\t\t\t<\/p>\n
\tJulie Rovner
\n\tKFF Health News<\/p>\n
\t\t\t \t\t\t \t\t\t \t\t\tJulie Rovner is chief Washington correspondent and host of KFF Health News\u2019 weekly health policy news podcast, \u201cWhat the Health?\u201d A noted expert on health policy issues, Julie is the author of the critically praised reference book \u201cHealth Care Politics and Policy A to Z,\u201d now in its third edition.\t\t<\/p>\n It\u2019s not exactly news that our nation\u2019s health care system is only a \u201csystem\u201d in the most generous sense of the word and that no one entity is really in charge of it. Notwithstanding, there are some specific responsibilities that belong to the federal government, others that belong to the states, and still others that are shared between them. And sometimes people and programs fall through the cracks.<\/p>\n Speaking before a live audience on June 23 at Aspen Ideas: Health in Colorado, three former governors \u2014 one of whom also served as secretary of the Department of Health and Human Services \u2014 discussed what it would take to make the nation\u2019s health care system run more smoothly.<\/p>\n The session, moderated by KFF Health News\u2019 Julie Rovner, featured Democrat Kathleen Sebelius, a former governor of Kansas and HHS secretary under President Barack Obama; Republican Chris Sununu, former governor of New Hampshire; and Democrat Roy Cooper, former governor of North Carolina.<\/p>\n \tKathleen Sebelius \tChris Sununu \tRoy Cooper Among the takeaways from the discussion:<\/p>\n Video of this episode is available here<\/a> on YouTube.<\/p>\n \t\t\t\t\tClick to open the transcript\t\t\t\t<\/p>\n \t\t\t\t\t\tTranscript: Live From Aspen \u2014 Governors and an HHS Secretary Sound Off<\/strong>\t\t\t\t<\/p>\n [Editor\u2019s note:<\/em><\/strong> This transcript was generated using both transcription software and a human\u2019s light touch. It has been edited for style and clarity.]<\/em>\u00a0<\/p>\n Julie Rovner:<\/strong> Hello and welcome back to \u201cWhat the Health?\u201d I\u2019m Julie Rovner, coming to you this week from the Aspen Ideas: Health conference in Aspen, Colorado. For this week\u2019s podcast, we\u2019re presenting a panel I moderated here with three former governors and one former HHS [Department of Health and Human Services] secretary, on how states and the federal government work together. This was taped on Monday, June 23, before a live audience. So, as we say, here we go.\u00a0<\/p>\n Good morning. Thank you all for being here. I\u2019m Julie Rovner. I\u2019m chief Washington correspondent at KFF Health News, and I\u2019m host of our weekly health news podcast \u2014 \u201cWhat the Health?\u201d \u2014 which we will do double duty this week for this panel. I am so thrilled to be here, and I welcome you all to Aspen Ideas: Health. As a journalist who\u2019s covered health policy at the federal and state level for, let us just say, many years, I am super excited for this panel, which brings together those with experience in both.\u00a0<\/p>\n I will start by introducing our panelists. Here on my left is Kathleen Sebelius. She served as HHS secretary during the Obama administration from 2009 to 2014, presiding over the passage and implementation of the Affordable Care Act. I hope you were all around last night for the wonderful panel where they were reminiscing. Prior to her tenure in Washington, Secretary Sebelius served two terms as Kansas\u2019 elected insurance commissioner and two more as governor. Today she also consults on health policy and serves on several boards, including \u2014 full disclosure \u2014 that of my organization, KFF.\u00a0<\/p>\n Next to her is Chris Sununu. He\u2019s the former Republican governor of New Hampshire. Opposed, he was elected to a record four times before returning to the private sector. He\u2019s also the only trained environmental engineer on this panel.\u00a0<\/p>\n Finally, Roy Cooper is the former Democratic governor of North Carolina, where he served alongside Gov. Sununu. I\u2019m sure they have many stories to tell. As a state lawmaker, Mr. Cooper wrote the state\u2019s first children\u2019s health insurance program in the 1980s and as governor championed the state\u2019s somewhat belated Medicaid expansion in 2023, which we\u2019ll also talk about. He\u2019s currently teaching at the Harvard School of Public Health.\u00a0<\/p>\n So here\u2019s what we\u2019re going to do. I\u2019m going to chat with these guys for, I don\u2019t know, 30, 40 minutes, and then we will open it to questions from the audience. There will be someone with microphones. I will let you know when it\u2019s time. Just please make sure your question is a question.\u00a0<\/p>\n So, I want to set the stage. It\u2019s not exactly news that our nation\u2019s health care system can only be called a system in the very most generous sense of that term. Nobody is really in charge of it. Notwithstanding that, there are some specific responsibilities that belong to the federal government, others that belong to the states and or counties and cities, and still others that are shared between them. Kathleen, you\u2019re the one on this panel who has served as both governor and as HHS secretary, so I was hoping you could give us two or three minutes on what you see as the primary roles for health care at the federal level at HHS, and those for states. And then I\u2019ll let the rest of you weigh in.\u00a0<\/p>\n Kathleen Sebelius:<\/strong> Well, good morning, everybody, and thanks, Julie, for moderating. It\u2019s lovely to be with my colleagues. That\u2019s one of my former lives, as governor, so it\u2019s great to be with governor colleagues. And just to make it clear, we\u2019re not trying to gang up on Chris Sununu. Alex Azar, former HHS secretary in the first Trump administration, was supposed to be here today and had a family health issue, so he couldn\u2019t join us. So it was supposed to be a little more balanced just to\u2014\u00a0<\/p>\n Chris Sununu:<\/strong> My conservative lifeline has abandoned me, and he\u2019ll buy me dinner in D.C. next time I\u2019m in town.\u00a0<\/p>\n Sebelius:<\/strong> So, as Julie said, I think the health system, if you want to call it that, is definitely interrelated. And I think it\u2019s one of the reasons that a lot of HHS secretaries have actually been governors, because we\u2019re customers, if you will, of the federal health system. But just to break down a couple of categories: I was the elected insurance commissioner, which is an unusual spot. Only 11 states elect an insurance commissioner. Most are appointed as part of a governor\u2019s Cabinet, but insurance is an over $3 trillion-a-year industry, still regulated at the state level. It\u2019s the only multitrillion-dollar industry that there is no federal insurance regulator, and it still has a lot of control over health issues at the state level. The insurance commissioners regulate the marketplace plans. They look out for every company selling private insurance. They regulate Medicare supplemental plans. They\u2019re very involved in consumer protection issues for insurance. And that\u2019s all at the state level.\u00a0<\/p>\n Then the governor is clearly in charge of health at the state level. Runs the state employee plan in every state, which often is the largest insurance pool. I don\u2019t know about in North Carolina or New Hampshire, but it certainly was in Kansas. Runs Medicaid, a huge health program. Is in charge of mental health, of the whole issues around the opioid crisis and drug issues. So a broad swath. In charge of prison health and corrections. A lot of health issues at the state level. And then you get to HHS, which is an agency that probably interacts more with states than any other Cabinet agency. I wrote down some of these numbers just so I wasn\u2019t making them up off the top of my head, but 69% of all federal grants to states are Medicaid, and HHS transfers more money to state governments than all the other domestic agencies put together.\u00a0<\/p>\n So it\u2019s largely Medicaid, but it also is mental health block grants. It\u2019s all the children and families programs. It\u2019s Head Start. It\u2019s agencies on aging. There\u2019s a real interaction. So governors are often good customers, if you will, of HHS. They need to be intertwined. They need to know what\u2019s going on, what grants are on the table. Runs the whole Indian Health Service. A number of us had tribes in our states. So there is a lot of interaction. And even though I wasn\u2019t able to quickly quantify the number, the other thing \u2014 and it\u2019s become more apparent with the cuts on the table \u2014 is states run universities, which rely on research grants from the federal government.\u00a0<\/p>\n So the recently announced NIH [National Institutes of Health] cuts have huge implications in Kansas. We have three major universities, which are losing hundreds of millions of dollars in research projects. But that\u2019s gone on all over the country. So there is a lot of interaction between the state and federal government. And as I say, with the insurance commissioner, we had to build an office at HHS to regulate the marketplace, because there were no federal regulators. So I brought in a lot of my former colleagues who had been in insurance departments around the country, to help set up that regulatory system and that oversight.\u00a0<\/p>\n Rovner:<\/strong> So I would like to ask the two former governors who\u2019ve not been HHS secretaries, if you can, to give us an example of cooperation between the federal government and state government on health care that worked really well and an example of one that maybe didn\u2019t work so well.\u00a0<\/p>\n Sununu:<\/strong> So I would argue they don\u2019t work well more than they work well, unfortunately. So a big issue I think, across the entire country, is rural access to care, right? So a lot of these grants \u2014 and the secretary\u2019s right \u2014 a lot of the grants that come in through Medicaid, they\u2019ll go to population centers and population health. That\u2019s really, really important aspects. But rural access to care, where you talk about mental health, the opioid crisis, that\u2019s really where so many folks get left out of the mix. We went down and I inherited \u2014 I don\u2019t want to say \u201cinherited\u201d \u2014 New Hampshire was at the tip of the spear for the drug crisis, right? The opioid crisis, 2017, we had the second-highest death rate in the country, and we realized the overdose rate, the death rate, was four times higher in rural New Hampshire than our inner cities, right? Four times. Why? It wasn\u2019t that \u2014 it\u2019s because nobody was putting services out there.\u00a0<\/p>\n Because it\u2019s so much easier to put the services in the city. So a good example is, we went down to D.C. We worked with, at the time, Secretary Azar, the head of CMS \u2014CMS is the center of Medicaid services and Medicare services, that\u2019s really the overseer of these massive, massive programs \u2014 to get some flexibility with the grants to be able to do a little more with our dollars and create a hub-and-spoke system for rural access to care. And that worked really, really, really well. And I\u2019m not here to tout [President Donald] Trump or anything, but at the time the Trump administration really got that and it worked well.\u00a0<\/p>\n But I would say, more often than not, if you want something done a little different \u2014 we call them [Section] 1115 waivers, not to get wonky \u2014 you want to try something, the challenge isn\u2019t that D.C. won\u2019t let you do it. The challenge is it can take forever to get it done. It takes six months for my team to put together an 1115 application and then a year and a half sometimes for Washington to decide, after a hundred lawyers look at it, whether they\u2019ll allow you to do it. So I would always argue, at the base of all this, is \u2014 Gov. Cooper, at the time, and his team, they know what North Carolina needs in terms of health care, specialized services, better than Washington, right? Or Mississippi. Or New Hampshire. The states know. They\u2019re on the ground.\u00a0<\/p>\n And my argument has always been: The best thing Washington can do if you want to save money and get better outcomes in health care, go more to a block-grant-type system. I know people don\u2019t like to hear that, but let the states who are on the ground have more flexibility with those Medicaid dollars, create the efficiency at a localized level, where the patient interactions there with a \u2014 because again, I had an opioid crisis. Maybe there\u2019s a huge mental health crisis in North Carolina. Maybe there\u2019s an acute-care crisis in urban populations in California. Let them have flexibility and the ability to make more immediate returns on that. And so that\u2019s why I say more often than not, it doesn\u2019t work, because of the time delay. The bureaucracy, the lawyers. No offense to the \u2014 well, I don\u2019t care if you take offense. But the lawyers in the room, the lawyers that get a hold of this thing and then give you a hundred reasons why it can\u2019t happen.\u00a0<\/p>\n And then the last thing I\u2019ll throw out there is billing codes. Do you know there\u2019s 10,000 Medicaid billing codes? Trying to ask a small nonprofit who\u2019s providing local health care services and a volunteer to understand 10,000 Medicaid billing codes, and what happens? Often it\u2019s not nefarious, but they get them wrong and then it comes back and it goes back and forth and the cash gets held up because of Washington, as opposed to just having a localized, We have our problem, let\u2019s fix it on the ground, and move forward and get the help they need.<\/em> So my challenge is always with the bureaucracy and slowing things down more than anything.\u00a0<\/p>\n Rovner:<\/strong> Gov. Cooper.\u00a0<\/p>\n Roy Cooper:<\/strong> Glad to be with you, Julie, and I worked closely with Gov. Sununu. We served as governors at the same time, and glad to have then-Gov. Sibelius, working with her when I was attorney general of North Carolina. I was an OK governor, but I\u2019ve got the greatest first lady in the history of North Carolina with my wife, Kristin, who\u2019s with us today. And thank you for all the work that you did. Somebody asked me what I miss most about being governor, and I said ingress and egress to sporting events was what I \u2014 because I had to learn to drive again.\u00a0<\/p>\n So I look at this relationship as the federal government being a major funder to reach goals, but that states have the flexibility within those guidelines to deal with individual challenges that states have. And I don\u2019t disagree completely with Gov. Sununu about how the waiver system is working, but when you get it working, it does some miracles.\u00a0<\/p>\n For example, we got the first 1115 waiver in the country, to invest Medicaid dollars in social determinants of health. We called it Healthy Opportunities. And we\u2019ve talked so much again and again about prevention and how investment there can make such a huge difference. We also got another waiver with hospital-directed payments to require all of our 99 hospitals to take part in a medical debt relief plan. When we expanded Medicaid in North Carolina, which we\u2019ll talk a little bit about in a minute, more than 652,000 people were so grateful to have health insurance, but many of them owed so much money in medical debt that it prevented them from buying a house or getting a credit card and was causing all kinds of problems. So we got a waiver to put a requirement in the directed payments that hospitals are getting to make sure that we wipe off the books that $4 billion in medical debt in North Carolina, and that is happening as we speak.\u00a0<\/p>\n People are getting the books cleared, all people who were on Medicaid and those making 350% or less of the federal poverty level. And then going forward, in order to continue to get the directed payments, they have to automatically enroll people at that income level into their programs for charity. So the cost of health care is being borne by those who can least afford it. And Medicaid has given us the opportunity and the flexibility with Medicaid has given us an opportunity to make those investments, and that\u2019s why I worry, Governor, about what this bill that\u2019s coming \u2014 you talk about red tape now. You look at red tape that\u2019s coming if this legislation passes Congress right now. It\u2019s going to make it 10 times worse.\u00a0<\/p>\n So when you think about what Medicaid has done and this system with all of its faults \u2014 it has many \u2014 we\u2019re at the lowest uninsured rate we\u2019ve been right now. So that thus far has been a success. We\u2019ve got a long way to go, but I think that we need to continue to work to make the investments angle toward prevention and keeping that symbiotic relationship between the federal and the state, make it smoother, eliminate red tape. But I think we\u2019re making some progress.\u00a0<\/p>\n Rovner:<\/strong> So let\u2019s talk about Medicaid, which is kind of the elephant in the room right now since the Senate is presumably going to take up a bill that would make some significant cuts to the program, possibly as soon as this week. You\u2019ve all three run Medicaid programs as governors. One of the Republican talking points on this bill is that what\u2019s supposed to be a shared program, states are using loopholes and gimmicks to make the federal government pay more. What would happen if these cuts actually went through? Would states be able to just say: OK, you caught us. Now we\u2019re just going to have to pay up<\/em>?\u00a0<\/p>\n Sebelius:<\/strong> Well, I can talk a little bit about it. So I live in a state, unfortunately, that has not expanded Medicaid. Kansas is one of the 10 states, although 40 states and the District of Columbia have used the Affordable Care Act provision to enroll slightly higher-income working folks in Medicaid. And it\u2019s a huge federal-state partnership, with the federal government paying 90% of the premium cost of that additional population.\u00a0<\/p>\n Rovner:<\/strong> And that was because the states didn\u2019t think they had the money to expand otherwise?\u00a0<\/p>\n Sebelius:<\/strong> That\u2019s correct. So it was a generous offer, but after the Supreme Court it was a voluntary program. So there are still 10 states in the country, and what you can see easily looking at the map of the country is what the health outcomes are in the states that have not expanded. Expansion was available on Jan. 1, 2014. So we have a 10-year real-time experiment in health outcomes, in budget outcomes, in what has happened to the state economy. And we know a couple of things from a national level. More hospitals have closed, mostly rural hospitals, in states that have not expanded than the states that expanded. There are fairly significant health differences now. There were health differences before, but they have been accelerated.\u00a0<\/p>\n There are more maternal-health deaths in states that have not expanded, not because the woman may not be eligible for Medicaid but because the hospital closes and now she\u2019s 50 miles away from her birthing center and transportation issues and don\u2019t have gas in the car and whatever. We are losing women having children, which is really shocking in the United States of America. So I think that not only is Medicaid a huge portion \u2014 I had a good friend who some of you may know, Brian Schweitzer, who was the former governor of Montana, and Brian used to say what a governor does is pretty easy. We medicate, we educate, we incarcerate, and the rest is chump change. You can find it in the couch, but it\u2014\u00a0<\/p>\n Sununu:<\/strong> Well, I disagree with that. Totally different discussion.\u00a0<\/p>\n Sebelius:<\/strong> In terms of where the money is. Those are the big chunks of \u2014 and Medicaid in most state budgets, it\u2019s a huge chunk of money. So when you talk about potentially $700 billion in cuts to Medicaid, it will blow up state budgets across the country, and it will leave, to Gov. Sununu and Gov. Cooper\u2019s points, literally millions of people uninsured. The estimates out of the House bill \u2014 the Senate bill still hasn\u2019t been scored \u2014 out of the House bill is 8- to 9 million people, but I think that\u2019s likely to go up with a Senate bill.\u00a0<\/p>\n Sununu:<\/strong> I would add, expanded Medicaid has been \u2014 we were an expanded Medicaid state. It\u2019s been wonderful. Health outcomes are definitely a lot better. There\u2019s a lot more access to services, and these are, again, the difference in the population, these are able-bodied working adults as opposed to the traditional Medicaid population that deal with either poverty issues or disability and all this other stuff. So it\u2019s a 50-50 versus split on traditional versus 90-10. I don\u2019t have a problem with changes. The way they\u2019re doing it is awful. So as a state, if you want \u2014 they are really adamant about dropping it, and it would lead to bad outcomes, there\u2019s no question \u2014 I would say, OK, do it over 10 years. We\u2019re going to drop it 5% a year.<\/em> Allow states to gradually come in, right? Allow states to alter their budgets. No state can alter their budget and take up \u2014 in California it might even be a trillion, hundreds of billions of dollars.\u00a0<\/p>\n Sebelius:<\/strong> Yeah.\u00a0<\/p>\n Sununu:<\/strong> So it\u2019s so much money. So no state can do that. And so obviously you\u2019d have a collapse of the system. It would be terrible to do that, and they\u2019ve taken that off the table. The meta-scam piece is much more complicated, where states tax hospitals, match it with federal funds and send it back to hospitals in terms of uncompensated care. That\u2019s a bad practice that everybody does, so we should keep it. I don\u2019t know a better way to say it. And I say that because New Hampshire was the first one.\u00a0\u00a0<\/p>\n Sebelius:<\/strong> And it\u2019s legal. It\u2019s legal.\u00a0<\/p>\n Sununu:<\/strong> We invented it in \u201992. It\u2019s legal. It\u2019s fine. It\u2019s become precedent in practice. It\u2019s OK. And so we should keep doing that. And what they\u2019re going to do is lower the amount that states can tax the hospitals and therefore lower the amount that we would get. And that, really, for us \u2014 I don\u2019t know how other states use their dollars \u2014 we put a large portion of that back to hospitals for that uncompensated population, the ones that truly are unregistered. I don\u2019t mind going after \u2014 we should get the cost at some point, right? You all owe $37 trillion, by the way. I hope you know that. So the savings have to come from somewhere, but Washington has to be smart about how to do it, what the actual outcomes are going to be, and how to ratchet it down so you\u2019re not, again, throwing everybody off the cliff. And that\u2019s what this bill would do. It would throw people right off a cliff.\u00a0<\/p>\n Cooper:<\/strong> Yeah, I think the answer is absolutely no states can\u2019t afford it. We governors have to balance budgets. The federal government obviously doesn\u2019t. They just continue to raise the debt ceiling, problems in and of itself, but that\u2019s where the funding should come from. I think there are a few billionaires we could tax a little bit more in order to create more funding to do the work that we need to do, but\u2014\u00a0<\/p>\n Sununu:<\/strong> There\u2019s a basket at the door if you all want to drop something in on the way out.\u00a0<\/p>\n Sebelius:<\/strong> A big basket.\u00a0<\/p>\n Cooper:<\/strong> That, too. But I think that if we\u2019re going to rely on the states \u2014 what\u2019s happening now, I think, is a sneaky way to do this. I think they have understood that just openly and notoriously telling the states they have to pay more is not going to work and it\u2019s not politically feasible. But what they have done is gone through the back door and created all of this red tape that\u2019s going to end up with people being pushed off who are otherwise eligible. It\u2019s going to end up with states having to make horrible choices, like with SNAP [Supplemental Nutrition Assistance Program] benefits, for example.\u00a0<\/p>\n In North Carolina, we\u2019ll have a shortfall of about $700 million. Now with SNAP benefits, not only do you feed hungry people who need food, but there\u2019s an economic benefit to our state. It\u2019s like a $1.80 economic benefit generated from $1 of SNAP benefit. But I don\u2019t see my Republican legislature putting in an extra $700 million in SNAP benefits in order to be able to feed hungry people. So the choices that states are going to make are going to be bad, because states are limited as to the decisions that they have to make. And this is going to be really tough, particularly if this Senate bill doesn\u2019t change a whole lot. States are going to have a significant problem.\u00a0<\/p>\n Sebelius:<\/strong> All I wanted to say is in addition to the Medicaid issue hitting a big portion of the lower-income working population is a corresponding Affordable Care Act hit that isn\u2019t in the bill, because it\u2019s a tax incentive that will expire at the end of this year. So not acting on the additional premium tax credits for the Affordable Care Act hits almost the same \u2014 in a state like Kansas, which has not expanded Medicaid, a lot of that population is in the marketplace plans with an enhanced tax credit. That goes away at the end of the year. So we\u2019re looking at potentially 11 million people in states across this country.\u00a0<\/p>\n And no governor has the ability to write a check and say: OK, I\u2019m going to just provide, out of 100% state funds, I\u2019ll help you buy your health insurance.<\/em> But not having health insurance means you don\u2019t get doctors paid, more hospitals go on \u2014it has a ripple. People can\u2019t take their meds. They can\u2019t go to work. They have mental health issues. It is a really spiraling impact. And as Gov. Cooper and Sununu have said, we have the lowest rate of uninsured Americans right now that we\u2019ve ever had in history, and that could change pretty dramatically.\u00a0<\/p>\n Sununu:<\/strong> The only other piece I was going to bring up just to highlight the cowardice of Washington, D.C.: Why are they focusing on Medicaid, but no one wants to talk Medicare? Well, it\u2019s easy because states, right? Because they can blame states. Well, we made changes, but it\u2019s up to the states whether they want to keep it or not,<\/em> right? And they\u2019re going to blame the governors and blame what\u2019s happening at the state level, whether expanded Medicaid survives or not. Meanwhile, it\u2019s the crisis that they\u2019re creating. Then you have Medicare, which, by the way, everyone agrees there\u2019s massive waste and fraud and abuse, and that system needs a massive overhaul because that system, by the way, is going bankrupt, right? It\u2019ll be insolvent in nine or 10 years, something like that, right?. But no one wants to talk about that piece, right?. But that\u2019s an integral piece because both those left and right hands of Medicaid and Medicare drive the non-private sector of health care, right? Which creates not a competitive \u2014 we can get into the whole reducing competition in a free market in health care to actually get costs down.\u00a0<\/p>\n But it\u2019s really hard as a governor, I think, and I think I speak for all 50, to hear Washington talk about all these massive cuts they want to make to Medicaid, but they\u2019re not going to touch Medicare, because that\u2019s a federal program. And so they have to do both in some way, and they have to do it in a smart way, in an even-keeled way. It has to take place over time. It has to look at population health outcomes. But they don\u2019t think like that. They just don\u2019t. They look at top-line numbers, top-line issues. Maybe they\u2019ll get to the bill in a few weeks. Maybe they won\u2019t. They\u2019ll be on vacation most of the summer. It\u2019ll be very frustrating. Even if it passes in the Senate, it won\u2019t even \u2014 what? September, maybe? Maybe they take it up in September?\u00a0<\/p>\n Rovner:<\/strong> You don\u2019t think they\u2019re going to make it by July Fourth?\u00a0<\/p>\n Sununu:<\/strong> The Senate might, but then they vacation. They\u2019ve got to go on vacation. So isn\u2019t that the frustration we all have? We have a major crisis here. Here\u2019s an idea. Do your jobs.\u00a0<\/p>\n Sebelius:<\/strong> Just a small addendum, too.\u00a0<\/p>\n Sununu:<\/strong> Sorry. I\u2019m frustrated.\u00a0<\/p>\n Sebelius:<\/strong> Gov. Sununu, because he\u2019s the baby of the group, if you can tell, and I\u2019m part of the gray tsunami. Part of the reason Medicare is running out of money is at least when my parents were involved in Medicare, there were six or seven workers for every retiree. We\u2019re now down to two. And I want to know those two workers. I got to tell you, I\u2019m at a point in my life I\u2019d like to bring them home with me, feed them on a regular basis, get them \u2014 but we have an aging country. We have many more people enrolled in Medicare right now than we have had in the past and fewer in the workforce. So the math, you\u2019re right, is daunting going forward, but it isn\u2019t, I would suggest, massive waste, fraud, and abuse as much as a changing demographic in our population.\u00a0<\/p>\n Sununu:<\/strong> I was quoting [Rep. Nancy] Pelosi on that one. Sorry.\u00a0<\/p>\n Rovner:<\/strong> I want to pick up on something. For those who were not there last night for the Affordable Care Act session, one of the things that no one brought up is that in the intervening 15 years since the Affordable Care Act passed, I think, every single one of the funding mechanisms to help offset the cost of the bill has been repealed by Congress. The individual mandate is gone. Most of the industry-specific taxes are gone. The Cadillac tax that was going to try and deter very generous health plans is gone. States don\u2019t have this kind of opportunity to say, We\u2019re going to pass something that pays for itself<\/em>, and then get rid of the pay force, right?\u00a0<\/p>\n Cooper:<\/strong> That\u2019s a really good point. And right now the Affordable Care Act is working to insure a lot of people, but it\u2019s continuing along with all of our system that\u2019s set up to drive up the cost. And I know we\u2019re going to talk a little bit about cost in just a minute, but again, I agree with Gov. Sununu \u2014 that\u2019s the coward\u2019s way out. All of the lobbyists come with their special interests who are paying something and should be paying something, but they get it removed piece by piece by piece. And then the only way to get it is from the very people who need it the most. And they\u2019re the ones who end up suffering. And I think it was mentioned last night \u2014 $14,600 a person in the United States for investment in health care. That\u2019s wrong on many levels.\u00a0<\/p>\n Rovner:<\/strong> So let\u2019s talk about cost. Who is responsible for controlling the cost of health care? Both sides point at each other. And as I mentioned at the opening, we don\u2019t really have a system, but we obviously have the federal government responsible for a lot of health care bills and the state government\u2019s responsible for a lot of health care bills. So at what point does somebody step up and say, We really need to get this under control<\/em>?\u00a0<\/p>\n Sununu:<\/strong> I\u2019ll throw a couple things in there. The average cost to spend overnight, in America, in a hospital: $32,000 \u2014 a night. That\u2019s insane, right? That\u2019s insane. And so the argument that I always have is, let\u2019s look at the cost to stay in a hospital. And I know this is going to seem far afield, but it\u2019s all part of health care. What I pay my average social worker \u2014 which, by the way, we need a lot more social workers. And if a social worker\u2019s making 50 grand a year, they\u2019re lucky doing it and God bless them. They\u2019re doing incredibly hard work. So why do we have a system that is driving these costs here, that haven\u2019t gotten any of those costs under control, still make it really difficult to pay the workforce? And I think workforce is a huge part of this crisis.\u00a0<\/p>\n Rovner:<\/strong> Next question.\u00a0<\/p>\n Sununu:<\/strong> Yeah, that\u2019s another the question, especially the social workers and whatnot and generationally and nurses and all that to get them in there. If you don\u2019t have the workforce, it\u2019s not going to work. So the disparity of costs. And then there are certain aspects, let\u2019s talk pharmaceuticals, where you are all, we are all effectively paying massive costs on pharmaceuticals because we\u2019re subsidizing the rest of the world, right? Because they\u2019re developed here. There\u2019s massive cost controls in Europe, so we pay a huge amount of money. And again, I\u2019m going to bring up Trump only because he brought up the \u201cfat shot.\u201d Is that what he called it? The other\u2014? Yeah. The fact that Ozempic here is $1,200 but a hundred bucks in Europe. Why? Because they have cost controls there, and our fairly unregulated system forces those types of costs on the private sector here.\u00a0<\/p>\n So I\u2019m a free-market guy. I\u2019m always a believer that the more private sector investment you get and the more, I\u2019ll just call it competition, especially smaller competition, can create better outcomes. But we just don\u2019t have that. There\u2019s no private sector. There\u2019s no competition in health care, because so much of it is driven by Medicaid and Medicare. So I would just argue that you have to look at finding the balance here in the U.S., but don\u2019t forget there\u2019s other issues across the rest of the world that are affecting your costs as well.\u00a0<\/p>\n Cooper:<\/strong> And I\u2019ll give you two things. One that you don\u2019t do to affect the cost issue. You may be tempted to reduce your budget to throw people off of coverage, but more people without coverage increases costs significantly, and we all pay for it when you have indigent patients going into those hospitals. They go to the private sector first, which is why a lot of businesses in North Carolina supported our expansion of Medicaid, because 44% of small businesses don\u2019t even provide coverage for their customers. So we should not be kicking people off coverage. In order to reduce costs, we need to cover more people. And the second thing we should do, and this we say a lot here and it was said last night, but collectively, if we can come together and make these short-term investments for long-term gain on primary care and prevention, that is the best way to lower costs to make sure people are healthier. Because our system is geared to spend all the money when it is most expensive and not when it is least expensive and can do the most good to delay that spending at the other end.\u00a0<\/p>\n And there are a lot of ways that we can approach this, but what frustrates me about Washington is that you don\u2019t see any real effort there to concentrate on prevention and primary care and making those investments that we know \u2014 we know \u2014 not only save lives but save money and reduce the cost of health care. And I think that can be a bipartisan way that we can come together to deal with this. Things you mentioned, certainly driving up the cost, but that is a basic thing that we know will make people healthier and will cost the system less.\u00a0<\/p>\n Sebelius:<\/strong> I don\u2019t think there\u2019s any disagreement in all of us and probably all of you that we pay way too much for health care per capita. And we have pretty indifferent health results. We have great care for some of the people some of the time. But in terms of universally good care for people across this country, regardless of where you live, it just doesn\u2019t happen. It isn\u2019t delivered, regardless of the fact that we spend much more money. I would say that it\u2019s beginning to have some impact, but a couple things occurred as part of the framework of the Affordable Care Act and other changes at the D.C. level. First, Medicare began to issue value-based payment contracts. They were nonexistent before 2010, and that just means you begin to pay for outcomes. Not just doing more stuff makes more money, but what happens to the patient? Is it a good recovery? Do you come back to the hospital too soon? Is somebody following up?\u00a0<\/p>\n So that has shifted now to most Medicare payments are really in a value-based payment outcome. And that has made a difference. I think it makes a difference in patient outcomes. It makes a difference across the board. There has been some change, not nearly enough, in primary care reimbursement. We need a whole lot more of that. Specialty care pays so much more than primary care, and it discourages young docs from going into a primary care field, a gerontology field, a pediatric field. We desperately need folks. I\u2019d say third that a lot of hospitals, and particularly in rural areas, to your point, Gov. Sununu, are beginning to look at a range of services, not just, as we call it, butts in beds, but they\u2019re running long-term care services. They\u2019re running a lot of outpatient.\u00a0<\/p>\n And we just had a session on rural health care, and the amount of outpatient care provided by rural hospitals is now up to about 80%. So actually they\u2019re trying to do prevention, trying to meet people where they are. We have to keep some support systems under those hospitals, because if their only payment is how many bed spaces you fill per night, it\u2019s counterintuitive to have hospitals doing prevention and then their bottom line is affected. But I think Gov. Cooper is just absolutely right on target. There was a huge prevention fund for the first time in the Affordable Care Act. It went to states and cities, not to some federal government. It was called, for years, a big slush fund. But it has engaged, I think, a lot of people, a lot of mayors, a lot of governors in everything from bike trails to healthy eating to scratch kitchens in schools, to doing a range of reintroducing physical education back into education classes. But we need to do a lot more of that.\u00a0<\/p>\n Sununu:<\/strong> Can I ask a question? Were you guys a managed Medicaid state?\u00a0<\/p>\n Cooper:<\/strong> Yeah, we are now.\u00a0<\/p>\n Sununu:<\/strong> Were you at the time? So for those who know, maybe 40 states, 41, 42 states?\u00a0<\/p>\n Sebelius:<\/strong> I think it\u2019s almost 45.\u00a0<\/p>\n Sununu:<\/strong> So the states, I don\u2019t know when this started. It had started right around the time I got in New Hampshire. We hired a couple large companies to basically manage our Medicaid. But to the Gov. Cooper\u2019s point, theoretically you bring those companies in to look at the whole health of the individual and more on the prevention services, more on that side as opposed to just fee-for-service, fee-for-service, right? Where you get inefficiency and waste and all that sort of thing. It\u2019s worked, kind of. I think most of the models still have a lot of fee-for-service built into them. And so it\u2019s not quite there. You have these very large companies, the Centenes and some of these other really, really large companies that are effectively deciding whether \u2014 they\u2019re insurance companies that are deciding whether someone should get care or not, or that service is required or not.\u00a0<\/p>\n Usually it works, but obviously we have a lot of tragic stories of families getting rejected for service or things like that. So, I think if given more flexibility that it could theoretically work, but I think the managed-care model is mostly working but not great. But it was designed to deal with exactly what Gov. Cooper\u2019s talking about, the whole health of the individual, more preventive care. Don\u2019t wait for the person on Medicaid to lose all their teeth \u2014 right? \u2014 because they\u2019re a meth addict and they have massive heart and liver issues, right? Get them those prevention services early on because they\u2019re into a recovery program and the whole health of the individual exponentially saves you money and increases their health outcomes and all that. But if you have somebody looking at that from a holistic perspective, theoretically it comes out better. I don\u2019t know. You probably have a better perspective than anyone whether you think it really has worked or not.\u00a0<\/p>\n Sebelius:<\/strong> Well, I think it\u2019s beginning to work and it works better in some places than others. But I think that the federal programs, arguably both Medicare and Medicaid, provide, if you will, the most efficient health insurance going. Private plans, in all due deference to your market competition, run anywhere from 15 to 20% overhead. Medicare runs at a 2% overhead. Medicaid is about that same thing. So delivery of health benefits on an efficient basis is really at the public sector, less at the private sector, which is why we were hoping to have a public option in the Affordable Care Act to get that market competition. Medicare Advantage provides market competition now to fee-for-service. And some of the companies do a great job with holistic care. Some of the companies do a really bad job, far more denials, far more issues of people not being able to get the benefits they need. So it is a balanced thing.\u00a0<\/p>\n Sununu:<\/strong> And smaller states, we had a trouble because we couldn\u2019t find many companies that wanted to come into a small state like New Hampshire, because the population wasn\u2019t going to be huge. We have the lowest population on Medicaid in the country. So if I got a third company and maybe they get 35-, 40,000 people, what\u2019s the risk pool of those individuals? They might be like, Nah, it\u2019s not going to work for us, <\/em>right? So the smaller states, because they\u2019re managed at the state level, have challenges. We tried to actually partner with Vermont and Maine.\u00a0<\/p>\n Sebelius:<\/strong> Regional.\u00a0<\/p>\n Sununu:<\/strong> Right? Regional opportunities. The feds wouldn\u2019t let us do that. Very frustrating. But not you.\u00a0<\/p>\n Sebelius:<\/strong> I did a waiver for New Hampshire to have a regional program.\u00a0<\/p>\n Sununu:<\/strong> No, I blame Alex for that. That\u2019s another thing \u2014 I\u2019ve yelled at Alex for that for years.\u00a0<\/p>\n Sebelius:<\/strong> Maybe the next guys took it away.\u00a0<\/p>\n Rovner:<\/strong> So we keep talking about people getting care or people not getting care. We haven\u2019t talked a lot about the people who deliver the care. Obviously the health care workforce is a continuing frustration in this country, as we know. We have too many specialists, not enough primary care doctors, not enough primary care available in rural areas. What\u2019s the various responsibility of the federal government and the states to try and ensure that \u2014 obviously states need to worry about workforce development. Isn\u2019t that one of the things that states do?\u00a0<\/p>\n Sununu:<\/strong> All right, I\u2019ll kick things off because I\u2019ll say something really liberal that you\u2019ll all love. Do you know what the key is? Honestly? It\u2019s an immigration reform bill.\u00a0<\/p>\n Sebelius:<\/strong> I was just\u2014\u00a0<\/p>\n Sununu:<\/strong> It\u2019s immigration reform. Because this generation is not having kids, right? We\u2019re losing population. So just the math on bodies, if you will, in terms of entering any workforce is going to be challenging as the United States goes forward. More and more if you look at the number of people, social workers, people in recovery, MLADCs [master licensed alcohol and drug counselors] in recovery programs, nurses, whatever it is, those tend to be more people that are born outside of this country, that come to this country. They go to nursing school \u2014 whatever it is they become, it\u2019s great.\u00a0<\/p>\n But until we get a good immigration reform bill that opens those doors bigger and better and with more regulation on top of them, but open those doors, I think it\u2019s going to be a challenge. It\u2019s not necessarily an issue for the government to \u2014 government can\u2019t create people, right? Maybe we can incentivize more schools and that sort of thing. And I think most governors do that. We put in nursing schools in our university system and all that, but you still have to fill the seats and you still have to encourage the young people to want to get into those types of programs.\u00a0<\/p>\n Sebelius:<\/strong> I think the government at the state and local level and federal level can do more. More residency programs. The federal government can actually move the needle on some of the payment systems for specialty vs. primary care. And we haven\u2019t moved fast enough on that. I think that\u2019s no doubt. What\u2019s pending right now with ICE [Immigration and Customs Enforcement] raids all over the country and people being terrified to come here or stay here is going to make the workforce issue significantly worse. Home health care workers, folks in nursing homes, people who are LPNs [licensed practical nurses] are now being discouraged from either coming or staying. And I think we\u2019re in for an even bigger shock.\u00a0<\/p>\n A lot of folks got burned out in covid. There\u2019s no question that we lost vital health care workers. We need to be on a really massive rebuilding program, and instead we have put up a big red flag. And a lot of people who are here who are providing care, who may have a family member or somebody else who is not at legal status, and they\u2019re gone or they\u2019re not going to go to work or they\u2019re not going to provide those services. And I think we\u2019re about to hit even a bigger wall.\u00a0<\/p>\n Cooper:<\/strong> You\u2019ve mentioned compensation. Obviously gearing more toward the preventive side, the primary care side is important. I also think one thing that\u2019s working some, and I think we could do more, obviously requires funding, but providing scholarship money for doctors, nurses, others who agree to give a certain number of years of service in primary care and particularly in rural areas. We\u2019re seeing some of that work. There are a lot of people who feel compelled. You mentioned, when I was up at the Chan School at Harvard and I was teaching a graduate school class, and I love public health people because they care so passionately about others and they want to get in this field. Making it financially viable for them to be able to complete the mission that they feel in their heart, I think, is something that I think is worthy of greater investment.\u00a0<\/p>\n Sununu:<\/strong> To that point, I think it\u2019s a great idea and it definitely works. But even before that, just look at what it costs to go to a four-year college now, right? I\u2019m a parent. I have a 20-, 19-, and a 12-year-old. So we\u2019re all absolutely looking at what college costs, and I don\u2019t mind picking on a few of them. Like NYU [New York University], what, a $100,000? So my daughter\u2019s not going to be a nurse, even think about being a nurse, because questioning whether she even goes to college, right? Because she might go to take community college classes instead or do something else. So, or she\u2019s got to find that other pathway. So the initial steps to getting to be a doctor or higher-level primary care physician even, there\u2019s a huge barrier before the barrier.\u00a0<\/p>\n And so I think we just need to think holistically about how young people and why they\u2019re making certain choices, and the financial aspects of going to college, I think, over the next 10 years are going to really blow up and create a massive problem. And sometimes it\u2019s very healthy, right?. Sometimes it\u2019s great that young people are thinking differently. It\u2019s not, Go to a four-year college or you don\u2019t have value.<\/em> No, they think totally different. They know they can have a great life path in other areas, but that postsecondary first-four-year barrier right now is just, we\u2019re just scratching the surface of how big it will be in terms of preventing them from entering the four-year.\u00a0<\/p>\n Rovner:<\/strong> We\u2019re running out of time. I do want to let the audience\u2014\u00a0<\/p>\n Sebelius:<\/strong> Can I just\u2014\u00a0<\/p>\n Rovner:<\/strong> Yes.\u00a0<\/p>\n Sebelius:<\/strong> One thing to Gov. Sununu\u2019s point. So there is the national commissioned health corps, which does pay off medical debt for nursing students blah blah blah. What we found, though, is a lot of people couldn\u2019t even get to the medical debt, because they can\u2019t get their college paid off. They can\u2019t get into medical school. So moving that to a much more upstream, into high school, into early college, is the way we get\u2014\u00a0<\/p>\n Sununu:<\/strong> Certificate programs in high school, like pre-nursing programs, social-work programs in your vo-tech schools \u2014 huge opportunities there. You get like a 14- or 15-year-old excited about helping someone. You\u2019re giving them a certificate. They could enter the workforce at 19 in some ways. And then the workforce is helping them pay off that schooling or expanding those community\u2014\u00a0<\/p>\n Sebelius:<\/strong> Or sending them on.\u00a0<\/p>\n Sununu:<\/strong> Yeah. There\u2019s all these other ways to do it. So I think that\u2019s the gateway that we have to keep opening.\u00a0<\/p>\n Sebelius:<\/strong> It\u2019s got to be earlier though.\u00a0<\/p>\n Sununu:<\/strong> Much earlier.\u00a0<\/p>\n Rovner:<\/strong> All right, we have time for a couple of questions. I see a lot of hands. Wait until a microphone gets to you. OK.\u00a0<\/p>\n Stephanie Diaz:<\/strong> Hi, and thank you for this amazing conversation. My name is Stephanie Diaz. I\u2019m with a corporate venture fund attached to a health system. Really thrilled for this conversation, and where it ended on workforce is really compelling. The Big Beautiful Bill and the Senate version has a cap on financial aid for degrees like medical programs. Considering what you just said, what are the goals of legislation like that and what can\u2014\u00a0<\/p>\n Sebelius:<\/strong> No idea.\u00a0<\/p>\n Diaz:<\/strong> Why?\u00a0<\/p>\n Cooper:<\/strong> Save money.\u00a0<\/p>\n Sununu:<\/strong> Yeah, yeah.\u00a0<\/p>\n Cooper:<\/strong> Finding a way.\u00a0<\/p>\n Rovner:<\/strong> What would the impact be? I think that\u2019s probably a fairer question.\u00a0<\/p>\n Sununu:<\/strong> Well, in this field would be devastating, right? I would imagine. I don\u2019t know what the cap is. I don\u2019t know what they\u2019re basing that on. I don\u2019t know if they\u2019re\u2014\u00a0<\/p>\n Diaz:<\/strong> $150,000. And we know that a medical degree costs, well, more than $150,000 for a student.\u00a0<\/p>\n Rovner:<\/strong> I think they\u2019ve said the goal is that they want to push \u2014 they want to force down tuition.\u00a0<\/p>\n Sununu:<\/strong> Well, the government forced up tuition. That\u2019s a whole different conversation.\u00a0<\/p>\n Cooper:<\/strong> They\u2019re going to force out med students is what they\u2019re going to do.\u00a0<\/p>\n Sununu:<\/strong> Look, I\u2019ll be the devil\u2019s advocate$150,000 for primary care, for example. If you\u2019re a primary care \u2014 any medical degree, yeah. I don\u2019t know what the thought process is other than they\u2019re probably saying, well, these doctors, once you get your degree, you\u2019re making a heck of a lot of money. These guys can pay stuff off. Let\u2019s move that tuition or scholarship money to the social workers, to the MLADCs, to the community colleges, because that\u2019s where you find more low-income families that can\u2019t pay even $7- or $10,000 at a community college. That\u2019s the real barrier. Low-income families as opposed to, look, giving $150,000, that\u2019s a lot of money. And if these guys \u2014 if there\u2019s anyone in America that can actually pay off college debt, it\u2019s a doctor. So I\u2019m being a little bit devil\u2019s advocate because I don\u2019t know the heart of the program, but that\u2019s a heck of a lot of money and that\u2019s a lot more tuition and scholarship funds than any other profession in the country. So I think it\u2019s just about finding a balance. I am being a little devil\u2019s advocate because I don\u2019t know the details.\u00a0<\/p>\n Rovner:<\/strong> All right, I think I have time for one more question.\u00a0<\/p>\n Speaker:<\/strong> I\u2019m a CFO at an ACO [accountable care organization] in Nebraska, and if I have to brag, our per cost, per beneficiaries, under $10,000 per reported on the latest 2023 numbers. Can you speak to the administration\u2019s thought on value-based care contracting? And I know in Project 2025 it was referenced that \u2014 you\u2019re laughing.\u00a0<\/p>\n Sununu:<\/strong> No, I hate hearing those words.\u00a0<\/p>\n Speaker:<\/strong> I did dig into that. And it is talked about to be attacked, value-based care contracts moving forward. So I was hoping that you could speak to that, maybe the intention of this administration, so thanks.\u00a0<\/p>\n Cooper:<\/strong> You want to talk about the intent of this administration?\u00a0<\/p>\n Sebelius:<\/strong> I\u2019m not going to speak about this administration. You can speak about that.\u00a0<\/p>\n Sununu:<\/strong> No, I have no idea what the intent was. And every time I hear Project 2025 I shudder because it\u2019s like, ah, I hate that thing. But, I don\u2019t know why.\u00a0<\/p>\n Speaker:<\/strong> No not why but for behind the scenes do you think there\u2019s still support for\u2014\u00a0<\/p>\n Sebelius:<\/strong> I can tell you it\u2019s one of the areas I think there\u2019s huge bipartisan support inside Congress. So folks have come after it often from the health system because they really didn\u2019t \u2014 they\u2019d much rather, in some cases, have the fee-for-service payment. If I operate, I want to get my money. If I\u2019m an anesthesiologist, I want to get my money. So value-based care really began to shake up the health system itself, health providers. I don\u2019t know what this administration intends to do, but I know Congress has really wrapped their arms around value-based care and is really pushing the administrative agencies inside D.C. to continue and go faster. Bundled care for an operation where you put all the providers together and look at outcome. A lot of things that the ACOs are doing, congratulations. But that notion didn\u2019t even exist before 2010, and I think it is absolutely on a trajectory now that it\u2019s not going to go back.\u00a0<\/p>\n Sununu:<\/strong> And I\u2019ll add this: As kooky as your successor is, the current HHS secretary, because he\u2019s kooky, he\u2019s not on board, either. So I think, again, regardless of what the administration wants, I don\u2019t think that\u2014\u00a0<\/p>\n Sebelius:<\/strong> Oh, not on board with getting rid of that.\u00a0<\/p>\n Sununu:<\/strong> Yeah, exactly. Not on board with getting\u2014\u00a0<\/p>\n Sebelius:<\/strong> I just wanted to clarify.\u00a0<\/p>\n Sununu:<\/strong> I don\u2019t think there\u2019s going to be changes. I don\u2019t think Congress is there. I don\u2019t think the current secretary is there. I don\u2019t know where the current secretary is on a lot of different things. He seems to change his mind quite often, but just don\u2019t eat the red dye and you\u2019ll be fine.\u00a0<\/p>\n Sebelius:<\/strong> But it\u2019s one of the few places I would say\u2014\u00a0<\/p>\n Cooper:<\/strong> Is there anything in the BBB [Big Beautiful Bill] on that?\u00a0<\/p>\n Rovner:<\/strong> We are officially out of time before Gov. Sununu gets himself into more trouble. I want to thank the panel so much and thank you to the audience, and enjoy your time at Aspen.\u00a0<\/p>\n OK. That\u2019s our show for this week. As always, if you enjoyed the podcast, you can subscribe wherever you get your podcast. We\u2019d appreciate it if you left us a review. That helps other people find us, too. Special thanks as always to our producer, Francis Ying, holding down the fort in Washington, and our editor, Emmarie Huetteman, here on the ground with me in Aspen. Also, as always, you can email us your comments or questions. We\u2019re at whatthehealth@kff.org, all one word. Or you can tweet me. I\u2019m @jrovner<\/a>. Or on Bluesky, @julierovner<\/a>. We\u2019ll be back in your feed from Washington next week. Until then, be healthy.\u00a0<\/p>\n \tFrancis Ying \tEmmarie Huetteman To hear all our podcasts,\u00a0click here<\/a>.<\/em><\/p>\n And subscribe to KFF Health News\u2019 \u201cWhat the Health?\u201d on\u00a0Spotify<\/a>,\u00a0Apple Podcasts<\/a>,\u00a0Pocket Casts<\/a>, or wherever you listen to podcasts.<\/em><\/p>\n KFF Health News<\/a> is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF\u2014an independent source of health policy research, polling, and journalism. Learn more about KFF<\/a>.<\/p>\n
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