Meidas Health: Former VA Secretary Dr. David Shulkin on America’s Health Care Crisis

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2:41Grab tasty flatbreads and their new balsamic chicken salad in the prepared foods department. Keep things fresh with organic red cherries, strawberries and peaches at their peak. And stock up on bug sprays and sun care must-haves. Make your summer sizzle at Whole Foods Market. Midas Mighty, welcome to another episode of Midas Health. There's a lot that's happening that frankly I think is confusing when we think about the changes or proposed changes to federal health policy from the Trump administration. And there are very few people in the country like Secretary Dr. David Shulkin to help us figure it all out, to help us navigate through this very complex policy situation.

3:27You know, Dr. Shulkin has served both President Obama and President Trump. He was most recently the secretary of the VA for the Trump administration, served in very high senior ranking roles under the Obama administration, has been confirmed by the Senate some of those roles to a vote of 100 to 0. I just found that out because I was warming up an audience for him in Philadelphia at a healthcare conference a few weeks ago, and we had a chance to reconnect. I said I'd love to have him over at Midas Health, and he graciously accepted. So I'm excited to have him join and for all of you to listen to his perspectives, especially at this really important time for the country.

4:07Secretary Shulkin, thank you for joining Midas Health. I'm glad to be with you today, man. I know there's a lot that we can cover, but I wanted to make sure our listenership had a chance to get your perspectives on everything that's happening when it comes to Affordable Care Act marketplaces potentially not being as hospitable to coverage as in years past, new proposals from the president suggesting that HSA health savings accounts might actually be the focus of the current administration. There's a lot there for those of the many out there who aren't spending their entire days thinking about these terms and these programs.

4:49I'm wondering what your thoughts on what you're seeing and if you could help us through this confusion. I think that all of us that spend our time in health care understand how complicated this is. And if you now bring this up to a political level where people that don't spend their time in health care, but are responsible for making policy for the country, take a look at it. They're frustrated too. And I think what we're seeing here is very interesting. The recent shutdown, the continued debates have really focused on ACA subsidies, but But what ACA subsidies really are, are a bandaid to a broken system that's really become unaffordable and non-sustainable.

5:33And unfortunately, what we're seeing is that neither the Republicans nor the Democrats have a plan for comprehensive reform to fix this system. And in fact, the last time that we had a holistic view of the system was back in 2009 with the advent of Obamacare, which means that we're really looking at thinking that developed in 2006 to 2008 if policy happened in 2009. And so what we're seeing is 15 years of really not addressing the systemic problems in the health care system. And I think that's where this frustration is boiling over. And that's what we're seeing right now. Are you of the minds?

6:16You said this when I heard you in Philly at that fireside chat at Penn. And I loved it because I agreed with it. But it feels like Democrats and Republicans, to paraphrase you, neither party seems to have a plan in place for a long term fix for our health care system. But I'm wondering if you can elaborate. Yeah. Well, first of all, I think we are going to get there on some type of agreement on the subsidies, because in the absence of a plan, the subsidies are the only thing that are going to provide some type of transition to hopefully a better system. And so what what really needs to happen is we need to be able to have the political will to recognize that the current system of paying for units of care for the country simply isn't working.

7:09And what we really need to do is to transition to a reimbursement system at the policy level that begins to take away the intense fragmentation of our system. That means that providers look at their job differently and are paid differently than payers who are paid differently and look at their job differently than pharmaceutical and device manufacturers who look at it differently than technology providers and service providers in the healthcare industry. And whenever you have such a fragmented system with different incentives to perform, you're going to get a system that essentially goes out of control.

7:49And our system is going out of control in two ways. One is we're seeing less people likely to be covered for insurance next year and the following years than we have in a long time. You're seeing even those that are covered no longer being able to afford it with premiums going up 50, 60, 100 percent on small businesses and individuals. And we're seeing essentially the same gaps in quality and the same disparities in the health care system that we've seen for decades. And so by any measure, this is not a system that's really getting the results for the amount of money that the country is spending on it, which is close to 20 percent of the GDP.

8:36Do you ever wonder, and I imagine the millions of folks that listen to Midas Touch and some fraction of which will listen to Midas Health. You know, the reason I wanted you to join is for many reasons, but one of which is you are a bipartisan leader. You appeal to both sides of the political aisle in ways in which I feel very few people can and do in our contemporary politics. when you have conversations not to ask you to betray confidences but do you feel like there's a bipartisan understanding that something as simple as not extending I'm not saying it's simple but extending the subsidies imperfect solution a bunch of people would be left out of the healthcare system if it doesn't isn't extended it strikes me that that's the only way forward maybe that is what they're going to land on But for months, it seems like there was an unwillingness to acknowledge that reality.

9:38And the government got shut down for 40 plus days. We could fall both sides, I guess, to a certain degree. But from your vantage, is there a unanimity or a majority line of thinking among senators and congresspeople that we should be doing? We all largely agree that something needs to be done. They largely agree on the parameters of what needs to be done. Because it doesn't seem like that's the case from the outside looking in, but you have a different vantage. Well, I think that the political framing of this issue around the subsidies was an interesting one, but clearly the wrong one. You know, I do think that's the way this is.

10:18This short term political crisis is going to get solved, because I think when you speak to people privately, almost everybody agrees that in the absence of a different solution, the subsidies are needed just as a point of transition to we can get to something else. But, you know, if you think about the subsidies, it is reaching approximately 20 million Americans out of a country of close to 400 million. So it's a very small percent of Americans that this is really addressing. So anybody who thinks that this is going to solve the affordability crisis for American health care, I think, just isn't looking at it properly.

10:57And so the problem is, is that we are facing this right now without a real alternative approach. There is no comprehensive solution being floated by either party. And so hopefully this is a wake up call. We do get the subsidy deal done to give us some time to really treat this as the crisis that it is. I want to pivot slightly. I suspect we're going to hear more and more about this in the weeks and months ahead, even if the subsidy issue gets extended. And for our listeners out there, Dr. Shulkin and I have been talking about these enhanced premium tax credits that became so much the focal point of the government shutdown over the last few months.

11:43You may have seen headlines saying that Democrats were wanting to negotiate on an extension before they agreed to reopen the government. and lots of hand-winking. But these subsidies, which were passed in 2021 to make healthcare more affordable on these Obamacare exchanges that exist in many states across the country, were passed in 2021. They made health insurance cheaper to afford for about 24 million Americans. As you point out, Dr. Shulkin, this is a fraction of the country. They expire on December 31st of 2025, no guarantee for extension. And what does this mean? This means for a family of four in Kentucky, we're seeing potentially five-figure increases in health insurance premiums if they aren't extended.

12:29So huge consequences. I want to pivot, though. I bet many of us have already heard or will hear about health savings accounts. I saw Senator Cassidy of Louisiana suggest and be very bullish on this concept that that's where they're going to head with the plan. that even if they temporarily extend tax credits to make or to extend these tax premium credits that we were just talking about, they really want to focus in on sending checks to Americans to bolster health savings accounts. From your vantage, I'm wondering what your thoughts are on that approach, because it seems like it's an either or, that they want to move towards that and away from Obamacare subsidies.

13:18And I'm wondering what your thoughts are on that. I certainly understand why it's politically appealing. Politicians like to be on the end of giving checks directly to Americans so they know where the money is coming from. And of course, our current health care system is anything but transparent. The money flow that happens once you pay your insurance premium and how that gets spent and dissipated, I think, is very difficult to follow. Just try to follow an explanation of benefits that you get from any medical service that you have. And I don't know anybody who really understands them. So I understand the simplistic nature of trying to cut the middleman out and give money directly to people to let them have control over where they spend it.

14:03But the complexity of the current system, that's not really going to solve the problem because people are still going to need their insurance plans and people are still going to see these types of cost increases. So unless you went to a full system of where money is given, the full premium dollar is given to consumers, consumers have the right information, the transparency of cost and quality data that they could make those decisions. I don't think you're going to see this as a solution that really begins to impact the basic issue of affordability and fragmentation in our system. But the idea is not a bad one.

14:47The idea of giving the consumer more control, the idea of providing the patient with the information to be able to make decisions. And frankly, for the patient to have some skin in the game in terms of how they're spending their money and the accountability for that money, those are all good ideas. And so if this is a way to start out, I'd say, you know, I would, you know, in some ways be optimistic about the start. But if it's viewed as we've now fixed the health care problem, I think that's going to be oversimplification. I want to follow up. You brought up quality price transparency, and I'm glad you did.

15:35I wanted to get your take on this because I think that's a great goal. I've spent some time at health technology companies where everything is direct to consumer, and we hope that patients will compare prices and go with the best quality, lowest cost option. I read, however, and I wanted to see if you agreed with this, that short of knee surgeries and shopping around for knee surgeries, if you have a choice and you have time to plan for it, that you can shop around for the best potential price. That very few Americans seem to actually, even when given the option, and sometimes they're not because it's an emergency, in very few cases do people actually truly shop around.

16:19And I'm wondering, do you agree with that notion that let's say we were to give everybody their full or give them more money and move away from sort of our insurance based approach to health coverage? Do you think that the system as it stands today makes it even possible for people to know what they're paying for across the range of services? Yeah. So first of all, I think you do have an accurate reflection of what the health services research data has shown, which is that even given information, patients have been reluctant to rely upon the system that they have forever, which is asking your friends and family where they would go if they were sick and have been reluctant to actually use the data.

17:08But I would say it's actually a flawed measure that we're using of whether consumers and patients actually want this information. That without the financial accountability, it's really hard to ask people to seriously use this information. That, in other words, people who have been studied, whether they are making choices about quality data and volume data, are doing this through their insurance plans and so therefore are shielded from the financial decisions. When you now if you were having a system that would open it up, like potentially in HSA account where they are given the right information at the right time in an understandable format and their financial decisions are going to be impacted by where they make a choice.

18:08In other words, do you get your CAT scan at a hospital where it may cost$2 ,000, or do you get your CAT scan in a freestanding imaging center where it may cost$500? I do think that's where consumers will begin to start using that data and changing behavior. You always make us so much smarter, Secretary Shulkin. Thank you. I 100 % agree with that. Before we let you go, there's a lot out there right now. Last Friday, it was reported that the current administration is changing potentially how it thinks about magnitude of loans for graduate trainings for professional degrees. If you pursue a law degree or medical degree, the limits in which you can draw against the government to get a non-need-based loan are changing.

19:03It's$200 ,000 now is the maximum. So four-year medical school,$200 ,000, three-year law school,$200 ,000. Nursing school will be excluded from that maximum draw limit. And sometimes nursing school can cost up to$150 ,000 based on where you go. Now it's going to be$100 ,000 for nonprofessional degrees. And currently nursing school will be decimated as a nonprofessional degree. Lots of uproar, lots of unhappy voices out there. And I sympathize with them. But as always, you're able to cut through the noise. And I wanted to get your perspective. I know this is just for recent news here, but just your general feeling about the federal government investing in the future of the healthcare workforce and whether or not you view a decision like this as potentially short-sighted or is there a rhyme to this reason?

19:59Because I think there's a lot of people out there upset by what they're hearing. In government, there's always a balance between where you spend taxpayer money and the value that you're getting. But I think in this case, the data and the demographics should drive the policy. We are a society that's getting older, that's going to require more, not less, nursing care as we get older. And the workforce shortages that we already see in the American health care system with nurses are significant and will only grow. Policy should support where the needs are and the growth is. And so I believe policy should support additional people entering the educational system to get nursing degrees and to get health care degrees.

20:56And so anything that discourages them from doing that and helps defray the cost of that type of education, I think, is short-sighted policy. And so I was disappointed to see this. And I think that this will need to be revisited. Secretary David Shulkin, Dr. David Shulkin, you have a career that inspires many of us, including me. For our audience out there, there's very few people that bridge the gap in our politics the way Dr. Shulkin does. And that's why I wanted to make sure he had a chance to join all of us and just give us his calm, reasoned perspectives on a lot of complicated topics. Dr.

21:37Shulkin, thanks for being with Midas Health. Glad to be here. Thanks.

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