Here’s your host, Don Crane.
[00:00:35.640] Don Crane:
I had the good fortune of interviewing Ami Bera the other day. He is the United States Congressman from the 7th District of California. But Congressman Bera is truly unique. Unlike his colleagues in the House and colleagues in the Senate, he is, to my knowledge, the only physician in Congress that has actually personally managed the delivery of care in a capitated integrated physician group. He’s an internist and was a Medical Director for the Mercy Medical Group near Sacramento, California, now an APG member. So, as we urge Congress to accelerate the value movement, I thought that Ami’s insights would be particularly helpful. I think I was correct. Take a listen.
Congressman Bera, thank you so much for joining us today. Ami, if I may call you that, especially since we’re friends, I think if I may call you that, I will.
[00:01:37.360] Ami Bera:
Yeah, absolutely, Don.
[00:01:38.800] Don Crane:
Thank you. That’s great. And thank you for joining us. This is some important times and important things to talk about. So quickly, looking at your resume, most of our listeners know who you are and already admire you and your work. But ever so briefly, you’ve been a member of the U.S. House of Representatives since 2013. You’re the longest serving Indian American in Congress. You’re on the House Foreign Affairs Committee. You’re not on one of the committees of jurisdiction as in Ways and Means or Energy and Commerce, but you’re one of the founders of the Innovation Caucus, which is a collection of members focused on healthcare innovation. And what you are more than anything else, though, if I may be so bold, is the perhaps the most knowledgeable member of Congress on these issues of delivery model and delivery model reform, and payment models and care models. And the reason I say that, and this is where I need you to help me out a little bit, but my understanding is that you practiced medicine there outside of Sacramento for a considerable time for I think one of the two Dignity medical groups there…could have been Woodland, don’t recall. And for a time, you were a Medical Director there within that group, is that right, Ami?
[00:02:55.120] Ami Bera:
Yeah, I will go and fill in the gaps. I’m trained in general, internal medicine, did my residency in San Francisco, then moved up to the Sacramento area and joined what is now the Mercy Medical Group and was Medical Director of Care Management for the five Dignity’s. They were Mercy Hospitals back then, Dignity Hospitals now. I’m obviously very familiar with the group practice model, which I was a part of a heavily-penetrated managed care marketplace and did a lot there in terms of how we took on risk, how we manage our patients, setting up disease management programs, hospitalist programs, and then did the public health side of things as Chief Medical Officer for Sacramento County and then finished as the Associate Dean for Admissions at UC Davis. My wife would say, you can’t keep a job, can you?
[00:03:53.770] Don Crane:
Well, but thank you for filling in those gaps because you made the point far better than I could. You’ve got experience in this thing we call the risk model, as in capitation. And, you know, by virtue of all of these jobs that you bounced from bounce to bounce, you’ve also seen fee-for-service side by side with capitation. So, you’re knowledgeable and now not just to blow smoke, but I’ve got to say, when I think about the US Congress, I think there’s one physician senator in the Senate, maybe two now. And I can’t remember the precise number within the House, perhaps something on the order of 20. But I don’t think there’s any physician in all of Congress that has as much or as any or let’s say as much personal knowledge, hands-on experience with capitated delegated models. So, you are uniquely well qualified to talk with me today and almost singularly qualified. So, anyway, I’m excited at this opportunity. So, let me start with, you know, kind of a I think a threshold question, not the ultimate one, but so having experienced capitated delegated and perhaps side by side with fee-for-service, can you offer me your opinion as to which is superior? We’ll just start with that and then we’ll go from there. I mean, you’ve experienced them both. Which is better?
[00:05:16.060] Ami Bera:
You know, I think the model that provides higher quality and more cost-efficient care certainly is a capitated model.
[00:05:23.620] Don Crane:
So, here we are. We could conclude the call and go ahead and start the party. But this really starts off for the rest of the questions. So, you know, that’s the case. We’re convinced that’s the case, there’s been a lot of data that’s demonstrated that, but unfortunately, it doesn’t seem that the world yet knows that. So, why isn’t capitated delegated more mainstream? Why doesn’t, why is it not a more predominant part of our system? Do you have thoughts on that?
[00:05:53.320] Ami Bera:
Yeah, I do. And I think these are my opinions, but I think they’re my opinions based on my experience. If you go back to the 90s and, you know, when you look at what President Clinton was trying to do and certainly was going towards a more managed care…managed competition model of care, and you saw the politics that were at play now. I think that scared off a large portion of the country. Yet, here in California, we leaned into a lot of this risk and we figured out how to do it and how to do it well. I think, you know, if you were to talk to most of the California groups, certainly up in Sacramento where I’ve spent my professional career, we’d be happy to take on as much risk as possible because, you know, if you gave us the control over decision making and et cetera, we’re very confident we would make the right decisions. We would make the right investments, and we can deliver a higher quality product at a lower cost.
[00:07:01.890] Don Crane:
Well, so indeed, the Clinton administration, Hillary, in fact, made a run at then, I suppose you would call it managed care and a big an expansion of it. But it didn’t, of course, succeed then, but move forward in time. Affordable Care Act in 2010 gave birth to ACOs and then raced forward in time a little further to MACRA, which was, I think enacted in about 2015? 2015, I think. And, of course it created MIPS and the kind of pay for performance program within original Medicare and rewarded those that are groups that are moving into alternative payment models or APMs. So, the value movement between the ACA and MACRA, I mean I think it’s the case they gave birth in a big way to the value movement. And I think back to Sylvia Burwell, then the Secretary of HHS, created targets for the, you know, the proliferation and increased penetration of value-based models across the country. And so, looking at that, it is my impression that we have fallen short of her targets. And I think that is indeed the case. And so, I ask you, how do you think the value movement is going?
[00:08:16.860] Ami Bera:
You know, I think we ran into an administration in the last four years that really wasn’t doing a whole lot in this space. I think we lost some time there. But that said, within some of these alternative payment models, the value-based models, you know, looking at some of the ACOs and where we’ve had successes and, you know, some have been less than successful and I know some of your groups have been in this ACO marketplace. I think now’s the time for us to go back and look at what’s worked, what are the best practices and lessons learned, and then start, you know, as an original intent, was to start spreading and, you know, allowing more of those groups to take place again and spreading those best practices.
[00:09:05.970] Don Crane:
So, I think all of what you said, of course, resonates completely with me. I wish you were the Speaker of the House and the President at the same time, but you’re not. Where are your colleagues in Congress? Where is Congress writ large as a whole on doing just what you said, getting back into the question of how to best produce and promote value? Is Congress going to take that on? And I already have…I’m worried about the tea leaves. I’m saying, so where is Congress on this now?
[00:09:32.640] Ami Bera:
You know, the problem with Congress is when it comes to healthcare, we’ve lost a decade because of the politics. We haven’t actually been trying to solve things. So, I think the better question is, where’s the Biden administration going to be in this? And I think the Biden administration will actually lean into this. You know, as you start to see the HHS team take place. I think this is a place where, you know, look, I still think there’ll be fights of the past, but the Biden administration is going to have to lean in as they start to increase access to care. What you see in the American Rescue Plan, with the expanded subsidies, you’ll see many more patients coming into the healthcare system. I don’t know if folks lean into Medicaid expansion in some of the states that haven’t done it. But again, you almost get to universal coverage. But the big piece of this now is how do you better manage the cost of care? And I’ve always been a believer that, you know, where again, the more risk we can push over to the providers, to, you know, and especially places where you see a little bit more integration…in California, you see a lot of integration with the hospitals and the provider groups. In some places, you’ll see full integration with the health plan totally integrated. How do we encourage a little bit more of that? And again, put the decision making and the risk with those folks that are actually on the front line delivering the care. I think that CMS will actually be supportive of continuing to move in that value-based direction.
[00:11:22.890] Don Crane:
Boy, I hope so. You know, they’ve shelved a number of the pilots now. I think we expected them to curtail the number of pilots and demos, but we don’t know how many they’re going to curtail. And so, it’s still the jury is out on what CMS is going to do. We have another tea leaf for, though, to look at in terms of Congress. And so, you referred to the American Rescue Plan, if I got it right quickly and react to my observation there. So indeed, subsidies increased and improved to expand coverage. Unquestionably a good thing. We like to get to universal coverage somehow, but nothing there about cost, nothing about delivery model, nothing about payment model. And so, the worry I have, and I’d like your comment on it, is that we put more people into the system. But a system that’s not yet itself been repaired. It remains dysfunctional, et cetera, et cetera, et cetera. And I worry that we’re going to find ourselves a year or three or five downstream, you know, rejoicing in the fact that we’ve got far more people covered, but finding ourselves, you know, deeper or deeper in the hole in terms of the spend, you know, we’re at 18 percent of GDP now and we’ll be, who knows what. So, I worry that we’re got a leaky boat, that’s the metaphor I always use. And we haven’t fixed the leaks and we’ve put more people into it. Is that a reasonable observation now or am I inappropriately worried?
[00:12:53.090] Ami Bera:
No. I share your same concern. And that, you know, again, this is way too simplistic for the audience listening that the two big pieces that we have to solve when we’re looking at healthcare are both access and cost. And obviously, it’s a lot easier to solve the access piece but if you solve one without the other, then you really have created a bigger problem, as you already pointed out. And again, I think there’s going to be tremendous pressure to address the cost side of things. And that’s where the politics are always difficult. But the solutions are there and, yeah, I’ve always thought, again, I’m biased because I’m a Californian and have grown up in a managed care arena, that we’ve learned a lot based on our California experience. I just don’t know that we’ve shared enough of that with the rest of the country, so they don’t have to be afraid of taking on some of this risk. And that’s something that I thought we got to do a better job of taking what we’ve learned over the past two, three decades and sharing that with the rest of the country.
[00:14:06.960] Don Crane:
I couldn’t agree more. That, of course, is our job and we’re at APG and we’re trying our best. Among our problems is an absence or a paucity of data, right? You know, where do you get the data to prove the superiority? You’ve got to do it in kind of a comparative way. And it’s hard to get to and it differs from program to program. But, you know, we’ll be knocking on your door looking for your help in terms of, you know, proselytizing this model basically. So, as we look at the pressures on it, how big a pressure is the impending insolvency of the trust fund? So, we hear it’s going to go insolvent in 2024. Are they going to patch that in some way or is it really going to drive change? Does the deficit, going to be a big driver or what do you think?
[00:14:58.830] Ami Bera:
Certainly, I think there will be patches, there’ll be some smoke and mirrors, but I think it’ll be hard to fundamentally change what Medicare looks like. So, I think we will have to, you know, there are certain places where, you know, if we could solve the cost of pharmaceuticals, that could be a big reduction in stress on the trust fund. If we could better actively manage some of the higher cost patients or conditions, those 20 percent that drive 80 percent of the healthcare costs, I think that certainly could relieve some pressure. I think the more immediate political challenge, and this is within The Democratic Party is, I do think you’re going to see a renewed push to say, let’s go for a public option or a Medicare for All type option. And that looks good and sounds good on a bumper sticker, but in truth, when you start to ask some of the folks that are pushing that, it’s like, what are you talking about Medicare fee-for-service? Are you going to put all these new people in the trust fund that’s already stressed, or are you talking about a Medicare Advantage type proposition? I actually do think you might be able to build support if you did a gradual public option buy-in and on a Medicare Advantage type product. And I think you would get some, I think you’d get industry supporting that. I certainly think APG knows how to manage Medicare Advantage lives really well. And I think you can get some public support of slowly phasing something like that in as a potential public option. But I would separate that from your traditional Medicare because there are real issues that we have to address there as well.
[00:16:51.980] Don Crane:
Oh, I completely agree. I mean, I think for those of us sort of in the know or at least partially in the know, it’s laughable wouldn’t be the word…I want to be more respectful than that, but to create a Medicare for All where we just dump everybody into fee-for-service, Medicare is like, I’m kidding…I mean, the only way you would want to do that is that is if you figured it would be so bad, so fast, it would blow everything up and we would have to start all over.
[00:17:19.940] Ami Bera:
It would collapse the system.
[00:17:21.650] Don Crane:
Just collapse the system. I mean, that seems like bad policy and bad practice. But, you know, so interesting on the Medicare Advantage piece…so, they I think that a fair number of Democrats still, you know, are reluctant to overly privatize our healthcare system and throw more of it into the hands of private health plans, because for a variety of reasons…but I’ll tell you one concern I have on that, that I will run by you. Some of your distinguished predecessors on this podcast…a few pretty illustrious names…are of the opinion that the incumbents, a fancy word, basically, for health plans. And I think hospitals. They really don’t want to move into risk. They don’t want to capitate. They like fee-for-service just fine. They’re quiet about that. They may talk a bit of a game about value, but in terms of their actual walk, they’re very happy with fee-for-service and are not finding a compelling need to move away from it. And in point of fact, are kind of concerned that empowering physician groups might actually be somehow inimical to their self-interest. So, what is your perspective on that question? Do you think health plans are interested in moving into value or not? Do you think hospitals are interested in moving into value or not? Or are they barriers that we have to actually, you know, call that out and create teeth or mandates or really powerful incentives to get them to move to value?
[00:18:57.920] Ami Bera:
I’ll answer it this way. Look at their profit and loss statements or look at their balance sheets. They’re doing very well right now in the current fee-for-service environment. And they don’t…if you’re a health plan CEO, you don’t have a whole lot of incentive to want to change right now. You’re going to be reluctant to that change. And certainly, on the hospital side, pre-COVID, I think if you look at the hospital balance sheets, they’re probably still doing OK post-COVID. And I think…so, yes. I think you’ll find some barriers to changing and moving away from a fee-for-service system. That said, there’s as you’ve already pointed out, there’s tremendous pressure on us to figure something out on the cost side. I think a couple of things are going to happen. One, you’ve seen tremendous consolidation in the marketplace on the hospital and healthcare side. You know, you’re getting Judiciary and others looking at some of these monopolies that have been created in the tech sector. There’s also conversation to talk about that market consolidation that’s happening on the health plans and the hospital side and how that’s been a cost driver as well. And I think those are preliminary conversations, but I think they’re necessary conversations because I think once we understand the impact on cost of this market consolidation without necessarily adding any value to the end product, I don’t think it’s going to be a small amount. And hopefully that does give Congress the incentive to address these issues.
[00:20:40.950] Don Crane:
So, I agree. I mean, we have this interesting kind of conundrum or balancing issue. You know, we’ve asked physicians groups and hospitals to start working together in a team-based way, data driven way, systematic way in order to improve quality cost and so that they indeed have done. And so, some of that integration indeed has produced good results, lower cost, better care. But that same kind of aggregation creates market power. And so, we’ve invited them to get together in ACOs and other similar vehicles. And yet that aggregation creates market power, which then leads to sometimes perhaps monopolistic practices. And so, a balancing is going to need to be achieved on that. In your backyard, my backyard, is our friend Sutter, a really excellent system. And certainly, you know, they have paid a price in that lawsuit that our new Secretary of HHS filed against them for monopolistic practices and so forth. So, I mean, any thoughts on the Sutter settlement and Xavier Becerra and what we can expect from him going forward?
[00:21:58.560] Ami Bera:
Xavier is a friend so I don’t want to speculate too much. Look, I think his nomination was a little bit of a surprise for many of us, but I suspect that he probably does come into office and will look at what’s happening in the market, some of these issues of market consolidation, as he did here in the state of California. I don’t know exactly how that will play out, but, you know, I certainly think it’s on the radar screen.
[00:22:34.790] Don Crane:
Yeah, and as it probably should be, should have been, should be now, should be in the future. We always need, I think, a vibrant, you know, enforcement arm. It’s probably it’s the AG’s office, Department of Justice and trying to remember the other agency right now…it isn’t HHS actually that enforces, so it will be interesting to see how that plays out.
You’re listening to APG on American Healthcare. We’ll be right back after this message.
[00:23:05.030] Don Crane:
I want to thank the TDC Group, the exclusive sponsor of the APG on American Healthcare podcast. The TDC Group is the nation’s largest physician owned provider of insurance risk management in healthcare practice improvement solutions. Visit TDC Group dot com to learn more.
We’re back with more from APG on American Healthcare. Once again, here’s your host, APG President and CEO Don Crane.
[00:23:33.860] Don Crane:
So, one final area that is of interest to us, I think, and it’s the Better Care Plan. So, as people have looked at the public option being discussed and I think perhaps promoted by the Biden administration, we’ll have to see how that plays out. But the argument that I think is being, you know, put forward is that let’s have a public option, but only if it’s capitation-exclusive. In other words, to have a public option and have just throw on another program out there that’s on a fee-for-service platform won’t advance our interests. But were the public option to be exclusively capitated with other value-based and quality kind of elements to it. Then in that event, we really might start moving the needle, create some competition where that model starts to perform better than other models. And maybe we really do start to, you know, transform the system in that kind of a sort of a holistic way. How would you react to a public option that was capitation exclusive?
[00:24:42.230] Ami Bera:
That would be music to my ears. So, you’re preaching to the choir right now. I think that is the direction that you would want to go. Any type of public option is going to meet a lot of resistance, but, you know, the existing traditional health plans, they shouldn’t be afraid of the competition. They feel like they can deliver a higher quality product at a lower cost, more power to them. I do think a purely capitated option and, again, whether that’s Medicare Advantage has you know, there has been some market manipulation in there as well on the plan side. But you could use a vehicle like that in a purely capitated format without the carve outs and everything else. And I think you could create a high quality, very competitively priced product that, again, I think your member groups would be very willing to engage with.
[00:25:44.760] Don Crane:
So, this very morning, I was looking at a tea leaf. It was a report, I think mostly based on speculation, but it was reported on the likely contents of the infrastructure bill that we’re about to see. And I’m told that the Speaker is using it as a vehicle to include a fair number of measures that might not directly address infrastructure, but need to get accomplished. So, it becomes a kind of a potpourri. And I didn’t see anything in there in terms of the value movement.
So, advise me, is there still, do you think, opportunity to influence that bill and get some of the kinds of things we’re talking about included? And if not, is this…can we still look forward in this first two years until the midterm elections and while there’s DDD in terms of House and Senate and Congress? Is it reasonable to hope for, you know, other healthcare reform legislation in the next couple of years?
[00:26:45.480] Ami Bera:
Yeah, I think there is. On the Jobs in Recovery Act…let me think about it in a couple of ways. I think there’s an immediate piece that would make sense and it would be hard for folks to sabotage politically because I do think there’ll be a push to do more broadband access, broadband infrastructure. As we write this bill I’m thinking through on the telehealth, telemedicine side. Can you drop something on top of that, that actually…there’s no one in Congress or no one in the know who really is going to argue that telehealth, telemedicine, audio visits shouldn’t be here to stay.
We all knew they were going to be super effective and the pandemic’s shown how useful it is in the delivery of healthcare. We’ve always had a problem with how do you pay for reimbursement? What does that look like? I would take this bill again, write it on the back of broadband it and access to healthcare and try to figure out the cost reimbursement side of it, put some funds in there to continue to build off of what I think will again raise quality and lower costs.
So, I think that’s one component. I do think the Speaker and others in our caucus may want to go bigger, broader, bolder on this. But I think there’s a danger if you try to push too much into this next Jobs and Recovery Act that really aren’t about infrastructure, aren’t about job creation, because I think that the politics will distract and say something that it isn’t. So, I think we have a little bit cautious. But the telehealth telemedicine one, I think you can very strongly make the case for riding on the back of broadband infrastructure, et cetera, and then making sure that there’s front end and end user access.
Secondly, I do think the value-based bundled payment space, I don’t know that you’ll see significant legislation, but I do know within the Healthcare Innovations Caucus we’re thinking about, okay, what would that look like if we were going to try to do something? Can you build something in a bipartisan way? You know, some of them might be seeing what you can do just working directly with CMS. As they come together, I think we’ll be reaching out to get a sense of how they’re thinking about that.
And then the last big item that it really is coming at us that a few of us, myself, Congressman Peters from San Diego and a few others have been thinking about is we’re seeing these remarkable advances in gene therapy, in oncology care. If gene therapy for sickle cell comes out at a time where, you know, our budgets are really stretched, these could break the bank and the public is going to want access. And I as a doctor are going to want to give them access to those medications.
But we’ve got to figure out how you pay for those and how you create risk-sharing models where there’s a high upfront cost that may pay for itself over…if it actually cures sickle cell, you’re going to get a big return on that investment by reduced costs on the back end. Government doesn’t do that pricing very well, but we’re thinking about what do those models look like? So, the doctors that you represent, Don, can have access to the therapies that they want.
You know, we have a mechanism by which to pay for them.
[00:30:35.070] Don Crane:
So, I find myself very seldom defending the pharma industry. But it is, I think, almost axiomatic that the right drug at the right time is the lowest cost intervention. I mean, it beats any surgery if it works. So, I’m with you. I mean, we’re definitely in the choir with you. So, Ami, this was really good advice. I’m going to come back down the hallway and knock on your door and talk further about what we can do to basically leverage off the learnings here from the pandemic when it comes to telehealth and the like. It seems like an auspicious time to, you know, capitalize on some of those learnings. And we have a receptive audience we know much better. We need…I think the appreciation for primary care has never been higher. Right? And actually, the understanding of this funny word called capitation has probably never been that higher. So, it seems like now is the time to strike while the iron is hot. So, we’re going to…we’re headed your direction, Ami. We’re going to keep looking for your advice and working with you as best we can on this and other subjects. So, I think we should probably wrap up, let you get on downstream to your next appointment. And thank you very, very, very much. Appreciate it. And we’ll do this again one of these days.
[00:31:55.700] Ami Bera:
You’re very welcome. I’m looking forward to that time where you can actually knock on my door and it’s not a virtual knock and we can sit down and talk through these things. That should be coming shortly, hopefully.
[00:32:06.640] Don Crane:
Yeah, I agree. Well, we’ll look forward to it. So, thanks, Ami. Take care. You be safe and stay well. OK?
[00:32:13.150] Ami Bera:
Thank you. Be well.
[00:32:14.980] Don Crane:
As you may have observed, our annual conference this year will now be held in person December 9th through December 11th at the Marriott Marquis San Diego Marina. Please save the date and be sure to register. It will be, to say the least, and extraordinarily welcome and refreshing chance to see each other in person once again. In the meantime, stay safe and be well.
Thanks for listening to APG on American Healthcare with your host, APG President and CEO Don Crane. For more information about APG and transcripts of this show, visit the APG website at APG dot org.