CareTalk Podcast – Former US Rep. Allyson Schwartz What Makes Medicare Advantage Better

Former US Representative, Allyson Schwartz, joins the show to discuss what makes Medicare Advantage a better option than traditional Medicare.

David Williams:

Welcome to CareTalk. Your weekly home for incisive debate about healthcare, business and policy. I’m David Williams, president of Health Business Group.

John Driscoll:

And I’m John Driscoll, the CEO at CareCentrix. So David, who do we have today?

David Williams:

Well, John, here’s the story. You’re always telling me how great Medicare Advantage is and I’m always cutting your knees out from under you and I said, “John needs a pal. John needs somebody who knows what they’re talking about, about Medicare Advantage.” So we have somebody on named Allyson Schwartz. John, who’s that?

John Driscoll:

Former congresswoman Allyson Schwartz, who now runs the Better Medicare Alliance, a fierce and thoughtful and charming advocate for Medicare Advantage. So perhaps she can warm you up to the task, David.

David Williams:

Welcome, Allyson.

Allyson Schwartz:

I think I’m delighted to be here.

John Driscoll:

So Allyson, maybe start with, for those who don’t quite understand it. What is Medicare Advantage and what is the Better Medicare Alliance stand for and try to accomplish?

Allyson Schwartz:

Well, first of all, I’ll start with Better Medicare Alliance, which is, we are a national coalition. What you consider this? The array of stakeholders in healthcare and we include health plans and provider health systems, primary care groups. We have a number of professional associations, so it could be the American Nurses Association to Five Doctors, the Nursing Messages, really all the way across the board and we also have community partners like Meals on Wheels and the Area Agencies on Aging who are really basically the stakeholders who really pay for and provide Medicare and are really interested in and supportive of what is basically simple way to say it, the managed care option in Medicare and they offer a variety of health plans to Medicare beneficiaries and say, “You can either pick the traditional fee for service system, which we believe is quite fragmented and expensive and people get lost. It’s confusing or one that is a one-stop shop.”

John Driscoll:

David, you’re a big fan of the confusing lost world of Medicare fee for service. What say you?

David Williams:

Well, John, here’s the thing. So I hear about Medicare advantage and they have the better Medicare Alliance. So it sounds like Allyson that you’re talking about traditional Medicare is like Medicare disadvantage and they need like the worst Medicare Alliance as well. So I thought people like traditional Medicare. They can go where they want, they’re not in any networks and I know there had been some complains before about G as you know, Medicare managed care on the one hand, maybe it saves money. On the other hand, maybe it’s costing the taxpayer more.

Allyson Schwartz:

All good points, but I’ll pick them apart if I may. But first of all, there’s a role for traditional fee for service Medicare. There are people for whom that might be a better choice. We believe in people being able to make an active choice in which way you want to receive your benefits. If in fact, money’s no object, you can afford a Medicare policy you might want traditional fee for service and the truth is also that people may find their choices change over time when they’re in Medicare. Maybe this year, next year, the year after this works for me, but next year it doesn’t. We’re finding more people who are in Medicare, traditional Medicare, switching to Medicare Advantage as they start to see it’s more expensive than they thought. It is confusing. It is fragmented and they can get a better deal.

As far as who’s paid more or less? MedPAC has said that we’ve reached parody. You’re absolutely right. It used to be paid more in 2006 until 2008. Medicare Advantage was paid more. They made the case 25 years ago as to create a whole new way of doing healthcare. You had to incentivize providers and plans to get involved. So we now have almost 80% of beneficiaries are in high quality plans. So is it working? Yes. There’s 99% satisfaction in Medicare Advantage is pretty high percent affection in Medicare as well, but it really is what works for you.

John Driscoll:

I think that there’s no question that we’ve created a system that actually a lot of seniors are very happy with. I think what I’ve heard is that there’s a fair amount of concern still about overpayment, particularly around the risk adjusters. There is that troubling OIG report. There’s no question. I think at least from my perspective that coordinated care is superior and I’d love to talk to you about the values of coordinated care versus discounts. But how do you… what are your thoughts on the challenges that to the ways that Medicare advantage plans, those that are in the private side are actually using the risk system to potentially inflate their profits. I mean, certainly some of the critics have really attacked Medicare Advantage, not on the substance of the program, but on the way people are potentially gaming the system.

Allyson Schwartz:

This is a complicated system. What is interesting is that in the ACA for example, they do risk adjustment, but they do it in a different way. They do it by populations, and age, and geography. It’s some of that in MA. But what’s interesting in Medicare Advantage is that every beneficiary, every year has to get a risk assessment. You get paid a little bit less if you’re healthier than the average Medicare beneficiary. You get paid a little bit more… the plans get paid a little bit more if you have higher risks. The idea was is to actually make sure that there are no incentives for skimming and it’s turned out that Medicare Advantage therefore takes us very seriously. They spend a lot of time, energy, and money to actually make sure that they get an accurate risk assessment for every beneficiary every year.

They do a better job than fee for service. We do believe that and understand that what risk assessment does is give the opportunity. Something in MA that doesn’t exist in fee for service, which is the opportunity to create risk stratification. You can identify every beneficiary in Medicare Advantage by risk. You know that person has diabetes but in fact, they’ve never come in to see your clinician. They go after those people. Now I’ve seen that happens every time, but there’s a lot of outreach. There’s a lot of care management that says, “Make an appointment. Why haven’t you made an appointment?” You see ads say, “We’ll help you schedule the appointment. Please come and see us. We want you to have a primary care provider. You don’t have transportation. We’ll provide transportation to your medical appointment.” Again, it’s not universal, but it’s increasingly interested in getting these people who are at risk, care.

John Driscoll:

Really changed David is, I get into the Medicare advantage area would, at that point, it was called Medicare plus choices or managed care and the Feds had actually cleaned up a lot of those marketing violations around just enrolling healthy people that were really marked the early years of managed care. But what really changed in is embedded in the risk adjusters is that the federal government will actually pay you to care more for those who are sick and so they changed the incentive set. So actually the health plans are more incented now to actually cover everyone in fact, to cover more unhealthy people, because there are so much opportunity to turn around that care. I mean, not managed care can help you with your emotional issues, David, but for chronically ill, elderly people, they can actually make a huge difference. I mean, coordinated care of any sort really, but by Medicare advantage, you’re actually paid to coordinate care.

Allyson Schwartz:

Can I also say that what’s interesting, it shows up in who’s in Medicare Advantage now. There’s been a different trend in the last 10 years. It’s increasingly low in modest income folks. It’s increasingly people with multiple chronic conditions. More of the frail elderly and people, again, with complex chronic conditions, because they’re themselves seeing the benefit of this and so it’s working for the people it should be working for, which is really quite terrific.

John Driscoll:

Do you see direct contracting, maybe you could explain direct contracting or CMS as much as CMS has an agenda right now, they appear to want to create even more value based alternatives where you’d have a direct coordinated care contract with the federal government in your local doc called direct contract and do you see that as adding, moving the system in the right direction or the wrong one, and does direct contracting compete then with Medicare advantage?

Allyson Schwartz:

Well, those are good questions that I’m not sure I have all the answers to because we haven’t yet seen direct contracting happen, but it is on its way and actually, this has been a path that, again, I was even a part of, to some extent, not direct contracting itself, but the path that how do you keep moving fee for service healthcare towards a more value-based system and the way you do that, well, there are a number of different ways that they’ve been doing it. They’ve given primary care doctors a bump up in order to do care coordination. [inaudible 00:08:56] started this direct contracting. Some of it is still questionable because it’s people will be assigned to this contractor rather than actually get to choose it. I think there’s some controversy about whether that should be your choice or the choice of the system.

I think there’s some pushback on that from some of the beneficiary groups. I do think it is another way to potentially bring providers to the notion of accepting risk, of accepting the population of patients to take care of over time. The questions I have about it is every one of these fee for service add ons that we do, like way we can tweak it a little bit. It has new rules and new requirements and new expectations and they sometimes are not as long lasting or create enough certainty for providers or enough financial benefits for providers to add all the other things that providers don’t typically do and some of that is the actuarial analysis of this population and figuring out what benefits you can really provide and which ones can’t you and to do some of the dollars and cents of it. So I’ll be interested to see how it works and I’m going to be following it pretty closely. Possibly it’s another tool in the toolbox to get to move providers to a risk-based system where they take some responsibility.

David Williams:

So talking about administrations and CMS. There’s a new person being nominated to run CMS, Chiquita Brooks Lusher. We are told, and she’s certainly a known quantity from the Obama administration. What’s the impact that she’ll have broadly and on Medicare advantage? What’s the thinking?

Allyson Schwartz:

Well, interestingly we don’t have really clear signals from the Biden administration yet about Medicare Advantage. What he has said, Biden himself, President Biden. Sorry. I know him personally, so it’s hard not to just call him Joe like everybody else, but I’ll be respectful. The president and I actually know the secretary nominee as well. They have a lot on their plate right now, right. I mean, and they have some very clear goals. Obviously, COVID is one. Expanding Medicaid and Medicaid expansion to states that don’t have it. Dealing with the ACA and making sure that works right and getting people who are newly uninsured or currently uninsured to get them into care and get them into coverage and make it more affordable. The President Biden has said is that he is going to maintain the guarantee of Medicare.

So that’s a great place to start and if it’s Medicare the way it is now with the option, Medicare Advantage, that’s great. I do also know the administration is very interested, and we just talked about, in moving towards a more value-based system. In which case you got to love Medicare Advantage because it’s doing it. It’s leading the way on this and if you want to tackle disparities, if you want to tackle some of these issues about social determinants, which they do and I know that the new CMS administrator nominee is very interested in the duals [inaudible 00:12:09] population, the Medicaid population in social determinants, in disparities. Again, Medicare Advantage is a huge opportunity to do that, right. We’ve not yet heard them say those words. So there’s a little hesitation about how gung ho they’ll be on Medicare Advantage. But we do expect that it’s going to fit very comfortably in their priorities going forward and should be a part of what they hope to see in healthcare, which is better coverage, better care and less cost to the beneficiary.

John Driscoll:

With the Medicare trust fund looking like it’s going to go bankrupt in 2024, which no one’s really paying attention to and we’re spending trillions of dollars of money we didn’t expect to. How do you think that’s going to affect the federal government’s budget in general? I mean, honestly, as an ex Congresswoman, I don’t know whether you remember BBA 97, but I really don’t think that folks are looking at what the impact of the bills coming due, because we can’t obviously let the Medicare trust fund that everyone loves go bankrupt and the only way we’re going to change that is to fundamentally change the cost structure to go down at a time when we’ve got 10,000 people turning Medicare every day, what’s the solution?

Allyson Schwartz:

Well, the solution, there are a couple of things. First of all, we were very concerned about cost containment, even though it got very little appreciation when the ACA that we needed to bend the cost curve, is the way we talked about it from the budget committee, I was high ranking on a budget committee for most of my time in Congress and there’s no question that the economists will say no, and the administration will say no, it is important to spend some money. We’ve got to tackle COVID, we’ve got to get those vaccines out the door. We’ve got to get into people’s arms and we have got to replenish the economy. The economy looks like it’s coming back faster. Even the Medicare trust fund, which you’re right to worry about and if I was still in Congress, and even now I do worry about on the insurance maintain insolvency… It’s getting back some resources because people going back to work, which is great, but that still isn’t where it needs to be.

So there are a couple of things you can do about it. You want to look at where there are cost savings to be had in the system and some of those certainly in fee for service, we’ve talked about, it’s inefficient, it’s expensive. Where can you move more people to a more efficient and more cost effective mechanism? We think Medicare advantage is a part of that and you also have to look at revenue. It is very difficult to imagine how you double the number of people in Medicare and have fewer workers, because that’s the demographics in our country, how we actually do it without more revenue. So where can you get that revenue and how do you do that? There’s cost savings to be had and we know it in the pharmaceutical sphere, we know that there are places that we could do better in terms of, again, some of the fee for service tax, the structure of the spending structure.

So it will be a conversation. It will be an important conversation and it’s one that we should start sooner than later, but it’s certainly we will be BMA and you may know I’m actually leaving better Medicare Alliance in six months. It’ll be somebody else’s task at BMA, but I hope to be engaged in that conversation about how do we do this in a way that does not diminish the drive to quality and the drive to improve care and outcomes and get people better care at better cost, with more benefits. I believe it can be done without actually blowing up the budget. I know again, but it’s going to take some real hard thinking and some willingness to do some tough things, but I believe we’re up for it and I know that seniors are going to be 20% of the population, and we’re not going to walk away from Medicare and we’re going to fight for Medicare to be there for ourselves and for the future generations.

John Driscoll:

So, David, I think she slayed you on the fee for service thing.

David Williams:

It’s a tough one, John. I ought to say that John, you’re such a downer with your question about budget and spending. I like the magical thinking. We should go back to that. I might snap my fingers and the pandemic is over and the trust fund is trustworthy forever.

John Driscoll:

At some point the tectonic plates of costs are going to start to move and I just thought, well, I think we need to be prepared for it and I think thinking about new ways to engineer value-based care, leverage Medicare advantage to leverage what we know makes a great deal of sense. And so thank you, Allyson, for joining us today.

David Williams:

Well, that’s it for another edition of care talk and John, as long as those tectonic plates shift on geologic time, which should be just fine. I’m David Williams, president of Health Business Group.

John Driscoll:

And I’m John Driscoll, the CEO of CareCentrix thanks for listening. And if you like what you heard or disagree with it or agree with it, please subscribe.