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 improve 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.
[00:00:35.700] Don Crane:
We have four physicians in the U.S. Senate, a good thing. And one of them is Senator Bill Cassidy, the senior Senator from Louisiana. Senator Cassidy is on the Senate Finance and Health Committees, both of which have jurisdiction over healthcare issues, putting him in the center of national healthcare debates. I sat down the other day with Senator Cassidy. I wanted to hear his thoughts on the Biden administration, healthcare policies, and the prospects for healthcare transformation in the U.S. now that we are nearing the end of the acute phase of the pandemic. This is our conversation. Take a listen.
[00:01:18.120] Don Crane:
Senator Cassidy, it’s a pleasure to have you with us today. How are you?
[00:01:22.080] Senator Cassidy:
I’m doing very well, thank you. How are you?
[00:01:24.330] Don Crane:
Fine, thank you. Fine, thank you. So, a little background. You are the United States Senator from Louisiana, now in your second term. You serve on the Finance Committee in the Senate, which is one of two committees of jurisdiction within the Senate, and sits as well on the Health, Education, Labor, and Pensions Committee, the second of the two committees of jurisdiction over healthcare matters. Very important for our listeners, I think, Senator Cassidy, you were a practicing gastroenterologist with a very impressive, I think, background in lots of things, but clearly also your work with vulnerable populations in Louisiana. The work you did in terms of setting up dental clinics, free clinics, and the vaccination programs, and hurricane relief. And it kind of goes on and on, all of really admirable background in terms of your attitude towards, I think, health disparities basically in vulnerable population issues, that are near and dear to us. And then finally, as I kind of go through an abbreviated bio here, most perhaps importantly, you really, having now spoken with you a few times, are one of the most knowledgeable members of Congress on healthcare issues. So, with that background, I just explain why I’m basically so excited to be able to talk with you today. So, with that, I’ll dive into some questions, if I may, and we’ll talk back and forth and see what we can learn. So, as you know, America’s Physician Groups is, as I’ve said, highly interested in the value movement. So, the movement from volume to value, away from fee-for-service to almost anything other than fee-for-service, but particularly risk contracting. And yes, a lot of our focus is on Medicare, but that focus applies actually equally to Medicaid and commercial and every program and product around, basically. So, I think my first question for you is, what is your general view of this value movement? Is this necessary? Indispensable? A dalliance? Bad idea? Good idea? What are your thoughts?
[00:03:32.250] Senator Cassidy:
I think it is essential. We’re only going to achieve our goal of quality, affordable healthcare for all if we align incentives. Now, by the way, there’s two ways to define affordable. You can make it affordable for the patient by making it free, but it quickly becomes unaffordable for society. So, affordable has a double entendre…that affordability for the patient, the affordability for society as a whole whose helping to pay those bills. Now, if you align the incentives in a value-based agreement in which you give agency to the patient and you emphasize the patient-physician relationship as a cornerstone, giving them both kind of the incentive both, you know, for the patient’s health and for their own personal finances, then you achieve it. Again, you lower cost, you have better outcomes as you deliver quality care. And the only way we get there is by assigning value to it, as I just described.
[00:04:42.360] Don Crane:
So, you know, this might be…take up, you know, ten volumes to answer. But what’s wrong with the current system now? What is it about fee-for-service that’s bad? What’s wrong with American healthcare, if I may ask very broadly?
[00:04:55.640] Senator Cassidy:
Well, it’s kind of cost plus contracting in the sense that the more you do, the more you get paid, or the greater the intensity of the services. Now, frankly, sometimes if my wife is in a terrible auto accident, I don’t want people skimping on her care when she’s brought to the trauma unit and they’re trying to save her life. We’re not speaking about that, but we are speaking about low-quality care in which marginal efficacy but contributes greatly to expense. Sometimes an example illustrates: I had a patient who had a health savings account. I was…my principal practice was hepatology or liver disease. And she calls me up and she goes, “My cardiologist ordered a liver scan on me”…because of, you know, I forget why she told me, “but I have a health savings account. I have to pay for that out of this. If I need it, I will pay it. But if I don’t need it, I’m not going to get it. And you’re my liver doctor.” And I said, “You don’t need it. Don’t get it. Save your money.” Contrast that with another person I spoke with and she goes…and she’s a woman of wealth…and she goes, “You know, I just don’t like to worry about bills. So, I just got an insurance policy that pays for everything. And if my doctor tells me to get it, I get it.” Now, frankly, the first patient will not only have a lower cost of care, but she’s going to be better off because we are not spending money unnecessarily and doing unnecessary procedures. The second one is going to cost the system a heck of a lot more. But she’s also at risk of getting a procedure which is not indicated that, in itself, endangers her health.
[00:06:40.080] Don Crane:
So, you know, my hat is off to you. How representative are your sensible views across the rest of, I’ll say the Senate, before I say Congress generally. In other words, how much support would you guess there is for basically the value movement? How well known is that? How well supported is that in the Senate?
[00:07:03.690] Senator Cassidy:
I think there is a lot of support for moving to value. Now, what that movement looks like differs sometimes according to party. The Affordable Care Act started accountable care organizations. That is a movement from volume to value, an incentive, if you will. Now, Democrats love it. Republicans looked at it and say, you know, OK. On the other hand, Medicare Advantage, which again moves from, you know, kind of unstructured fee-for-service into a more structured, value-based purchasing has saved a lot of money. It’s improved outcomes, relative to the unenrolled cohort. Republicans love it. Democrats are a little bit ho hum. So, people liked the concept, even if they prefer different flavors. I think what we need to have is people agnostic to the flavor and more kind of understanding that the concept can come in several flavors, and we don’t debate over the flavor except insofar as that we have hard data that one is better than the other in terms of improving outcomes while simultaneously controlling cost.
[00:08:22.190] Don Crane:
Very good. So, let’s shift our gaze to the Biden administration. You know, we’ve been watching with interest their health agenda as it’s kind of been formulated and communicated and so forth. And of course, we see this large emphasis on the expansion of coverage. And I think it’s fair to say that APG would like to see universal coverage, you know, achieved somehow. But we are a little concerned about the relative…I’ll use the word ‘relative’…absence of talk about the value movement. Now, that might change, but, you know, they continue, here we are already into June and there is a kind of continued examination of the existing pilot programs within CMMI and a fair amount of that’s understandable, so I don’t want to be overly critical. But indeed, you know, I don’t think it’s unfair to say that the primary focus is on expansion of coverage and the means that, as best I can tell, principally used is the increase of subsidies to get there. What are your thoughts on that sort of that kind of prioritization?
[00:09:33.620] Senator Cassidy:
I agree with your assessment. There was some demonstration projects, for example, around renal care that were all set up and ready to be kicked off and CMMI postponed them for a year. Now…and these demonstration projects had taken a lot of work…there was nothing partisan about them, but it was going to improve care for kidney patients and it’s been postponed for a year. I’m not quite sure why, except that it came out of the Trump administration, and I think they just did a word search. Trump canceled, Trump postponed, Trump whatever. So maybe a little harsh, but I’m a little frustrated by that because objectively, it was a good program. I also agree with your assessment there’s been a real emphasis upon expanding coverage and lowering the out-of-pocket exposure for someone for that coverage. But it’s interesting, if you think about it: under the Affordable Care Act, there was a recognition that if the patient, the patient who had over-subsidization of their healthcare tended also to be an over-user, and that overuse, aside from driving up costs, inevitably drives exposure to complications. And so, they had different secondary taxes, the so-called Cadillac Tax, which attempted to suppress the overall value of a policy, if you will, the over-subsidization of health insurance. Now, we’re in a situation where they’re trying to basically prevent anybody on the exchanges from having exposure to cost. It’s like they’re working against that which they originally tried to strive for in the Affordable Care Act, which is to have the proper balance of subsidy relative to coverage. So, I would argue that, again, they’ve been working not to have kind of systems of care, but rather expanded coverage, number one. And number two, they’re actually working against some of the more solid concepts of the Affordable Care Act that you shouldn’t over-subsidize.
[00:11:51.860] Don Crane:
So, you know, I kind of again…I’ll state it in another way. Are you worried that they’re taking the foot off the gas pedal behind the value movement? Is this…you sense there’s any permanence to this or is it only temporary? Should I not be as worried as I am? What would you counsel?
[00:12:09.590] Senator Cassidy:
I spoke to CMMI regarding specifically the renal demonstration project, and they said we’ve only delayed it. It will kick off. So, I have to take them at their word. If they delay it again, I’ll be very frustrated. We don’t…renal failure patients on dialysis have very poor outcomes. And it’s easy to imagine how a more structured care environment could lead to better outcomes. So, time will tell, and I hope time tells that they actually will continue the emphasis upon this as opposed to it was a passing fancy.
[00:13:19.700] Don Crane:
Let’s shift to the subject that we unfortunately must talk about, and that is the pandemic. I think we’re 15 months into it now. I happen to be in Los Angeles as we speak. And, of course, the circumstances are different geographically and state to state and county and county across the country. But it seems that it’s fair to say that we’re moving out of the acute phase and perhaps on our way out of the tunnel where there’s light at the end of it and looking pretty good in some areas. But it’s also yielded all kinds of lessons. So, I think it’s actually dramatically highlighted the issue of health disparities with vulnerable populations. It’s highlighted the weakness of fee-for-service that nearly evaporated for a time, nearly bankrupting physicians, which, you know, then impaired access at a time when patients most needed their physicians, they weren’t available, et cetera, et cetera. So, have you had a chance to think about these lessons and have you made recommendations to your peers on the Senate Finance and so forth as to what we do in the wake of this pandemic, hopefully being smarter and wiser for these lessons?
[00:14:34.890] Senator Cassidy:
My gosh, how much time do you have?
[00:14:40.020] Don Crane:
As much as you want, Senator. I know you guys have talked a lot about telehealth, for example, and that’s indeed one of the most interesting ones that’s really stood out. And so, you know, your view about making the payment for telehealth permanent, I’d be interested in that. I’d actually like to know what you think about how we pay for telehealth. The same amount, a lesser amount, how does it fit into a capitated model? I think it was forty-three questions now, I know, but anyway…but I love hearing you talk and just, you could start with, generally, what have we learned from the pandemic?
[00:15:14.220] Senator Cassidy:
Well, we’ve learned that our supply chain and our pandemic response was found wanting, in the sense that the strategic national stockpile had material which was outdated, are outmoded, and there is no just-in-time sort of first-in-first-out type of system. It just wasn’t. So, we need to upgrade that. Secondly, we learned as regards logistical supply chain that there’s a potential that we’re overexposed to Asia when it comes to some of our supply chains. So, when even though 3M was making the mask in China, when China needed the N95, they instituted force majeure and embargoed the export of 3M Masks from China to the United States. So, we have a vulnerability there. There is a question of whether we should nearshore or re-shore some of these industries, and we can go into that separately. Next, we did learn that telemedicine and tele-mental-health can be effective. I do think that will be a sea change. Think about the adolescent child, the adolescent with mental health issues in rural USA. Right now, she does not really have access to an adolescent psychiatrist. It’s possible that tele-mental-health would bring her access that she currently has not had. So, I do think that’s going to be a sea change. Doesn’t work for everybody. Like I say, you can’t get your prostate examined by telehealth, last I checked. But you certainly can look at an autistic child and see how the child is interacting with his or her environment in a way which is probably more…a better exam than if you have the parent drive the child through traffic to come to a strange place and see a strange doctor. So, in some places, telehealth is clearly far superior than what we had beforehand. How we pay for that, I think depends. You can imagine the cost basis for telehealth is lower. OK, I’m a doctor. Two days a week I’m in the clinic, but one day a week I’m in my closet. And yes, I got to do an EHR, but it’s electronic health record, I don’t even need anybody to file it. So, I think the cost basis needs to be worked out. We’ll see how that goes. I think that there’s going to be more emphasis upon some things which clearly predispose to ill health. We always knew it, but COVID dramatized it. Obesity, for example. Those who are obese had a far greater risk of dying if infected with COVID. Now, by the way, we always knew they have more likelihood of dying from strokes, heart attacks, more likely to have gallstones. We’re looking at diabetes, renal failure, you name it. But I think it’s kind of captured the American people’s imagination that we’ve got these underlying chronic diseases that predispose to a higher death rate from COVID. I think that’s going to be a big change. Speaking to people in nursing homes, for the geriatricians: my nursing home providers tell me that there is a real reluctance to bring folks to live in nursing homes because of the death rate in some nursing homes for those who live there. That’s going to be quite something. You know, I could go on, but I think the implications of this are just going to continue to spin out.
[00:19:09.210] Don Crane:
So, of course, I totally agree. I have my eye on the Medicare trust funds. And so, I think we’re hearing that some of the projections are that the Part A fund will be insolvent in 2024. So you know, the kind of…the concern about affordability and costs to the U.S. government has always been present, but never quite as acute as it is now. I worry that there isn’t sufficient sense of urgency in, I’ll just say, Congress. And that, you know, here we have these lessons. We think we know more about how to deliver care better. We know how to pay for it in a smarter way. We know really the implications of chronic disease now that they’ve been exacerbated by COVID, as you mentioned, particularly obesity. You know, I’m watching the newspaper every morning and I’m not seeing any particular action. Do you have a concern about the level of urgency that’s being felt in Washington, DC, I’ll say generally?
[00:20:12.000] Senator Cassidy:
I have a tremendous concern, you know, both about the Medicare trust fund going bankrupt, but also about the lack of urgency. So first, let me speak to everybody listening to this podcast. We live in a representative democracy. You have the ability to educate your Congresswoman, Congressman, or Senator to get them engaged on this issue. Just to be clear, by law…now we may supersede the law…but by law, when the trust fund goes bankrupt, it then becomes pay-as-you-go. So, a provider’s reimbursement should only reflect the amount entering the trust fund at any one time. It’s projected that reimbursement would fall to 80 percent of what it currently is. Now most folks feel like Medicare just kind of pays the bills without much extra. Imagine only getting 80 percent of that. So, it is a big issue. My own team, we’re working very hard on this. By the way, not just the Part A portion, but also the B and D portions. It may be that we end up bailing out the trust fund from the general fund, but if we do that, that’s just going to exacerbate the overall indebtedness of our nation. We’re going to have this issue at least through the mid-30s, 2030s, because Baby boomers are becoming eligible for Medicare at a rate of 10,000 per day. And we only start having a decrease in the population of baby boomers on Medicare around the mid-30s, I think 2036, someone told me, that may not be quite right. So, we’ve got that. We got to tie it off for the next 15 years and figure out how to handle this.
[00:21:56.620] Don Crane:
I think we need to clone you, Senator. You’re so in tune with these issues. It’s really refreshing to hear you say these things. I’ll conclude in a final area that’s of interest to us, and I think you, as well. And that is really health disparity. So, the pandemic really made utterly visible that which we knew existed for a long time to communities of color and so forth, had much higher rates of COVID, higher rates of hospitalization, higher mortality, morbidity, all across the board. And so, there is now, I think, welcome high-level of focus on disparities of all sorts, higher focus on social determinants of health, slightly different subject, but very much related. What are your views on that subject?
[00:22:45.580] Senator Cassidy:
So, one, we got to address them. If we don’t address them, we’re never going to get a handle on healthcare costs. And let’s make it more particular, because sometimes it’s easier to go to the particular and then extrapolate back out. Let’s look at dual-eligibles. That group of patients who are eligible both for Medicare because of age or disability, and Medicaid because of poverty or coexisting conditions. Our society spends an incredible amount of money on dual-eligibles and gets really lousy outcomes. Now, the duals, they’re dual-eligible typically because they’ve got some major morbidity, a serious mental illness, for example…and, the metabolic syndrome we spoke of earlier. And disproportionately, it’s going to be people who I mean, it’s going to by almost by definition, it’s the impoverished. So certainly, we have a disparity among the wealthier and the less wealthy. We really need…this is where I think value-based purchasing and moving away from uncoordinated fee-for-service while simultaneously addressing determinates…social determinants of disease is the only path forward. They’re too complex to just allow them to ricochet between providers hoping to get a phone call because they happen to tell you they saw someone across town. It needs to be coordinated care with social workers, maybe folks who are, you know, you name the issue because again, the social determinants that have some specialized system of looking at what they do. Now, these are patients that we may pay $90,000 dollars a year to care for, on average. So, we can really do this, improve outcomes, lower costs. One more example. Just again, to give a more specific example. There’s a way to do this, but you got to kind of jump through hoops in Medicare. But imagine the patient who has COPD without air conditioning, living in a dusty, hot city. I used to live in Los Angeles, so I imagine it’s there. Opening the windows for ventilation, going into bronchospasm and popping in and out of emergency rooms because of their bronchospasm, because they don’t have an A/C. Wouldn’t it be great if you could buy them an air conditioner, a unit, window unit? You know, boom, now they can keep the doors, the windows shut and stay at home? There’s ways to address this, but we’ve got to be, you know, wise how we do it.
[00:25:26.030] Don Crane:
So, you know, it’s interesting you mention that example. It’s been kicked around a lot. So, I could be a little off on the facts, but that’s CareMore. That’s one of APG’s members that did this a number of years ago. They noticed the spike in ER visits from their COPD patients. It was 115 degrees outside, and some smart physicians said, go to Sears. They bought 15 air conditioners and put them in the back of a pickup truck and they installed them and they saved the organization, you know, I don’t know how many tens of thousands of dollars. But the example is really important because there you have a social determinant kind of a situation where poverty doesn’t allow for a kind of air conditioning and, you know, an intervention other than, you know, a scalpel or a pill, is the thing necessary to produce better outcome and better health. And so, that model has been demonstrated, I think, over and over. And, you know, you can tell I’m an impatient sort of fellow, so I would, I think I’ll let you go but with one final question. Anything you would recommend to my listeners that we do or we do differently in order to advance this agenda that it sounds like you and we jointly share?
[00:26:41.120] Senator Cassidy:
Yeah. So, anybody listening to this podcast knows a heck of a lot about health care. So, the first thing you do, if you go to speak to a Senator or Representative, somebody in your state legislature, is figure out how to talk in a way in which you don’t immediately lose them. And it has to be a one-liner, if you will. This is a way that’s how would you say this value-based purchasing…right now, we spent a lot of money and we get poor outcomes. Value-based purchasing is about getting better outcomes by spending less money. You know, and then maybe give another example that someone can relate to. You wouldn’t take your transmission to this mechanic and the carburetor to that mechanic and the pistons to another mechanic. You’d bring them to one mechanic and ask one mechanic to bring in somebody extra if he needed them, but to otherwise coordinate the repair of your car. Why don’t we do that with our healthcare? Something that people can relate to because you and I can start speaking and people are not going to understand us, Don. And if we don’t…if we just lose them and if we lose them, then we lose our ability to affect behavior. So, get that one-liner down, make a real effort to educate your legislators. And then, by the way, talk to them about Medicare going bankrupt.
[00:28:08.750] Don Crane:
Senator, that’s very good advice. We’ll do that very thing. And we’ll look forward to working with you and seeing you in the near future, I hope. And in the meantime, please stay well. Thank you for all of your good work.
[00:28:20.450] Senator Cassidy:
Thank you very much, Don. Appreciate it, buddy.
[00:28:22.130] Don Crane:
OK, take care.
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