Latest / Off the Chart: A Business of Medicine Podcast / S1 Ep174: Insurance was never meant to be a first-dollar payer, with Joanne Frederick
Transcript
- Speaker 1 0:00 We've created this behemoth, very expensive, and frankly very profitable healthcare system around fixing a problem that maybe the the fix is is way worse than the symptom was to begin with. Austin Littrell 0:25 Welcome to Off the Chart, a business and medicine podcast featuring lively and informative conversations with healthcare experts, opinion leaders, and practicing physicians about the challenges facing doctors and medical practices. My name is Austin Latrell, and the associate editor of Medical Economics. I'd like to thank you for joining us today. In today's episode, Medical Economics senior editor Richard Payerton sat down with Joanne Frederick, CEO of Government Market Strategies. Frederick has spent more than 30 years working inside government health programs, and she starts with the one she knows best. Tricare covers more than 9 million service members, their families, and retirees, and for the physicians who see them, it comes with a real problem. Tricare pays at a discount off Medicare rates, and plenty of practices will tell you that Medicare doesn't cover their costs to begin with. But Frederick argues the program also has something worth borrowing, and that's its focus on readiness. From there, the conversation opens up. Frederick makes the case that insurance was never meant to be a first-dollar payer. That somewhere along the way, we inserted it between the patient and the physician, and it's grown into something close to unmanageable. Richard asked her what a cash-based system would actually look like at the practice level, where artificial intelligence fits into all of this, and why she thinks direct primary care paired with an annual health improvement plan could finally move medicine from disease care towards wellness. With all of that said, Joanne Frederick, thank you for joining us, and now let's get into the episode. Richard Payerchin 1:44 I'm Richard Payerchin, reporting for Medical Economics. With me today is Joanne Frederick, CEO of Government Market Strategies, a government healthcare consulting firm. Thank you for joining us today, Speaker 1 1:56 Richard. Thank you so much for having me. It's a pleasure. Richard Payerchin 2:00 And today we're going to get into some details about kind of big picture healthcare spending, and then maybe even some little picture, so to speak, details with at the practice level. Before we get into that, can you introduce yourself and your company? Speaker 1 2:15 Absolutely, Richard. Thank you. So I have been in the healthcare space since the late '80s, and started my first company in 1992, and have primarily focused on public sector health programs, for example, Medicare, Medicaid, the Tricare program, the military health program, VA healthcare as well, and have spent the last 30 plus years navigating through those systems, both at a policy level and then more specifically how policy then promulgates down to the way contracts are designed and the way programs are delivered to the beneficiaries or patients that are subject to those programs. Richard Payerchin 3:00 With a lot of our audience, they're I think very familiar with Medicare and Medicaid. There is another really I guess you'd call it government-based or backed healthcare insurance program called Tricare. Your company has worked with Tricare, the health insurance program that covers active duty members of the military. For physicians who are not necessarily familiar with that program? Can you explain briefly what it Speaker 1 3:24 is? Absolutely, Richard. So the Tricare program is really-it's not only active duty military, but it's active duty military, their dependents and retirees. So those folks that served in the armed forces for 20 years or more are eligible for the Tricare retiree program around the world. It covers about 9.4 million folks. About 400,000 of those are overseas, and about 9 million of those are here in the continental United States. The Tricare program is really the health plan wraparound that that covers beneficiaries. In this case, those folks are called beneficiaries. That covers those beneficiaries when they cannot get the care they need in the military treatment facilities or MTFs. Those facilities are run by the Department of War and are staffed with military physicians, nurses, PAs, etc. So that's considered the direct care system, and when beneficiaries can't get the care they need in the direct care system due to capacity or capability, those patients or beneficiaries are sent outside into the community to receive the care they need from community providers, and this has been happening since the late '80s when I first got into this system. Richard Payerchin 4:46 Just to be perfectly candid, I didn't realize there were quite that many beneficiaries involved. I figured it was into the millions, but I didn't realize it would be approaching, you know, be more than 9 million, maybe even approaching 10. Speaker 1 4:58 It's a very large population. And they are kind of dispersed all through the United States and overseas. You can think about the population in sort of buckets of. There's definitely a kind of density in places where there are large military facilities, like San Diego, like Pensacola, Florida, like Norfolk, Virginia, and there are, of course, spaces and installations all across the the nation and all across the world. So it's really an interesting program in that you have to have, as the Tricare program, as the wraparound or purchased care, it's called. You really need to have a broad network and coverage of providers to make sure that you have the capacity and capability made more difficult by what they call the readiness mission. And in the military, the readiness mission is a ready medical force and a medically ready force, which means that the military employed, you know, professional provider community must be ready to deploy. They must have the training, the knowledge, skills, and abilities they need to be deployed as needed. And we also want our our service members to be medically fit to deploy. So it's a fascinating system. It is reasonably complex, and it takes care of people that deserve the very best that the healthcare system can deliver. Richard Payerchin 6:29 Absolutely, I think you know it. It there are lots of different areas of debate within the healthcare system. I would hope that one that is maybe not open to debate, obviously, is the desire for servicemen and women to have access to the care that they need-that that's a no-brainer. At least I would think Speaker 1 6:46 it-it is a no-brainer, Richard. I would say I would contend that the way the program is administered has a significant opportunities for improvement. And one of the concerns in the current program is that the the provider community is paid on a discount and sometimes a significant discount off of Medicare rates, and I certainly would assume that there are folks in your audience that that know that even Medicare rates are not adequate to cover costs, and yet if you see a Tricare beneficiary, they're getting paid less than that, and and sometimes significantly less than that. So I think there are some opportunities for improvement in the way the Tricare program is administered, to really make sure that the that the provider community is incentivized to treat those provide those beneficiaries as part of their ongoing practice, Richard Payerchin 7:45 you know what Medicare reimbursement is a perennial topic for us, and and when you mention about reimbursement rates that come in even lower than that, I think that is absolutely something our audience would relate to. If I may, I'll I'll we'll look at the other side of the coin, so to speak, with the Tricare program, are there any say benefits or lessons that have been helpful or beneficial that might actually you know be a good idea to expand across other elements of U.S. healthcare? Speaker 1 8:17 That's a great question, Richard, and one that frankly I didn't expect. I I do believe that the Tricare program, and rightfully so, offers a a pretty significant benefit. Again, these are are men and women that raise their right hand and agree to serve the nation in its time of greatest need, and their family members serve as well. And I think if I were to take one thing from the way the Tricare program considers healthcare and considers the way it takes care of the beneficiaries is really back to that readiness mission, and one could argue that it is the job of the healthcare system at large to make sure each of us are ready for whatever our individual missions may be, and that we are at our most healthy, and that we are at our ability to kind of achieve our own personal goals and missions, whether that is work or taking care of our families, et cetera. And I think that's one of the things that the Tricare program really focuses on. It readiness is core to everything that they do, and we could probably all benefit by thinking about readiness in the greater healthcare system and how we can take better care of our population through better structured programs, better reimbursement to providers, and really treat the provider as sort of the most valuable player on the field of our lives to help us get healthy and stay healthy into our old age. Richard Payerchin 9:42 I like that analogy, not least because one of the things that, frankly, we wrestle with for coverage. I know that our physician audience reads, you know, a lot of the same data that we do that talks about the ratio of investment in the U.S. healthcare system. The amount that's paid-it's a huge part of the economy, and then outcomes, especially compared with other developed nations. And anytime we can sort of focus or refocus or remember about the importance of of that care, I like the the analogy of readiness as a sort of a attitude or a mindset to think about overall patient health and outcomes. I think that that I like that analogy. Very cool. Speaker 1 10:27 Thank you. I appreciate that. I'll I'll give that some more thought, Richard. Maybe we can come back and talk about that again in more detail on on another at another time. Richard Payerchin 10:36 Yeah, and you know what? Definitely wanted to, if I may sort of expand our conversation a little bit, because Tricare is not the only system or you know form of insurance or reimbursement that you've worked with. Frankly, wanted to get into some thoughts and ideas about what it might mean for the U.S. healthcare system if there was more conversion to a cash-only system, and just to sort of introduce that topic, when policymakers and physicians talk about a cash-only healthcare system, they don't always mean the same thing. How would you define Speaker 1 11:13 it? It's a great question, Richard. And and talking about a cash-only system in in the complexity that's our U.S. healthcare system is deserved of sort of a coming together and creating a common definition and a common awareness. I would hearken us back to the idea of insurance and think about your car insurance or your homeowner's insurance. Insurance was never intended to be a first dollar payer. Insurance is intended to take care of something when something goes wrong. Your insurance doesn't pay your fuel; it doesn't pay your for your oil changes on your car, etc. And somewhere along the way, you know, we can go back in the history of how we got here, but somewhere along the way, we inserted insurance in between the relationship between the person or the patient and the physician, and I think that was well intentioned way back when when it happened, but now it has become a behemoth, sort of a monster that is difficult to control. And to your point, health outcomes in the United States, are lower than most other, if not all, other developed nations, and yet we spend more per capita than any other nation in the world. So something is not right; something is missing there. And if we think about the administrative costs now associated with healthcare, and estimates range between 15 and 30% of healthcare dollars are administrative costs. What if we got rid of them? That's the premise or the hypothesis. Let's let's take insurance back to its intended purpose, which is a catastrophic emergency, accident, you know, significant diagnosis, cancer, etc. and move migrate ourselves back to the relationship between a patient and a physician or another type of you know nurse practitioner, etc. Is really sacrosanct and and support that relationship with a quote cash basis system, which does not mean that patients are running around with a pocket full of cash to hand you know dollar bills to their their healthcare professionals, but more that we remove insurance, we remove the administrative burden of insurance, and we remove the complexity, quite frankly, that insurance really introduces in between that patient and and provider relationship. Keith A. Reynolds 13:53 Hey there, Keith Reynolds here, and welcome to the P2 Management Minute. In just 60 seconds, we deliver proven real-world tactics you can plug into your practice today, whether that means speeding up check-in, lifting staff morale, or nudging patient satisfaction north. No theory, no fluff, just the kind of guidance that fits between appointments and moves the needle before lunch. But the best ideas don't all come from our newsroom; they come from you. Got a clever workflow hack, an employee engagement win, or a lesson learned the hard way? I want to be true. Shoot me an email at kreynolds@mjhlifesciences.com with your topic, a quick outline, or even a smartphone clip. We'll handle the rest and get your insights in front of your peers nationwide. Let's make every minute count together. Thanks for watching, and I'll see you in the next P2 Management Minute. Richard Payerchin 14:45 I think it's a great introduction because our audience, and one of the I'm again not a physician myself. I don't mean to speak for doctors, but you know my impression has been in interviewing many of them in the last few years for. Frankly, is is that is one of the foundational reasons why they get into their job, so to speak. Not only because of the love of medicine and science, but to be able to treat patients, and that that relationship is so vitally important. And you touched on, for example, the administrative complexity. You know some of those burdens that I know that our audience has to deal with. Insurance companies argue that their administration and their infrastructure, prior authorizations as part of that. You know, approving care before it's actually delivered. That insurance companies argue that they add value and justify their cost that way. How do you respond to that argument? Speaker 1 15:42 Again, I think that was potentially true at the beginning, right when we start when managed care started becoming a you know a significant part of the marketplace in the '90s. I was there. I remember managed care, frankly, through the Tricare program. The Tricare program was really the first introduction of managed care concepts in much of the country, and I think it's you know does it does the value make sense? And if ultimately prior authorizations run through two or three times between the insurance company and the provider and the patient, and ultimately get approved, then all we're doing is paying for someone to do that work, and with the technology that we have today, there is certainly the ability to streamline those types of transactions and decide that some of them don't need prior authorization. Should we really stand in between, or should we put a system in between of a physician saying, "I think you should have a insert test here" Should we put an administrative system in between that you know ultimately collects dollars every time a prior authorization transaction goes back and forth, and then ultimately, again, to to perhaps approve that care, you know, the idea of a prior authorization is is this care medically necessary and medically appropriate? That that's the concept, and we have allowed insurance companies to have an opinion in that, and in the beginning, it really was for cost control on the idea that fee for service healthcare, the costs were out of control, and physicians were just you know referring care willy nilly. I don't really think that evidence is proven true across the entire system. Are there pockets of folks that experience that? Absolutely, but we've created this behemoth, very expensive, and frankly very profitable healthcare system around fixing a problem that maybe wasn't maybe the the fix is is way worse than the symptom was to begin with. Richard Payerchin 18:00 That issue of profitability, we could probably go on the rest of the day talking about only because, and I'm not, I'm not trying to be silly about it. Frankly, these are publicly reported documents that are made of again by law must be reported publicly by insurance companies. We're not just making this up. I will switch gears slightly though, because you did talk about technology, and this is something that comes up now. I call it the AI question or the technology question comes up in frankly just about every interview. Artificial intelligence has been a real disruptor for good in healthcare and so many other sectors, and and frankly there are a disruptor maybe for some bad. We we can debate that. Where I'm going with this is though, a lot of clinicians hope that AI will improve patient care, both on the clinical side as well as the administrative side. Health insurance companies also have access to AI programs. Can you talk more about how do you envision technology is going to change how the industry looks, how it operates, the costs, the money over the next say one year, five years, 10 years. Speaker 1 19:08 Absolutely, Richard. I think AI holds a lot of promise. And back in 2023, I went to MIT to attend a program on AI and strategy, seeing the you know the train coming at us here and and wanting to really understand from sort of the best and the brightest in the nation, what what was happening? I, you know, there are really two ways to look at that at AI, and there are sort of two schools of thought. One school is, you know, we're going to help patients get information that they didn't have access to, and that's, you know, one could argue good or bad, and then the other school of thought is to your question: we're going to make the delivery of healthcare more efficient and potentially more effective. And I have had the honor and privilege of seeing, you know, several AI applications that I think hold real promise to help the healthcare system. At large to help patient care at large, a lot of the adoption right now is sort of sentient listening and taking patient notes into medical records, and I think that's great. But that's not really-I think that's just the tip of the iceberg. Let's say of what is really possible, and you think about a patient or a person. Let's call them a person. I've been in the healthcare industry for you know 35 years, and even I at times have difficulty navigating the healthcare system, and I understand it. So when I think about the promise of AI from a person care, patient care perspective, I really see a lot of promise in a navigation system. It can't, though, replace that relationship and that provider-patient relationship. Back to our concept of readiness, we all want to feel better. That's sort of the goal, right? We all want to feel better and have enough energy to play with our children, or go on our marathon run, whatever those things are. That's the goal of feeling healthy. And if you have difficulty navigating through a system that helps you get to that readiness or that healthful feeling state, can we use AI to help that navigation? What is the best next thing I should do for my health to make feel better tomorrow, etc. And there are some applications out there that are trying those things, and there will be some that are are used for for not good outcomes. And I think we really need to be willing as a nation to have, and potentially the world to have really thoughtful conversations about how we can deploy this technology, then it's probably not what's being deployed today. Though again, we're at the the tip of the iceberg. I think we should think about the point of the healthcare system, the players on the field. Do we need all of those players? For do we need insurance in between kind of primary care relationships? Maybe not. And once we have the structure, then how do we deploy these tools in service of what ultimately our goals and outcomes are? That's the conversation I would love to have. Richard Payerchin 22:18 Direct primary care, if you're familiar, you know is the method by which patients pay a flat monthly membership fee to their physician. I want to go back to your concept, though, of using insurance for an emergency, not necessarily for sort of the day-to-day maintenance, so to speak, day-to-day health for a patient. And a lot of people point to direct primary care as an example of what might happen in a cash-based system. Can you talk about your experience with direct primary care, and does that serve as a good example? Are there areas that need tweaks or even a major overhaul in that methodology? Speaker 1 22:56 Absolutely. I actually have been participating in a direct primary care system for quite some time now, some number of years, and I've had a great experience with it, frankly. But I, I do think to your question, Richard, there's a missing piece, and that is, do we rely, and should we rely on our primary care physician to be our quote health coach, and do they have the time? Do they have the the you know patient panel in order to spend the amount of time that really someone needs in order to sort of get to what I call your annual health improvement plan? Wouldn't it be great if we lived in a system where every year you met with your physician or a physician assistant or even a you know well qualified, well trained health coach to say, okay, my goal for this year for my personal health is to whatever that is, run a marathon or sleep better or you know feel less stress or you know lose five or 10 pounds whatever that is, to have someone sort of at your support and at your side to help you craft a personal plan to get there. Now, primary care physicians could certainly help with that, but the question is: Are we better off creating an additional sort of wraparound system or service that's an adjunct to to direct primary care that really works on those annual health improvement plans. Of course, your physician would review and approve to make sure there isn't anything counter indicated. But I think there's an opportunity to really, you know, shift the system from quote a disease care system, which we've heard for a long time, into really a health and wellness based system, and the combination I think of direct primary care and really something akin to an annual health improvement program at the individual person level shows great promise and particularly now let's loop back to the AI conversation and some of the technology that's available. I think that's a great new promise on the horizon. Here, we just need the courage to sit down and have those conversations and really work together to figure out what the right solution is. But I think that's very encouraging for the future of healthcare in the in the country. Richard Payerchin 25:18 One question I always like to ask: Our main audience is primary care physicians. What would you like to say to them, or what would you like them to know? Speaker 1 25:25 I would like to say thank you, and I think you know my own experience. You know the amount of administrative burden that the healthcare system places on primary care physicians is extraordinary in my mind, and the number of staff that it takes to navigate through the myriad of potentially hundreds of different insurance plans and provider contracts, and what's allowed and what's not allowed, and doing all of that while you know really providing the care that brought your audience into the business in the first place is extraordinary, and I I think it's a shame that we've created this huge industrial base just to help a person sit down with their provider, their doctor. And I, for 1am, absolutely willing to work to change that. So what I would say is thank you, and what I would welcome are ideas on how to do that. It's the folks that deliver care every day that that have the best ideas. Richard Payerchin 26:25 I'm Richard Payerchin, reporting for Medical Economics. My guest today has been Joanne Frederick, CEO of Government Market Strategies, health insurance, primary care, costs, technology. These are big questions, big issues. It's been a great conversation, and I hope we get to talk about them again sometime. Speaker 1 26:45 Thank you, Richard. It's been my pleasure. Austin Littrell 26:50 Once again, that was a conversation between Medical Economics senior editor Richard Payerton and Joanne Frederick, CEO of Government Market Strategies. My name is Austin Latrell, and on behalf of the whole Medical Economics and Physicians Practice teams. I'd like to thank you for listening to the show and ask you please subscribe so you don't miss the next episode. As always, be sure to check back on Monday and Thursday mornings for the latest conversations with experts sharing strategies, stories, and solutions for your practice. You can find us by searching off the chart wherever you get your podcasts. And if you'd like the best stories that medical economics and physicians practice published, delivered straight to your email six days of the week. Subscribe to our newsletters at medicaleconomics.com and physicianspractice.com. Off the chart, a business of medicine podcast is executive produced by Chris Masolini and Keith Reynolds, and produced by Austin Latrell. Medical Economics and Physicians Practice are both members of the MJH Life Sciences family. Thank you. Transcribed by https://otter.ai