Latest / The SEANC View / Why Health Care Costs So Much: Dr. Brian Miller on Hospital Mergers and State Health Plan Solutions

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Why Health Care Costs So Much: Dr. Brian Miller on Hospital Mergers and State Health Plan Solutions · The SEANC View

• 0:00
  Hello and welcome to another edition of the Scenic View podcast, the only podcast for state employee and retiree issues.
• 0:08
  I'm Jonathan Owens alongside Artis Watkins and Suzanne Beasley.
• 0:13
  Our guest today wears a few different hats and they all center around the central question that we keep asking on this podcast.
• 0:22
  Why does health care cost so much and what can we do about it?
• 0:26
  Dr. Brian Miller is a practicing hospitalist at John Hopkins Hospital and a licensed physician in North Carolina.
• 0:35
  He's also a Hoover Institute visiting fellow who advises Congress on the Medicare program
• 0:42
  and has been published in the Harvard Business Review and the New England Journal of Medicine.
• 0:47
  In North Carolina, he is vice chairman of the North Carolina State Health Plan Board of Trustees,
• 0:54
  which is the plan that our members rely on every day for their health care.
• 0:59
  He's also chairing the plan's new medical policy advisory committee.
• 1:05
  Most recently, he authored a piece with Artis Watkins in the Carolina Journal
• 1:10
  taking a look at the merger between Atrium Health and Wake Med
• 1:15
  and what it could mean for the health plan and for North Carolina.
• 1:19
  That was a well received article from what I understand and we're happy to have him on the podcast.
• 1:24
  Dr. Miller, welcome.
• 1:26
  Thank you. Thank you for having me.
• 1:28
  You know, we've had some we're blessed on this podcast that people have been willing to come on who are big deals.
• 1:36
  A lot of big deals on the state level.
• 1:39
  I think you're our first big deal kind of nationally.
• 1:43
  That's very kind of you.
• 1:46
  My request is, can someone tell my wife?
• 1:49
  Sure, sure, sure.
• 1:52
  I still have to empty the dishwasher, take out the trash, weed the garden and all the other sundry usual tasks.
• 2:01
  He's just keeping it real.
• 2:03
  That's it.
• 2:04
  First off, just tell us a little bit about yourself and how you got into the state health plan.
• 2:10
  So I've had a lot of fun. I grew up out west and did a lengthy training.
• 2:15
  Right. I did two residencies, internal medicine and public health and preventive medicine.
• 2:19
  I did my MBA at UNC and that was the best part of my training.
• 2:24
  To be honest, I had the most fun. The system worked well.
• 2:28
  The state was great. Right.
• 2:30
  It had a student friendly, business friendly, worker friendly environment.
• 2:35
  The nature was phenomenal. Right. Trees everywhere. You have the ocean.
• 2:39
  People were nice. I felt welcomed and truly felt at home.
• 2:43
  And then went and did my residencies and worked for everybody who regulated the health care industry.
• 2:50
  I worked at CMS, the Centers for Medicare and Medicaid Services, which runs Medicare and Medicaid.
• 2:55
  I worked at the Federal Trade Commission doing merger enforcement for hospitals, physician groups and pharma companies.
• 3:02
  FCC, FDA and joined the Hopkins faculty.
• 3:06
  And then Congress and the Government Accountability Office put me on MedPAC, which is the Medicare advisory body for Congress.
• 3:15
  And so I work a lot with Congress. And then when Brad took over the state health plan, our treasurer and board chairman,
• 3:21
  he brought me on because he said, I need expertise in helping fix this giant challenge that we face.
• 3:31
  You know, we brought Tom in as our new CEO.
• 3:34
  We eventually added an actuary to the state health plan board because we were five hundred million dollars in the hole on a four point five billion dollar plan for the next year, widening to one point four billion dollars.
• 3:48
  And so this was an opportunity to fix something that, in my view, we could use tools that would work and be a win for members.
• 3:58
  And essentially an opportunity to push for lower unit costs for the state employees, because I said, look, I had a great couple of years at UNC and the system worked well for me.
• 4:08
  And we should make the system work well for everybody.
• 4:11
  I agree. Wow. Well, that's a lot that got you to the table in the first place.
• 4:14
  I know that when you first came on the board after Treasurer Bronner had appointed you, it wasn't long.
• 4:20
  And then you asked, I never had a board member do this, asked to sit and talk, have a meeting and talk about the issues.
• 4:27
  I was thrilled somebody asked and was happy to have that meeting with you.
• 4:32
  We ended up talking the longest time. Yeah.
• 4:35
  And my my answer is, is when you serve on a board, you work for the organization, the organization works for your members.
• 4:42
  And the thought of not talking to you had never crossed my mind.
• 4:46
  Like, I'd have to. I should. And it's privilege and it's fun.
• 4:50
  And the whole point of the state health plan is to serve the workers.
• 4:55
  Right. Because we're helping, you know, manage your health benefits. We want to exist.
• 5:00
  We're down for that. And this is not a renumerative opportunity.
• 5:04
  As I said, they fund our travel and give us lunch at the board meeting, which is a wonderful sandwich.
• 5:10
  So we're doing this to make the system work.
• 5:13
  And so if we're going to make the system work, we have to get input from everyone who is part of the system.
• 5:20
  That includes, obviously, our plan members. Right.
• 5:23
  That includes our retirees. Occasionally, this includes the state legislature, obviously, which has a huge role.
• 5:31
  It also includes doctors, hospitals, pharma companies, device companies.
• 5:37
  We might not like what some of those stakeholders say because we want lower unit costs.
• 5:42
  But to not meet with you is not even an option.
• 5:47
  And I'm surprised that that has not happened on a regular basis and should happen on a regular basis.
• 5:54
  And frankly, one of the things I like about our leadership team is that Tom is super engaged.
• 6:00
  Oh, absolutely. Tom meets with all the member groups a lot, which is hard to work in with all the other constituencies.
• 6:10
  He has to make sure he keeps up with it all time.
• 6:12
  So definitely he's the longest running podcast guest, by the way.
• 6:16
  Tom Friedman.
• 6:17
  Very good. I think it's been four or five times.
• 6:20
  Yeah. And by the way, Tom Friedman, just for people listening, is the executive administrator of the health plan.
• 6:26
  In case that wasn't clear. But I don't know if you remember this, Brian.
• 6:30
  But the first time we sat down and talked like that, I was kind of suspicious.
• 6:34
  Like, what in the world? This is so strange.
• 6:37
  I'm not even sure what to make of it.
• 6:39
  But by the end of that conversation, I realized this guy's the real deal.
• 6:42
  And one of the other things we talked about is the fact that doctors and nurses,
• 6:47
  when we get mad as a group at the fact we don't know what we pay hospital systems.
• 6:54
  It's not because we think doctors and nurses are becoming billionaires.
• 6:59
  That's who's caring for us.
• 7:01
  The doctors and nurses are the ones that we all appropriately look up to so much because they save our lives.
• 7:08
  And they keep us healthy to have good lives.
• 7:11
  But that's not who's making out in this whole, I'll call it a scheme,
• 7:16
  of the way we pay for health care in this country and certainly in this state.
• 7:22
  It's not the doctors and nurses. It's administrators.
• 7:25
  I agree wholeheartedly. And I would also add, if I had rheumatoid arthritis,
• 7:31
  I'm okay with my rheumatologist making a couple extra bucks.
• 7:36
  Absolutely.
• 7:37
  If I had brain cancer or a spinal surgical problem and I had difficulty walking,
• 7:44
  I want my neurosurgeon to be the best of the best and to be appropriately trained.
• 7:50
  They work 90 hours to 100 hours a week regularly.
• 7:54
  What I don't want is to have most of my spending fund an administrative complex around them.
• 8:03
  Right.
• 8:04
  I want to actually fund the people doing the work.
• 8:07
  And there's a lot of administrative waste in the system.
• 8:10
  I mean, a heck of a lot.
• 8:12
  And the joke is that attached to that doctor, nurse, or independent community pharmacist
• 8:18
  are three to five administrators. And that's a problem.
• 8:22
  Absolutely.
• 8:23
  Yeah, because I don't think any of us have a problem with the people who directly care for us getting paid to provide that care.
• 8:30
  That's right.
• 8:31
  And I think people are surprised, too, that they aren't the ones getting paid.
• 8:36
  You know, people outside of knowing what we know a lot of times,
• 8:39
  they think the doctors are making all this huge, incredible money, and it's not actually the doctors.
• 8:46
  Yeah, and physicians have largely become employees of large corporations.
• 8:52
  There are some independent physician groups,
• 8:54
  but there has been a huge move towards corporate employment of physicians and nurses.
• 8:59
  And there are tradeoffs, right?
• 9:01
  Some of that's good, and some of that is bad.
• 9:03
  It's good if you get systems of technology and support and care that make things more convenient for patients who are ultimately our plan members.
• 9:12
  It's not good if it doesn't do that, and it just drives up cost.
• 9:16
  Right.
• 9:17
  We talked about the Relentless Health Value podcast, I don't know, in the last few episodes at some point.
• 9:25
  And one of the things I heard on there that made the most sense to me was the angel complex that the hospitals have around them
• 9:32
  because of the doctors and nurses, because we all do feel like, hey, these doctors and nurses are actually angels that come in
• 9:39
  and help us out of a situation we could never help ourselves.
• 9:43
  And that kind of gets, that goodwill gets lumped onto the hospital overall
• 9:48
  without really thinking about the fact that it's a corporate entity in most cases.
• 9:53
  And so the point they were making on the podcast is it's very hard to kind of drill through that
• 10:00
  and get Americans to understand that those doctors and nurses they think so much of are just not part of that corporate machine.
• 10:07
  They may work for it, but they're not being given the benefits.
• 10:10
  Yeah, I think that's a really good point.
• 10:12
  And I think the other thing to think about is administrative machinery can be good if it serves the patient and the clinician, right?
• 10:22
  So if you get single source billing, you get, I hate to say this, airline-style check-in where you swipe your iPhone or Droid.
• 10:33
  I know using the airlines as an example of good service, who am I? I must be insane.
• 10:38
  If you get sort of those sorts of convenient features and technology, that administrative machinery is good.
• 10:45
  On the other hand, if you get administrative machinery that propels its own growth instead of reinvesting in clinical operations and technology
• 10:55
  and the frontline clinical workers, and instead you get streams of PowerPoints and administrative costs,
• 11:03
  which don't directly correlate and drive value for the patient, that's harmful in that increased cost.
• 11:11
  And I think this gets to another thing that at least I think the state health plan is very focused on, which is purchasing for value.
• 11:20
  And I know that sounds like a bunch of gobbledygook, right?
• 11:23
  You're like, oh my God, it's another silly health policy article that doesn't actually mean anything in the real world.
• 11:30
  And I view the strategy as simple.
• 11:34
  The answer is we have a lot of purchasing power, and we should use it to get good value for the members.
• 11:41
  And good value for the members could be a couple of things, right?
• 11:46
  So people always ask me about quality, right?
• 11:49
  And they're like, well, is the state health plan purchasing quality?
• 11:53
  And I personally view quality as sort of a minimum hurdle, right?
• 11:58
  So you have to jump over that hurdle.
• 12:00
  And then the rest of quality is performance, and performance could be a couple of things.
• 12:06
  It could be convenient access, right?
• 12:09
  So if you have an OB appointment because you're pregnant, and they offer you something at 10.45 a.m. on a Tuesday, that's not convenient access, nor is that high quality because you have a job, right?
• 12:26
  And you can't just take off your entire day to go to the doctor's at 10.45.
• 12:32
  So thinking about things like extended hours or weekend hours.
• 12:36
  And my point is that quality doesn't matter if you don't have access.
• 12:42
  And also quality is often measured on sort of process features, which I think are important, right?
• 12:49
  Making sure that people do the things they're supposed to do, sort of like the Toyota production line.
• 12:55
  But at the end of the day, the member cares about the outcome, right?
• 12:58
  Because outcomes, like we're all looking for a result.
• 13:02
  It's great if we go to the doctors and the hospitals and, you know, I'm a patient myself as a doctor, right?
• 13:08
  It's great if I go to the doctor and the doctor does all the right things.
• 13:11
  But if I get the wrong outcome, you know, or the population that I'm part of the insured of gets the wrong outcome, I'm going to be pretty unhappy, right?
• 13:21
  So I think looking at sort of the traditional medical process quality, I look at that as like a floor and a hurdle to jump over.
• 13:30
  And then performance relates to more of population-based outcomes, access, convenience, etc.
• 13:37
  And when you have 550,000 members and you start to build a preferred provider network, we can start to ask for those things over time.
• 13:47
  And that's, to me, is a real win.
• 13:50
  And the other thing I think that's really interesting about the strategy is we want members to win, right?
• 13:56
  Costs are going up, right?
• 13:57
  We have inflation.
• 13:59
  The rest of the world, which, frankly, is not fun for any of us, whether it's gas, food, whatever prices are going up, health care prices are going up.
• 14:08
  And so can we use benefit design through preferred providers to make sure that there's an opportunity for people's costs to not go up and, in fact, an opportunity for costs to go down?
• 14:21
  Yeah.
• 14:22
  So let's talk about the column that you guys wrote together, Artis and Dr. Miller.
• 14:27
  Right.
• 14:28
  The Carolina Journal, Murders Only Make Hospital Monopolies Worse, is the title.
• 14:35
  It's syndicated around a few places in the state.
• 14:38
  I've seen links for it in other papers as well.
• 14:42
  In the column, you describe the merger history of Atrium as a string of pearls, one acquisition after another.
• 14:51
  At what point is that not a growth strategy but a public policy problem?
• 14:57
  I think that hospital mergers are a public policy problem writ large.
• 15:03
  I'm very open to evidence that it improves economies of scale, improves quality, and improves convenience.
• 15:10
  But in the 30 years of merger history that we have, when you look at the economic and medical quality evidence, it suggests that that is not the case.
• 15:22
  So in concentrated markets, when competitors merge, whether it's hospitals, drug companies, doctors, it's a concern.
• 15:31
  And it's particularly a concern for hospitals because hospitals have inpatient and outpatient footprints, and that largely makes up 51% of unit costs.
• 15:43
  And so when you have larger corporations, they have more market power to demand higher prices.
• 15:50
  And that ends up hurting the consumer.
• 15:53
  And the consumer is the patient, and the consumer is a plan member.
• 15:57
  And I don't think that's a good thing for society.
• 16:02
  As I said, I'm very open to evidence suggesting that that's not the case, but haven't yet seen it.
• 16:09
  So the board has talked about how steering some of these new options in the state health plan, how trying to steer the members of the state health plan will help them specifically with their out-of-pocket costs.
• 16:22
  But talk a little bit about how this atrium buying out WakeMed would affect being able to steer people to lower costs.
• 16:31
  Yeah, so this is a merger that directly addresses steering as a strategy.
• 16:38
  So it makes it much harder for us to execute steering as a way to preserve members' financial wherewithal, right?
• 16:47
  Because the whole point of steering is that you take volume and use volume purchasing to get a lower price.
• 16:54
  If you're negotiating with a new, larger statewide enterprise, that's much harder.
• 17:01
  Now, my hope is that all statewide enterprises come to the table and offer the state health plan lower prices in exchange for volume.
• 17:11
  As a board member, I'm not part of those negotiations, right?
• 17:15
  That's our excellent leadership team, which is working on that.
• 17:19
  But my hope is that large statewide enterprises do that.
• 17:25
  But of course, if you're a large statewide enterprise, you might not have to.
• 17:29
  And to me, that's a concern because the reason that we have a preferred provider strategy is to preserve the benefits for the members and give them an option through preferred providers to preserve their cost structure and lower their cost structure.
• 17:47
  And we've seen a lot of consolidation in recent years here in North Carolina like everybody else has.
• 17:52
  And in all of those cases, that has been a non-beneficial thing at the end of the day for the folks in the local area who use those hospitals.
• 18:02
  But this one's a little different.
• 18:05
  The Atrium announced the WakeMed merger after close of business on Friday, tried to push an amendment through a routine county commission meeting the following Monday on a ‑‑ on the consent agenda, not even on part of the agenda where you debate.
• 18:20
  What should, you know, what should the public read into that kind of timing?
• 18:24
  Or, you know, should that not ring warning bells for everyone that if this was awesome for the public?
• 18:32
  I mean, it's the first time we've seen it done this way in North Carolina, but it seems pretty sneaky.
• 18:38
  I'm a big fan of transparency and timelines and public process, and I might sound like an old‑fashioned good governance sort of person because I am, right?
• 18:48
  So if you're going to do something that's important, announce it during business hours.
• 18:54
  Announce it at the beginning of the week, right?
• 18:57
  Have a discussion and have a debate.
• 19:00
  Now there is a discussion and a debate, but my question is what is the purchase price for WakeMed, right?
• 19:08
  Because if you're merging into a health system, what value are you providing the local citizens, right?
• 19:17
  Because you're buying what is functionally a public entity by taking corporate control, and there were other merger offers on the table for several billion dollars.
• 19:27
  Right, more than what was in the agreement with Atrium.
• 19:30
  Right.
• 19:31
  Yeah, so it makes you wonder about what provisions might be in that contract that benefits particular people.
• 19:38
  Yeah, so I don't know what's in the contract because I'm not in those negotiations, but I do think, you know, in general as leaders of large enterprises, right?
• 19:50
  You know, I'm the state health plan board, and it would be the same if I were on the hospital board.
• 19:55
  You have a responsibility to conduct yourself, especially as being part of a public entity, with transparency of process and information.
• 20:06
  And that, whether you're in local government, state government, federal government, whether you're in, you know, a publicly owned delivery system or not, you know, I think that's the expectation that we should have for our leaders.
• 20:19
  That's the expectation I set for myself.
• 20:22
  That's the expectation, you know, that I set for the folks I work with.
• 20:27
  And, you know, it's my hope that the hospitals in the state that are publicly owned will follow a similar ethos.
• 20:36
  And, you know, I was disappointed to see an announcement after hours on a Friday because, to me, that did not meet that standard that I would expect.
• 20:49
  Since that announcement and the postponement, it seems like the atrium side has been saying, well, the Wake County government really doesn't have a role in this.
• 21:00
  We're a private company, and Wake Med is a private company.
• 21:05
  But, you know, the Wake County commissioners do have a role in it, right?
• 21:08
  And they seem like they are even trying to kind of pass the buck a little bit on it.
• 21:13
  And they do have a responsibility to vote on this and take it seriously, right?
• 21:20
  Yeah.
• 21:21
  As I said, I think anybody who serves in a public position has a duty to the people that we serve.
• 21:29
  I said my duty is to your members.
• 21:31
  I take that very seriously.
• 21:33
  And my hope is that people in similar positions in other organizations also take that duty very seriously.
• 21:41
  And when you serve in public positions, you get pressure, right?
• 21:45
  I'm not naive, right?
• 21:48
  Politics are politics.
• 21:50
  People want certain things, and you can get pressured.
• 21:53
  And I think the sort of measure of our character as individuals and as leaders is how we respond and the decisions that we make in those circumstances.
• 22:03
  So you talked about this anti-steering provisions.
• 22:06
  I know your column said something about Texas has a provision now.
• 22:11
  Yeah.
• 22:12
  So states have actually recognized that when health systems behave poorly in terms of contracting practices, that it's anti-competitive and drives up costs.
• 22:24
  So states, there's model language that states have used to prevent anti-steering, anti-tiering in commercial insurance contracting.
• 22:34
  And I think that's a great model to prevent anti-competitive corporate behavior by hospitals.
• 22:40
  And, you know, ensure that you have a more vigorous hospital environment, right?
• 22:44
  So, you know, using a health system outside the state as an example, if you look at MedStar, which owns Georgetown, where I went to residency, and I'm using Georgetown as an example because I love Georgetown.
• 22:57
  And so, you know, MedStar could say in its commercial contracting, by the way, if you want to contract with MedStar Union and Washington Hospital Center, you also have to include Georgetown or I won't contract with you at all commercial health plan.
• 23:14
  And so laws like what Texas have say that you can't do that in commercial insurance contracts.
• 23:21
  And I think that's great for consumers.
• 23:23
  And I think that's a great example that we can and should think about.
• 23:28
  You know, we talked about this atrium wake med potential merger a lot here on this podcast so far, but want to kind of wrap that up and bring it home as to why, as you know, part of the leadership of the state health plan board.
• 23:43
  Y'all are keenly aware that this is going to cost every single person in the plan.
• 23:49
  They don't have to live in Wake County to be affected by this.
• 23:52
  And I believe it was it was well over $100 in a year that I heard out of the health plan.
• 23:59
  Yeah, that sounds right.
• 24:00
  I don't remember the exact number off the top of my head.
• 24:04
  You know, I can say that wake med is a very well managed system independently.
• 24:09
  Right. Has a billion dollars in cash, has high volume, 9% margin, which is quite good for the hospital industry.
• 24:19
  Right. It's a acute care hospital industry has margins, you know, two, three percent, five if you're going gangbusters.
• 24:26
  So 9% margin is good. Very good.
• 24:29
  And then they have an A plus bond rating with a 400 million dollar expansion already planned.
• 24:37
  So financially, the system is doing well.
• 24:41
  So mergers tend to result in higher prices for consumers.
• 24:46
  And in terms of thinking about fairness, if you're a statewide health plan, you wouldn't just target the people in the county because that wouldn't be very nice.
• 24:56
  Nor would that be fair.
• 24:57
  And so mergers that increase pricing power, increase premiums.
• 25:03
  And so unless we get good prices and, you know, I would hope that a merged entity, if this were to happen, would come to the state health plan and say, look, we want your volume.
• 25:13
  Here's the price we're willing to offer. We want to give a discount for volume.
• 25:18
  Costco style, right. The two pound jar of mayonnaise that we all want.
• 25:22
  I'd hope that the combined health system would do that.
• 25:25
  You know, I can't predict what they would or wouldn't do, but I would hope that they would do that.
• 25:30
  And if they did do that, then the merger would have strong value for members.
• 25:36
  But if they have to. I have to stop on that, Dr. Miller. Do we all want a two pound jar of mayonnaise?
• 25:42
  I mean, as I would prefer, I would prefer a two pound jar of mustard.
• 25:49
  I just found that a curious example for a physician to give.
• 25:55
  Well, it could be it could be a miracle whip.
• 26:00
  But but but the point is, is that, you know, mergers raise costs.
• 26:04
  And the only way it's not going to raise costs is if we get a preferred provider discount and they come to us and say, hey, we want your volume.
• 26:12
  And I hope that they come to us or come to Tom or and the team more accurately and say, hey, we want your volume.
• 26:19
  If we're combined, this is what we're willing to do with scale.
• 26:22
  History suggests that that might not be the case, but I would hope that that is right, because I need to remain optimistic.
• 26:31
  True. So we don't have a whole lot of time left.
• 26:34
  We know you're a busy man, but let's get to some more, maybe a broader question about the state health plan and the situation that it's in right now.
• 26:42
  How do you feel about the state of the plan now and, you know, how it's going to impact members?
• 26:49
  So I feel great about a couple of things. One is I like the fact that we did income adjusted premiums because I think that's fair.
• 26:57
  The joke is, is that the dermatologists can afford more than the unit manager right at UNC hospitals.
• 27:04
  I think that's a fair thing. I was a big proponent of that. The Medicare program does that.
• 27:09
  It's called in Medicare. It's called Irma. For us, we're just calling it income adjusted premiums.
• 27:14
  So I think that that makes the health plan cost more targeted. Right.
• 27:19
  Because we're trying to target a percentage of your income. And so if you earn more, you pay more.
• 27:24
  If you earn less, you pay less. In terms of the benefit design, you know, at our upcoming board meeting,
• 27:30
  we're going to be discussing and voting on the preferred provider network.
• 27:35
  And to me, I'm really excited about that, because if you think about it, we're actually lowering costs in the preferred network.
• 27:44
  So people still have the access network, which is the sort of basic statewide option in rural areas and suburban urban areas.
• 27:53
  But if in areas where there is an opportunity for competition, we are going to leverage that competition to get lower costs.
• 28:01
  And so if you look at the slide deck from our last board meeting, the annual deductible under the preferred tier is going to be fifteen hundred.
• 28:08
  Right. So that that would be a decrease. And that would be sort of like time travel going back in time.
• 28:14
  And we often don't get to do that in the insurance world. And so I think that's super cool.
• 28:19
  The access, you know, staying at a three thousand dollar individual deductible preferred, obviously going to five thousand.
• 28:26
  And so the idea being that if you're a member, like you can stick with your doctors and hospitals and have sort of the same benefit.
• 28:34
  But you also have the option to go to areas where the state health plan gets a better deal.
• 28:40
  And if the state health plan is getting a better deal, the member gets a better deal, too.
• 28:46
  And so I'm super excited about that because, frankly, we all need to win as a team because we are a team.
• 28:52
  So the members in the plan should win. It shouldn't just be the plan winning and saying, great, you know, we fixed reserves.
• 28:58
  They're back at the level they should be. That's important. But the members have to directly win with us as we go on that journey.
• 29:06
  I think the other thing that I'm sort of thinking about in the long term is what we can do to lower drug costs for members.
• 29:13
  That's sort of a long term strategy discussion that we are noodling and thinking about because biologic drug costs are way too high.
• 29:23
  Yeah, that's been a big hit for for for everyone, but for our folks in particular over the past year.
• 29:30
  Right. And so thinking about that again, this is a long term strategy question.
• 29:35
  We don't have a clear answer yet, in all honesty, but it's if you have Crohn's disease or ulcerative colitis, for example, it's not your fault.
• 29:44
  Right. Like no one went out and raised their hand and said, hey, I'd love ulcerative colitis.
• 29:49
  Right. It sucks. And, you know, drug diseases like that are treated with highly effective drugs, most of which are biologic therapies.
• 29:57
  But the answer is, is that biologic drugs are super expensive. Sometimes how we purchase them is more or less competitive.
• 30:05
  And, you know, that's like a long term three, five year strategy question of how do we bend that cost curve.
• 30:12
  Right. And change is never easy.
• 30:14
  I think it's important to point out here again that the new structure for the state health plan with the access tier and then the preferred provider tier does not mean you have to change your doctor.
• 30:24
  You still have the access model where you can stay.
• 30:27
  You can stick. And so the great thing about the access is you can stick with your doctors and hospitals and get the standard benefit.
• 30:34
  You have the option to shift some of them or if you get new health conditions or new problems, pick someone from that preferred network and get lower costs.
• 30:44
  Right. It's the option. And, you know, obviously, I want people to save money, you know, recognizing I said that the cost of everything else is going up in life.
• 30:52
  And so if you can save money on your health care and still get very good care, to me, that's a win.
• 30:59
  Yeah. And change is never easy, but change has to happen.
• 31:03
  We can't keep going down the same path that we've been going with the state health plan.
• 31:08
  I do know one of the things we do get a little pushback on with the salary adjusted premiums.
• 31:14
  I've had some folks who make more money but never go to the doctor, you know, think that it's unfair.
• 31:20
  I don't rightly know what the numbers are to how many folks never go to the doctor that are making more money than our rank and file state employees.
• 31:30
  Yeah. And my answer is, you know, I understand, but we have to make compromises.
• 31:35
  And that to me, income adjusted premiums seems like the right thing to do. Right.
• 31:40
  And, you know, we have a progressive tax schema in the US. Right.
• 31:46
  As you make more money, your marginal tax rate goes up. Some people don't like that.
• 31:51
  And that's OK. But that policy tends to work.
• 31:55
  And the same policy has worked for Medicare premiums for years.
• 32:01
  Yeah. And, you know, Medicare is not perfect by all means.
• 32:06
  I think, though, that that's a good policy that we implemented. And the answer is we all got to pull some weight.
• 32:13
  And we're in this together. Sustainability of the plan has been part of our conversations with our folks.
• 32:20
  It's sustainability. It's also fairness. Right. Right.
• 32:25
  Because we're trying to we're trying to keep the state health plan as a rich benefit.
• 32:29
  Right. Because recognizing that there is a trade off when you work for the government, you make less money.
• 32:34
  It's just you make less money. But the trade off is that you get better benefits and a better retirement plan.
• 32:42
  And so if we're going to preserve that social contract of you make less money when you work for the state, you have a richer health benefits plan.
• 32:51
  Right. We have to make compromises to make sure that we continue to fulfill that social contract.
• 32:57
  Income adjusted premiums, I think, is one that helps us fulfill that social contract.
• 33:03
  And it's also fair and, frankly, more equitable for the plan members.
• 33:07
  Right. I think you could sell it better. You know, we're all in this together.
• 33:11
  Yeah. If we had transparency in the pricing, because if you've got a state employee making sixty five grand, so they're considered well off.
• 33:19
  But you have a CEO making twenty six million a year, but we can't see what we're paying their hospital system.
• 33:26
  That's where people feel like we're not really all in this together. Come on.
• 33:30
  Yeah. I mean, I'm a big fan of price transparency at the federal level.
• 33:35
  For example, there's the Patients Deserve Price Tags Act, which is a bill that's pushing price transparency for doctors, hospitals, plans, ambulatory surgery.
• 33:47
  So that's something that's moving at the federal level, which I've been a big fan of.
• 33:50
  I published on price transparency in favor of it, obviously, with the Department of Justice Antitrust Division.
• 33:57
  So whether you realize or not, you're talking to one of the biggest fans of price transparency.
• 34:02
  I realized, you know, price transparency can sometimes help folks make better decisions.
• 34:09
  And sometimes it doesn't matter. Right. For some things. Right.
• 34:13
  No one's going to look at their cardiac bypass surgery and say, hey, this is 40 and this is forty two thousand.
• 34:19
  I'm going to pick the forty thousand. Like that's not a decision people are making or should be reasonably expected to make.
• 34:26
  I also realize that in general, price transparency for goods and services is a reasonable expectation in society. Right.
• 34:34
  We know the price of gas. We know the price of buying furniture at Ikea.
• 34:39
  Right. I think that knowing the price of, you know, doctors, drugs and hospitals is a good thing.
• 34:45
  And it takes a little bit to get there.
• 34:47
  So we always wrap up with a question of the week for me, and it's usually crazy.
• 34:51
  But if you have a real expert on, we probably should ask a real question, don't you think?
• 34:56
  Oh, I'm not going to ask you, like, what's your favorite ice cream flavor or anything.
• 35:02
  You can ask me what my favorite ice cream flavor is. It's pistachio.
• 35:07
  Oh, that's interesting.
• 35:09
  So my question is, and it kind of ties into what we were just talking about.
• 35:14
  North Carolina has been named the most expensive state in the nation for health care.
• 35:19
  And state employees are a big part of that plan. I mean, they're 10 percent of the market.
• 35:25
  What's one thing that North Carolina should do to maybe lessen those costs and move down that list?
• 35:33
  I think that the entire commercial insurance market should move towards a preferred provider strategy.
• 35:40
  And I hope that the state health plan is leading in that.
• 35:44
  And when I mean preferred provider strategy, I mean a real preferred provider strategy,
• 35:48
  not just a 10 versus 15 dollar copay, but changing the benefit design like we are.
• 35:54
  I think if the entire commercial insurance market moves in that direction,
• 35:59
  that that will help bend that cost curve in a positive way, right?
• 36:03
  Because you're rewarding the members with lower costs.
• 36:07
  You're forcing and driving hospital competition on price and non-price features,
• 36:13
  which I think will be good for the hospital industry, too.
• 36:17
  They might not always enjoy it.
• 36:19
  But I think it's a good thing that will make the system more vibrant and robust in the long term.
• 36:25
  So I would say a preferred provider strategy with benefit design that drives it could massively lower costs.
• 36:33
  Lower costs means people go to the doctor and stay healthier. So that's a win-win.
• 36:38
  That's right. And I would say even just getting to the doctor and being able to get affordable, easy, convenient access for chronic disease treatment.
• 36:47
  Right. Right. I want people to stay healthier, but I realize that a lot of people already have chronic illnesses.
• 36:53
  And so I think making it easy for them to manage them is the win.
• 36:57
  Artis, do you have anything else to talk about?
• 37:00
  Well, one of the questions, John, you had come up with, which I felt like we just can't not ask this before we leave.
• 37:08
  It is interesting to me that you're a physician. You work for a hospital.
• 37:13
  You're kind of in all of these worlds around every part of the health care debate.
• 37:18
  But yet you fight for consumers so openly in Congress and on the state health plan in many of your roles.
• 37:26
  Do you ever get in trouble for that from the hospitals?
• 37:30
  Because it is kind of remarkable that somebody who's in the system is railing on the system.
• 37:37
  I would say, you know, I try and be constructive and positive in terms of what the opportunity is.
• 37:44
  I've had my own experience with managed care myself.
• 37:48
  So, you know, I got sick in medical school and had high blood pressure and the provider directory was out of date.
• 37:57
  And so I went and saw someone and it cost me eight thousand plus dollars for all the testing and whatnot,
• 38:04
  because it was out of network, non-preferred provider.
• 38:08
  And it wasn't clear to me how to submit receipts to get reimbursement.
• 38:12
  And, you know, I got all these letters in the mail from the insurance company.
• 38:17
  And so that's how I became interested in managed care.
• 38:20
  And so I would say managed care has opportunities to do a better job.
• 38:25
  But managed care is the banker, right? The plan is the bank.
• 38:29
  I would say the delivery system needs to do a better job because I'm a consumer, too.
• 38:34
  My relatives are consumers. And so I would say asking for people to get a better deal
• 38:41
  and having improved clinical operations built around technology and the consumer is something that we must have.
• 38:48
  We have that in other industries. We don't have that in the health care industry.
• 38:52
  I would say historically, the health care industry has not been interested in this in a substantial way.
• 39:00
  And I think that's starting to change as political pressures have started to change.
• 39:05
  And so I guess I would say that personally, it hasn't always been easy for me.
• 39:10
  But as I said, I judge myself based upon if I'm true to myself, both in private and public settings.
• 39:18
  And so when that system changes, my messaging will change.
• 39:22
  And I'm always supportive of delivery systems, of which there are some, you know,
• 39:27
  delivery systems that are small, nimble and innovative or even large and innovative.
• 39:33
  You look at Kaiser in California, which is trying to do a vertically integrated payer provider,
• 39:38
  which is doing a lot of good things with technology.
• 39:41
  So I would say, yes, I definitely get pressures from a variety of corners,
• 39:47
  but I wouldn't be true to myself and my relatives if I didn't speak up.
• 39:53
  Well, we're very lucky to have you as a leader on the state health plan board.
• 39:57
  We're very lucky. Treasurer Briner tapped you for the role and we got to meet you.
• 40:02
  Thank you so much for coming on here and talking to our members today.
• 40:05
  Thank you for having me.
• 40:07
  I think that's our show this week. Everyone have a great week.