tv Discussion Focuses on the Future of Medicaid CSPAN November 13, 2016 2:00am-3:37am EST
what i take comfort in is this is that mr. trump is a businessman who was in the real estate business where he built buildings and brought a deliverable to the table. he was in the service businesses, he went to -- you went to his hotels or golf courses, you had to have a deliverable. if we had been focused on we will do just fine. >> you can watch that entire interview tomorrow at 10:00 a.m. and 6:00 p.m. eastern. lawmakers return to capitol hill next week to begin their lame-duck session that includes house leadership elections.
wille floor, the house consider several bills, including one that reauthorizes sanctions against third-party investment in iran's energy sector. legislation that would allow the library of congress to collect recordings of gold star family's. house live on the c-span, the senate live on c-span 2. >> a look at the u.s. health care system and the future of medicaid with state health officials from florida and hawaii. this is part of a conference hosted by the national association medicaid directors. it is an hour and a half.
>> welcome, good morning. i am thrilled to see on day two of the public session or day three for the state folks or day four for those people on the board, it has been a long couple of days, a long conference, a fantastic congress -- a fantastic conference. extremely well attended and insightful and entertaining and educational. on the last day, which is election day, we still have close to 1000 people here. it means the appetite to learn
about medicaid and to think about the future of medicaid and health care system is still is --nt and interesting interesting and a priority for all of you. i am personally very pleased and happy about that. again thank you all for being here. i will not take up too much time here and really tee up the next session which i'm excited about. just as a preface, similar to the session that we kicked off
this is not going to be the future of what happens after the election, that is not the crystal ball we are doing today, but we are looking out to the near and somewhat distant future of a lot of important health care issues. he has a number of slides, he will talk through, and i remember i was talking to the plenary speaker at the upcoming
lunch today, and i was telling her what the agenda was going to look like i said we would start the morning off with the health care futurist, dr. ian morrison. she said, he is fantastic. and he had him come over and talk to us, it was wonderful. so i'm super excited about this. what we are going to have, dr. morrison will come up here and prognosticate a little bit about the future of health care. and then we are going to turn to two reactors to be able to listen to what he said, take it all in, and then either agree, disagree, but ground what he has been saying about the future with the reality in state medicaid programs today. so our two reactors will be justin senior con medicaid
director in florida, interim health secretary in florida, and judy mohr peterson, the medicaid director in hawaii, prior to that the medicare director in oregon. they are both long serving medicare directors, long serving members of the namd board. they bring a wealth and a breadth of experience not just as blue states and red states, not just east coast and west coast and pacific coast but also a debate about who has got the best beaches and who has the warmest states and who has the best state to move to.
the two of them will take turns reacting to what we have seen, and unmoderated and back and forth amongst the three of them to take some of these things forward. i'm really excited about this. i will get off the stage and out of the way and turn the microphone over to ian morrison and say, welcome, thanks for coming. [applause] >> thank you very much. what a pleasure and honor to be here on a momentous day. i am a professional futurist. my definition of a futureist is an economist who couldn't handle the calculus, basically. i'm in the sweeping generalization business. a lot of people ask me, how exactly did you become a futurist? my major was geographic and economic change in scotland, 1580 to 1830, which is incredibly useful.
[laughter] as useful training, i've been a student of structural change in society for 40 years. i left scotland in the late '70s, moved to canada and they let me in partly because i had an urban planning degree. they didn't need them in vancouver where i moved to. they needed them in the yukon. i was not going to the yukon. i ended up getting a job with the management engineering unit 13.1, which was the canadian equivalent of the kgb, spent seven years in an academic medical center doing clinical reengineering before it was called that and working on my doctorate in health policy and health economics. then i got an offer to join the institute for the future, the modestly entitled institute for the future to work on a project called looking ahead at american health care. the robert johnson foundation sponsored.
i basically have been doing that ever since. i have been looking ahead at american health care at the institute for many years. i ran the health program there. i was ceo in the '90s. for most of the last 20 years, i have been a free-floating radical. i come in for a day, insult people and leave. it is about like newt gingrich but at a lower price point. i don't consider myself a deep expert on medicaid. i work mostly with the private sector players, whether provider systems or health plans. it is an honor to be here. i care a lot about medicaid. i was on the board of the california health care foundation for a decade. obviously, we were very interested in that. i currently serve on the board of the martin luther king hospital in los angeles. medicaid is the gold card for us, mlk.
i sit on the long-range planning committee at the stanford children's hospital. i do care a lot about medicaid but i don't consider myself a deep expert. let me share with you the basic rules for futureists. you should make forecasts for things that are far off so people can't tell if you are right or wrong. make so many forecasts one of them have to be right. never give people a number and a year in the same sentence. that's a very important one. whatever you do, don't talk about elections the day of an election. [laughter] it is kind of a stupid thing to do. i'm going to violate that by talking about the election. i want to give you a sense of what i think is going on in the field in health care, more generally. i think we are making progress. i'm more excited now than i have ever been in my 30 years in the u.s. i will close by giving you my, as an outsider, the takeaways
for medicaid and then we will hear from our distinguished colleagues. elections matter. i'm in a partnership with the harris poll and the harvard school of public health for 30 years. harvard always says that elections matter. by the end of the day, which is by the way, the most overused phrase by pundits on cnn. at the end of the day, we will know whether it is a blowout for hillary clinton or whether it is brexit. brexit is particularly poignant for me as a scot, because you will recall that the scot's voted overwhelmingly to remain in the european union. as been the londoners. it was the rest of britain, particularly england, that voted against it. i will remind you that donald trump visited turnberry not by
accident, i would say, the day after the brexit vote just arrived in scotland. the place is going wild over the vote. about to take their country back, just like we will in america. no games. you have to remember that the scot's voted overwhelmingly to remain. my scottish colleagues raised the bar in terms of profanity and creative use of the english language. if you go on twitter, i wouldn't read them all. they were not particularly impressed by that. it is instructive to look at what happened with brexit. a vote about the future and the people that overwhelmingly voted for this were old people. they are not going to be in the future very much longer. yet, the vote was amongst young people disproportionately towards remain. what we saw in the brexit was the places with the most elderly people and fewest college graduates and people identifying
most as english, set a nationalism measure where the areas that went towards brexit. there may be a metaphor and mr. trump has said brexit times five. we will find out by the end of the day. as i mentioned, i've had this partnership with the harris poll in harvard for a long time. my colleague, bob landon, who has this great new project he is doing with politico, did a survey a few weeks ago, which really captures the differences and the deep divide in the country with regard to how the electorate think about the affordable care act. trump voters disproportionately think it is going very poorly. clinton supporters are on the other side of that argument. it turns out according to bob's analysis that the fundamental dividing line is attitudes towards the role of government. if you believe that government should play a bigger role, you think the affordable act is doing okay. if you believe the government should play less of a role, you think it is doing horribly. it is not like you have made a systematic judgment based on evidence.
it is more about the attitudes towards government and the role of government in health care. that spills over into what should happen to the affordable care act. people that are supporting trump generally want to repeal it or scale it back. people supporting clinton want to build on it or go even further. so those are the divides in the country. as bob taught all of us, those of us that have the opportunity to work to work with him over the years, the only time you see major changes in health policy is when you get one team running the table. the question is, is that going to happen this time around? let's just play the extremes. if democrats were to win and win the senate, unlikely they will win the house, you would probably see an expansion of subsidies to shore up some of the affordability issues. you would probably see subsidy to shore up in the deductible
issue. perhaps expansions for groups previously not covered. more funds for prevention and certainly attitudes nationally favor action on pharmaceutical pricing. the cadillac tax, in our view, the group that i work with basically, is not ever coming back, no matter who is running country. there may be a lot of talk about public options and single pare but they wouldn't do anything. the real question, i think the question for the country that will be decided by this election maybe more states will expand medicaid. we will hear from our good colleagues in a second as to whether that is real or not. if republicans were to win and run the table, i think they are going to get rid of obama care. they are certainly going to change the name. i can't imagine trump is going to talk about it. it will not be hugely popular to call it obamacare with trump in the white house.
it is hard to know what they would do really if you want to go on my website, i did some fake interviews with donald trump i found amusing. anyway, again, i think the mandates would be gone. it would be shifted to the state level. we are going to get rid of the lines and it is going to be beautiful, beautiful, beautiful. i'm confident in that. the real question is, are rich people going to keep writing a check for poor people? are we going to see coverage continue and subsidies exist going forward? the best analysis i have seen by various reputable sources, if hillary wins and we have team "a" in the white house, coverage might be expanded by a further $9 million. if team "b" wins, we may lose 20 million uninsured. that would be sad. i think we have made significant progress. like it or not, obamacare has reduced the uninsured across the country. i spend a lot of my time in board rooms with large provider system.
you can see it, depending on which state you go to the impact this has had. it has been achieved through both exchanges which have had a rocky time in this third or our third year now. mostly, through medicaid expansion. that is the big story. very few hospitals will say, i have seen a huge number of exchange people coming through. not so much in florida. it is a big deal in florida and texas. what they really have seen is an expansion of medicaid. you have heard from the officials at cms and other experts, is this massive move toward payment reforms, which i think is irreversible and will continue under any political scenario. partly because it has been reinforced by the behavior of people on the grown. the people i work with, the large integrated delivery systems are quite committed to a move away from unfettered fee for service.
let me give you two signal conditions. the fact that dan malton runs memorial herman is retiring and was replaced by ben chu who ran kaiser. similarly, joe allison, the great ceo of baylor, scott, and white, is retiring and they have recruited jim hinton, who ran presbyterian in albuquerque, one of the large integrated systems in the country. that is a signal that the boards of these major institutions see a future very different from the past. the other thing we are seeing is this massive consolidation going on across the country. i will say more about that at the plan level, but more importantly at the provider level, and we sometimes forget that there is this indoor miss long-term secular shift away from inpatient to the annual tory environment.
i drop my wife of at the hospital, i waited till she was out of the o.r. i had to go to another meeting and a friend picked her up. she was back home by 11:00. if you had knee surgery in scotland, when i was a kid, i would be in hospital for six weeks. so the world has changed significantly. the other big change we sometimes miss that was really generated by the affordable care act -- not the affordable care act but the stimulus bill on the high-tech act was the ubiquitous deployment of electronic health record. we at least got into the 20th century, if not the 21st century. the work that needs to be done in my view is enhancing the consumer and provider experience in health care. what we have seen is a megatrend, particularly in the employer-sponsored insurance market, is the shift toward high deductible care, which is a very blunt instrument in my view and has not been particularly effective.
it has been effective in containing employers cost but it has not necessarily been the best thing for the people who are receiving care. the other point to note is that we in health care, we don't exist in a vacuum. i live in menlo park, california, ground zero of google and facebook and venture capital. a massive amount of money has been put in consumer facing apps, partly because we in health care -- think about how you run your own life. everything you consume or interact with your family or reservations for travel or restaurants is done through your phone. yet, when you have to deal with health care, you have to step back into another century, deal with people who are writing things on white boards in babylonic cuniform and faxing things to each other. the fax machine should have been out of business 25 years ago. yet, it is the life blood of american health care.
you have to show this in some states to prove that obamacare did work in terms of reducing the uninsured. the biggest reduction in the uninsured since lbj. i need not tell this group, the uninsured reduction was more significant in states that expanded medicaid than states that did not. that, i think, is the important back drop on this election day. so from my perspective, here are the stories i'm seeing and hearing in my travels across the country. some of this is just based on what i'm hearing. also, this partnership i have with harris and harvard, we survey every year doctors, consumers, employers and hospital leaders. i am going to give you greatest hits about those and spend a little bit of time on shallow pocketed consumers. the reason why i think it is different this time with all this health policy stuff is a pretty simple fact. the average american family
cannot afford the average health insurance premium. you think about that for eight nanoseconds, that's a wee bit of a problem. the average french family can afford the average family because it costs half as much. median dpo policy for a family of four in the employer market is $18,142 in the employer market. does not compute. what we have done is see this she wanted increase in unaffordability of premiums. the green line is workers contribution compared to the blue line, health insurance premiums generally. the green line being above the blue line means there is cost shift to the employees. the boston two lines are overall workers earnings and inflation and, of course, they are way, way, way less than the increase in premiums. again, the average family, therefore, hasn't had a wage
increase, any increment in compensation came in the form of health benefits. this is the point we are at now where the kaiser family foundation, up around 18, 142. including what employers and workers pay. that does not include out of pocket costs. if you use the millman numbers, you are up around $25,000. what is corporate america's idea? to shift the cost to consumers. we are at the point now where 50% of the workers have a deductible of $1,000 or more, 29% of a deductible of 2000 or more, 20% of $3,000 or more. why is that significant? median households don't have $3000. they don't have that in financial assets. that's why what we have seen is that they forego care. this is not our data but data from the commonwealth fund.
if you look on the right-hand side of the chart, this is people who have jobs, who have health insurance, who are doing it right. they just happen in the case of the dark blue line to make less than 200% of the federal poverty level. if you are in that category, about half of folk in that category have foregone care of one type or another. had a problem but didn't go to a clinic or fill out a prescription, skipped a test or treatment and didn't see a specialist. it would be lovely and convenient for economists, and a beautiful thing if they were only foregoing unnecessary care. but that is not what happens. when i was on the board, we gave the rand organization $3 million to prove the obvious, which is when people have to pay out of pocket, they don't get stuff. some of that matters to their health. let me just say, when it comes to consumers, i hate
satisfaction surveys. just hate them. why? because they don't move. we waste acres of real estate doing these satisfaction surveys an they don't move over time. why is that? americans are nice people. you want to see dissatisfaction, go survey the french. [laughter] they're pissed off about everything. the reason we do it, occasionally you see a movement. we did see a significant drop in the last couple of years in the percent of americans that say the insurance plans meets my family's needs very or extremely well. that was particularly acute for exchange folk. i would point out that people on medicaid are as happy as people on commercial plans with this. they are much more positive than people on exchanges. in fact, when we look -- what we like is not satisfaction surveys. we put together this emotional scale that we ask consumers about and the question is, how would you describe your feelings about the health care you received today, including how much you pay for it and the benefits you receive?
please select all that apply. this is going to come as a complete shock to the men in the room. you can have more than one emotion simultaneously. [laughter] women understand that. men have a great deal of difficulty with that concept. they have trouble coming up with one emotion at a time, let alone more than one emotion. you see what you would expect as a social scientist. you see a normal distribution around the stuff in the middle accepting mutual re-sign. you don't see many saying they are empowered. a surprising number say they are powerless, depressed and angry. i put the california numbers to brag about as a californian. the reason the numbers skew more positively in california is we have kaiser. we have hmos, which are generally not high deductible and we have a much higher
penetration than most other parts of the country and we have medicaid that's huge. a third of californians are on medicaid. all of those reduce the out of pocket cost burden which i think tracks to satisfaction and we know when we break this out in our survey by class of insurance, it is ironic that the people who skew more positively have public insurance, not private insurance. fewer people with commercial insurance are hopeful and as many are powerless. the numbers for public insurance, rather, tend to be slightly better on the positive side and less negative on the negative side, which may be a function of expectations. one of the things we know from consumers. we have a very big sample in this survey. one thing we know about consumers that is sort of interesting. the role out of pocket costs plays. 28% of americans have received a balanced bill for care they thought was covered. if you are in that category, you have much less to say you are powerless, depressed and angry. similarly, about 8% of americans
went to see a bill for hospital services not in their work -- network, even though it was in that work. the ultimate example of this was a woman went to see her physician. he said, oh, yes, i can take care of that problem. she made sure. she had a ppo, went to choice, made absolutely sure the doctor was in network. she had this problem. the doctor said, i can take care of that. go to my surgery center on the second floor where he suddenly was out of network and sent her a bill for $18,000. didn't resolve the problem clinically. she had to go to a hospital. this time, she is really making sure that the surgeon is in network and the hospital is in network only to find that the anesthesiologist and the second assistant surgeon were out of network. they sent her collective bills for $24,000, all perfectly legal. this has caused some states like new york to pass the no surprises law which tells you you have to inform the patient
in advance they are going to be screwed by the second assistant surgeon. i am sorry. transparency is not a solution here. that's wrong in my view. these hospitals are conspiring to defraud patients. so the other thing we found in our survey with regard to this out of pocket cost stuff, we found a group of patients, about 10% of the american public who use the health system and have trouble paying for it. another word for them would be patients. almost anyone admitted to a hospital or has a serious procedure done and makes less than $150,000 a year is going to be in this category. they are not all on medicaid. in fact, fewer than average are on medicaid. they are disproportionately uninsured to be true. most of them have employer-sponsored coverage. if you are in that category, you
skew very heavily to the negative end of the spectrum of powerless, depressed and angry. what do consumers want? in a word, they want cheaper. we put them through a tradeoff exercise. i will not bore you through the details. basically, you can have this or that. you can't have both. which do you prefer? you do that over a big enough sample and you reveal relative preferences. what they tell us is give me low premiums, low deductibles, low co-pays, and i will trade off choice for cost. that is basically what the story is. one of these things we found is the one thing that seems to have bipartisan support amongst those that vote republican, democrat are independent is reducing out-of-pocket cost. that will certainly be a focus if hillary clinton i elected president. i am not going to go into as much depth as the other stories. i want to hit on a few of the
trends we think are important for the market to watch and have some implication for all of you and your roles. the first has to do with consolidation. we are seeing this at the health plan level, although i think one or two of these mergers might not be consummated because of resistance from the department of justice. i was talking to a liberal group of doctors at ucsf a couple of months ago. i said, the good news for you liberals is, we are going to have a single payer system. the bad news is, it is united health care. [laughter] i'm not really that worried. the doj lawyers called me. i said, i don't have a problem with it. as long as there are three of
them, it's fine. what i'm much more concerned about is what i see in every market i go to. i go it a lot of board retreats with a lot of hospital systems across the country. what we are seeing here is the creation of 200 large, regional, integrated delivery systems that are coming to dominate the landscape. when i say dominate, it doesn't mean everybody is going to work for them. certainly, we are seeing doctors running to hospitals to huddle for warmth. we are seeing hospitals consolidating regionally. we are seeing the role of for-profit and private equity money driving some of this. the bond market thinks it is a good idea. there is a positive up side from this integration, which is, if you think about a managerial success where you drive out inappropriate clinical variation and you improve quality and reduce cost, that would be a win for the world, a win for the health system. unfortunately, the data don't support that. the tendency is to use pricing
power to raise prices rather than yield true efficiencies. by the way, this isn't going over well with the people who pay the bill. it includes walmart and disney. their view of the world is not donald trump's increase view. their view is 4%, 2016, 4% increase. the good news about employers is that -- the good news is, they are not leaving. they are not abandoning the field. it has been surprising positive effect of the affordable care act that the number of people with commercial health insurance has remained relatively flat as the cbo had predicted. what we track is the red line, which is the percent of american employers that say my company is
actively exploring ways to get out of providing health insurance to our employees. you can see that red line. you don't have to read the numbers. it just went up and came down. the reason is that they took a look at private exchanges. they took a look at exiting the field. they made a determination that there was really fundamentally their responsibility to ensure their health -- that employees' needs were met. that's the 87% number at the top. they are not leaving. that's the good news. the bad news for the delivery system is they are not leaving. they are going to be in the face of the delivery system going forward. that's what we have seen and hear anecdotally this year. employers putting pressure on their health plans to get zero premium increases or zero price increases from these provider systems. there is a megatrend that is still troubling.
i don't think obama should be blamed for this. this is the progressive unaffordability of health care which reflects this. over time, we're seeing fewer and fewer workers covered by employee health benefits. the reason that is true is because of the progressive unaffordability of health care. i live in silicon valley. a lot of people work at google. not a lot of people work for google. the people cleaning the floors are contractors. they generally have less health benefits than the really sophisticated high-tech folk. the other trend that relates to this is employers' experience of price. now, this is a sophisticated audience. you all know about the dartmouth atlas, the left-hand side-view on this chart where medicare spending per capita has been rigorously analyzed by the folks at dartmouth, and the dark areas of the country are expansive.
the light areas are cheap. what you don't always see is the chart on the right-hand side, which is the smart alecs of harvard who did the same an analysis but with self-employed insurance data. this explains the mystery for those of us that travel around the country. you get states like wisconsin where hospitals are getting 300% of medicare in the private sector. there is huge variation across the country in the rates paid. even in my state, california, northern california has low utilization and very high prices. southern california, it is the other way around. that's why even in kaiser, there is a $100 price per member between northern and southern california rates. this is the hardest data in america to get. so i just made it up. [laughter] ian: it is a little hard. the labels got squished. let me talk you through it. on the left-hand side.
if you do coronary bypass surgery on an uninsured human in oklahoma, you will get 7 cents back on the dollar. medicaid in my state pays 69% of the cost and medicare pays 89% of costs. so you don't have to be a rocket scientist or a futureist to figure out, you are going to charge the private sector more if you are a provider. on average, it is around 150% of cost. the dream is to get the number on the right-hand side, which i call the demented saudi prince price, which is -- what would a saudi prince pay at johns hopkins. that's what cfo's call the charge master. [laughter] ian: again, it is tough to see the labels here. what we did with exchanges is inserted another player in the mix. so every hospital board i do, this is the story you hear.
this is in an expansion state. we have windfall profits on the in-patient side because their bad debt went way down, 6% to 4% for hospitals like that. it's true in many, many states across the country. the problem is, you have now permanently impaired your pair mix, because you have way more medicaid patients. that's why over time, we are going to see the slow deterioration of the finances in those hospitals, many of whom were doing spectacularly well in 2015. i didn't really just make the data up. the american hospital association tracks this stuff. we are seeing a widening gap between what medicare and medicaid pays relative to cost and what private payers pay. there is a little bit of wining going on here. when these cfo's say to me,
medicare doesn't pay the true cost of care. i say let's rephrase that. medicare doesn't pay for the income aspirations for you and your people doing things exactly the same way, which doesn't sound so good. i know this is going to be painful. all of you in this room are feeling this sting. the pbgh board meeting, this is the number one issue for employers. i was with the ceo for care first. maryland is an odd state because it is an all pair rate setting state. he said for the first time, specialty pharma per member per month now exceeds inpatient hospitals spent. pharma per member per month exceeds inpatient hospital for all carriers i have talked to. it is going up dramatically. the entire pharmaceutical industry, including the old legacy players, are pivoting to large molecular biology entities with very high prices.
it has gotten kind of ridiculous. hepc being the primary example. $84,000 in the u.s. and $900 in egypt. so i put together this slide as a joke, as we say in glasgow, half joking, full serious. it is cheaper for a self-insured employer to send that hep-c patient for a three-month luxury vacation to egypt, put them up at the ritz-carlton, give them a meal allowance and take their friend or partner, fly them business class, and tack on the niles spa cruise where you will be pampered to death for 10 days, and you would still save
$30,000. that's nuts. that's why when we do surveys, 72% of americans including a majority of republicans believe that price controls or caps on pharmaceuticals should be enacted. i think we will see action on this one way or the other. it is maybe the plot forming the trump administration too. the other thing we are seeing across the country is this migration to try and make volume to value real. the best estimate i can give you of how real this is, is from our survey of hospitals where we ask them, you know, you have to pick one of these options. on the left-hand side is the least invasive, which is, we have no plans to take risk beyond modest share savings and pay for performance, about a third. on the far right-hand side are hospitals who say we are committed to removing the majority of revenue toss fully at risk within five years.
that's around 6% to 8%. the next to last is building an aco model that is capable of taking risk such as medicare advantage or employer direct contracting. i think that's about right. we ask another way. about 20% of health systems say they are going to have an insurance license within five years. i think this is a separation going on between the people who want no part of this, people in the middle who are sort of playing at it by doing a clinical integration strategy, and people that are serious about migrating more towards risk over time. the other thing that's reinforcing this is payments reforms from cms and private payers, including both bundles and the shift towards population
health. i want to make a distinction between bundles and population health for a second. a bundle, more is still better. it is not so alien to these providers. they are used to being in the growth business. it does encourage improvement across by putting an envelope further out around the continuum of care. but not everything is easily bundled. i worry a lot that the sum of the bundles is going to be more than the current payment. the reason i say that is my good friend, pat fry, who ran sutter for many years, who has a tendency for profanity, which i appreciate, said to me about bundles, "screw me on the bundle, i'll screw you on the rest." in other words, you can grind me down on orthopedics, but i will charge you more for stuff you can't bundle and come out the same. i think that's right. i think that's the way providers play the came. i'm a big fan of cap tation, risk, accountable care, population health. it makes you think about the frequency with which you do things and the appropriateness. it will cause you to go up the food chain to focus on the determinants of health. you will find a lot of the solutions. i am preaching to the converted. because this is where you have been for all your careers. it looks more like social work
than medical care. that epiphany is happening all over america with providers that are getting into the risk business. there is this mutual disrespect problem. everybody in american health care thinks everybody else's job is easy and anyone can do what an insurance company does. that's just not true. so what happens when you get in the risk business. well, what happens is you hire another smart alec consultant. they will run the numbers and you will find what is a law of physics that in any insurance poll, 5% of patients account for 50% of costs. 1% account for 20%. the bottom 50% utilizers use next to nothing. what's in that 5%? well, what's typically in that 5% are hondas, as one key category. what is a honda? i'm a honda. i was denied coverage before obamacare saved my bacon in 2012 in the individual market in california. i was denied coverage not once, not twice but thrice. it was thrice denied, positively
biblical. [laughter] ian: the reason blue shield denied me is they said you are a honda, hypertensive, obese, noncompliant, diabetic, alcoholic, right? [laughter] ian: none of which is true, but kind of directionally correct. [laughter] ian: anyway, so the other thing you will find is behavioral health. 20% of americans of behavioral health, super utilizers, it is more than 85%. anyone who is in end-of-life care in the medicare population will be in at 5%. anyone with active cancer will be in it, the frail elderly and the elderly population. social work, not medicare, may be the solution. for any clinicians, if you prescribe one biological, you will automatically be in the top 5% high cost cases in the commercial market. let me just close by telling a couple of stories and make a couple of observations about what this means for medicare.
the stories basically are what i'm hearing, how these provider systems are responding to this new future. the story of the trap is this young hospitalist who -- a latino kid who went to ucsf and did well. he came back, wanted to serve his community in phoenix in a very low-income neighborhood with a horrible readmission rate. he told the ceo, "i can cut this rate in half." he took his truck and he drove on his own time at night to see the family, took the discharge summary, gathered the family around, spoke to them in spanish about what grandma had done in the hospital, the meds she was on now, and what should happen going forward. he did. he cut the rate in half. you don't need a board certified ucsf trained hospitalist doing it. you can have a kid with a clipboard in a checklist who spoke spanish or better yet, a
friend of the family. that is happening over in the country where health systems are getting on to this. the second example came from art gonzalez in denver health at the time. he told me the story of the number one frequent flyer patient they had. mrs. johnson, a brittle diabetic, constantly being readmitted in the e.r., in the hospital, not in control. despite the fact she was in a patient-centered medical home and the entire cast of "grey's anatomy" came around her every friday. it wasn't until some smart young nurse asked the question, mrs. johnson, why are you not taking your meds? she said, well, they have to be refrigeratored. so? i don't have a fridge. they bought her a fridge. she never came back. in a good way she never came back, he was fine. final story told to me by
bernard from kaiser, from 300 medicaid to a million users. it has a fantastic group visit program for diabetics, multi-disciplinary team, patients, it's great. they were having this problem with the newly covered medicaid members not turning up for appointments. the doctor is getting all judgey about it. "well, that is what happens when you deal with medicaid," until some smart alec realized the reason was because the bus schedule didn't work. they couldn't get there until 10:30. so they changed the bus schedule. lo and behold, it worked out. so those are the kinds of interventions across the country, people segmenting high-risk populations, people using advanced analytics,
patient registries and medical, going upstream, understanding that they have to focus on the population and be more imaginative with the problems going forward by partnering with others, and that's what we're seeing. this group knows this. i think a lot of people have to be reminded of it. that this notion we overinvest in health services in this country and underinvest in social services. the great elizabeth bradley's work has really underscored this. i go to france. the french are number one in all these international measures. after an exposure to the french health system, it is bloody scruffy, i have to tell you. the reason they do well on every measure has nothing to do with medicare. it's because they walk, they drink red wine, and walk and get naked in the summer. nothing will keep your bmi down better than getting naked in the summer. [laughter] ian: one final point on
population health. the single biggest determinant of life expectancy is income. this is what we social scientists call a straight line. it turns out this was a massive study by stanford and harvard researchers. it turns out, if you're going to be poor, it is better to be poor with a bunch of rich liberals in your neighborhood than in places that are more darwinian. there are lessons. i'll skip to the doctor stuff. here is the punch line for you all. medicaid is massive. it's bigger than france. 72.6 million americans by last count, as far as i'm aware, that is unbelievable how big this program is. i think it's a challenge for the country. partly because of the churn in and out of eligibility. partly the question who is going
to look after them, which providers are going to take them. it's a huge list. this your world. i don't mean to be preachy here but it's covering kids, mums, expansion population. it supports dual eligible, and it is the default for most middle class americans. i think your challenge, our challenge as a nation is design financially stable delivery models for the future. i made that point. i think the way you do that is to innovate that scale. the problem right now we do a lot of tinkering. we're great at pilots. we are absolutely brilliant at pilots appeared i go talk to the ceo's of these hospital stations, oh, do you have a patient-centered medical home, and it's like scout badges when you're in the scouts. i'll get that. do you have accountable care organizations? i've got three of them.
diabetes disease register. absolutely. then you ask the follow-up question, what percentage of patients get that on a percentage basis, square root of 0. we need to innovate that scale. so let me just say in closing, there are really only three payment streams going forward -- manage medicaid, high deductible health care, medicare advantage/aco risk. that's the game. it's going to require the delivery system to transform itself. the real question this election will decide is are rich people going to write a check for poor people. there really only three futures for health care. the nirvana where we move to large integrated systems transform to meet the triple aim spurred by payment reform by public and private payers. that's what i'm hoping for. i'm worried about darwinian consumerism of the subsidies, support being taken out, and we have to live in a world of high deductibles and economic rationing.
i worry about the left of the political spectrum taking over and grinding down on budgets and prices, locking in all the inefficiencies that currently exist in the system. what that means for medicaid, i think innovation on the one hand, about thinking creatively of combining social spending and various social initiatives in a more creative way. if it is darwinian consumerism, i think we will have to put the arm on providers to take their fair share, otherwise they will just geographically discriminate against people. i worry a bit about the price controls, how we maintain quality and appropriateness. but you are going to figure it out. these great colleagues here are going to tell us how it's going to work. i salute you for what you do. it's incredibly important. the people of america who depend on you salute you for what you do, and i thank you for your time and attention this morning.
thank you. [applause] matt: all right. thank you, ian. it is rare to see someone elicit so much laughter in a conversation around medicate but we certainly appreciate that today. so you brought up a lot of points and images, some images especially around bmi, i think we'll try to remove from our brains when this is over. but there's a lot to chew on there. so let me move immediately to experts who are grounded in the reality of the now and let's start with justin. in your experience in florida, what's your reaction to that? are these scenarios that you see, or is he just way off for a variety of reasons? justin: i agree with the scenario he's laid out.
i think the payment streams in particular are probably the ones that are going to survive. i'm optimistic. just like him. i'm very optimistic about how things will go. i was in a doctor's office several years ago. the doctor's office, like many doctor's offices, never updated its magazine stack. i was reading an "economist" magazine from a couple years earlier that was talking about this new sony ereader that came out. they were poopooing whether it would take off because it was out. every magazine, paper mill started to collapse as a result of an innovation.
there are certain things out there that we don't know what's going to come down the pike. one odd thing about health care, innovation tends to make health care more expensive rather than cheaper, especially in the short run. that poses challenge. we in florida have done our best to consolidate our systems and related by our operation and focus on what we're trying to accomplish. to come up with shared definitions of success that go across the aisle and things we're trying to achieve. we're trying to do it in a way we set the incentives. so much of what we've done in united states in health care is get the incentives wrong. it has always been pay for volume with a lot of the biggest providers being shielded from their cost increases. they are paid based on their cost. what they end up with, if you set your system up like that, is a health care delivery system where americans get more prescriptions than anyone else, they get more procedures than anyone else, and the costs have gone through the roof. it only costs us about two or three years of life expectancy compared to our peer countries when it comes down to it.
we've got to change the way that we deliver health care in the country. we've really got to work at getting incentives right and paying for value. that is a very difficult thing to do because it involves -- there are a lot of people in this room that make a lot of money off medicaid and medicare programs. they make a lot of money off of these funding streams. when you say you're going to save money -- when we say we're going to save money, what we're saying is we're going to reduce the amount of money we give you over time, and we're going to have higher expectations for what we get for that money. we're going to try to build the incentives that way. these are not cash assistance programs programs. you're speaking not to a room of poor people but a room of very wealthy people. i can only imagine what the average income is in the room or median income is in the room, but i'm sure it's much higher than the national average.
we really need to think about that. if we put so much pressure in the state government on other investments that the state officials would like to make, and they would love to make more investment in education, they would like to make more investment in trade and transportation infrastructure, but we start to swallow that up in health care. you have to question the value of that investment over time. and we have done our best to try to become a smaller and smaller percentage of our state budget. we are a nonexpansion state. i think the states that did the expansion have made a jump, but they ultimately are trying to do the same thing in terms of becoming a smaller percentage once they captured that population. we have been successful for the last several years. we have combined a lot of different delivery systems into one. it is one of the funding streams that ian was talking about.
we have medicaid managed care. that is the primary way we deliver services. we would love to see provider innovations. in our program, we actually had a special spot reserved in our competitive procurement for managed care plans for provider-based managed care plans, ones that were owned in majority by providers. we had to give at least one slot in every region where it did a competitive bid, we had to give one slot to a provider service network. we did that. we had provider service networks bid in every state and we awarded them. there is not one provider service network in ft. lauderdale. every other one sold in six months to an hmo. by the way, that feature is still in our statute and the procurement is next year if you're thinking about forming a provider network and bidding. nice way to make money, turn around and sell it in six months. we're wondering whether we're going to see a repeat of that in upcoming procurement. all of these pressures, really need to think about the investments we're making.
we really need to think about how to structure the system so the incentives are right and we're driving toward quality without being inflationary. matt: great. matt: great. thanks, justin. judy, thoughts from hawaii and the oregon system. judy: thank you. as i was listening to that and some issues of cost shift, et cetera. this has come up over the past few days, actually indirectly in one of the slides there. it was who is driving the costs. right? who is the uninsured? if you think about the medicaid program, it's the hondas, the people with behavioral health challenges, much higher prevalence rates. it's poor people, who face many more challenges in maintaining
their health, who are much more affected by income disparities, by lack of access to fresh foods, to lower levels -- having to do with quality of education, et cetera. and so when medicaid isn't paying as much, it's also -- we're also working with some of the most -- some of the populations that have the most challenges in their life. so when we talk about the impact of social determinants and talk about impact of not funding within those areas, that's where the conversation is going. there's -- that's why there's the cost shift. it's that when you say that the are rich people that need to pay
-- how much are they going to pay for the poor people, it's also what kinds of things are we going to do to invest in the so-called social determinants of health. where it is that we work, where it is that we live, where we play, how much education we have, what's our housing stability? when i first got to hawaii, i went there, and they talked a lot about -- in hawaii they said, oh, we love what you did in oregon. we love the health system transformation and all your work there. we really want you to do that here. i'm thinking in my head, there's no way i'm going to do -- you can't replicate one to the other. as the saying goes, you've seen one medicaid program, you've seen the one medicaid program. each state is unique. every state has its own unique traits traits. one of the first things i did was i spent time listening, what
do the people want to see. one of the things that was so striking and so different from oregon is that in oregon health system delivery transfer systems were led by providers, they were led by health systems, by the ipa's, by the coordinated care organizations, by the managed care plans. it was led by them. in hawaii i began to talk to people, health systems, primary care associations, the long-term care industry. what people said to me is the thing that is most important to us is creating a healthy hawaii, healthy communities, healthy families. that doesn't come from the health care delivery system. that comes from communities working together at the local level, building and addressing the needs within that community.
so what do we have? we have some of the most innovative federally qualified health centers. we have a hospital and health care system that is now trying to work together to address what people are recognizing as the social determinants of health. so after being there now just over a year and a half, the interesting thing is that now people are talking about social determinants of health. we're talking about how do we invest in communities, to prevent trauma so they can learn better in school, get better employment, so they are not on medicaid. that's the goal. and then -- how can we address the severe homeless problem that we have in hawaii?
in order to do that, you have to take a look at your behavioral health, your substance use, that continuum of care, who is paying for it, how do you pay for it, how do you make it integrated with the medical health system? how do you partner with housing? i know more about section 8 and all those things than i ever did before. i have had to learn a whole new system of acronyms, because housing matters. and then my poor housing people have now had to learn about medicaid. that's been delightful. so all these new partnerships are being formed. now we're having conversations with the health systems, with the managed care plans. now the question is, all right, we're focusing on social determinants of health, what's health care's role? how far do you go?
they are not going to be the social workers. but medicaid and the health system has a seat at the table. how are we going to play a role within that seat at the table? that's where i really see medicaid going. that's where i see the health system going in that if you're going to talk about addressing the social determinants of health, then you're going to have to create new partnerships, new connections, and you're going to have to think about how you provide the appropriate incentives. so now the questions are with the health care delivery systems, how do we align the financial incentives so we're not paying for continued sick care instead of health care? how do we pay for and incentivize health, and where should we be spending our money? those are the kinds of conversations that we're having in hawaii that i'm actually thrilled about, because i think
that is really where the direction of medicaid is going and where the direction of the health care area is going as well. matt: great. thanks, judy. so with this i want to start peppering the group with some questions. so i want to sort of start where you left off and amplify what you are saying but also come back and link in a couple of slides that ian put up there. one is the chart that basically looks at any distribution you've got, 1% of the population driving 20% of the cost and 5% driving 50%. whether medicare, medicaid, commercial, you kind of see that, but i think it's fair to say within the medicaid world, that 1% and 5% is much more expensive and much different and much more -- brings many more sort of challenges and opportunities than in other payer mixes. does that then lead us naturally
to your other chart, where we're looking at the u.s. versus other countries, where we're all engrained into this statistic of, well, the u.s. spends far more on health care per capita than any other country. but then when you kind of add in the social services, it's much more similar, although arguably our balance of that is off. so is the key for medicaid, to build on what judy is saying, to refashion the medical into more social, to get that correct balance, and finally, to get at one of your last points, ian, which is -- i don't know if i would phrase it as will the rich pay for the poor, but given medicaid is a government program, is a public program, and is dependent on taxpayers to sustain, how do we make this transition? ask it a couple ways. how do we change it? i'm thinking -- how do we also manage that change such that it
is politically sustainable? by that i mean, you know, is there a political will for taxpayers -- there's a political will for taxpayers to be providing appendectomies for people who need them. is there a political will for government to be paying for refrigerators and apartments, et cetera, on a large scale. let me stop that question and just throw it back to the three of you. justin, i don't know if you want to go first.
justin: the answer to that question is yes and no. ultimately when we went to a managed care model, the greatest thing you get out of a managed care model is the flexibility. they are on the hook for the most expensive intervention at the end of the rainbow, so they will do things like buy a refrigerator or fix an air conditioner simply because they have a payment actuarial sound, and it makes sense for them to use that kind of purchase versus paying for that. i would think if it's in my budget as a line item to buy people refrigerators and air conditioners, it would be a real hot topic. the way we've set it up with managed care organizations being at risk for the full panoply of services, i think you can do it. in fact, our managed care associations have added lots of benefits over and above what we offer under our state plan not built into their rates because we do know they make sense. so we would be giving people services in a place that makes the most sense. i think that taxpayers in general do support the program. you have to support the taxpayers, too. they certainly don't want to feel like you're wasting their
money. when they read a story in the paper about someone not getting a service that they think they have already paid for and should be covered, the taxpayers get very angry about it. they also get very angry about waste. you have to keep them in balance. they would support anything that makes sense in a system that makes sense where they think you're driving towards a high-quality product. judy: so i was thinking as you said that, i agree entirely with justin. i think the answer is yes and no. no, i'm not going to have a line item for a refrigerator or for tennis shoes or for the air conditioner, but i do think -- i do think we should build in a way to account for those services within the managed care rate, because eventually they will go down and down and down and won't be any more savings to have.
a place i like to go a little bit more differently is to characterize i do think health care and medical system needs to become more engaged and more consumer focused as opposed to body part or provider. you are disease specific. at the same point, i think that it's not that we need to have a health care system that -- where we have doctors doing social work. i do not believe that is the model that i want to see or that i think is in any way effective. i would like physicians to be more engaged, more able to actually listen and do those kinds of things, because then you get better outcomes with your health. when it comes to the social determinants of health, i want educators to be educating. i want that sort of social work
aspect of it to come together. that gets to the point of something that we heard yesterday with the opening plenary session, and that's that it actually -- one, there's no easy solution. there's no silver bullet. it's going to take all of us working together. i think that's the other point i'd like to make, and that is it really is about community coming together and working together. so it's not that i have the expectation that we're going to pay for the rent or the refrigerators, etc., from the health care system, it's a matter of reallocating and working together as a community to invest in what the community needs to create those healthy communities and healthy families.
ian: maybe -- i agree with that completely. i actually trained in the u.k., and my graduate work was in newcastle, which was a working class town that went through massive deindustrialization in the 1970's. we were doing what we called multiple deprivation scores, which was a cross-sectional look at lack of housing, education employment and so forth. health was a tiny fraction of that. i completely agree with that. i was going to tell one anecdote, which illustrates, if i was in your shoes, an opportunity. as i mentioned, i was on the california health care
foundation board. we had a retreat in fresno about four or five years ago. and this city manager, young assistant city manager in one of the towns next to fresno, he and his wife had a baby and he was up in the middle of the night and he saw a pbs interview talking about hot spotting. .so this guy got inspired, and he got the data from ambulance about emergency calls and hot spotted them. so we got in a bus with this guy, the board and our spouses and went on a tour of all the hot spots. the first hot spot was an assisted living facility whose idea of assistance was to call the fire department for assistance any time anything happened, like a patient snored, they would call the fire department. next thing they were in the e.r. the next thing we went to was a slum landlord where there was multiple instances of kids with asthma, having life-threatening asthma attacks and on and on and on.
my wife's old -- not old, seasoned -- emergency room nurse, analyst, asked how many fires do you have? he was going on 4000 visits at $7,000 a pop -- 7000 at $4,000, can't remember the right way around. 10. 10 fires in a year, 7000 of those events. so if i was doing customer focused analytics, i would look at where those hot spots are for all the streams within the purview of state/local budgets, and start with that pot of money and figure out a better way to deploy that problem. i think it's massive. i think it's massive. i think there's an enormous opportunity to enrich lives. maybe by giving them a job or check or something else. i keep coming back.
income and life expectancy, income and health status perfectly correlate. i tell the kids all the time, be in the top 1%, you'll do just fine. [laughter] matt: so, justin and judy is that the answer? if so, how easy is it to actually do that? justin: i think it's really hard to do. that type of thing is coming. getting that refined opportunity at the community level and putting out figurative fires, if not, thankfully, literal ones, i think health care is going to get more personal. the relationship, the understanding of what's going on at the personal level should become greater between the
doctor's office and individual, between the health plan and individual. i think information sharing is going to become much stronger. there's just a lot of opportunities there. we've hit the edge of affordability, and we've hit the edge of affordability of all three of the future streams. the private pay, the state government pay, the federal pay. everybody has hit the edge of affordability. necessity is the mother of invention. there's a lot better ways to do it. at the same time, we're at the point of a revolution and information that could help us get back from the brink.
and that is where we are. ian: let me just reinforce what you said. hitting the edge of affordability, the woman who runs health benefits apple told me this story, when they were going to cost shift like usual to employees, it went all the way to tim cook, who said, "no, we're not going to do it." apple employs 100,000 people, 0% work in the stores. they don't make much money, but they get good health benefits. it went to the top of the company. in so doing, partly because of that, partly was the apple watch wasn't selling very well, they put in a worldwide travel ban at apple for nondiscretionary travel. they have $300 billion in a bank in ireland for god's sake. if apple has hit the wall of affordability for its employees, then we know it's real. judy: and for sure with in-state budgets, medicare directors know we've become an increasing part of the budget. as justin noted earlier, that can't be. that cannot continue. we must have a change. must have it stop. government does invest in those social services and does invest in those things. i was at one of the sessions yesterday, also about public-private partnerships and investing in some of those social determinants of health, and i think that is another area we definitely need to start seeing some of those things
happen as well. but it's very much the case that we have reached the edge of affordability. i would like to note that the truth of the statement, at least in the health care industry, we talked about we're getting a lot better about, you know, information, et cetera. we're still in the -- we're still in the dark ages when it comes to that. ian: oh, yeah. judy: and some of our privacy rules are that way, that make it so hard to share data, to put those things together. they kind of work against you when those things -- when you're trying to do some of those things. it's certainly possible, but we
have a long ways to go in trying to pull together. i think those are some of the challenges that are upcoming in the next few years for sure. matt: let me build on the theme of affordability and take the question in a slightly different direction, thinking about the future, let's talk about medicaid expansion itself and other types of ways in order to provide insurance to people who may not have it or are in the system. so you know, justin, you are in the state that has not done medicaid expansion. you're on the board in the south region where relatively few of the states have done it. judy, you have represented two states who have done the expansion and represent a region where not all but more have done it. what really do you think is the future of the medicaid expansion either in terms of more states coming on, more states coming off, or finding different approaches to address the underlying issue? justin? justin: i think we're going to
have a very prolonged period of time where there are a significant number of nonexpansion states. that is going to give those -- there's going to be data. you will have to look at the effect that has over time. i would be very surprised if florida did it in the next few years. i would be very surprised if texas did it in the next few years and many of the other southern states. you will get this opportunity to look and see what type of impact that has on unemployment, on the state's economy, on labor participation, on the uninsured rates, and on public health. there will be basis of comparison. the one thing that has not happened with expansion states is they have not had to pay for it yet. they will have to start paying for it on january 1st of 2017. that is coming up in a few weeks. the amount they have to pay will incrementally go up for the next few years after that.
the other thing that hasn't happen since the expansion, there hasn't been a recession. if, in fact, they are driving down their labor participation rates and cutting into their revenue and driving up their costs by taking on the expense of the expansion, it will be very interesting to see what happens during first significant recession in those states. i think that we will have a prolonged period of time with non-expansion states, and there probably will be a recession, perhaps even a significant one, where we will have to see what happens to the states that expanded versus states that didn't and how they fare in that situation. because as we went through the last recession, our enrollment, it's a counter cyclical program. our enrollment spiked by nearly a million people in a short period of time. that was a deep recession. all recessions we see several hundred thousand people added to the program.
and instantly coming your costs go up at a time when your revenue really drops in the state. they have balanced budget, none can print money. that will be an interesting inflection point in the coming 10 years when the recession hits for the states. we are looking at it. one thing that the supreme court did is they inadvertently created a work requirement to get insurance coverage. you have to get above 100% of poverty, and then you are able to purchase insurance on the exchange, the cost. in florida, our minimum wage is higher than national minimum wage, and you have to work 30, 32 hours a week at minimum wage in order to get to silver plan. the majority of them purchased silver plans with cost wraps, so they are below 250% of federal poverty. we are still looking at our data
and trying to understand it. if you look at the census data, we are seeing a significant drop in the number of people that were in the gap. we were looking at 500,000 people in the gap below childless adults, below 100% of federal poverty a few years ago. it now seems significantly less than that, less in 2014 and even less in 2015. looking at that over time and understanding significance, keep in mind that we have maybe fallen into a situation where we have a significant reduction in unemployment rate, and it is permanently 100% federally financed. judy: well, on this point justin and i don't agree. [laughter]
judy: which probably doesn't come as a surprise. i would use statements, what's going to happen when there is a recession? what is going to happen to the people who find themselves uninsured, unemployed, in recession, below poverty level, and they have no access to insurance? i've now worked in two states, both of whom expanded, but they also came from a different background, in their expansions and in their decisions on how to cover people. oregon, while they did expand in the sense they had population up to 100% of poverty level, they also capped it. so i come from the state with infamous oregon house study. my takeaway from that is health insurance helps save lives. i did see that on a regular basis. people who were uninsured, who did not have access to health insurance, they were foregoing needed health care. they were coming in, and you
know, we got stories, letters after oregon expanded. there were stories written -- you know, handwritten letters to us, to me as a medicaid director, talking about how this health insurance saved their lives. so i approach it -- well, i appreciate the economic argument. i also approach it from a public health and from really a standpoint where health coverage and access to health insurance saves lives. does it have to be medicaid? no, it does not have to be medicaid. that's where in hawaii, it is
the only state in the country with arisa waiver, and so they have prepaid health act. they have had 90%, 95% health insurance rates for 40 years with a much higher proportion of people covered by employer-based insurance. so yes, we did have a medicaid expansion. but it didn't impact hawaii as much as it did in other states. so it does not have to be medicaid, but i would challenge us and states and others to at least consider as a public health if we want to think about how it is that you want to help keep your population healthy and have healthy communities, then how are you going to help make sure that your population has access to health insurance, especially those who are low-income, below 100% of the
federal poverty level? we already talked about they are the ones who tend to have higher rates or prevalence rates of substance use, mental health, behavioral health needs, of chronic disease, of living in high-stress areas of low income, et cetera. so i -- so that's where i come from when it comes to the medicaid expansion. i happen to agree with justin that it's not likely that the states who have chosen not to expand, i probably believe there's probably going to be additional states that might choose to expand. i hope that's the case. but i think there's other pathways to expansion, and we could explore those as well. ian: i think it's a very useful kaiser family foundation piece that just came out -- 4.4 million uninsured in the 19
states not expanding. 2.6 of those gap. it's clear and certainly you talk to people who have gotten coverage, they feel relieved by that, so it does make a difference to people's health. i think that is unequivocal. the question is can they do it. i want to underscore what they said about recession. we've had the longest expansion for a long time. we are way overdue for a downturn. that will put tremendous pressure on medicaid as both of you indicated. i think we've got to prepare ourselves mentally for that. it's just asking too much for a continuous expansion. economies don't work that way. i hate to be a buzz kill in that regard. i do think that what's important
is finding sustainable delivery models going forward despite this pressure. i think what we all agree is that that will require innovation for plans to provide services to states but also for providers. i honestly think in a lot of these expansion states, we have to put the arm on provider systems to take care of uninsured. what we are seeing is in states like texas is cherry picking geography of underinsured patients, and that undermines of delivering on a charitable basis, and we may have to legislate in some states. i think it's nuts in texas. it's easier to get into princeton than get a medicaid card in texas. maybe we should loosen up.
matt: i want to live with one question -- leave with one question for all of you. medicaid -- it's bigger than france. we cover births, long-term care, a lot of stuff in between. what should it look like, thinking about the future of medicaid. and obviously, ian, medicaid has a role vis-a-vis all the payers and all the dynamics that you deal with. in one minute or less, and i will start with you, ian, what should medicaid look like? what should be done to make it better and more functional? ian: i've been doing this for 30 years. i've had the same answer for 30 years. there should be a basic floor below which no american falls, and there should be a guaranteed
delivery system for folks. i actually personally say we should fund a delivery system that everyone has access to. if you want to trade up with your own money, knock yourself out. but that delivery system should be paid for through tax-supported financing. not a single-payer system necessarily but funded delivery system. how we do that, whether we put the arm on delivery systems to take a certain requisite number of people or give people a block grant, i'm fine with that. but the deal is nobody should be left at the bottom. if people want to trade up for a choice of providers, they look at models like the australian system and others where there is lots of room for people to, you know, expand service offerings and pick stuff financed through supplementary insurance, provided the base program covers most people and most people would be comfortable in that
quality and service of that program. i think that's eventually what we've got to get to. this categorical eligibility in and out is nuts, with all due respect. [laughter] matt: yeah. judy and then finish with justin. judy: wow. ok, i'm still trying to think about that. i do think that the future of health care needs to become more simplified, that we've made it incredible administratively complex. i was oftentimes, the aca when you talk about medicaid, we simplified eligibility. for those of us who run medicaid eligibility and had to develop medicaid eligibility systems we know that is a fundamental lie. that is not the case. that is not what happened. but if we were actually able to simplify, i'm not sure i would
go all the way to getting rid of entirely the categorical that is probably going to continue to be some distinguishing, some tiering. at least some basic -- everybody gets below a certain level you need to get this basic coverage. i think that is a direction. i think for the health care delivery system, i think you're going to see -- for the medicate -- medicaid program you're going to see medicaid playing a much larger role in that and partnering -- hopefully partnering more effectively with medicare in the future as well. that's a hard sell. but that would be my hope on the health care delivery side of the innovations there. >> final word. >> you come to medicaid and it can be bewildering.
we have tried to place the enrollees at the center of the system. as they come in, they have a set of maybe four or five very clear choices of health plan with different service packages. we tried to create a session where they compete for business based on benefits they provide, based on the customer service they provide, based on the networks they have put together and various other times the plans compete based on price as we make decisions around bringing them in. but that's what we -- we're trying to set up a system where the consumer is at the center of it and plans competing based on price and quality and consumer satisfaction and they are competing for enrollees. enrollees at the center of the system. i think providers have a place there, too. we still encourage providers to develop these systems either as subcontractors to our plans or to develop their own plan and to eventually become fully at risk and to innovate. ultimately, it has to be about the patient and has to be about the consumer and they have to come in and feel like they are in an understandable system that is going to successfully meet