Centers for Medicare and Medicaid Services Administrator Seema Verma and Health Evolution CEO Julie Murchinson took to the stage at the last Health Evolution Summit for a wide-ranging conversation about a number of today’s most pressing topics.
In this first of a three-part Health Evolution Interview series, they discussed Verma’s life prior to CMS, her biggest surprise when joining the agency, how she manages to lead substantive and sweeping changes while the White House and others are working to repeal the Affordable Care Act, and efforts to unleash innovation and the power of consumers.
Murchinson: We’re thrilled to have you here. And I want to start with just the personal you. You’re near the top of the most influential list in the industry. So where do you come from? What’s your journey so far?
Verma: I started my career working on the front lines in a public hospital. That shaped a lot of my thinking about health care because you’re seeing government run programs, you’re seeing the quest of a public hospital trying to be innovative, trying to compete with private players and you’re also seeing patients, very vulnerable patients, and the difficulties and the issues that they face. So it was a great experience for me because it was looking at the health care system from a lot of different vantage points.
Then I went on to work with states and helped them craft policies and innovative ideas. In my work as a consultant, when I ran my own consulting business, the great part about that was being able to work with all different parts of the health care sector. Not only working on the state government side, but hospital systems, the private sector or technology firms. Some of the neat things that I got to do as a consultant were designing health care programs and also working all the way through implementation. Getting legislation passed, working with CMS on waivers, and actually sitting there with the IT vendors discussing exactly how this was going to work from an operational perspective.
Murchinson: Once you got to CMS, then, what was the biggest surprise?
Verma: When I first came to CMS, people said “these programs are so big.” I had one person say to me “it doesn’t even make sense.” We were very short staffed in the beginning, and so I essentially was clearing everything across the whole agency. So I’ve gotten to work with everyone.
For me, it makes a lot of sense that the agency is structured the way that it is between Medicaid and Medicare and the exchanges and also now with CMMI. We are running programs that have the same problems and the same issues and they’re all rooted in how we address health care costs. If we’re solving that, we’re helping Medicare, Medicaid and the exchanges. The challenge of the agency now is not only running these programs but, because they’re so large, we have an impact on the entire health care system.
Murchinson: So the magnitude of CMS is one thing. When you get into where we’re headed toward spending approaching $3 trillion, I hear you’re adding 10,000 members a day, the drum beat around Medicare for All is really rising. So talk a little bit about the trajectory and what you’re doing …
Verma: So you’re right, it’s 10,000 every single day. The other challenge that we have is people are living longer. If we look at the number of people that are 85, that number is almost going to double by 2050. So it’s people living longer and more people are on the program as their needs change. That’s not sustainable. The implications for the country in terms of our role in the entire world is impacted by that. So if we look at what we’re doing at the agency, everything is sort of centered around how we make care more affordable, more accessible, and make sure that we have high quality care.
That’s nothing new. We’ve been hearing that for many years. I think our approach has been a little bit different. One area that we’re really focusing on is empowering patients. For years we’ve been regulating everybody, hospitals, doctors, pharmaceutical companies. We really haven’t unleashed the power of the consumer in healthcare. So we’re doing a lot of work around that.
The second area is unleashing competition. When you have competition, you are creating basically the ambition for providing more low-cost quality care. Without competition there’s no incentive around innovation.
The other piece is focusing on how we unleash innovation across the whole system. It starts with simple things like making sure once the FDA approves a device or medication, that we’re doing a good job of making sure that it is accessible to our patients.
We’re working on those issues. This is an area that I think isn’t very sexy, but it’s regulatory relief.
Murchison: With Medicaid and job requirements you’ve been a hot button. But I’ve watched you take what you did in Indiana and take a different approach at CMS to state reform and how you think about enabling waivers and enabling different relationships between the federal government and states. Can you talk a little bit about what that looks like?
Verma: Before I came to CMS I negotiated between states and CMS. What I learned going from state to state is that states are the laboratories of innovation coming up with great ideas. They know what’s going to work best in their health system. Every health care delivery system is a little bit different. The issues in Montana are very different than the issues in New York City or New York state. So you can’t have a one size fits all approach with states paying for these programs. In the Medicaid expansion population it’s only 10 percent but in a lot of the other areas of the program they’re paying sometimes up to half. Yet in terms of decision making, they really don’t have any control in the program. It’s a very ‘mother may I?’ system where they’re basically asking us to approve routine changes. It’s almost a cultural change.
We want to be able to say ‘we’re here to get you where you want to go’ as opposed to being a barrier to innovation.
In terms of work requirements, what I will say on that is we are responding to state requests. There are states saying ‘we want to help the people living in our state rise out of poverty and find a pathway out’. Anybody that’s worked in Medicaid knows that a lot of those individuals, they don’t want to be there. People don’t want to receive government assistance. They want to be independent. They need help and they need more than an insurance card. Having a job and having the dignity of work could have a very positive impact on health outcomes. So I think the whole notion of waivers is around experimentation, testing innovative ideas. We need to try to do things differently. We need to try to end poverty and try different techniques and to not allow innovation, I think, is a tremendous disservice to the people that we serve.
Murchinson: Can you share how you’re managing CMS, given Trump’s intention to eliminate the ACA?
Verma: First of all, it’s our job to implement the law so that’s what we’re doing. I think it’s really born out of concern that things aren’t working the way that they should. I agree that we have provided coverage to people that can’t afford coverage and that’s a good thing. But we also have tremendous problems where premiums have gone up by over 100 percent. And I can’t think of a single thing that I buy that has gone up over 100 percent. We’re seeing a lack of competition in markets where even the year before 50 percent of counties only had one choice of health care plan. We’re seeing millions of people that have left the exchanges that are not subsidized and can’t afford anything. So there are still many challenges that remain. What we’ve tried to do is figure out how can we stabilize the market. Unfortunately, without Congress’s help, there’s not a lot that we can do, but we’re trying to figure out what we can do to stabilize. This year for the first time rates were actually lower, there wasn’t a double digit rate increase and, in fact, we actually saw a decrease.
Check back on the Health Evolution website for parts 2 and 3 of our interview with Administrator Verma. The next Health Evolution Summit takes place April 1-3, 2020 in Laguna Niguel, California.