CAROLYN ENGELHARD: Welcome to The Medical Center Hour.
My name is Carolyn Engelhard.
I'm here representing Marcia Day Childress in the--
who is our usual moderator.
She is out of town, and I am fortunate enough
to be the lucky person to have the day-after election
Medical Center Hour.
I'd like to welcome you all here.
I'd like to give a special shout out
to all of my students and friends
and colleagues who showed up.
It's good to see everybody.
The title of today's program is Morning in America.
As you can see from your handout,
that is taken from a 1984 Ronald Reagan re-election
campaign, where they introduced the theme Morning in America,
promoting this image of the US as a hopeful nation moving
toward a better future.
I'm sure many of you sitting in your here today
wonder just exactly what our future will look like,
after last night.
And instead of me reading my little blurb to you,
which you are very capable at reading yourself,
I think that I will introduce you to our speakers,
so we can get the program going.
We are very, very fortunate today
to have two experts with us, who can
speak to national- and state-level health care policy.
Delegate David Toscano represents
Charlottesville and part of Albemarle County
in the Virginia General Assembly.
He is also the democratic leader in the House of Delegates.
There is no one who knows more, in Richmond,
about this topic than David.
I can tell you that for sure, because he and I are friends,
and we have worked together for many years.
Next, we have is Professor Rick Mayes, from the University
of Richmond.
Rick has a long history-- he's written extensively,
he's worked in the federal government,
he's an expert on Medicare.
He'll talk a little bit today, for all the docs in the room,
about how your Medicare payment will be changing in the future.
As well as, I've asked both gentlemen
to do somewhat of a debrief on the election.
It's been not even really 12 hours, so,
give us a little slack, here, as far
as knowing-- gazing into our crystal ball.
Professor Mayes will speak first, and then
Delegate Toscano, and then we will open up for questions.
I would like to also state that neither of our speakers
have any financial interest to declare, and I know many of you
are on-call and on-page.
If you would just put your phones on vibrate,
or keep them close to you, so we can
have as few interruptions as possible.
Thank you, and I'd like to present Professor Mayes.
RICK MAYES: All right, thank you, Carolyn.
I haven't had a day like this in a very long time.
But the last time I was this shocked, about an election,
was when I used to work for George H.W. Bush,
and we lost in 1992.
And it was-- nobody I knew voted for Bill Clinton.
I didn't know anyone outside my circles
who voted for Bill Clinton.
And I think it's a great reminder
to push ourselves outside of our normal comfort
zones, our normal circles of engagement,
read different sources of information,
because nobody saw this coming.
So, in 20 minutes, I'm going to trying
to touch on both the ACA, it's status now,
where it's going-- that's the first half.
And the second half, I had to change a few slides
this morning, to make this work.
But MAGRA is another acronym that physicians, especially,
are going to have to make their peace with in the coming years.
It's not going to change based on this election.
And so, it's still worth talking about.
So, this is the surreal part of our politics.
My former boss, by the admission, voted for this woman
to the right, who is married to the person who beat him.
And she still lost.
So, if you can make sense of that,
then you should be up here talking, instead of me.
How is the ACA doing, for as much longer it's
going to exist?
If people love the insurance regulation reforms--
they love getting rid of the preexisting condition
exclusions, lifetime limits on health insurance,
annual limits.
They like more community rating.
That stuff is very popular across the political spectrum.
Republicans like that, Democrats like that.
We have the lowest rate of uninsured population
we've ever had, since we've been recording.
So, in this sense the ACA has done fairly well so far.
Medicaid expansion I'm going to leave to Delegate Tosacano.
Here we are, down here, as you can
see-- we're in the different set of states
that didn't expand Medicaid.
So our rate of decrease doesn't match
the states that have decreased.
So, we're OK, in terms of our overall rate,
but we could've been better.
Is Medicaid-- is Virginia going to spend Medicaid, now?
I'll totally leave it to you.
I'm going to be hugely optimistic about that.
That's the good stuff, so far, about the ACA.
What has not gone as planned?
There are still a lot of people that,
even with the offer and subsidies and assistance,
can't afford the premiums.
And I think that's a big lesson that the nation has learned--
is that we tried to thread the needle of Medicaid expansion
for poor people, and subsidies for people
who are just above the poverty line, to buy private insurance.
And what we're finding is you have
to be fairly far above that poverty line for the health
insurance to be affordable.
And then, actually, once you get out of subsidy range,
you're back into the situation where health insurance
can be really expensive.
We're also finding that for some of these policies
to even be affordable, the networks
of providers-- clinicians and hospitals--
has been very narrow.
A lot more narrow than people thought.
And that's also made the plans somewhat unpopular,
because you have insurance, but you can't see the people
that you're familiar with.
And maybe a lot of you have seen the increase in deductibles.
I have a slide that showed how the average sized deductible
for a silver plan is $3,000-$4,000
for an individual.
And that's a lot of money to come up with,
before your insurance kicks in.
For some family plans, it's $10,000.
This is the news, I think also really
hurt Hillary Clinton was the average increase this year,
in health insurance premiums, 21% based on the state who
are in the huge range.
You can spend all day saying, well, it's
not what it used to be, and it would've
been higher without the ACA.
It doesn't make any difference.
That's a really high number.
At the same time, the number of insurers
in each county in the United States it's going down.
So, those are the trends going in the opposite direction
of what you want.
Having said that, also, some of the private insurers
are pulling out of different markets.
And I hope nobody here is losing sleep, at night,
about how those poor health insurance
companies are going to do.
But you might think, oh my gosh, they're
pulling out because they're losing money.
Those poor insurance companies.
Don't feel they bad for them.
I can give you 20 other things to worry about before that.
This is just their annual profits from last year.
This is after everything has been
paid-- taxes, depreciation, payroll, everything.
This is the amount of money health
insurers made in pure take-home profit last year.
And compared, to S&P 500 in the last three years,
they've done great.
In fact, this morning, they're the one sector
that has jumped up the most.
So, don't worry too much about the health insurance.
This slide doesn't work any more.
This slide was-- Bill Clinton was saying,
hey, there are some problems with the ACA,
and this is how we could fix it.
We could expand public option.
We could let people 55-64 buy-in to Medicare.
We could stiffen the penalties for people
who don't have health insurance, at the same time that we expand
subsidies to help them before that.
I think all of this is a moot point at this point.
You can even tell by his face.
He doesn't think there's anything more to this, either.
What are the prospects for bipartisan reform?
All right, this slide is actually
more relevant than when I made the presentation.
I don't see Harvey-- the only area of agreement
in surveys on health care, between Republicans
and Democrats and Trump, which is its own brand--
his own pharmaceutical prices-- that's
the only area you see unanimity-- in that,
there's something has to be done.
All of the other things I showed you in the slide before,
there's not a consensus on that.
So, I don't think the prospects are very good for this.
I think this slide, maybe, is the most important.
We get fixated on a lot of the personal part--
is Hillary popular, unpopular?
Is Trump offensive, and so forth.
And those things people debate.
I really think this is the slide that explains so much
of our politics, and why it's so hard for policies
like the Affordable Care Act to succeed.
And that's because over-- I was born in 1969-- so,
over these last 40-plus years, the middle class has really
been hollowed out.
It's much smaller than it used to be.
And the poor of our society-- the working
poor and abject poor-- have increased in proportion.
And what makes it even more complicated,
is the affluent have also increased.
So, it's really hard to have-- the ACA is a targeted plan
to help people who are uninsured primarily.
That's its main objective.
And to help people, down here, who are uninsured,
most of the financing has to come from up here.
That's one reason why the plan has never
been wildly successful, in contrast
to the things like social security and Medicare,
because everybody pays into those,
everybody benefits from those.
And, so, Republicans like this program,
Democrats like those programs.
But targeted programs are very vulnerable and susceptible.
And they're not nearly as popular.
Having said that, we've got to do something on health care,
because if you look at how much Medicare and Medicaid takes up
of the federal budget, it's the one thing in the future that's
really going to put a lot of pressure on our federal budget,
and take away spending on other things that we care about,
like education and investments in roads,
and infrastructure in the environment.
All right, I am a professor, so we have
to have one equation slide.
If you want to slow the rate of cost growth-- as complicated
as health care is-- and I've spent
my whole lot of trying to keep it in my head
and explain it to students.
And it is manifestly complicated.
If you want to slow the rate of health care cost growth,
there actually is-- it's not that
complicated-- there's only three levers you can pull up or down.
You can change the prices you pay for health care--
and these are always broken up by public pairs
and private pairs.
You can change the volume of care-- very tough to do.
Other countries-- this is what they do-- they limit,
they have queues to get hip replacements.
They do x-number of hip replacements each year,
then you have to roll over to the next year.
And that's how they control volume.
We don't do that in the United States.
And, then, the last thing you do is
you can just limit the number of people that do have access
to the health care system.
In the last couple years, this has gone up.
So, these are the only things that you can do.
This is-- my old boss in the Bush Administration--
a UVA alum from 1979, Tom Scully-- when
I wrote my first book on Medicare, he
had the most provocative quote that I led the book with,
because it was the most outrageous thing anybody
had said to me in the interview.
It's not outrageous anymore, and actually, I
think a lot of people have come around to it.
His whole argument was-- he ran CMS
at the time-- it's a fool's errand
to try to get prices just right, on all the CPT codes and DRGs
for hospitals.
You're always using two-year-old data.
It's a moving target you're trying to hit.
You're always behind.
The system's very easily gained by different groups
that have a stake in it.
And his argument was that we should just get all of that
and give every senior citizen a stipend to go out
and by private health insurance--
adjusted by the age and illness level--
and then just walk away.
And everybody was so aghast that he said that.
I think-- I think this is the future of Medicare.
And I think that's important, because how Medicare goes
and how it pays doctors and hospitals and providers
is how the rest of the health care system goes.
So, try this is it.
This is the next pivot to MACRA, which is the new payment
system for Medicare for physicians, starting in 2019.
And, if you aren't already depressed and overwhelmed,
this is where the talks going to take a darker turn.
As polarized as Congress has been, over the last few years,
this is the one thing Republican and Democrats agreed on, passed
in 2015, to completely revamp the way Medicare
pays physicians.
They're going to get rid of a lot of the traditional way
of trying to get just every individual price right.
And they're going to come up a new system--
I'm going to show it you-- about how to pay physicians.
And then the whole rest of the private sector
will follow suit.
And you know the writing is on the wall for fee for service.
And William Frist-- cardiac surgeon,
Republican, former senator majority leader-- co-authors
an article in New England Journal of Medicine, saying we
got to get away from fee for service.
That's when everybody should know the days are numbered.
The only reason why we haven't done it quicker
is we just don't have the technical know-how
to switch that quickly yet.
And the real thing to notice is that it's
going to start pushing a lot of the risk.
When you move away from fee for service
to bundled payments and capitation.
So a bundled payment is we're not
going to pay five different providers for one hip
replacement.
The health system's going to get one bundled payment,
and they'll divvy it out to all the different
anesthesiologists, diagnostic, the clinician-- they'll
parcel that out.
It's not going to be five separate bills.
That's going to put more pressure on the health care
system to bring those costs under control.
And then capitation is just full blown.
All the risk is shifted to UVA, or to any system that
takes on that patient's care for the year.
If you can bring to carry a hundred
under the amount you are given, you
get to keep that, or share the profit from that--
or share the savings.
If you the care for that individual goes over,
the health system's on the hook for that.
What we're looking for is that sweet spot.
How much risk to put on the providers, and then what level.
if you put too much risk on the individual physicians,
it's bad, for a lot of reasons we learned of the 1990s
with managed care.
So, we're trying to figure out-- do
you want to put it at the health system,
do you want to put it at a whole practice of physicians,
or do you want to put it down at the individual level.
We don't know yet-- which-- what place is the sweet spot.
OK, so this is the thing that went through.
Part of the Affordable Care Act was piloting and pioneering
new ways of paying providers to reward them for quality
and actually incentivized them to think more
practically upstream, and what prevention
do better care coordination give clinicians
more autonomy over the care and try to reduce their paperwork.
And this is the terrible acronym we're going to get.
Medicare's a new system.
Medicare accesses child health plan Authorization Act.
It's taken all these years of patching what we paid Medicare
physicians, each year, because the old formula, every year,
would've led to a decrease in what we pay physicians that
was politically unacceptable.
The problem's that, every year, that rolled over.
And we were at the point where if we didn't do this,
and we just let the formula run out,
there's going to be a 25% reduction of physician fees
next year.
And that was equally apocalyptic.
So, we have a new system.
And you guys are going to have two of the physicians, here,
are going to have either this model, which
I-- by the way, this is not in the legislation that I care.
Still going to care.
This is my interpretation of it.
Physicians will either have-- they
can go with MIPs-- merit-based incentive payment system--
or they can find an alternative payment
model, which I'll characterize for you in a second.
You're going to have to choose one of these two options,
as a physician.
If you don't choose, it'll be chosen for you.
This is the formula for determining
the merit increases in physician pay, from year to year.
And I would go to the detail for this for you,
but it's already-- the regulations
for it are already changing.
So, I don't want to do that.
But these are all-- this is the one that stands out,
because this one already impacts physician
reimbursement for Medicare.
And the paperwork is so onerous on this,
that a lot of physicians don't even bother reporting,
that they just a 1% hit.
Because it so detracts from the quality of their life,
they don't want to do it.
So, starting 2019, under MIPS, if you're a high merit based
physician, your pay goes up 4%.
But, if-- for whatever reason-- your outcomes
are deemed to be lower on there-- if you
can lose 4% on your reimbursement--
when it's fully phased in, in 2022, if you're a high merit
physician, you get a 9% increase.
If you're on a low merit physician, it goes down 9%.
Just the fear of this, and the fact that a lot of the
can't control how the merit score will actually play out
is pushing people.
First of all, also, you got to go to the biggest
practice you can get to.
Because, if you're a small practice,
all the requirements most that go along with this,
it's going to get very hard for you to actually come out ahead.
So, the carrot is to join a qualified plan--
an alternative payment model where-- if you don't even
know exactly, they haven't even released the exact details
of what qualifies for this.
I mean, we have passed legislation
that has to do the actual models have not been pilot tested,
which is very different than DRGs in the 19-- DRGs
have been pilot tested in Connecticut and New Jersey.
And William Hsiao, at Harvard, did the same thing
for physicians with the resource-based relative value
scale.
Those things have been pilot tested
before they went into effect.
These have not.
And this is still in play.
And, I think, in a sense, what is a qualified plan?
It is as big of plan as you can be,
that can take full risk for each patient.
And that's how they're going to qualify.
What is all this doing downstream
to the health care system?
What are the implications for health care in the United
States?
This trend's already happening.
This change in Medicare reimbursement
is driving this even faster.
The health system's getting as big as can possibly get.
And the small practices of 10 or less physicians
are going to be a very hard thing to sustain in the future.
So physicians are going to have two choices, in my estimation--
join a really large health system,
or join the largest single specialty group they
can find in their area.
And, in so doing, be being so good that you
have to have them in all the health care plans,
and so that they can handle all the risk.
And just the example-- if you ever
spend much time schools of public health, or health
administration-- like I have-- you
have to come to terms with this model.
Because there are-- this is like a religion.
If you believe in Kaiser, you think the whole country
should be Kaiser Permanente.
Staff Model-- they own everything.
It's vertically and horizontally integrated.
They have the outpatient, they have the skilled nursing
facilities, they have the pediatric clinics,
they have inpatient trauma centers.
They had everything under one roof.
And, so, they can take a bundled payment, or one sum,
and take care of all that patients care.
If you're enamored with this-- and a lot of people
are-- this is the model.
This is the future.
The downside of this is this is monolithic.
And this takes over whole regions.
And it can drive a lot of competition.
The fear for a lot of physicians and health systems
is you don't want to be down here in the future.
Right?
And I used to work at Blockbuster in college,
and I try to tell students of what is what like.
And they looked at me like, why would you ever work at a kiosk?
That makes no sense.
I always say, it didn't used to be a kiosk.
It used to be a place where you would go with a date,
and say, let's go find a movie, and walk around,
and all the films that you wanted to see were there.
But that was half of the point.
Kodak, BlackBerry, Pan Am-- these
are all great companies that just couldn't
adapt to the new model.
And, so, these are the entities that survived.
And the same thing's happening to health care.
An example is UMPC in Pittsburgh--
this is the monolithic health system in Pittsburgh
and all of western Pennsylvania.
They bought out every practice they need,
and they're now selling their own health insurance.
So, if you're going to buy it-- and by the way,
it's the cheapest in the area.
Because, as long as you willing to stay in the network of UPMC,
they'll sell you the cheapest insurance there is.
It's driving out all the United and Cignas and Aetnas.
And there's not much insurance left, which
means you have a monopoly left.
There's not much competition.
So, right now, the cost of insurance is affordable.
But, once they dominate the whole market,
we just have to ask them, please don't
exploit that market share.
And they're-- this is what's happening, now.
This is going to be impacted to dramatically by this election.
The Obama Administration was abusing the justice department
to push back on antitrust-- what they thought
were antitrust violations-- health insurers
and health systems getting to big
in certain regions, hospitals buying out
too many other hospitals for only one system left.
I don't know if they're going to be
that vigorous about antitrust enforcement moving forward.
I doubt it.
And then places like Boston Partners
runs the whole place until the attorney general
in Massachusetts said, no, you don't
get to have all of Cape Cod, because, every time you
go into a region-- and we look at the prices
after you've dominated, and before the prices always go up.
I'm from California, and in many of these towns
it's Kaiser or Sutter.
That's all there is.
And we're not that far from the Hampton Roads area,
where it's all Sentara.
And God bless Sentara, but they're not
satisfied just with the Hampton Roads
area, as you know in this town.
It's like "Lord of the Rings," we're moving across the valley.
And their buying up places like Martha Jefferson,
to expand their empire, there's going
to be like a battle between these large health care
systems.
And the last thing I want to comment, if I have time--
I don't know exactly how this is going to play out.
But once Medicare goes to full capitation of bundle payments
and all these value-based programs,
for the first time in all of health care,
I think the paradigm's going to flip.
And I think primary care physicians, for the first time,
are going to get the upper hand on specialists.
They've always been at the low end of the table,
because they've been outnumbered.
And all the annual updates and the specialists
always outnumbered them.
And, in the system of volume-based care,
the more RBRVS used, you could generate a specialist, more
money you brought to the system, the more valuable you were.
Under bundle payments and capitation,
the whole thing flips.
And, if you are good at keeping people out of the hospital--
keeping them healthy, avoiding re-admissions--
your stock's going to rise dramatically.
And, if you're a super sub-specialist
that doesn't do that kind of thing--
and that's not your forte-- you, now,
are going to cost the system a lot more.
So, I think, we've talked about this for years.
How do we incentivize a reward prevention and primary care?
I think with [INAUDIBLE] help-- Let the data do it.
Let people just do it for the right reason.
Most people you-- at the end of the day-- money
is what changes behavior.
And I think this shift in payment philosophy--
and just looking at the wrong numbers
at the end-- I think this is going to nurses,
the PAs, the primary care physicians, the people that
keep people out of the health care system--
that's Kaiser's secret-- is keep people out
of the hospital that shouldn't be in the hospital.
That's how they make their money.
I think that you're going to finally see
the primary care coalitions turn the tables on the specialists.
Not that there's a competition, but when
you've been kicked around for 30 years,
and you got small increases and you're always marginalized--
you can see what happened last night.
You can only kick people around so long, and then not
give them a fair shake, they're going
to come back at some point.
All right.
How much time do I have left?
You've got two and a 1/2 minutes.
All right!
You guys want to deal with US health care industry since 1970
in one slide.
DRGs was Medicare's first attempt
to start a [INAUDIBLE] hospital.
In cost growth [INAUDIBLE] five years away from the trust
funds from getting expired.
And that's a bundled payment for inpatient care,
and it was a big deal.
And it worked.
It worked, in the sense that a lot of places
just didn't actually lower their overall cost growth.
They shifted increased cost to private payers
to make up the difference for lower Medicare reimbursements.
That worked to keep Medicare solved,
but they then shifted to the RBRVS
for physicians-- that began in 1992--
to slow the rate of Medicare cost growth for physicians.
And that worked.
In fact, those two worked so well,
that all of those extra costs got shifted to private payers.
And that gave rise to for-profit health insurers,
who came up with very restrictive
capitated for-profit HMOs managed care.
That worked-- that was popular for five years,
until they started kicking out moms
after 24 hours-- after C-sections,
and they started rationing care in a very unpopular way.
And we realized that, eventually, that didn't work.
So we had kicked them out.
And, then, over the last decade, the cost kept going up.
And we finally got the-- we got the Affordable Care Act.
And all of this is a response to the system
trying to remain solvent.
The health care system is built on about 7%-9% increase
in revenues every year.
That's what providers need.
That's what higher schools and higher education need--
about 7%-9% growth.
If you want to understand the history of US health care,
someone's not getting that 7%-9%.
And that becomes a crisis, and then we
have to find a way to do it.
Now, we've squeezed all of those places we can squeeze.
And, now, we need-- we-- meaning the government-- feels
like it has been reached its limit of how
it can manipulate prices.
It's not going to touch volume, and it's
trying to increase the number of people covered.
So, the only thing left to do is to put all the risk back
on the providers, which is going to make
a very interesting decade to see how they can handle that.
If you want to read more about this,
this book just came out, literally, today.
Brand-new release by my colleague at Columbia.
And she's got a whole book on the history
of physician payments for-- by Medicare-- for physicians.
And I think the best medical writer
on the scene, Atul Gawande.
They have an article, called "Overkill,"
that explains this in more journalistic terms that
are easier to understand.
Thank you very much.
DAVID TOSCANO: Good afternoon.
Good afternoon, everyone.
Can you all hear me back there?
Great.
It's great to be here.
University It's great to hear the presentation
of the professor.
I'm just a small town country lawyer,
trying to do the best I can.
Why do you laugh at that?
That's pretty good.
So, I'm going to tell you a couple stories,
and then I'm going to put up some slides.
I was joking about how I almost through the whole slide
show presentation out the window, this morning,
in aftermath of what happened last night.
And I'm sure a lot of you stayed up late,
watching, and trying to figure out what it all means.
I'm the democratic leader in the Virginia House of Delegates,
and part of what I do is try to find good candidates who
will run for public office, and then
try to operate their campaign, so they can win.
So, Hillary Clinton has been beset by health care
from the very beginning.
You remember when she worked with Bill Clinton
to try to enact health care reform when he was president.
And, of course, she worked with Barack Obama.
And I think that Obamacare sort of got her again, last night.
But it happens to me, too.
And I'll tell you a story how that happened.
Back in 2013, we had a gubernatorial race.
And we had a whole bunch of people
running for House of Delegates.
A lot of problems in Washington DC.
And a lot of our candidates were doing very, very well.
And about two weeks out, from the election,
we had a series of polls.
And we were ahead in six of our contested delegate
races-- in our polls.
About two days later, what happens, but the unveiling
of healthcare.gov.
You remember the infamous website?
That crashed and burned.
And, with it, so did our candidates.
And we lost six of those races by a total of about 800 votes
total.
And if the election had gone on for another week, or 10 days,
Governor Terry McAuliffe would not be your governor.
That's how serious it was.
And, with the recent increases in premiums,
that kind of got to Hillary Clinton as well.
So, it's happened to me.
It happened to her.
It wasn't the only reason she lost,
but it certainly was one reason.
The other thing I might offer to you,
today, is you're probably asking yourself the question,
why is it that the stock values are
increasing among pharmaceuticals and insurance companies?
You would think that they would be going down-- that there's
so much uncertainty.
But I would submit to you that maybe the good bet
is that, if Obamacare is repealed, then
it's the market that takes over.
And, when that happens, you're not
going to see insurance companies be
constrained by the constraints and restraints of Obamacare.
And the pharmaceuticals are probably not going
to be restrained either.
So, they're making a bet.
And, so, we're going to see how this whole unfolds over time.
I don't know what to say about Donald Trump and antitrust.
Anybody can guess what Donald Trump will do,
because we really don't know very much what
he will do, in the federal arena,
to try to do something about health care costs.
You just can't let the market run amok,
or you're not going to be able to constrain costs.
So, you might see some antitrust stuff out of Trump.
Who knows?
He's so unpredictable.
He doesn't fit very easily into the conservative ideology
that says let the market work.
So, it will be interesting to see.
OK.
I got a clicker.
All right.
So, where do we go?
I thought a timeline might be useful.
When Obama came into the office, he had this idea
that he would work together, with Republicans,
to come up with some kind of health care insurance reform.
And he said to himself, look, the idea
of the individual mandate-- the idea that everybody ought
to be forced to play by buying insurance--
is a Republican idea.
And he said, oh, boy, at least I've got a Republican idea.
I can use that to build a coalition of Democrats
and Republicans to get something done.
Only problem, of course, is he had
Mitch McConnell in the Senate saying,
our primary goal is to make sure that Obama doesn't get anything
done throughout his term.
And, so, after a whole series of fits and starts,
Obama realized that he could not get health reform passed,
using Republicans as part of the coalition.
So, like anybody who recognizes the words of Stevie Wynwood,
in his great rock song, "When You See a Chance, Take It,"
Obama said, this was my chance.
I've got control of the House, I've
got a majority in the Senate, and I almost
have a filibuster proof majority in the Senate-- i.e.
60 votes.
So, I'm going to force it through,
because that's my only chance to get it done.
And, you know, the professor will tell us more
about this, but when Ted Kennedy--
a big proponent of health care reform--
dies, before Obama gets this passed, and Scott
Brown-- a Republican-- takes his place, now Obama's got
a problem.
And the problem is that there are no longer
60 Democrats in the Senate.
So, he does the thing that any good president
would do-- he uses a procedural trick, called reconciliation,
to get ACA passed.
That occurred, and he signed the bill March 23, 2010.
And we all know about a whole bunch of good things
that have happened with ACA, and a lot of people like.
We also note there have been a bunch of challenges to the law.
And now I'm going to use my handy clicker.
And you can look at these, and you
can review these, if you want.
It's a lawyer's delight-- probably
not something you guys are interested in-- but, for me, it
was a lot of fun to read.
Series of decisions that were made-- one of which
is very important for states.
And that was this one, here-- where the Supreme Court upheld
Obamacare, but said that we could not--
the feds could not force states to expand Medicaid.
That-- then it became an issue for states, as
to whether we want to expand.
A couple other dates, here-- February 2, 2016-- Republicans
vote for the 62nd time to repeal ACA.
Here's some data about insurance rates.
And, then, we had some increases in the rates on the exchanges.
Now, when January 1-- or January 20 or January 21--
rolls around, we're going to see what repeal and replace
actually looks like.
Because nobody knows.
They could repeal a law altogether.
And that would throw everything into a total tizzy,
because the health care system is very, very complex.
And this law has been operating for a long period of time,
and people have put together their whole lives
based on this law.
And if you just throw it out, without something in its place,
all hell breaks loose.
Now, Donald Trump has a problem.
Repeal and replace.
First of all, with what?
And, secondly, can you even do it?
Because Donald Trump has the House.
He has a majority in the Senate, I think,
unless I missed something late last night.
But he doesn't have a filibuster-proof Senate.
So, he would have to play fast and loose
with the procedures of the House and Senate
to get anything through related to changing the health care
law.
That may be good.
That may be bad.
He can play with the budget, however,
and there are all kinds of things that can be done.
So, we're going to find out what happens with that.
Now, where are we now?
We've got a lot more people insured than ever before,
but, in Virginia, we've got a million people on Medicaid.
Now, you know the difference between Medicare.
Medicare is the insurance policy for people like me,
who are of a certain age and can qualify.
It's provisions for providing medical insurance.
Medicaid is for really poor people, and people
who don't have as much money, who are old, disabled,
people that could be in nursing homes.
It's an expensive program and it's expensive program
for the state.
In Virginia, we've got more insured than ever before,
but we still have a big block of uninsured.
Medicaid is partly funded by the state
and partly funded by the feds.
In Virginia, we put a dollar in, the feds give us a dollar.
It's a 50-50 split in the cost of Medicaid.
If we had expanded Medicaid, we would
have had 100% of that expansion paid
for by the federal government.
Your tax dollars-- that are gone to Washington
and sit in the pot till they're sent out to Connecticut,
or go wherever they are, and not come back to Virginia.
We want to get that money back-- those of us who
supported Medicaid expansion.
And 100% of that expansion would be supported
by the federal government.
That, of course, drops over time-- to 97%, 95%, 90%.
But it's still more than 50%, which is what we get back, now,
from the federal government.
OK, who gets Medicaid?
It's poor people, the elderly, working parents.
The costs-- The cost of Medicaid has been rising in Virginia.
Virginia does a lot better than a lot of states,
but we still have some pretty hefty costs,
and that's what gets some people very worried.
They say, you've got to reform Medicaid first,
and then you could consider expanding it.
This shows you a pie chart of the difference in the budget
drivers for the state budget, over time.
So, you look over here, and you see--
where is it-- Medicaid-- 5.4% of the state general fund budget
in 1985-- 21% in 2016-- that is a huge increase.
That's what gives my Republican colleagues heartburn.
And that's one of the reasons they
don't like to think about expanding Medicaid.
Of course, the irony of this is that they've been
expanding Medicaid every year.
Every year, they put another group
of people in the pot-- usually they
are folks that have severe disabilities-- they
are very costly to maintain.
Last year, we put some folks that
had mental challenges-- mental health challenges--
and we're putting them in in the least efficient way possible.
We're expanding Medicaid in a traditional way.
We're not expanding it in terms of getting
100% paid for by the feds.
It's the most inefficient way possible.
They don't seem to realize that.
OK, this shows that most Medicaid-- the enrollment
in Medicaid is mostly kids.
But most of the costs is for long term care.
So, unless you start kicking people out
of nursing homes early, you're going to have a hard time.
We do-- we rank 48th in Medicaid spending per capita.
48Th.
And these are some of the people.
And we can go over those in detail later.
The long and short is my prognostication
for whether the state will take on Medicaid expansion
in this General Assembly session--
I don't think that's very likely.
Given what's happened with the Federal Election,
I think it's highly unlikely that anybody in Virginia
is going to be able to pass Medicaid expansion,
even though it makes a lot of financial sense from Virginia.
So, I think I'm done.
CAROLYN ENGELHARD: OK.
DAVID TOSCANO: Right?
And I want to open it up for questions.
And you can tell us what to think about the election,
as well.
So, thank you very much.
CAROLYN ENGELHARD: OK.
OK, great.
Thank you both very much.
We have a lot of time for questions,
which is unusual in the Medical Center Hour,
because we often don't.
And I know that you have a lot of questions for our speakers.
DAVID TOSCANO: And I got more slides, too,
if you ever want to see them.
CAROLYN ENGELHARD: I threatened them
with like an inch of their life, so that we'd have
plenty of time for questions.
So, who would like to start?
DAVID TOSCANO: We've got one right down here.
AUDIENCE: So, if Trump-- four years down the road--
has done things to the health care system,
what it will look like?
DAVID TOSCANO: Well, it's all speculation right now.
Because we really have never heard
him say exactly what he means by replacing Obamacare.
So, we don't have any idea ever what
it's going to look like down the-- I think
it is fair to say one thing.
You can agree with me-- I hope you agree with me--
it's not getting smaller.
The health care system is only getting bigger.
It's becoming a greater, greater part of our economy-- greater
impact.
And part of that is that we're getting older,
and, secondly, we're getting more demanding.
I think those two things are driving it.
I don't know if you might have other comments other than--
RICK MAYES: I'd agree-- he can't shrink the proportion of GDP
that's consumed by health care.
He doesn't have that power.
I think, if you want some solace,
he didn't-- and he jumped on the anti-Obamacare bandwagon--
because it helped him.
That wasn't his top five tirade throughout the campaign.
He voiced support for Medicare throughout the campaign.
There's loose talk that what he might do is-- he
and the Republicans might repeal the individual mandate
and subsidies-- shift to tax credits
to people to buy private health insurance, take Medicaid ship
it to a block grant to the states--
to let the states do what they want to do,
which would not be good for Medicaid expansion.
That makes it even harder, because if you
do that, it's a clever way to send less federal money
to the states and put more of the financial burden
on the states to pay for Medicaid.
And then the question would be-- would
some of the states that expanded-- would they
then change their mind?
Would any state then-- who are now 19 with us--
would they switch?
Not likely.
Not with financial burdens.
So, I don't think health care would look dramatically
different, but some of the progress that's
been achieved in the last five years
would definitely be pulled back.
[INTERPOSING VOICES]
RICK MAYES: If can add one more thing,
I always end that kind of comment to say,
I hope the people in charge are still open to reason.
Right?
If you find short-term ways to cut back
on spending on health care, people who are still sick still
fall through the cracks.
And they end up in places like this--
the ER is the ultimate safety net
in our country for everything.
And, so, if you don't pay for it up front,
we are all going to pay for it in the emergency room.
The costs will shifted back out through private insurance,
through dish payments from the federal government.
It doesn't go away, it just gets diluted out.
And we all end up paying for it.
So, it'd be so much better to get
people more access upstream-- and your from my class,
so you know this.
You have a test.
It sounds like it's a political ploy,
but the more people you get in the system,
it'll get them better access to primary care.
But my primary care doctor specialist.
CAROLYN ENGELHARD: Thanks.
We have a question up here.
RICK MAYES: It's good for the country.
AUDIENCE: How can we increase the size of Medicaid
in Virginia, when we know that we are already into a deficit
situation with the budget?
Why not try to collaborate with the private sector,
as opposed to-- for solutions and management-- as opposed
to getting it over to the govern-- which we know
makes a mess of everything they try to do?
DAVID TOSCANO: Well, good question.
I hear all the time.
A reasonable question.
First of all, Medicaid is not going away.
There is no doubt it's not going away.
There are a lot of people who you
are friends with who need Medicaid,
because they can't afford to pay for nursing home care.
Or, they need Medicaid, because their kids are
too poor to access health care.
And if they're too poor, and they're very sick,
they're going to need Medicaid.
Or they need to go to an emergency room--
like UVA-- which is a quasi-government entity.
So, if you want to take a position--
the government ought never be involved in the health care
system-- then you're leaving everybody-- your friends
and neighbors-- at total mercy of the marketplace,
and what their economic resources can provide to them.
The thing about Medicaid expansion
is that, in Virginia, what was proposed
was called Marketplace Virginia.
And other-- under that plan, money would come in,
and insurance would be provided through the private sector.
It wasn't government-run health care,
it was a subsidy that was going to go to private insurance
companies to provide the care.
The only one who's really advocated
for a government-run operation has been Bernie Sanders.
Now, Donald Trump, interestingly enough,
has taken a position-- which I think is fascinating--
that he has said, I want to provide health care
for everyone in America.
He said that on a number of occasions.
We don't know what that means.
It never really came up much in the campaign.
But we're going to see what it means,
because if you repeal Obamacare, and you replace it,
you got to replace it with something.
And we don't know that something is.
Even if it's tax credits for everyone,
do they have to use the tax credits to buy insurance?
And, if so, are they being forced
by the federal government to buy insurance?
So, there are a whole--
AUDIENCE: If we increase the entitlements federally
for the money you're suggesting that Trump promised--
we're up to $20 trillion in debt-- it's not sustainable.
DAVID TOSCANO: It's not sustainable.
You are-- you're absolutely right.
It is not sustainable without new revenues.
It is not sustainable without new revenues,
and I don't have the answer for you on that,
but I can tell you that if Donald Trump wants
to provide health care to everyone in America,
he's going to have to find revenues to do it.
Because there ain't revenues out there, right now, to do it.
CAROLYN ENGELHARD: I also meant to ask each of you--
when you ask a question-- to please identify yourself.
I had meant to say that before.
So, another question?
AUDIENCE: Hi, I'm Jordan.
I graduated in May and I'm here doing
research of the University.
And, so, this is kind of similar to what we just asked, but more
of a principal question.
So that contrasts with-- so, it seems
we're either putting people into a public system,
or we're giving them money to go buy private insurance--
as an alternative to what we have--
is there any data that shows the efficiency of taking
those people that are maybe in a federally subsidized program,
and putting them in the private system--
as far as driving down costs, or quality of care,
is there any system like that that's already been done?
RICK MAYES: Generally speaking, private insurance
has higher administrative costs.
About 25% of the premium dollar go to the administration.
Medicare and Medicaid public options
have lower administration costs.
But there's even the argument that
Medicare's-- for instance-- Medicare's administration costs
are actually too low.
In fact, you don't want it be as-- it's too efficient,
because they don't have enough personnel to catch
waste, fraud, and abuse.
So, in between private and the public sector,
is a better ratio that would be better
for expanding coverage, but not being taken advantage of.
DAVID TOSCANO: Yeah, I agree.
There are some studies that show that Medicaid
is a more efficiently run operation than private plans.
Of course, you get the government involved in that,
but--
RICK MAYES: One of the problems-- hospitals
love Medicaid.
They don't love them.
They love that many patients who otherwise don't have anything--
if they have Medicaid, that helps their revenues.
So, the hospitals that you've seen in Virginia
have been very pro Medicaid expansion.
The doctors have sat on the sidelines for absolutely
understandable reasons.
I don't care how altruistic humanitarian
you are as a position, you don't want to see your Medicaid payer
mix increase, because reimbursements don't match you
costs.
And the paperwork-- it literally kills
a little your soul everyday.
So, we haven't solved that yet.
That's why physicians haven't been at the general assembly
anywhere like the hospital administration has.
And I don't blame them.
You can only ask clinicians-- you
don't want your policy to be a right-- it has to be a martyr.
That's a terrible policy.
So, you have to increase reimbursement rates
or change the delivery system to make
it worthwhile from their investment.
CAROLYN ENGELHARD: Did you want to ask a question?
OK.
Would you pass that over, please?
And please identify yourself.
AUDIENCE: Hello, my name is John.
I'm a first year at the college here at UVA.
And I have an interest in health law and health care fund.
So, my question-- this may be more
relevant to Delegate Toscano.
So, given a world or state in Virginia,
in which Democrats has control of both the House, the Senate,
and the governor's seat-- what steps would
you and your colleagues be able to take to make sure
that-- given that discretionary Medicaid spending
seems to be increasing and crowding out the budget,
in terms of education costs, which
is leading to higher costs and, say, higher education,
for instance.
So, right-- I think you had a slide up there
that showed that.
DAVID TOSCANO: I bring it up because you're on your role.
AUDIENCE: Yeah.
Well, given a state in which you have more power
to do so, what steps would you take to make Medicaid
expansion, or Medicaid expenditures more efficient--
or to make other non-discretionary costs more
efficient, so as to make education better, for instance,
or to make Medicaid still affordable to the state,
while tackling a possible budget or debt crisis?
DAVID TOSCANO: Big, big question.
All right.
So, first of all, let's take a look at this pot right now.
This is the pot that exists right now.
And, certainly, we've got to do something
to get control of Medicaid spending.
That is very difficult. The major way
you do that are what we would call coordination of benefits.
There are some people who are dual eligible people.
They are people who can take advantage
of Medicare and Medicaid.
If you can figure out a way to bring those together,
you can cut some costs in reforming the system.
And, in fact, Virginia now has a process in place
to create those savings.
How much savings is going to be gener-- it's hard to know,
and how do you balance it out with those people who presently
are in the system, who are getting older more infirm
and in greater need?
Well, we got to get people out of nursing homes.
There's no doubt about it.
And one of the ways we can do that
is change the incentives to provide more community care
in non-nursing home settings.
That might take some initial investment,
but it will bend the curl a little bit.
It's hard to say that you're ever
going to be able to do much about this section.
As to Medicaid expansion, however, that's
funded not 50-50.
That's funded 100% from the feds.
So, if we can bring that new people in,
who-- and have the reforms in place-- it's going to help us.
But is it going to solve the problem?
We've got to grow the-- we got to grow the budget.
There's no doubt about that.
That means creating more jobs, that means
creating more tax revenues.
No one wants to do a tax increase,
and no one would support it for Medicaid expansion.
But we're going to have to do more to bolster the economy,
so everybody can share it.
CAROLYN ENGELHARD: Rick, do you want to respond to that at all?
RICK MAYES: I agree with that, philosophically.
I think there-- a billion dollar-- a billion
and a 1/2 dollar shortfall, so expansion, right now,
just seems politically impossible.
And I-- the gentleman who asked the question before-- I
don't think he's still here.
You drove him away.
I think it's a legitimate point he raises.
And I think it undercuts arguments for expansion.
And I don't think Democrats-- the people who
push for expansion-- take that question seriously enough.
We do have an annual budget deficits.
We have accumulated deficits that are very significant,
and we have interest payments to the Japanese
and the Chinese, every year, that are 10% of our budget.
And you can't just keep adding, you
have to reform the delivery system.
You've got to find a way for the health care system
to still survive, but have lower overhead.
And, so, just expansion on its own
is irresponsible and not politically powered.
DAVID TOSCANO: I wish the gentleman had stayed,
because I think that's the really critical point-- is
what do you do long term?
Because this is not sustainable.
And the federal government runs a budget deficit.
We have to have a balanced budget.
We, right now, have short form revenues, but it's not huge.
It's going to solved in Virginia.
We don't have anything like what's happening
in the federal government.
But, long term, we've got to be worried about that.
AUDIENCE: So, I'm Guillermo Solorzano,
I'm one of the physicians here.
Question-- in more of your opinion-- realizing
that, at least as a clinician, a large-- I don't
know about the percentage, but-- so much goes into medications.
And, with the increasing amounts of costs to medications,
I'm assuming that's driving a whole lot of Medicaid, Medicare
aside.
So, just your opinion, as far as what can the federal government
do, and what do you-- can you comment on what may be done?
Because, otherwise, they're going to make a lot of money,
and they still are making a lot of money.
And it's-- at least from my perspective--
my patients are going to suffer, the budget's going to suffer,
and it just puts a whole bunch of strain on the system.
RICK MAYES: I'll do a quick one, and you can take it from there.
In the last two years, pharmaceuticals are the single,
largest-- single biggest increased component
of health care cost increases.
It's cyclical-- there have been years where pharmaceuticals
were negligible.
In the last couple of years, they've
jumped up-- not for generics-- but for brand-new drugs that
are very, very expensive.
What can we do about?
There's other countries, other systems,
you could benchmark the price to whatever
the Veteran's Administration pays,
or whatever Medicaid pays.
Can you imagine the pharmaceutical companies'
response to that?
Yeah, they would just go ballistic.
And they have a lot of money, and make
them lobby really hard.
It'd make a lot of sense to do that--
and that's what other countries do to limit the cost
growth of pharmaceuticals.
That's not been the American way.
You could have-- Medicaid does that in many states.
Medicaid benchmarks what it pays, and buys
at the lowest retail rate.
Medicare choice not to do that.
So, if Medicare didn't follow suit,
it's hard to get that market leverage
to do that system wide.
You could let imports in from Canada,
but there's all kinds of powerful stakeholders
that'll push back on that as well.
And the last option you have-- my favorite-- is Australia's.
They just sit down in a room like,
with all the pharmaceutical companies, once a year,
and they say, if you want entry to our $20-billion market,
in every class of drugs, you got to give us a little bit.
And, if you give in, you'll make money off the volume.
Per unit cost, you won't make that much.
But you'll get 20 million people, and you'll make money,
and they have some of those lowest pharmaceutical costs
in the world.
But that requires that government actually do that.
And they're cool is that culturally and politically
in our country, we're not cool with that.
I'm not optimistic on that.
The only thing you can do right now, is to shame them.
With journalism, that's the only way
you can-- is to pick them hard off the fourth committee
and say, my god, what kind of human being
are you to raise EpiPens to $600.
But, that's a terrible method.
That's just drug by drug.
We need something much more systemic.
DAVID TOSCANO: In Virginia, we're doing some of that now.
We have formularies in Medicaid and it
had to do with certain prescription medicines.
And we're not going outside the formularies,
otherwise you're not going to get medicine.
So, I mean, is this kind of a rationing thing,
but it's the only way we can keep this stuff under control.
It'll be very interesting to see Donald Trump,
because he is not beholden to anybody, including the drug
companies.
And whether he puts in a proposal
to allow drugs to be purchased across state lines
or through foreign companies, I think you better watch it.
Because that's like the low hanging fruit
that's very politically-- very politically popular.
So, watch that one, because that could be a pretty easy win
for him, right off the bat.
Because he's got Republicans lined up on that.
RICK MAYES: They had made themselves good villains,
so that'd be a nice target to hit that really hard first.
DAVID TOSCANO: That would be interesting.
CAROLYN ENGELHARD: OK, Scott.
AUDIENCE: I'm Scott Syverud, an emergency physician
at the state hospital here.
Just a very specific political question,
which is-- can Donald Trump use the same method
that Obama used to get through the senate to repeal it.
RICK MAYES: Reconciliation.
Yes he can.
DAVID TOSCANO: I think it's a little bit more--
I think it is a little more difficult, now,
because remember-- they had passed-- they had passed it
in the Senate, first, before it went to the House
for reconciliation.
And, now, the Senate knows that it's
coming, so the Senate could filibuster the bill before it
ever got to the House.
But you could use reconciliation,
if you were in the right political posture to do it.
RICK MAYES: And you also got to be
weary of some Republicans, who are very marginal seats,
might feel immense pressure to go along with that.
And I recognize you from the Remote Area Medical
missions in Grundy.
And I think it's the most amazing story.
I haven't seen you there for years.
I've been going down with my students.
And, every year, the weekend was horrible, overrun,
the patients came up-- dental, vision, general medical,
and they had to make a a Sophie's choice choice
about which one they're going to do.
And, then, three years ago, we ended on Saturday afternoon.
Everybody got all the care they wanted,
because all the people that came from West Virginia and Kentucky
didn't come anymore, because their states expanded Medicaid.
And our patient population was purely Virginia.
So, it was a great example of how good policy at that level
can have that kind of dramatic impact.
CAROLYN ENGELHARD: So, we have time
for one last question, Meg.
AUDIENCE: Hi, my name is Meg Thornberry.
I'm the health and science editor
for the undergraduate paper, here, "The Popular Daily."
A lot of women-- especially a lot of young women--
are afraid that between promises to repeal the Affordable Care
Act and promises to pass the First Amendment Defense Act,
or religious freedom bills, they are going to lose access
to reproductive care.
There's actually a campaign, right now,
that says, go out and get an IUD in the next three months,
because we won't be able to get anything afterwards.
Is that a realistic fear?
DAVID TOSCANO: I think it's very real in Virginia.
Virginia-- the House is controlled by Republicans,
the Senate's controlled by the Republicans.
You get a Republican governor, and you bar the door.
You'll see everything that Terry McAuliffe has
vetoed get past in Virginia.
So, next year's election will be a key election in Virginia,
as to what that looks like.
Now, at the federal level, I'm not
as conversant with some of the policy choices there.
And maybe you have some insight--
RICK MAYES: I think it will play out more with the state level.
I think it is a serious threat.
I would love to show the states that
would consider that-- an example, Colorado,
which has made IUDs and family planning much more accessible
to women that don't cost statewide.
They have the lowest teen-pregnancy rate
in the country.
But that's data.
This stuff touches on really emotional, philosophical,
profoundly personal feelings that are not
as susceptible through data.
So, I think it's a very legitimate concern.
Really legitimate.
DAVID TOSCANO: Gotta engage in the political process.
CAROLYN ENGELHARD: Well, I think this is
a good time for us to wrap up.
Before we thank our speakers, I'd
like to announce that the next Medical Center Hour will
be Monday, November 28.
It's a special program on health information technology--
what are the challenges.
And the speaker is Dr. Vindell Washington from the Department
of Health and Human Services.
Please join me in thanking our speakers today.