INTRO:
I am Ruth Katz, co-Director of Aspen Ideas Health and Executive Director of the Health Men Society Program here at the Aspen Institute. I'm delighted to welcome you to another Aspen Ideas Health 2020 virtual event. While the Covid Pandemic has prevented us from gathering in person, we are delighted to be able to continue to host informative and inspiring conversations with leading health practitioners, advocates, artists, scientists, innovators, and policymakers, and we couldn't be more excited about today's program. A conversation with Seema Verma, administrator of the Centers for Medicare and Medicaid, known as CMS, an agency within the Department of Health and Human Services. As CMS Administrator, CMA Verma oversees a $1 trillion budget, representing 25% of the total federal budget administers health coverage programs for more than 140 Americans, and oversees the quality and safety of all hospitals participating in Medicare. A huge portfolio. Indeed, Seema will be in conversation with Alan Weill, editor-in-Chief of Health Affairs, a leading American health policy journal.
Previously, Alan was executive director of the National Academy for State Health Policy and held a cabinet position as executive director of the Colorado Department of Healthcare Policy and financing the State's Medicaid Agency. Alan's a good friend of the Aspen Institute. He also serves as director of the Aspen Health Strategy Group by former HHS secretaries, Kathleen Sebelius and Tommy Thompson. With that, thank you both for taking time from your incredibly busy schedules to join us for what undoubtedly will be a very interesting discussion. And of course, thanks again to all of you in the audience for joining us today. We look forward to seeing you soon for our next Aspen Ideas Health event. With that, Alan, the Aspen stage is all yours. Thank you again both.
Thank you Ruth Seema, it's great to have a chance to talk with you. We don't have a lot of time, so I'm going to jump right in. More than 60 million Americans rely on the Medicare program. I'm curious what you view as the biggest challenges confronting that program and what you've done during your tenure to try to address those.
Seema
Well, thanks for having me today, Alan. It's great to be with you. So when it comes to Medicare, I think we've been delivering on the promise that the President make to always protect the Medicare program. But if we look at not just the Medicare program, but the Medicaid program and really health insurance for Americans and the uninsured, the big issue that we face in our country is the cost of healthcare. We have one of the best healthcare systems in the entire world. Obviously that's evidenced with the great progress that our providers have made around Covid treatments. But the issue in our healthcare system is around affordability. And so when I look at Medicare and Medicaid, what we're trying to do across the board is make healthcare more affordable. Because when it's more affordable, then it's accessible to every single American in the country, and that's important for the sustainability of the Medicare program of Medicaid and all of the programs that we have.
If we can make healthcare more affordable, then we assure that these programs are sustainable over the long term and that we are delivering high quality care. Seniors have paid into this program their entire lives and they deserve high quality care. From our perspective, we've been working on a range of policies that are focused on lowering the cost of healthcare. That's why you hear us talk about drug pricing. That's why you hear us talk about price, transparency, interoperability. We're trying to solve problems across the healthcare system that will not only help Medicare, but that will also have an outsized impact on the entire healthcare system. In Medicare in particular, I think our policies have worked. We're just about to start open enrollment, and we've had great news with President Trump's tenure. We've actually seen premiums go down on average of 34% in some areas of the country.
I was just looking at the data this morning, North Carolina, 44%, Michigan, over 50%. So seniors are actually seeing their premiums decline very significantly. And the same thing that we're seeing in the Part D program where premiums have gone down 12%. We're offering a new insulin program where seniors can get their insulin for $35 a month. What's also interesting here is while we have dropped premiums, we've actually increased the number of choices that seniors have. They have more choices of plans, and we're actually adding more benefits. We've given more flexibility to our health plans across the Medicare Advantage program, and they're offering things like home care, transportation, meal services, things that are going to keep seniors independent and keep them healthy. So the president's policies, I think in Medicare are working, and then we've done a lot to lower out-of-pocket expenses for our seniors. We've also just made some changes to make the Medicare program work better for our seniors. We have an initiative called emedicare, which is a lot of online tools, price transparency tools, updating the plan finders. So it just makes it easier for our seniors to compare between the traditional program and Medicare Advantage. They can look at the quality of the providers. They see we've updated all of our quality compare website, so it's just easier for our patients and our beneficiaries to make decisions about their healthcare.
So there's a broad consensus. I think that affordability is a key challenge for Americans under the Affordable Care Act, Medicare started a number of experiments designed to improve value, to put incentives for providers to deliver high quality care at a lower cost and to keep some of those savings if they were successful. The Trump administration has continued this tradition of experimentation. I just wonder if you could talk about your sense of what's working and not working at the experimentation level.
Seema
Well, I think that there's been broad consensus around the concept of value-based care. And what that means is that instead of paying doctors for every service that they do what we call a fee for service system to pay doctors and providers based on what they achieve, the outcomes that they produce, the quality metrics that they achieve, and actually setting some benchmarks or financial targets for them. And that's been sort of the premise of value-based care. I think that's enjoyed bipartisan support. What we've done at the agency is fix a lot of the programs that were geared towards value-based care. Fortunately, many of them were not working, and we saw that taxpayers were losing money. It wasn't a great return on investment. And so we've restructured a lot of those programs to provide more skin in the game for providers, and we're seeing great results there as well.
Our A CO program, which is a value-based program for hospitals as produced over a billion dollars in savings in just the past year. So we've had to restructure some of those programs, but I think that trying to move to a different system where we're paying providers based on what they achieve, the outcomes that they achieve. And then as part of that, we've also tried to push a lot of other reforms that are going to put patients back in the driver's seat of their healthcare. We're trying to push on price transparency, for example, and that goes alongside with value-based care. If patients have more information about price transparency and quality transparency, they're going to pick providers that are delivering better care and lower costs, and we want to create a competitive atmosphere where providers are competing for patients on the basis of cost and quality.
So as we learn, I think we would expect all of these programs to evolve. I do wonder, you gave the impression that there are things that failing and costing a lot of money, and I wondered what it is you've sort of dispensed with that you would've put in that category.
Seema
Sure. Well, I think one of the best examples of that is the A CO program. We were giving a lot of flexibility to providers waiving a lot of the Medicaid regulations and rules, and yet what we were seeing is that providers were taking advantage of those flexibilities, but a lot of them weren't saving any money and they were actually costing the money more, costing the whole system more money. And so we changed a lot of those rules. We required providers that were participating in the program to take on risk to have some skin in the game, and I think that's made all of the difference. We actually see now that they are delivering better outcomes, higher quality and lower cost for patients.
Let's turn to an important change you made quite recently in the wake of covid, which was expanding the availability of payment for telehealth. My question to you is, do you think this is a permanent shift, the growth that we've seen in telehealth? And if so, what are you doing in your seat to try to make it permanent? Or is this just something that will pass as people's willingness to go to a physician's office returns?
Seema
Well, lemme be very clear, and I think the president's been clear on this issue. We think that telehealth is very important. It's a tool in the toolbox for our providers and that this is something that should continue. When we look at our healthcare system, given where we are in terms of high costs issues with accessibility, we want to do everything we can to improve the healthcare system. And telehealth really offers and addresses several healthcare problems that we're having. So for example, accessibility. I mean, sometimes it's just hard to get to the doctor. You need healthcare services. In COVID in particular, it was a lifeline for many of our patients. They could receive care safely in their homes, and it was better for providers too because it allowed them to save personal protective equipment and they were still able to provide healthcare services effectively. Now, it's not going to replace inpatient or in-person care, but I think what it can do is it can solve a few problems.
And let me go through those. Number one, for mental health services, we know often that there's a lot of stigma associated with mental health services. And in our country, there's been a growing demand and need for these types of services. And so even though we've seen a lot of in-person services return, we're still seeing high rates of telehealth use for mental health services also across the country in rural areas in particular, but even in some urban areas, we know that there's difficulty accessing certain specialists and subspecialists. By allowing for telehealth, we can actually increase access to higher quality healthcare services if you're able to connect with a specialist. I think that can also save our money for the whole healthcare system down the line if we're able to provide timely care to patients. I also think that there's just a convenience factor for patients. It's just easier for them to get healthcare services.
They're going to take better healthcare or better care of themselves if it's just easier to get services. The other thing that we hear from providers is that, again, it doesn't replace inpatient or in-person services, but it also gives them a view into the patient's environment. I was talking to a pediatrician that treats special needs children, and he said, I was able to see the patient in their home, their environment. I was able to touch base with a lot of their caregivers that I would not necessarily see during a visit. So I think there's definitely a role for it, and why wouldn't we want to do everything we can to make healthcare more accessible and affordable for Americans across the country?
So those are great reasons to be in support of telehealth. Traditionally, payers have been nervous, and we've published some of the research on this, that remote visits can actually add costs that people, instead of not going to the doctor for something mild, will say, well, it's easy to pick up the phone or easy to get on a video chat. Or they'll start an interaction telephonically or over a video and it'll lead to an in-office visit. So there'll be two visits where there would've been one. So how do we overcome the concerns that this is actually going to drive up cost? It may be convenient and it may be great care, but payers, you started by saying, we're concerned about cost. How do we assure that that's not a barrier that gets in the way of sustaining these efforts?
Seema
Well, first of all, this is why I think the transition to value-based care where you're paying doctors for outcomes and you're not necessarily paying them for each and every service that they provide, but you're paying them in a lump sum. I think that also addresses the issue with any service that we provide. In the Medicare program, we always to be worried about fraud and abuse and over utilization. So we're going to be looking at how we pay and reimburse for telehealth, taking those things into consideration. I think those are certainly important issues, and I would say they're valid issues, but I think those are things that we can try to address. Those are things that we can overcome. It shouldn't be a reason to not offer telehealth services.
Let me turn to the other major program under your leadership, which is Medicaid. I know from your work before you came to this position, you've been a longstanding supporter of work requirements for Medicaid recipients. We've published a number of pieces in health affairs that suggest people don't always understand the requirements, may not be aware that they exist, and recently it didn't seem to show any effect on the level of work. And of course the economy's going through this major shift now with particularly low wage workers under pressure and higher unemployment rates. Just wonder if you're thinking about work requirements and the role they play in the future of Medicaid has changed at all in this environment or what it is you're looking for moving forward.
Seema
Sure. Alan, I'm not sure you characterize my views on this. Well, first of all, let me start at a high level with the Medicaid program. I mean, this is a program which is a lifeline for many people. Some of our most vulnerable population are working poor pregnant women, children, individuals living with disabilities. This program is also one of the number one budget items for states and for the people that rely on this program, it's important that we deliver high quality care that's accessible. So lemme start with that. What we have seen in the data is that the Medicaid quality hasn't always produced that. There's many great examples of what the Medicaid program has done. That being said, there's a lot of questions about the quality that it produces. From my standpoint, it's time for changes in the way we deal with the Medicaid program. And part of that is empowering states.
I think that states are on the front lines, they're running this program, they're closer to the people that we serve, and decisions shouldn't be made in Washington dc. They're funding this program significantly. And yet the federal government holds all the cards as making all the decisions about this very, very important program. And as you know, every state is different. Every delivery system is different. The people that are being served by the Medicaid program may look different in every state. So it's important that they're empowered to make decisions about their programs when it comes to work requirements or community engagement. I'm supportive of states making decisions about their programs, about deciding what's going to work best in their state. So we had a lot of states come to us, really over 20 states, a lot of interest in this program. To be very clear, this program was not geared at the traditional Medicaid program.
It was aimed at what we call working non-disabled individuals, people that are not dealing with acute healthcare issues or substance abuse people that folks felt were able to contribute to the community in some way, whether it was volunteer work or going to school. What I heard from governors across the country is that they wanted to do more than just hand out insurance cards. They wanted to help people rise out of poverty, help them be independent. Nobody wants to be dependent on a government program to be on the Medicaid program. They need help. They need help with their healthcare. And what we also saw in the data is that people that are engaged in work have better healthcare outcomes. We've known that for many years. And so as we talk about the social determinants of health, just giving somebody a Medicaid card isn't going to solve their problems. And many states wanted to experiment with community engagement requirements, and this required individuals to have some sort of minimum requirement about engaging in either looking for a job, volunteering or participating in some type of educational program. So at the end of the day, our country has struggled with poverty for so many years despite all of these programs. And so I support innovative efforts by governors that are trying to help people, trying to lift them out of poverty and find a path forward.
Okay. We pitched this as an opportunity for the audience to ask questions, and we don't have much time, but I do want to get a couple of those in before I know you have to go. One of the questions that's coming from the audience is the note that preventive care has really dropped during the pandemic, and that's quite concerning given the potential long-term benefits of prevention. So the question is, how do you in your role, think about a response to this so that we don't suffer terrible health effects down the road due to people not getting needed care?
Seema
Well, I think you're absolutely right. We have seen preventative services drop off not only for our Medicare population, but even for kids. This is something that I think could give rise to a second public health crisis if communities across the country don't start addressing this. In children in particular, we've seen that vaccinations have dropped off healthcare screenings that are routinely provided in schools, vision screenings, hearing screenings are just not getting done. And when it comes to kids, I think this is really important. I have my own personal experience where my son went through a routine vision screening when he was just four years old and they detected an abnormality and we were able to treat it, but had it gone undetected, he would've lost vision permanently in his eye, in that particular eye. So I can't stress enough how important it is that we're not only dealing with the immediate issues around covid and trying to reduce transmission and keep people safe, but we have to find a path forward to make sure that people are getting those preventative services.
In the Medicare program, we're starting to see a little bit of an increase, and rates are starting to get back to where they were before. But we know that millions of Americans are afraid to get healthcare services. And we're concerned because we're hearing from, let's say, oncologists that are saying, we're seeing people show up with very advanced cancer because they were afraid to come in. I think healthcare providers across the country are taking precautions. They have plans in place to make sure that when patients come in that they're safe, the doctors are safe and the patients are safe. And so really, I think this is just a call to action for communities across the country to come up with plans to ensure that children are getting the needed services that they're getting. And really every American is not forgoing essential preventative healthcare services.
Okay. Last question before you have to go. The programs you oversee reach the most vulnerable Americans, were anticipating at some point a vaccine for covid. What are you doing to prepare to make sure that the most vulnerable are the ones at the front of the line as the vaccine rolls out?
Seema
Well, we've already seen some of the recommendations from the advisory committees and the CDC that obviously we're going to be prioritizing those that are most at risk. And what comes top of mind for me is our nursing home residents. They've been hit particularly hard by this and our seniors just in general. One of the things that we're doing at CMS is that we want to make sure that people across the country have convenient places to go, that our providers across the country are ready to provide these immunizations that we're providing the appropriate reimbursement for administering these vaccines. And also just getting out the word, there's a lot of fear around vaccines. I think we've been very clear that any vaccine that comes out has to be safe and effective, and there's not going to be any shortcuts. Unfortunately. There's just been a lot of people trying to suggest that this vaccine isn't going to be safe. And unfortunately, I think that could have an impact on people's willingness to take the vaccine. But rest assured, there are no shortcuts when it comes to safety and efficacy for the American people around these vaccines.
Well, thank you for taking time out of what I know is an incredibly busy schedule to answer some of our questions and some of the audience's questions. Wish you the best of luck in the important responsibilities that you have. And once again, to the audience, thank you for watching Seema, a pleasure to talk to you. And that's it for today.
Seema
Thank you.
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