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Richard Helppie
Hello, and welcome to The Common Bridge. Welcome to our listeners, our readers and our viewers. Ultimately, everybody is going to interact with the health care system in the United States of America, it is the greatest system. If you need diagnosis, you need treatment, you want to be in the United States of America. And as Winston Churchill was quoted, Americans will always do the right thing after they try everything else. That kind of describes our payment system, which is a bit of a mess. We're bringing back today, a returning guest, a noted expert in health care policy, health care administration, health care operations, chief executive officer of the Michigan Hospital Association, Brian Peters. His influence is national and to some degree international; he has a great command of the topic. We're going to just have a chat on what's going on in health care today. Brian, as always, it's really great to see you, welcome to The Common Bridge.
Brian Peters
Thank you so much for having me Rich, I always enjoy our conversations.
Richard Helppie
Brian, maybe just start with what's top of mind for you and your constituent healthcare providers. What are the kinds of things you're thinking about? I know it's going to be a long list but our listeners, readers and viewers all want to know about this.
Brian Peters
Well, it is a long list but the reality is, in an election year - particularly one that is so dynamic, as this one has proven to be - our eyes really have to be focused, laser sharp, on what lies ahead in a lame duck session that could potentially be fraught with all sorts of risks, but also opportunity. Then we'll know, soon enough, what will happen at the congressional level, certainly with control of the US House and Senate, but also here in Michigan, where our state house is up for re-election this fall, the state senate and the governor, of course, are not up. But control of the house is very much at stake. I know the outcome of those races in Michigan and across the country will have an awful lot to do with the priority list for 2025 and beyond. So we really start there with the political dynamic in this very, very interesting - to use that word - election year.
Richard Helppie
Indeed, it is a sharp contrast. Let's just talk about payment systems a little bit. The Patient Protection and Affordable Care Act, also known as Obamacare, is the law of the land. It's been the law of land for some time, it's been modified early on, some of the most egregious parts of it - like the independent payment advisory board - were removed early. It's fashioned as insurance reform and made eligible a lot of people that were formerly not eligible for Medicaid but at least they have some coverage. What is the future of the Affordable Care Act, if we turn toward the Republicans or if we turn toward the Democrats, as a country?
Brian Peters
Well, it's interesting to rewind the clock a bit. If you remember when the Affordable Care Act was first signed into law, we went through several election cycles where you had a very significant focus on rolling back or repealing altogether, the Affordable Care Act. If you recall, we had court cases that bubbled their way all the way up to the Supreme Court of the United States that dealt with some of the fundamentals of the ACA. I think it's notable that in this particular election, at the state level, and certainly at the federal level, while you're hearing some talk about healthcare, generally speaking it is not the number one discussion topic and you don't see it in the platforms from either party. Any serious talk about fundamental change of the Affordable Care Act, no one at this point is talking about unwinding and undoing what has now become, as you said, the law of the land. Now, certainly, that doesn't mean that we won't have very robust conversations about some of the issues that relate to healthcare financing and delivery, and some of those relate to the Affordable Care Act, no question about it. But I think the days of having these big picture political debates about whether or not the country can afford the ACA, whether or not it makes sense to continue down that path of Medicaid expansion, and insurance exchanges and all the rest, I think that ship has sailed. Depending on where you sit, you may think that's a good thing or a bad thing. I think from the Michigan hospitals and health systems perspective, on balance, that's been a good thing to address what had become a chronic condition, here in our state, of uninsured folks who could not access the system in a very efficient or effective way because they lacked coverage, were afraid to seek treatment or screenings at an early stage. I think on the balance, that's been a good thing. We've had a Medicaid provider tax program, as convoluted as it is, it's a program that we support, because at the end of the day, it's created a revenue stream that allows our hospitals to provide access to care for everyone in their respective communities.
Richard Helppie
Tell the audience how that Medicaid tax works. It is really an interesting part of the healthcare payments method.
Brian Peters
It really is. And you know, Rich, we've talked about this before, if you were to start with a blank slate and design the American healthcare system from scratch, would you come up with an approach like the one we have today? The answer, of course, is absolutely not. But the reality is, it's the system we have now and until there is something that can replace it that is politically viable and would check all of the boxes for our members, certainly. But other providers and insurers and all the other members of that healthcare ecosystem, I think we have to do what we can to protect and preserve the system we have and make sure that it benefits patients at the end of the day. So to answer your question, this Medicaid provider tax program that Michigan has - other states have it, it's been around for over 20 years now, in some form or fashion - in essence, the state of Michigan taxes every hospital in the state. We pay a tax, we have to pay it, that is not voluntary, that's a tax like any other tax. The state of Michigan then uses that revenue to draw down federal matching funds through the Medicaid program, which of course is a shared state and federal responsibility. We then use those new matching funds to return revenue back to the hospitals and health systems who paid the tax based on their Medicaid volume. So you have hospitals that provide a very large number of Medicaid patients with their care, their screenings or treatments, the whole list of health care interventions. We benefit from that tax program; at the end of the day, it ensures that access can be protected.
Richard Helppie
You made mention about the cases that were at the Supreme Court and indeed, I just happened to be at your convention on Mackinaw Island, at the podium about ready to introduce somebody and there was an enormous room wide screen behind us carrying live from the Supreme Court, and of course, they were talking about the personal mandate. The initial news was you can't do it and then the Roberts court said, no, it is a tax and congress has the ability to tax. Then we've made able-bodied people without children with a higher income prior to that eligible for Medicaid. With the methods that you've talked about, Medicare has remained a firm pillar of the fabric. It seems to me we have, on the insurance side right now, two big problems. First of all, the notion of employer provided healthcare, in that people will say, oh, that's a well run part of the system. But you know, look, if a person gets too sick to work, they're out of the system. If they get too old, they're kicked out of the system. And companies try to find ways to not identify someone as an employee, so they don't have to cover them. But to me, it's a simple thing, tax the benefit. Problem solved. Nobody will do that. The second part, though, that I think is really egregious that you don't hear about because there's not a political organization, but it is people that are self-employed or small business owners that are trying to access the exchanges. A small family can have $8,000 of premium to get them an $8,000 deductible, so they're $16,000 out of pocket before they begin to get any kind of insurance benefit. Those folks have just been left to fend for themselves at an unaffordable rate. I don't imagine this is on the radar of anybody. So those two items; those folks that are trying to do the right thing by buying coverage that are being just slammed with high deductibles and high premiums, and then this legacy thing of being covered through your employer, which you know, in my mind just has to go, that makes no sense anymore.
Brian Peters
At the end of the day, Rich, I think the word that describes what you've just lifted up, it's the umbrella term, and it's one that I think is going to be the buzzword and the focus when you talk about healthcare from a public policy perspective for the next few years, and that word is affordability. Now, it's not necessarily a new concept, we've talked about health care as a very large expense for quite some time but I think this idea of affordability - above and beyond access, above and beyond quality - affordability is really going to take center stage. Part of that, I think, is a connection to this broader public policy challenge related to inflation, and the affordability of everything from gas to a gallon of milk to housing for the typical American. Now you layer in health care expenses, which have continued to rise. I think the focus again, on Capitol Hill in Washington, DC, and certainly here in Lansing in the state capitol, increasingly is going to be on the affordability of the services that are being provided and where is the locus of that expense. In other words, we can look at the margin that's being created by hospitals here in the state of Michigan health systems and contrast that margin with the margin that's being achieved by pharma, by prescription drug makers, by medical device manufactures, by insurance companies, by all of the other components of the healthcare ecosystem. I think that that is going to be a real point of interest from our elected officials; they're going to want to know on behalf of their constituents, wait a minute, in this current healthcare environment, who's really doing well, and who's just barely making it, who's just barely creating a margin that allows them to reinvest and continue to provide access to communities? It's that old saying about pigs get fat and hogs get slaughtered. I think in the public policy domain, you're going to hear that phrase used a little more often than perhaps we have in the past.
Richard Helppie
Indeed, and some of the things in pharmacy, like the round trip dollars on pharmacy benefit managers to evade the actual medical loss ratio, that, to me is something that needs further investigation. And look, the counter argument to the high cost is that we have great supply in the United States. People hear about other countries nearby, Canada, for example, or European countries, they say it works so well with single payer. What they don't know is that those budgets are achieved by strangling supply, that there may not be an ER, that there may be one specialist for a particular children's illness in the entire country and if you don't like that person, or they're not treating you to the level you think you deserve, you don't really have an option. Even when you come down to the retail pharmacy, one of the techniques is to take things out of the prescription list and put it out as an over the counter and voila, now it's outside of the healthcare payment system. We've got to make sure that we address the supply, the choice, the access, and address affordability. I think you make a strong point, look at the earnings of United Healthcare, look at the earnings of the big pharmaceutical companies, the device manufacturers. These are very, very robust businesses that are writing the demographic trends where we need to get more health care, but it's crippling the tax supported institutions that take care of all of us. I don't know how we undo that knot. I hope you do, because that's kind of your job.
Brian Peters
I really have believed for some time that - this current election cycle notwithstanding - healthcare is going to be the public policy challenge of our time. And I stand by that, I really do believe if you take the long view over the next 20 years that healthcare is going to be that important and it's because of something you just referenced, Rich, and that's demographic reality. When you look at the aging population and the increased demand on the system, and you look at the fact that many of those folks who are aging into Medicare and aging into that phase of life where they're going to need more health care procedures and interventions than ever before, well, those are the same age cohorts that used to work in our hospitals and our clinics and nursing homes and all the rest and they're retiring. The pipeline right now, I can tell you very clearly, is not robust enough to replace them if we continue the current delivery model into the future. But that's a big gift because I really believe you're going to see a change in the way we go about the delivery of health care in this country, not only because of emerging technologies and artificial intelligence and all the rest, but also because of payment reform, because of a new approach to public policy that allows, perhaps, the full cadre of licensed caregivers to practice at the top of their license. We've had artificial limitations on that on a state by state basis. A great example here in Michigan in recent years, would be the ability of CRNA, certified registered nurse anesthetist, to administer anesthesia without direct physician oversight; we recently joined the vast majority of states in allowing that to occur independently. It's been critically important for access to care in rural communities throughout Michigan. That's just one example. Scope of practice is obviously a very contentious issue but it's one that you're going to see, I think, more debate around that. And at the same time, you're seeing these technologies - virtual nursing programs, for example - being deployed in hospitals in Michigan and throughout America. So I think at the end of the day, something's got to give, we can't have this delivery and financing model that we've had for decades in America, given what's happening with the demographic reality.
Richard Helppie
Brian, to that end, as we also become more technology dependent or empowered, however you want to look at it, where are things standing right now with telemedicine and getting reimbursement for that, and also tell my audience here about the concept of hospitalization at home? I don't think many people have even heard about it. And remember, it's a lay audience so if you could talk about telemedicine and where that might fit into the future and what that could do for cost and quality and access. And then similarly, I've heard from friends who had great experiences with hospitalizations at home.
Brian Peters
Absolutely, Rich. The hospital at home program, as well as telemedicine, are two aspects of health care delivery that absolutely were turbocharged as a result of the COVID 19 pandemic. Because, you remember, particularly in the early stages of the pandemic, when hospitals were really battening down the hatches to provide care only to this influx of COVID patients and really, to the extent of their ability, making sure that we didn't have anyone else coming into the acute care hospital setting, well, what that really led to was a dramatic increase in the use of telehealth. What we found was patient preference for receiving care via telemedicine was actually much higher than anyone had anticipated. In fact, when the pandemic started to recede, we found that many patients said well, even though I'm allowed to come into the hospital for this intervention, if I can receive this via telehealth, then I prefer that for all kinds of reasons, particularly if you think about it in the behavioral health realm. People have this stigma, this concern about I don't want to show up in person to have this behavioral health intervention for fear that someone's going to see me. If I can do that from the privacy of my own home one on one, as we're doing now, well, that's something that we found is a real preference. So that's number one. The hospital at home program that you're alluding to, means that we actually have qualified clinicians - could be a doctor, a nurse, some other caregiver - that show up at your home periodically and provides care; sets you up with all the durable medical equipment, whatever technology you might use or need in that home setting. But again, alleviating the need or the obligation to actually get in a car, drive to a hospital, deal with all of that, expose yourself potentially to infection control issues, that's another advantage of the hospital at home program. By the way, I mentioned transportation, we are very focused now more than ever on the social drivers of health: food insecurity and housing are two of the big three. The third is transportation. We found that people don't necessarily have the ability to get from point A to point B to their follow up appointments and whatever the case may be. So again, the hospital at home program and telehealth directly address that lack of transportation issue. So Rich, you've touched on something I think is a very important aspect of the future healthcare delivery system. And now the question is public policy. Can we have Medicare, Medicaid and private insurers adequately compensate providers who are in that realm, who are in the hospital at home business, who are in the telemedicine business.
Richard Helppie
I understand the hospital at home, that a van will pull up, you've got a hospital bed, you've got blood pressure monitors, oxygen tanks, etc. and they basically construct a hospital room in your home. They're monitoring it centrally, I guess they can use cameras if people permit, as well. Folks don't have to travel and the nurse stops by or the phlebotomist stops by to do their thing. Otherwise, people are at home watching their own TV in the four walls of their own house. Cheaper care - I mean less cost care, not cheaper, I should say - less cost care, a psychological benefit for not having to be [in] a hospital where there's...if you've ever been in one overnight, there are noises and people coming in and out and the lights are never shut off. You're going to rest better and heal faster it would seem. Then with telemedicine, I know my own personal experience it's, you're going to be seen at 3:18 and we'll send you a text when the doctor's ready so you can be in front of your computer; you're not chained to being in front of the computer. Now, again, this means that we need to have ubiquitous broadband and people need to have devices to do that. I think there are public policies moving in that direction today through the infrastructure bill. But Brian, you mentioned public policy, I mean, the conversation I'd love to have would be what are the questions you should ask the candidates for office? Of course, that would mean a substantive reply, because we have our political system now geared to how big we can scare you about the other side. For example, Donald Trump's going to take away your health care, he's going to throw millions of people out into the street. I don't think that happened the first time he was president, you can tell me if not. Then you'll have on the other side, well, the Democrats are going to lead us to the path of destruction because they're going to give your health care to people that aren't here legally and they're going to cave in to all these unions, and you're not going to be able to get any health care. So you've got two scare tactics going on. What should we be asking the people that want to serve in a public office about their views on health care?
Brian Peters
Well, it's really a great question, Richard, you're exactly right, the scare tactics are often overblown. When you think about the reality of our current political system, where even if one side on paper may have all of the levers of control - Michigan is a good example, our governor, our house and our senate here in Michigan are all controlled by Democrats - and yet, the Democrat agenda is not running wild in our state. Why is that? Because the margins of control in the house and senate are very narrow and politicians are always looking ahead to the next election. If you go too far down a path, you run the risk of being labeled as extreme and losing control in the next election. And so, for better or worse, our system is set up in such a way that there are some checks and balances. I use Michigan as an example currently, but certainly at the federal level as well, where - I can't predict the outcome of the election at the federal level - I can predict that the most likely outcome is divided control. In other words, it's not going to be one party controlling all three with super majorities, veto proof majorities, filibuster proof majorities. And because of that reality, there's going to need to be give and take. Now having said all that, to answer your question, what should we be asking? Well, I really believe that we should be asking elected officials, those who are running for re-election and those who may be running for office for the first time, where does healthcare stand on their priority list? In other words, some folks look to go to Washington or look to come to Lansing because they are a one issue candidate, they are so energized about a single topic and that's why they decided to run for office, and maybe an issue like healthcare is an afterthought to them because they're so laser focused on something else. We want to know where healthcare ranks. Do they understand the importance of healthcare, do they understand what you said at the top of the show Rich, which is, in essence, health care is everyone's destiny, we are all going to interact with the healthcare system, ourselves or our loved ones or colleagues, at some point in time, and we're going to need to have high quality, affordable accessible care. As an elected official, how are you going to contribute to that outcome, to making sure that we have access to quality affordable care in the future, and really let them explain their thinking on that topic because that will let you know how high of a priority it is. Now, to get into the weeds, I can tell you that we at the Michigan Health and Hospital Association, have set up a website, the MiCare Champion - M-I-C-A-R-E - MiCare Champion page. It is a mechanism to allow for grassroots engagement and advocacy, we always like to say politics is not a spectator sport. It's interesting to watch all of these machinations on the nightly news and certainly online, but get involved. And one of the ways to get involved is to educate yourselves. We're an organization that has a list of issues and priorities. You can educate yourselves on what our priorities are, whether that's something like Medicaid reimbursement, whether that's medical liability reform, certificate of need, nurse staffing ratio, mandate legislation; we have a laundry list of issues that are very important, the 340-B prescription drug pricing program, and also how to engage with your elected officials on each and every one of those topics. We have a range of data, talking points that you can use to engage in a conversation with elected officials and let them know how you're feeling about those topics. So again, politics is not a spectator sport, we all have an opportunity to get involved.
Richard Helppie
Indeed. I think your point about divided government is very important. If I was in a snarkier mood today, I would say something about our governor being the daughter of a healthcare insurance executive and probably gets an earful about that side from time to time. And look, I will tell you this, Brian, as a person that has achieved Medicare status, it's the first time that there has been a healthcare insurance provider that is looking at me longitudinally. And I think this is a thing that we need to think about, like if Aetna or United or someone is going to cover health care, let them write five and ten year policies, because these one year at a time and then renew it, it just gives them incentive to say no and block the payment of any claims, which frustrates people. When somebody's sick, they didn't pick getting sick, when someone's injured, they didn't choose to become injured and then they've got another fight on their hands with getting the insurance benefits that they've earned or that they qualify for. Then we have an army of lawyers out there that are willing to take a part of that to get you some of what you should be getting reimbursed for. So when you get the call to be Secretary of Health and Human Services from either President Harris or President Trump or President Vance, I hope that you will accept the call and be willing to go to Washington to serve because I'd sure like to see you doing that.
Brian Peters
You're very kind, Rich. On the Medicare topic, I think it's very interesting to look at the evolution where for many, many years since the inception of the program back in the mid 1960s it was the case that we had private insurance throughout our lives; if we were fortunate enough to have private insurance or perhaps we had Medicaid, an awful lot of Americans, of course, were completely uninsured. But for the most part, we had private insurance. As you said earlier, most of that was attached to our employment, it was employer sponsored insurance. And then when we turned 65, we left that world and went into the Medicare program, which was the exclusive domain of the federal government. Well, the evolution now with the MA plans, these are Medicare Advantage plans, means that those private insurers now have a stake in the game right through your golden years. So with Blue Cross Blue Shield out of Michigan, for example, they have what's known widely as their Blue for Life strategy, which means you're currently a Blue Cross subscriber maybe in your 40s or 50s, our goal is that when you reach age 65, qualify for Medicare, that you sign up for a Blue Cross MA, Medicare Advantage plan. Now, from a public policy perspective, there are some pros and cons to that and there's going to be a constant battle, I think, on Capitol Hill in the years to come because from a provider perspective, hospitals, doctors, we want to make sure that those MA plans are fairly and adequately compensating for the services that are being provided and that they don't leave Medicare patients in a lurch. In other words, leaving them with too many co-pays and deductibles beyond what the traditional Medicare program would have allowed. But if you look at all of the independent analysis, and this comes out on an annual basis, that gives you a rough idea, if someone in America that's about to turn 65 thinking that you're on Easy Street when it comes to your health care costs now that Medicare is going to step in and pay for everything, nothing could be further from the truth because that number for the average American is well above six figures in terms of what you would, from a projected degree, be required to pay as an American for your health care. Medicare does not pay for nursing home care by and large, it only covers a portion of your prescription drug expense, and so on and so forth. So I think it's the very ugly slap in the face for a lot of Americans who didn't perhaps account for and budget for the need to have out of pocket health care resources above and beyond what Medicare pays. And I think, again, it's going to be a public policy debate for years to come.
Richard Helppie
Indeed, and Medicare was designed at a time when we called insurance hospitalization. So the Medicare Part A works pretty well for inpatient care, Part B, which is more for physicians and outpatient services, I think the government policy on this is pretty good. It's a premium that is set based on income. So if you've done a little better, you pay a little more, but it only pays 80% of charges. And so folks have to go buy a Medicare gap plan or a Medigap Plan and that is under traditional Medicare. The advantage, of course to traditional Medicare is that there's no gatekeeper. If you're referred to a research hospital, you can go if the research hospitals willing to take you, there's no question about that, any Medicare provider can take you. Under Medicare Advantage, if you think you need to seek the services of a research hospital, your referral can be denied, and say, not medically necessary. So when folks are looking at that lower cost of Medicare Advantage, they need to understand that part of that discount is coming in, somebody else, ie the insurance company, is making medical decisions for you. So it's something to investigate carefully, because it's very difficult to go from a Medicare Advantage back toward traditional Medicare, you can be excluded for pre-existing conditions and everything else. Brian, you mentioned prescription drugs, it's my perception and I check less frequently than I used to in a prior life, candidly, but that that's been a program that's worked pretty well. It uses the Australian model of whether you need the drugs or not, sign up when you first become eligible because if you don't, there's a big catch-up premium if you want to get in later. I think it's sensible. It pits the for profit insurance companies against the for profit pharmaceutical companies, so that the formulary can be subject to intense business negotiation. Also it's a consumer product that has to be sold each year so that's keeping the cost down. My perception is Part D for Medicare remains a shining star. Am I wrong about that?
Brian Peters
So there's a lot to unpack there because prescription drugs are such a critical linchpin in modern American health care delivery. I think every one of us could point to an example of either ourselves personally, or a loved one, who's benefited tremendously from the innovation and the breakthroughs that the pharmaceutical manufacturers have created over time. Certainly I'm no exception and I will never lose sight of that fact. It's interesting to know that for many years, if you looked at any private insurance company in Michigan, and broke down their medical expense by line item, inpatient hospitalization was the most significant line item, the most expensive cost for them here in the state of Michigan, for many, many years. And about 15-16 years ago, that ceased to be the case. That is when prescription drug expense replaced inpatient hospitalization as the single largest line item. And with the GLP drugs, the Ozempics, and the rest - anxiety and depression medications - all of the other things that have come online within a very recent period of time, that expense has skyrocketed overall. And so when you look at the healthcare ecosystem - and you could map it out - you see one part of that ecosystem that is absolutely skyrocketing in terms of the expense. Now, having said that, to your question, yes, the Part D program, I think, has worked well. There have been improvements that have been made by congress and administrations in the White House in recent years that I think have created more robustness, more capacity in that program. There's going to be more to come, I think, in future years, for sure, because of these growing expenses. I mentioned earlier, the 340-B prescription drug program. That is a very high priority for Michigan Health and Hospital Association, and certainly for the American Hospital Association as well, because it allows certain providers, federally qualified health centers, for example, Medicare dependent hospitals in Michigan, those who provide care to a disproportionately large share of Medicaid or uninsured patients, it allows us to secure access to prescription drugs at an affordable rate. That then in turn allows us to provide access to care for everyone in the community, regardless of their ability to pay. So I think you're going to see more discussion about 340-B, more discussion about Medicare Part D, and then more discussion about how in fact, we go about encouraging innovation and research from the pharmaceutical manufacturers, while also allowing them to to go to market in a way that doesn't shut out the majority of Americans from an expense standpoint.
Richard Helppie
Is there a layman's simple short description of 340-B? What is it?
Brian Peters
It's a federal program that has been around for some time now, about 20 years or so. It is a program that says it does not cost the federal government or state government a penny; it essentially says to the pharmaceutical manufacturers, you are going to make available to this certain group of providers, that I just mentioned, these certain drugs in these certain settings at a particular cost. And it is a lower cost than what they might be priced at in the general market. It's a done specifically to allow for access to care for disadvantaged groups; Medicare, Medicaid, the uninsured, et cetera. And so it is a program that I think if you talk to any hospital in the state of Michigan that is a 340-B hospital, you talk to their CEO, they will tell you oftentimes it is the difference between maintaining access to a particular service line or not. It is that critically important. And by the way, that ranges from small critical access hospitals in the Upper Peninsula of Michigan to our largest academic medical centers, like the University of Michigan and Henry Ford; they are all part of that 340-B program and would tell you, it is critically important to their ability to maintain access to care.
Richard Helppie
Indeed, and as you go through that description it kind of strikes me, again, how backward we're doing things. There's a basic level of care and coverage that we all need and we shouldn't have to say that you're poor enough or you're old enough or you're any other kind of status. We could consolidate a lot of these programs and just have a basic level of care - I don't care what you want to call it, Medicare for all or medical for all, it doesn't really matter, we keep trying to pinprick little parts on this. Then also running underneath the surface...we don't have time to get into this today, but the business model for the pharmaceutical companies is going to change as we get more genetic medicine and very specific therapies based on a specific person and perhaps a specific tumor, versus we're going to produce the same pill for millions of people and hope that it does more good than bad. Brian, I think you've touched on this, the Biden administration is touting that insulin is $35 so if you don't mind, as we near our close, commenting? How did they achieve that and do we have a view whether it's a good or a bad thing for Medicare or Medicaid to negotiate drug prices directly versus going through an intermediary like an insurance company?
Brian Peters
It's a great question and it really is an interesting public policy question, because on the one hand, I think the consensus is very clear that what the Biden administration has done - and remember, for your listeners, sometimes we enact policy change in the way that most folks understand it, where Congress, the US House, the US Senate, look at proposed legislation, they'll debate that, they'll pass a bill, send it to the president for his - or her potentially in the future - signature. Now, in some cases, and in healthcare, we're very, very familiar with this. That's not the way public policy happens. In fact, it emanates from the executive branch, it comes from the White House and therefore, through HHS, the United States Health and Human Services, they can actually implement certain policies without congress getting involved. Now, sometimes when they implement a policy change the industry itself - maybe it's hospitals, maybe it's pharma, maybe it's someone else - will challenge that in court, and say you implemented a policy change and it's unconstitutional, you lacked the authority to do it. The 340-B drug program is a great example of that. Because recently, the Biden administration...I'm sorry, the Trump administration previous to the Biden administration, implemented something related to 340-B, that we found objectionable. Long story short, that case went all the way up to the Supreme Court of the United States, who ruled unanimously in our favor to overturn it. Now, I'm giving you that context to say the consensus is that what the Biden administration has done on insulin is widely viewed as a positive, because it was outrageous that we had so many Americans lacking access to this drug, which was not a breakthrough, it was not the result of some expensive new innovation in the last year, this has been around for for a long, long, long time. So on the one hand, that's a good thing. But on the other hand, I don't know that it's a universally good idea for congress, or the White House, or both of them together, to dictate how we go about the payment and delivery of health care services. In fact, on the whole, we found that it's best not to get our elected officials too deep in the weeds in terms of how that functions. In other words, we're hailing this move related to insulin but I can tell you, we would be fighting aggressively if the White House or congress tomorrow said, you know what, we're going to implement price caps on inpatient hospital services and we're going to go right down the DRG list, and say, you can only charge this much or this much or this much. Now that's what happens today in terms of Medicare, because they're the biggest payer, they tell us what they will pay for hospital services. And that's modified a bit on a regional basis, certainly, because of the AAPCC approach, but I will tell you that when it comes to the marketplace at large, we would certainly object to the White House or congress telling us what we could charge and telling insurers what they could pay.
Richard Helppie
In my view it is like if you're going to have direct government negotiation with the pharmas, do you do it at the retail level, the manufacturing level or at the distribution level? And then also, if you're negotiating for a particular class of drug and it's against a private insurer, there's leverage there, that if you don't meet a price point, you're not in the formulary. But if it goes into the federal system, now it's going to be the lobbyist saying you've got to put this in the formulary and they're going to be less price sensitive. Brian, as we're nearing the end of our talk today is there, in a nutshell, a difference between what the Trump administration tried to do with 340-B, unsuccessfully legally, and what the Biden administration accomplished, presumably legally? I don't know if it's being challenged with the insulin, what was the difference; that they were both trying to get prices down?
Brian Peters
Well, in one case with 340-B, you're talking about a program that was implemented by the federal government in a bipartisan fashion and has bipartisan support, and is something that affects the way we go about the delivery of health care, because it's the way that hospitals and others secure prescription drugs and then administer those drugs to patients. On the other hand, when you talk about the insulin issue, you're simply talking about the price of a single drug that's been around for a long time. We're not talking about the way it's secured and delivered. We're not talking about a public policy, we're strictly talking about the price of that one drug. And so you're talking about a couple of different things here. I think when you look at what actually will happen in a Harris administration, or in a second Trump administration, that's where you could have a really interesting conversation and what differences will there be in philosophy, vis-a-vis this prescription drug challenge. How friendly will they be to pharma versus how friendly to providers and patients? That's, I think, going to come out in the wash here very soon.
Richard Helppie
Brian, anything that we didn't talk about today that you think is important for the listeners, the readers and the viewers of The Common Bridge?
Brian Peters
I'm glad you asked, because I think we'd be remiss if we didn't lift up one last topic before we close, and that is the cyber security issue. We saw the Change Healthcare cyber attack and the impact that had on American health care, delivery and financing. We're still not out of the woods yet on that attack, one of the largest cyber attacks of any kind in the history of the United States. We saw what the Ascension hospitals had to deal with right here in the state of Michigan, very well covered by the media, just in recent months. At the end of the day, we know that healthcare is the number one target globally of cyber criminals - the FBI has been very clear in that regard - because of the value of the information that we house. We really want to be treated as partners with law enforcement and with elected officials; we are the victims, we are not the bad guys here; we want to make that very, very clear. We have a target on our backs and so we need partners in this fight. And one of those partners, quite honestly, patience, because we know that the human factor is the number one element in terms of access to our systems. In other words, be vigilant when you're looking at email and texts and phone calls. We know that phishing scams are the number one way that cyber criminals can access things they shouldn't be able to access. So we tell all of our employees in the hospital, in the health system domain - we want to work with patients as well - be vigilant, understand we are in an environment now where cyber criminals are very, very focused and motivated to gain access to healthcare records.
Richard Helppie
Well, I'm glad you brought that up. We've had Dan Dodson from Fortified Health Security, specialists in healthcare cyber security on a couple of times, had Rick Snyder and Dave Behen on talking about cyber security. And as I listened to the testimony on Capitol Hill with the CEO of United Healthcare, the parent of Change Healthcare, neither the questioners or the responder really understand how and why this happened. I've had the opportunity to talk some people at a more detailed level - don't want to reveal who they are or anything - but it was a screw up from top to bottom at Change Healthcare. The triggering event was one system that somebody was able to access without two factor authentication. So again, we encourage people to get two factor authentication for all of your cyber activities, not just your health care...that text back to your phone to verify it's you. It's well worth it.
Brian Peters
Absolutely, Rich, couldn't agree more.
Richard Helppie
We've been talking today with the chief executive officer of the Michigan Health and Hospital Association, Mr. Brian Peters. He is a very accomplished voice for a healthcare policy in the United States. He has my endorsement as the next Secretary of Health and Human Services, and I hope that folks have taken away from this some questions to ask those that we elect to serve us. And with that, this is your host, Rich Helppie signing off on The Common Bridge.
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