Latest / The Capitalism and Freedom in the Twenty-First Century Podcast / Dr. Oz On Affordability, Fighting Fraud, and AI in Healthcare | Hoover Institution

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Dr. Oz On Affordability, Fighting Fraud, and AI in Healthcare | Hoover Institution · The Capitalism and Freedom in the Twenty-First Century Podcast

0:08
This is The Capitalism and Freedom in the 21st Century
0:10
Podcast, an official podcast
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of the Hoover Institution's economic Policy working group
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where we talk about economics, markets, and public policy.
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I'm John Harley, your host. Today I'm joined by Dr.
0:20
Oz, who serves as the 17th administrator for the Centers
0:23
for Medicare and Medicaid Services in the
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second Trump administration.
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He's a professor emeritus at New York Presbyterian,
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Columbia Medical Center
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and has won nine daytime Emmy awards
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with his long running daytime talk show, the Dr.
0:37
Oz Show. I'm also joined by Dan Broman, who is the director
0:40
of Medicaid and Chip and deputy administrator at CMS
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and Kim Brand, who is CM S'S Chief Operating Officer,
0:48
as well as a deputy administrator.
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Thank you so much for, for joining us.
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Really an honor to have you all here.
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And I wanna start, I just really, you know, gotta tell you,
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you know, I think with most administrations,
1:00
very few people have any idea sort of what CMS does,
1:02
or they might not have heard of it,
1:04
even though it's the largest single organization on the
1:07
planet when it comes to actual dollars being spent.
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But now in the second Trump admin, I have to say, I,
1:14
you know, you're sort of the talk of the town this go around
1:17
and you built a, a really incredible team of clinicians,
1:20
entrepreneurs, healthcare experts,
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and more that seem to be everywhere all the time.
1:26
And you're working on a number of very,
1:28
very highly impactful initiatives.
1:30
Dr. A I wanna start with you.
1:32
You were a very successful TV host.
1:34
What inspired you to take on these exceptionally demanding
1:38
roles at the service of the president?
1:41
Well, thanks for the kind words.
1:43
I've always been in the change business.
1:44
And by that I mean, I, I, I love when there are issues we
1:47
can do better at.
1:48
And it's true in cardiac surgery, which was,
1:51
that's been a good part of my adult life.
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I, I knew there were better ways of doing these
1:55
without having to open someone's chest with a band saw,
1:57
which seemed archaic.
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And turns out there are ways now we can change heart valves
2:02
with catheters you put through vessels in the groin.
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I invented one of them,
2:06
started companies that worked in that space.
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I learned a lot about how to organize people,
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but I also learned a lot about how take on entrenched
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interests, but also change people's minds.
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'cause if you're gonna move from doing traditional surgery
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to a new version of that same procedure,
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you gotta get people to think differently about
2:23
a solution set.
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That's one of the reasons I went into media.
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It wasn't my vision to, frankly,
2:28
it wasn't on my vision board at all.
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My wife, Lisa, was the one who kept petitioning me saying
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that when I would come home and lament the fact
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that people I had operated on could have avoided my
2:37
services, if they'd just been warm months earlier
2:39
to change their lifestyle, it would've avoided them needing
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to have any of these operations.
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That got me thinking, well,
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maybe I should get the word out in a different way.
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And just to be, you know, blunt about it,
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the reason America doesn't get the message on health is
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sometimes is because we don't give it to them.
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And then at the same time, we made it hard
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to be healthy in America.
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And that translates into really expensive healthcare
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because we're sicker than the rest of the world.
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That's why we cost twice as much per capita
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as any other country in the world is
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because we're twice as obese.
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Statistically, we're 43% obese,
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and it's only about 20% in Europe, it's 5% in Japan.
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So president, you know, president Trump recognized
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that Secretary Kennedy, the Maha movement, embraced
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that idea, we can be healthier by being proactive.
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And so when the opportunity came to be able
3:26
to serve in politics, one of the opportunities was
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to support lifestyle changes,
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but also use the money that drives
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and incentivizes behaviors in a, in a more efficient way.
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And the president in invited me into the administration
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relatively soon after the election.
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It was probably 10 days after we won.
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So I had the jabal, which is to be able
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to recruit people like Dan Broman and,
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and Kim Branch, who you'll gonna be hearing a lot from top
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tier individuals who could have served anywhere, anytime,
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or frankly were doing very well in the private sector.
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But getting them to come in and join in this, this effort
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and really generational opportunity to make a difference in
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how we think about healthcare, which will last for decades,
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is what's attracted so much talent in the government.
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And I have to admit, my,
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my biggest bias coming on your podcast
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and, you know, participating
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with the Hoover Institution on this, is to recruit people.
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You guys are listened to
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by really smart folks who wanna make a difference.
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So if any of you're out there are motivated,
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as you're driving your cars, wherever you're headed,
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think about driving to Washington and joining us.
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We need people, we're hiring a thousand more folks.
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And I'm very sincere when I say this is your
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opportunity to make a difference.
4:33
Well, I'm very impressed by the amount of talent
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that you've been able to bring on.
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I mean, on top of Dan
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and Kim, Jeff Carlton,
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another deputy administrator I I know very well from
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some past jobs.
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And, you know, I'm very impressed just by the overall like,
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caliber of talent that you've been able to attract in CMS.
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It's very, I impressive. I wanna segue into affordability
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because that's a, a big topic right now.
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I know the, the Trump administration is doing a lot
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of things on, on affordability.
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America has been having a crisis
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of affordability when it comes to healthcare
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and families are sacrificing, say a lot of, you know,
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basic necessities like food
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and transportation in order to pay
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for rising healthcare costs.
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I mean, how did we get here over the many years
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and what are you doing about it at CMS?
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Well, we got here because we were all willing
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to allow friction in the healthcare system.
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And that friction starts in your home.
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The battle for health should be won in the kitchen,
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the living room, the bedroom.
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And if you make it hard to be healthy
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and you allow all kinds of changes
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to almost common sense regulations.
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Like for example, the original food pyramid,
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which was scandalous, you know, based on trials
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that were historically unlikely
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to be true, turned out they weren't.
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There was this honesty and how it was reporting,
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and I'll be very concrete, the, the, the vilification
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of dietary fat
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and cholesterol in favor
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of simple carbohydrates was criminal.
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And we have a bunch
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of people in America think you're better off having the
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white foods, white rice, white flour, white pasta,
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white sugar, as opposed to a little extra fat
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around the piece of high quality steak.
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And it turns out that, yeah, if you, if I have a choice
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and I do have a choice every day, I'd rather have the steak.
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Now there's lots of other ways of getting protein in your
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diet, but it's those kinds of decisions that have been made
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and and endorsed for a generation that allowed us
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to become sicker as a population,
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which has made it much more difficult
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and complicated to treat us.
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But we also have within the healthcare system, toll takers.
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And just again, for your audience,
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this is a pretty good example of how
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economic theory actually does coincide with reality.
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If you allow people to create friction in a system
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so data doesn't flow fluidly with, with there,
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there, there, there's data blocking.
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In fact, in many instances, institutions don't collaborate,
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insurers don't work with providers.
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You have electronic medical record systems
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that won't allow certain other people to get access to
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what they have as, as intel or insights.
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Everyone along that value chain
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where there's friction takes a little toll, just a,
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they dip their beak in the flow of information and money.
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And when you're talking about in our agency,
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$2 trillion coming through the spigot is a lot
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of opportunities for, you know, 10 billion here,
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50 billion there, a hundred billion the other places.
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It soon adds up to some real money.
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So part of the opportunity within CMS is how
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to spend tax dollars, $2 billion of them wisely, is to try
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to take away some of that friction.
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And I think our biggest wins ultimately will be measured in
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how we're able to create a free flow of data that allows us
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to use technologies for, you know,
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AI could be a good example, but many others as well.
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But let me give you one concrete example,
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something we've done for affordability
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and then I wanna turn it over to, to Kim
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and talk about this A second big topic that's come up and,
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and Dan can, can chime in at this as well.
7:49
So let's look at the, the concerns about
7:51
pharmaceutical drug pricing.
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About 27% roughly of the American public when they go
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to a drugstore, leaves empty handed,
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even though they had a prescription from a doctor
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to pick up a medication that
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theoretically would've made their life better.
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And what most Americans don't realize,
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even though almost one in three walk out empty handed,
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is the part of the reason is they pay on average three times
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more for the exact same drug made in the same facility in
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America usually than European counterparts pay.
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So how's that possible?
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The global freeloading is, is a, is a unfortunate
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but real problem that's been able to persist for decades.
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President Trump did not want that,
8:28
did not tolerate it was animated by frankly, in a way
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that you don't wanna disappoint him in.
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So we went out, Chris Klum participated in Hernandez,
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John Brooks, other members of the team that have
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that have joined us.
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And we went head to head with pharma
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and said, NOMAS, you've gotta come to us with drug prices
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that are, that are the same as
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what you're selling for in other countries.
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Now we're not price fixing you pick your price,
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but whatever you decide the price is,
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that's the price for everybody.
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You can't charge more for us
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so you can charge less elsewhere.
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And that is DR driven down prices.
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And you know, we'll save about $600 billion
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for America over the next 10 years thanks to these policies.
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And all these medications now are available on Trump rx.gov,
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which four out of five medications purchased in America are
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available on that site.
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So before you make a purchase, at least check the site
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to make sure that you're getting the best price available.
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You can even do it in the pharmacy before,
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before you pick up a medication.
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So that's just one obvious win.
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Another big win is fraud, waste and abuse.
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I'll just give you one number and then turn it to Kim to,
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to walk you through what we've been doing.
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If we could take the fraud out of Medicare, just Medicare,
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we would take the medi, the the, the trust fund that
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that finances Medicare and double its life expectancy.
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So if anybody's worried about whether there're gonna be
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enough money in a kitty when they're ready to retire,
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the answer is yes if you take the fraud out.
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And I'm not so sure if you don't take the fraud out.
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So Kim, tell 'em what they've won.
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Sure. So thanks Dr. Oz.
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So the issue is really simple here.
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Fraud in Medicare and Medicaid steals from the taxpayers,
10:00
undermines trust and threatens care
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for the people who need it the most.
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So we've been very clear with our strategy,
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we've been aggressive, we've been data-driven
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and we've been nationwide.
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And because of that we've used smarter analytics,
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stronger oversight, tougher regulation,
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deeper law enforcement partnerships,
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improved data integrity,
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and a really kick butt workforce ready
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to combat modern fraud schemes.
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So we are not just committed to addressing fraud,
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we are crushing it, as we like to say at CMS.
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So let me touch on the scope and scale of the fraud
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and delve into our strategy.
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But before I do that, I wanna give you just a couple
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of additional numbers that Dr.
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Oz talked about. So let's talk about
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what we've done in terms of our fraud detection
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and detection and enforcement totals.
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So since we started the CMS war room in 2025, in March
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of last year, we have been able
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to stop over $2 billion in potentially fraudulent payments
10:56
from going out the door.
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We have been able to have a return on investment
11:01
of $49 billion stopped from going out the
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door in terms of avoided payments, recovered dollars,
11:09
and overall impact on the program.
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That is a 59% increase over
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what it was the year before.
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We have also suspended almost 800 California home
11:21
health and hospice providers just this year
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by leveraging AI driven data modeling.
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So these new tools, these new approaches,
11:29
they're proving big dividends as Dr.
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Oz said. And our hope is that that is really going
11:34
to impact the longevity of the trust fund
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and make sure that we are being better steward
11:39
of taxpayer dollars.
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We have been looking at things like improper payments in
11:43
high risk sectors, in durable medical equipment
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where we have over $2 billion in improper suspicious
11:49
payments because of that.
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We've done a six month moratorium on DME,
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meaning we are not enrolling any new durable medical
11:57
equipment suppliers into the program.
11:59
If you look at just South Florida, just south Florida,
12:01
not all of Florida, there are twice
12:03
as many durable medical equipment suppliers there
12:06
as there are McDonald's,
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which is just mind boggling when you think about it.
12:10
We've also been looking at millions in Medicare payments
12:13
that have been tied to billing for deceased patients
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or for services never rendered, which is a big problem
12:19
that we continue to look at
12:20
because one of the things you don't wanna do is pay
12:23
for services for people who are no longer alive.
12:25
Another problem we've had, particularly with hospice, is
12:28
that people allegedly are never dying.
12:31
So we have a huge increase in the number
12:33
of people in hospice,
12:34
which is raising elevated oversight concerns.
12:37
So what we've done is we've taken our strategy, we used
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to be pay and chase, we for years, for 20 plus years,
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CMS has had to chase the money after it goes out the door.
12:48
Well, we're now going to prevent
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and detect we wanna stop that money from going out the door.
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So we have completely changed
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how we are doing this using real-time analytics.
12:58
The war room that I mentioned
13:00
before that has come back
13:01
with over $2 billion in results just since last March,
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has analysts, investigators
13:06
and policy experts that are all working together to detect
13:09
and disrupt fraud in real time.
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And the other part, and this is where it'll be a good segue
13:14
to hand it over to Dean to talk about some of
13:16
what we've been doing with the state has been strengthening
13:19
our federal and state oversight.
13:20
We have really been working with high risk states.
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You've seen a number of the
13:25
states that we've been working on.
13:26
Those are states that our data has shown us, Minnesota,
13:29
California, New York, Florida,
13:32
even now we've just been working with Ohio
13:34
where there are issues, high issues with them, billing
13:37
for personal care services, adult social daycares,
13:40
hospice, home health.
13:42
And we've been using our actions such as the moratorium
13:45
for DME that I mentioned, as well as enacting a home health
13:48
and hospice moratorium for six months.
13:50
And then doing things like enhanced provider screening
13:53
and prepayment reviews
13:54
to prevent those bad actors from gaining or rebilling
13:58
or regaining billing privileges.
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With that, I'm gonna hand it over to Dan to talk about
14:02
what we've been doing with states like California
14:04
and Minnesota and how we've been approaching it.
14:07
Yeah, thanks Kim. And I wouldn't be able to do
14:10
what I'm doing to lead the Medicaid program,
14:12
which is almost a trillion dollars without Dr.
14:14
Oz's leadership and, and Kim as well.
14:16
You know, and I had a unique problem that is
14:19
that we're solving, which is around,
14:20
we have 50 different programs
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and they're all very, very specific state programs
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and you know, when the money goes out the door,
14:28
they're running substantially running those programs
14:30
and every dollar needs to go
14:32
to the beneficiary who needs it the most.
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And we understand and see that that's not happening.
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You know, one of my pillars for our Medicaid program is
14:40
how do we streamline the program's design
14:42
and operations versus 50 different programs that are
14:44
so different in nature?
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And as we get to fraud, I think about how
14:47
to scale standardization across the Medicaid program
14:50
so we're all doing the same thing in the same way.
14:53
And that's not the case for fraud, waste and abuse.
14:55
And so we're taking that approach to fraud.
14:59
So all 50 states move
15:00
to a proactive posture using data analytics
15:03
that Kim has helped us with and taking proactive action.
15:06
One of the things that the,
15:08
the CMS has done is help states work on a
15:12
revalidation across all their high risk providers.
15:15
And so getting everyone to level up
15:18
and say, okay, who are my high risk providers?
15:21
I should be revalidating them on a more regular basis.
15:24
We're providing them a couple years to be able to do that,
15:26
but that levels everyone up together
15:28
and doing it in the same way.
15:30
That means we're all rowing in the same direction,
15:32
the federal and state government with the same tools,
15:35
the same posture.
15:36
And so, and the second thing I wanna talk about is the
15:39
progress that we made and going after fraud.
15:42
These are unprecedented use cases like
15:44
that she talked about in Minnesota
15:45
where it's on TV every day.
15:47
We had to act, you know, work with them,
15:48
build a corrective action plan to make sure we we right ship
15:53
that, that area.
15:55
But we're normalizing that fraud, waste
15:57
and abuse exists everywhere.
15:58
I think that's gonna be important for the American people.
16:01
Sometimes states would talk about, you know, I'm taking care
16:04
of things on my own.
16:06
They sometimes they knew what was going on
16:07
but they couldn't get it done.
16:09
Now we're normalizing it so that we all can take a step back
16:12
and say, this is happening
16:15
and what are we gonna do about it?
16:16
And it's all our responsibility, the federal government
16:18
and every state to ensure every dollar goes
16:21
to those who need it the most.
16:23
As Dr has says a lot to steal your benefits,
16:25
to steal your health or steal your life.
16:27
And so that's very meaningful to us.
16:30
But most importantly, we don't wanna be doing this all day.
16:33
We want states to have the right tools, the right data,
16:36
the right programming.
16:37
We're hosting demo days today for advanced analytics for all
16:41
of the states around fraud, waste, and abuse.
16:43
Kim has provided dashboards
16:45
and analytics, so states
16:46
for the first time can understand trends, anomalies,
16:49
they can see what's actually happening in their state
16:52
hotspot, compare themselves to other states as well,
16:55
which is super important.
16:56
You know, the way I think about it is, you know,
16:58
if this was your house right
17:00
and you were being robbed every single day
17:02
and you're watching those robbers go by,
17:05
you wouldn't wait months to take care of it, right?
17:07
You'd take that very, very seriously and you,
17:09
and you, you wouldn't do it slowly.
17:11
You would use every tool at your disposal
17:14
so it never happens again.
17:15
And I hope the latter is obviously, you know, that's
17:17
where we're going and we want every state to be able
17:19
to take care of it in the same way
17:20
for every taxpayer dollar.
17:23
It's so great to hear about your strategy
17:26
to root out waste, fraud, abuse nationwide.
17:27
I mean, reflexively, you know,
17:29
policy people talk about waste, fraud, abuse all the time,
17:32
but it's always been very abstract and
17:34
and I feel like now it's, it's becoming realer
17:36
and I think a lot of what your efforts are are are,
17:39
are helping to make it real and and,
17:41
and making it easier to, to track down, you know,
17:44
every day it seems like there's new media reports about,
17:47
you know, billions of dollars of, you know, rampant waste,
17:50
fraud abuse in the healthcare system.
17:52
And we've heard and about some of these, you know,
17:54
stories about, you know, fraudulent daycare
17:56
and autism centers in min in Minnesota.
17:59
Yes. Some of these hospice centers in California.
18:01
I mean, and, and you know, that obviously
18:02
that Nick Shirley video that came out I think in, you know,
18:05
December, January was I think just a a a mass regulatory
18:08
moment for a lot of people.
18:10
I mean, what, I mean, what were you thinking when
18:13
that video came out
18:14
and you,
18:15
you've been working on this task force with the vice president.
18:19
How much did you think the,
18:21
what do you think about the re response to that video?
18:23
I, I feel like it was viewed millions of times,
18:26
but I'm, I'm just curious like what, what,
18:29
what was your reaction to it and
18:31
and what do you think the, the broader reaction to
18:33
that video, and obviously people, you know,
18:36
being very upset, do, do you sort of see that very much
18:39
as sort of a, a mandate to, to root out waste, fraud,
18:43
abuse sort of now that people are,
18:45
are increasingly more aware of it.
18:47
But I feel like that was a, that was really a, the, the,
18:50
the big shock wave that that woke up a lot of people to
18:52
what was once sort of thought
18:54
as an abstract thing to something that's very real.
18:55
And for many people, you know, very close.
18:58
Well the videos brought alive the egregious
19:01
behavior of the criminals.
19:03
They, they weren't scared we had come to accept fraud
19:06
as part of how government works.
19:09
And I have to say, COVID changed everything.
19:12
There'd been fraud before COVID.
19:14
But in healthcare fraud is such a a,
19:18
a harmful endeavor that you're taking from people
19:21
who are down and out and struggling.
19:22
You're taking the last thing they have,
19:24
which is support from their government, our fellow man.
19:26
And you're stealing from them.
19:28
And so when you see these guys driving off of Lamborghinis
19:31
and refusing the talk and they're sort of ignoring
19:34
and laughing at the law, so to speak, people get angry now,
19:37
yes, the money matters.
19:38
There's no question we think it's a hundred billion dollars
19:40
a year that's slipping out of our fingers in government.
19:44
And as Kim pointed out, you know, we, we wanna detect
19:47
and prevent the money from going out anymore, they just,
19:49
money should never leave the building
19:50
that we're in right now, that's the safest place.
19:52
'cause once it leaves the building,
19:53
these are criminal multinational organizations,
19:56
they're often responsible.
19:57
The real kingpin, the money leaves the country.
20:00
It's hard to get back. We've caught people at the airport
20:02
with, you know, gold, you know, bars in their suitcases.
20:05
The number one airport
20:06
for money leaving the country is Minneapolis.
20:09
I mean, how is that possible?
20:11
So it it, it had been so normalized that people thought,
20:14
well it's gonna be corruption everywhere.
20:15
So they steal from healthcare.
20:17
So I think that was part of the wake up call.
20:19
But, you know, we were a year ago approached by Minnesota,
20:23
we had been pestering them for a couple months about what,
20:26
you know, whether they had their arms
20:27
around the fraud that was out there.
20:28
And they finally came to us at a, at a meeting in, at the,
20:32
towards the end of the summer and acknowledged they didn't
20:34
have control over the fraud there.
20:36
And they were desperately looking for ways
20:38
to get their arms around it.
20:40
And just as a concrete example, in Minnesota,
20:43
as in many places in the country, they will pay
20:45
to have you taken to the doctor's
20:46
office, you don't have money.
20:48
Now I could argue for that, you know,
20:50
I'd rather you get your diabetes medication than sit at home
20:52
with diabetes to develop renal failure than I have
20:54
to pay for your dialysis.
20:56
But in this, there's supposed to be, you know,
20:58
how expensive could that be?
21:00
They allocated a million dollars in the state of Minnesota
21:02
to drive you to the doctor's office.
21:04
When it went over a hundred million dollars,
21:06
they realized they were outta control
21:08
and they shut it down in Minnesota right now,
21:11
if you wanna get a ride to the doctor's
21:12
office, no one's taking you.
21:14
The program's gone.
21:16
What the president did by,
21:18
with the working families tax cut legislation
21:20
and the creation of the anti-fraud task force is save these
21:24
programs because when the fraud gets bad enough,
21:27
it all just go, boop, gone, finished nomas.
21:30
And that's I think the bigger message that we started
21:33
to appreciate these, these villains.
21:35
And they really are unsympathetic characters are
21:38
so audacious in their theft
21:41
and so unrelenting in their desire to do evil
21:44
and steal that it becomes a battle you wanna root for.
21:47
We're at war with fraud.
21:48
It's not just a financial issue
21:50
where you've got numbers misplaced.
21:52
But I wanna highlight it's not just about the the
21:55
bad guys in fraud.
21:57
The rules we have that govern these systems are
21:59
so weak without guardrails, law enforcement can't help.
22:04
And I wanna ask Dan to help you
22:06
and the audience understand the challenges he faces.
22:09
'cause Dan is, you know, Dan just does brag on
22:11
and built a very successful business helping folks who are,
22:14
as Hubert Humphrey called them those living in the shadows
22:18
and then sacrificed everything.
22:19
He's got young kids come in the government
22:21
and service, he's also in the Air
22:22
force, by the way, is reserve.
22:24
And so he's got to craft rules that all
22:27
of us can agree on, make sense.
22:29
And these are rules for who deserves
22:31
to get care in some of these settings.
22:33
But also he's gotta deal with things
22:34
like the work requirement.
22:36
Another sort of institutionalized fraud that we were facing
22:39
where we said that again, the origins of Medicare,
22:44
there it was 11 million people on the Medicaid program
22:46
and you know, several times more that Medicare Medicaid's
22:48
for poor people, Medicare is for older people.
22:51
And so the original Medicaid program,
22:53
you never thought about joining Medicaid if you
22:55
could have, if you could work.
22:56
And it wasn't for people who could work, it was for people
22:58
who couldn't work for whatever reason.
23:00
And so we gave in, in the, as part of the Obamacare changes,
23:05
we allowed people to who, who are able bodied able to go out
23:09
and participate in the workforce
23:11
or some type of capacity to participate, the ability
23:13
to just get free health insurance.
23:14
So then I, I'd love if you can walk the audience
23:17
through those two big issues.
23:18
How do you make rules around fraud?
23:19
But how do you, how do you tackle something like the work
23:21
requirement that's you launched last week?
23:24
Yeah, I mean these are great questions
23:26
and you know, this is one of the reasons I'm here
23:29
in this job and and working for this administration is this,
23:32
it's a unique opportunity
23:33
and time to define what Medicaid looks
23:35
like for decades to come.
23:37
And so, you know, a lot
23:38
of these critical important programs, I had decades
23:41
of experience working with health plans with Medicaid
23:43
and Medicare, hundreds of hospitals,
23:46
community-based organizations
23:47
and governments across the board.
23:50
And how technology is obviously a force multiplier
23:54
to a lot of things that we're doing.
23:55
And so, you know, a lot of the programs
23:57
that are obviously well intended, you know, guardrails are,
23:59
are critically important,
24:01
but also the same guardrails across 50 states, right?
24:04
And so aligning to how we streamline the programs design
24:07
and operations, it gets so much more critical.
24:10
And as we continue to spend almost $200 billion more
24:14
as we grow the program, it's gonna be important
24:17
that we have the right guard rails in place so
24:19
that the people that need it the most are ensuring
24:22
that we're getting and they're getting it.
24:23
And that's gonna be the most critical.
24:25
But if I take a step back, also, what we call the,
24:27
the working families tax cut legislation, you know,
24:29
it did three critical things which I think are super
24:31
important for the future of,
24:33
of Medicaid program and healthcare broadly.
24:35
First is the Rural Health Transformation fund.
24:37
I mean, this is $50 billion
24:40
that is gonna transform rural health
24:43
as the mass largest increase in investment in rural
24:45
areas in a long time.
24:47
And this is not supposed to be a short-term fix.
24:50
This is about long-term sustainability plan to transform
24:53
how we deliver care virtually using hub
24:56
and spoke models, increase workforce care,
24:58
different care models, access improvements,
25:00
and most importantly, leveraging technology.
25:03
We're not gonna, we can't add thousands
25:04
of behavioral health specialists in rural areas.
25:06
That's not possible. So we have to use the power
25:08
of technology to drive access for as a, a force multiplier
25:13
that that's truly game changing
25:14
and states are already getting moving.
25:16
And as a technology CEO in the past,
25:18
I'm obviously helping them deeply on how to implement this
25:22
and think about this for the long term as Dr.
25:24
Oz talked about. The second biggest thing is our community
25:27
engagement and work requirements.
25:28
And I call it our promoting paths to prosperity.
25:32
And there's really two critical things around this.
25:34
This is not just about meeting requirements, it is
25:38
to improve economic mobility.
25:39
This is our opportunity
25:40
to improve people's income for the population.
25:44
And if every state had that goal in mind, which a lot
25:45
of them do, this is going
25:47
to have a huge impact on Americans, our economy,
25:50
and ultimately people's wellbeing.
25:52
They are better off, they feel better when they have more
25:54
income and stable employment.
25:56
They can buy nutritious food, they have more stable housing.
25:59
And I've seen it firsthand.
26:00
So many people are stuck in
26:02
what we call this benefits cliff.
26:03
They make a hundred dollars more.
26:05
It's not worth it to lose all
26:06
of these benefits, not just Medicaid.
26:08
And so we're taking an approach, not just,
26:10
just obviously meet requirements
26:11
and this is a very big technology
26:13
approach, that's why I'm here.
26:14
But we're also taking the opportunity on
26:16
how we can bring sectors together using technology
26:19
to support that beneficiary.
26:20
How do we connect them electronically to work opportunities,
26:23
know what happened on the other
26:25
side in a closed loop fashion?
26:26
How do we bring community partners together
26:28
around behavioral health and,
26:30
and social services to lift them up.
26:32
If people have barriers to work, let's close those barriers
26:35
so we can all lift them up together
26:37
to improve those beneficiaries lives.
26:40
And the last thing I wanna talk about as it relates to
26:43
the bill and, and the regulations
26:44
that we're changing is the most important thing
26:46
is Medicaid growth.
26:48
The spending growth, obviously as Dr.
26:50
Oz talked about, which is continue to grow, you know,
26:52
outta control and we need to align spending
26:55
and value the, the value we get for every dollar is,
26:59
is critically important.
27:01
And there's a lot of financing and,
27:02
and eligibility transparency
27:04
and accuracy changes that one closed loophole in
27:07
how states were funding their portion of Medicaid
27:09
and the results they were didn't increase
27:12
or improve anyone's benefit.
27:14
We have 75% of our population that has one chronic disease
27:17
and 33% have three or more.
27:19
So as we spent billions
27:20
or hundreds of billions of dollars more a year,
27:23
we weren't getting better.
27:25
And when spending is increasing at a rate we can't
27:26
afford, as Dr.
27:28
Raj has also just mentioned, we can't add new programming
27:30
that we know can help beneficiaries
27:32
and are value oriented payment models
27:35
because we simply can't afford it.
27:37
So our goal is to really right size
27:39
and align spending to the value that we get.
27:41
Ensure our dollars are obviously focused on prevention,
27:44
chronic disease, catch these issues upstream versus payment
27:48
mechanisms that only benefit the supply side.
27:51
Our obligation in the end is to two people, two groups.
27:55
It's the taxpayers and the beneficiaries.
27:56
And when we're implementing policies,
27:58
which is why we appreciate those,
27:59
these are our guiding principles of what is best for them.
28:03
Yeah, it's, it's really great to hear about all these,
28:06
you know, positive elements of, you know, working families,
28:08
tax, tax legislation, the one big beautiful bills.
28:10
It's commonly known as,
28:12
we talk a lot about this on this podcast about, you know,
28:15
the, a lot of the pro-growth elements of, of the tax bill.
28:18
Often the, you know, corporate business side of things,
28:22
business taxation side of things.
28:23
And really it's so great to hear about all these, you know,
28:25
pro-growth, you know, healthcare side of things that'll,
28:29
you know, really have a positive impact on the healthcare
28:32
industry and overall health of, of American citizens.
28:36
Dr. Oz, I've got one last question for you.
28:38
So you've spoken a lot about the transformative use
28:41
of artificial intelligence in modern
28:43
technology and healthcare.
28:45
Tell us about what your vision is for
28:46
how AI can best serve both patients and providers out there.
28:50
I
28:51
Think most folks listening now would agree
28:53
that technology has been deflationary in most
28:56
sectors of the US economy.
28:57
That is not the case in healthcare. Quite the opposite.
29:00
And perhaps that's because we use technology at the end
29:03
of the care paradigm for the newest, coolest MRI scanner,
29:07
you know, some new CRISPR therapy.
29:09
And so if we don't use technology earlier in the course
29:13
of managing the population, giving people access to care
29:17
where they are meeting you, where you are to give you tips
29:20
for prevention or actual treatment for, for conditions
29:25
that maybe you otherwise would've ignored,
29:26
then we're never gonna be able to make it
29:28
deflationary in healthcare.
29:29
We have that unique opportunity now
29:31
because AI has progressed so rapidly if we use it correctly,
29:35
it's a big question that it'll be massively helpful in
29:39
keeping our population healthy.
29:40
But as the pope spoke of in his icic, you, is AI going
29:45
to serve humanity or will it bring us in the servitude?
29:48
And I think that's the big wrestling match.
29:50
So I'll challenge you, when was the last time you saw a
29:52
movie where AI was the hero?
29:55
It's been, it's been a while.
29:56
That doesn't exist. I don't think
29:57
I remember one. Yeah,
29:59
It's a, it's always a like a dystopian post-apocalyptic
30:01
world where that if only we had taken precautions.
30:05
So we have to be able to use AI in a way
30:07
that the American people feel comfortable.
30:10
And there are some good use cases. I'll give you an example.
30:13
Every single person and we cover over 160 million Americans.
30:16
So we touch the lives of, you know,
30:18
most, you know, half the people.
30:19
And if, if you think about it,
30:22
there's a couple things we give you
30:24
that you should take like a free wellness exam
30:26
for anyone over 65 on Medicare.
30:28
Everyone gets it. It's free.
30:29
Less than half the people take it.
30:31
They claim that they're too healthy for it.
30:33
In fact, by the way they claim that, but it's not true.
30:35
We have the claims data,
30:36
it turns out they're actually sicker than the people
30:38
who get examined every year.
30:39
So if we could make tools
30:40
and we now have mechanism of attracting technology companies
30:44
to work with us, we have a built a model where we'll pay you
30:47
to make apps that make people healthier again,
30:50
meet them at home and reduce your diabetic risk
30:53
or your actual hypertension, whatever the issue is.
30:56
These are remarkably effective.
30:58
And so we, and under the Amy Gleason's leadership have been
31:01
able to pull together over 700 tech companies.
31:04
Every company you've ever heard of is a pledge pretty much
31:07
to our CMS effort.
31:09
They will agree to share data, improve the system,
31:12
follow certain guide
31:13
and participate in the
31:15
digitalization of healthcare in America.
31:17
Even our COBOL based, you know,
31:19
19 6 79 circa system is being upgraded finally.
31:23
'cause we don't have any engineers left to know that stuff.
31:25
We didn't even have engineers,
31:26
we had less than 10 engineers in the entire organization.
31:29
Think of how scandalous that is.
31:31
So Kim Brandt, she's Chief operating officer,
31:35
she's not just a guru of of fraud.
31:37
She actually worked with Amy Gleason.
31:40
Both, both of them were angels
31:42
and completely refigure how we treat
31:45
data organizationally within CMS.
31:48
I think this is a, a role model for
31:50
how other organizations may think about bringing technology
31:53
AI into the workflow.
31:55
So do you wanna walk folks Kim, through
31:57
what you were able to do?
31:59
Sure. So we created a whole new office
32:01
of healthcare technology and policy
32:04
or products, I'm sorry, not policy products.
32:06
And the new office is really intended to help us centralize
32:09
and manage the creation of technology products
32:12
and programs that traditionally,
32:14
at least here at CMS have been managed separately across
32:17
multiple offices and centers.
32:19
We have over 35 offices and centers at CMS.
32:22
So that's a lot of different places,
32:24
a lot of different silos.
32:25
And what was happening was people were creating things in
32:28
those silos, but they weren't able
32:30
to leverage the technology.
32:32
They weren't able to leverage the people as Dr.
32:34
Oz talked about with the engineers and others.
32:37
And what we have been able to do
32:38
by creating this new office, which just launched yesterday,
32:42
is to create much greater consistency
32:44
or we're hoping to create greater consistency around
32:47
how those products are delivered across CMS.
32:50
And it supports a lot of the goals that we're hoping
32:53
to establish here at CMS
32:55
for the last year and a half under Dr.
32:57
Oz's leadership, we've been looking at driving, you know,
32:59
better data practices across CMS, trying
33:02
to do more shared services, trying
33:04
to have more common platforms,
33:05
having better interoperability.
33:08
This new office is gonna help us accelerate those efforts in
33:11
a really meaningful way.
33:13
And what's exciting about this also is that this helps us
33:16
to get better capabilities
33:18
and better tools for our agency.
33:22
One of the things that kind
33:23
of is adjacent to this that, that Dr.
33:25
Oz didn't mention is that we have been really pushing again
33:29
with his leadership on the entire workforce at CMS,
33:32
almost 6,000 people becoming conversant in ai.
33:36
We have a chief economist, a new Milani,
33:39
who is actually helping teach all of us on the senior team
33:42
how to use all the AI tools
33:44
and what they mean and how we can use them.
33:46
And then we have 30 AI ambassadors that are then going out
33:50
and teaching the 6,000 person workforce about these tools.
33:54
So as we are not only creating better products
33:56
and better things to help our beneficiaries,
33:58
we're also training our workforce to use these tools
34:01
to be able to make better policies
34:03
and have things that are going to be more usable
34:05
for those beneficiaries.
34:08
Terrific. I I know Anu Milani, he's a terrific professor
34:12
of economics at University of Chicago, so you're,
34:14
you're very fortunate to have him and, and Dr.
34:17
Oz, I couldn't agree with you more
34:18
On, can I interrupt?
34:19
Can I Absolutely interrupt one second since you're on Anoop.
34:21
So Anoop has been running data, you should speak to
34:24
probably worth a separate discussion of how the reduction of
34:30
of government funding of healthcare that's inflationary.
34:34
When we throw money at problems,
34:36
it actually costs the commercial sector more money as well.
34:39
And especially for your audience.
34:41
It's not just a, you know, unfortunate reality
34:44
that government will sometimes sloppily spend on
34:47
programs that don't make sense.
34:49
When we do that, we actually inflate prices in other sectors
34:53
of the health economy
34:54
and that's one of the reasons that we,
34:56
I think are overpaying for healthcare.
34:58
Now there are some things we're not paying enough for
35:00
and Dan Broman made Kim, we came here to build,
35:04
we didn't come here to cut, but you gotta take some
35:07
of the fat out a scalpel, not a meat cleaver.
35:10
And to do that effectively,
35:12
Anup has been a big part of this.
35:14
You actually wanna use the, our superpower,
35:16
which is not legislation.
35:18
I can go to Congress, which is across the street literally
35:20
from me and ask for legislation.
35:22
It doesn't always work out well.
35:23
I can go make rules, they can be challenging as well.
35:26
But the power to convene is our superpower.
35:29
We can go to industry 'cause we're a payer, right?
35:32
We're paying stuff all the time.
35:33
So we have extra lever arms.
35:35
So Dan Broman can go to the, all the major tech vendors
35:38
that work in Medicaid
35:39
and say, I need you to give us a discount.
35:41
Or frankly just nothing for charges
35:44
to get us off the ground on this work requirement.
35:46
He spoke about then negotiated over $600 million in
35:50
discounts for the states.
35:51
Kim can do the same thing.
35:52
She can have bakeoffs
35:54
and competitions for vendors who wanna help us with fraud.
35:57
We're doing the same thing with our call
35:58
center negotiations.
35:59
We're doing the same thing with the effort to digitize,
36:03
you know, in a modern cloud-based way,
36:05
the way the building system for our programs all negotiated
36:08
because we have the power to convene.
36:09
The greatest example though is prior authorization.
36:13
Something is heinous process
36:14
that know folks listening now don't like I know it
36:17
'cause statistically no one does, but it does work in redu.
36:19
It's like a second opinion but forced on you
36:22
and the insurance company stops you from getting something
36:24
done that you want that's hard to fix with the law,
36:27
the way you fix those kinds of problems.
36:29
You tell the insurance companies, we're gonna come
36:30
after you if you don't deal with this,
36:32
but we know you don't like it either.
36:33
It wastes your time, the doctor's time,
36:35
patients hate it, fix it.
36:36
And then we get the providers, the docs, hospitals
36:38
to work together.
36:40
There's actually a meeting upstairs I left
36:41
to come do this podcast where they're speaking.
36:43
And then the final part,
36:44
of course you get the patients engaged.
36:46
There's so many clever ideas, so many smart ways
36:48
of fixing these problems.
36:50
And they're nimble if industry participates.
36:53
And if the one defining nature of this administration,
36:55
I think is the president likes cutting deals, come work
36:59
with us, offer us a better mousetrap to help us think
37:01
through a challenge that we have tried to fix
37:03
through government, you know, policy.
37:05
Which again, we're trying to, we're trying to fix problems.
37:08
Sometimes the best way to fix the problem is, you know,
37:10
call the people who are involved in the problem
37:12
and say, guys, you have a better idea than we do.
37:14
If you do, we'll give you safe harbor.
37:16
Go take care of the issue we're watching.
37:18
If you don't do it, we're coming after you.
37:20
But we have been remarkably gratified at
37:22
how well this has worked.
37:24
Well, it's really amazing to hear just yeah, about this,
37:27
these fantastic efforts attracting so much talent,
37:31
really bringing, I think a, an innovator's
37:33
mindset to government.
37:35
Also, you know, what you said earlier about on AI
37:39
and echoing what Pope Leo, you know, said about how
37:43
we should be, you know,
37:45
AI should be serving us not the other way around.
37:47
As he said, this recent cyclical.
37:48
And really great to hear about all the efforts
37:50
across the board from, you know, fighting, combating fraud
37:54
with the, you know, anti-fraud task force.
37:57
You know, the, the changes in the one big beautiful bill
38:00
that are are related to healthcare
38:02
and of course, you know, Trump, RX, what's going on,
38:06
on the affordability front as well with the, some
38:08
of the most favorite nation deals as well.
38:10
Really wanna thank you all for coming on on the show here.
38:13
It's been a really fantastic conversation and
38:15
and honor to have you all on.
38:17
God bless you. Take care. Thank you.
38:19
Thank you, Jim. This is the Capitalism and Freedom
38:21
and the 21st Century podcast
38:23
and official podcast
38:24
of the Hoover Institution's economic policy working group
38:26
where you talk about economics, markets, and public policy.
38:29
I'm John Harley, your host.
38:30
Thank you so much for joining us.