Francois de Brantes, Health Care Incentives Improvement Institute Inc.

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Mark Masselli: This is C onversation on Health Care, I'm Mark Masselli.

Margaret Flinter: And I'm Margaret Flinter.

Mark Masselli: Well Margaret after a very rocky start with the Health Insurance
E xchanges the first open enrolment period under the Affordable Care Act exceeded the
administrations expectation si g ning up over 7 million Americans for health coverage.

Margaret Flinter: Well, all in all it’s been a huge learning c urve for everyone watch ing all
these advance unfold and the deem d ays of e a r ly January when nothings seem to be
working now see m far behind this.

Mark Masselli: A recent poll show some 50% of the nation things favorably about the
health care law now that’s up from 40% just a f ew short months ago in spite of all th e
snafus with the online portals.

Margaret Flinter: Well, at the same time a poll of doctors around the country shows up
pretty unfavorable view of congress. Well, there was a bipartisan deal to fix the
sustainable growth rate formula for reimbursing practices for Medicare patients.
Congress end ed up passing another emergency funding m easure in stead , this is the
th
17 time congress ha s pass ed an emergency bill to keep the reimbursement rat es intact
but Mark it 's just not a solution and it’s getting kind of old .

Mark Masselli: Congress simply couldn’t agree on where that money would come from.
But it’s an extremely important issue Margaret 10,000 Americans per day turn 65 add
into the Med icare patient load. So, it’s time to repeal the flawed SGR and find a
permanent so lution.

Margaret Flinter: And we’re still looking a solution to the H ea l th Care cost issue, at
close to 20% of the nation’s GDP it’s a crippling w eight on family finances and our future
growth in our economy. And our guest today h eads an organization that seeking
meaningful payment reform in health care as one approach to containing health care
cost.

Mark Masselli: F rançois de B rantes is Director of the Health Care Incen tive
Improvement Institute and his organization just release d a report c a rt on health pricing
transparency and 45 states across the country got a failing gr ade . We have much work
to do there.

Margaret Flinter: Lori Roberson, Managing Editor of F a ctCheck .org will look at another
false claim spoken about health policy in the public domain and no matter what the topic
you can hear all of our shows by going to CHC Radio.

Mark Masselli: A nd a s always if you have comments you can email us at chcra dio.com
or find us on Facebook or Twitter , we 'd love hearing from you.

Margaret Flinter: Now, we’ll get to our interview with François de Brantes in just
moment.

Mark Masselli: But, first here is our producer Marianne O ' Hare with this week 's headline
n ews.

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Marianne O ' Hare: I’m Marianne O 'Hare, with these Health Care H eadlines. 7.1 million
st
and counting the last minute push leading up to the March 31 open enrolment deadline
on the insurance exchanges. So, a business really a mp up, continue d problems with
the federal exchanges w hich serves 36 states around the country look ed to derail that
number. And a number of states with their own exchange were also having some
serious issues including Ore go n who sight never really work properly and Maryland as
well that states is decided to scrape their system entirely. And adopt a system develop
by access held CT CEO Kevin Counihan in Connecticut that system work ed essentially
flawlessly and needed v ery little re tro f itting. Kevi n Counihan expects other states will
seek to adopt the Connecticut exchange design as well.

Meanwhile , there are millions more newly insured A mericans who are hiding in plain
sight according to a report at a New York Times. Millions of custo mers opted to
pu rchase insurance on their own through p rivate insurers instead of the exchanges . Big
insurers like WellPoint and Highmark say they a significant business privately of f of the
insurance exchanges. Meanwhile , no d oc fix this year though there was a much loaded
b ipartisan plan in place to replace the sustainable growth rate formula for Medicare
reimbursement for practices serving seniors, there was no agreement on how to fund
the fix so it's been delayed for another year. A nd so we have plans for the ICD - 10
switch it w as supposed to happen in October of this year , the house man age to get a
one year delay into the S G R bill which passed in the senate as well a number of
medical groups are opposed to being force d to switch. I’m Marianne O ' H are with these
Health Care H eadlines .

(Music)

Mar k Masselli : We are speaking today with health economist François de Brantes
Executive Director of the Health Care Incentive Improvement I nstitute not for profit
organization focusing on improving health care to ta rget models of payment reform
previously Mr. De Brantes was the program leader for various health care initiatives at
G E C orporate H ealth care P rograms . A nd Mr. De Brantes has spoken and written
extensively on heal th economics in numerous publica tions including health affairs in his
recent eBook it’s the incen tive stupid why rotten incentive continue to screw up
healthcare. He earned his master's in financial economic at U niversity of Paris and

earn ed his MBA at the Tuck S chool of Business Administration at Dartmouth College.
Mr. De Brantes welcome to C onversations of H ealth C are.

François de Brantes: Thank you.

Mark Masselli: François, y our organization released a pretty demy report on the state of
price transparency in the he alth care in this country. Ranking 45 out 50 states with
f ailing grades and -- and you call this lack of price transparency in health care one of the
most overlook consumer protection m easures we face. So, why is transparency so
important and w ell we wan t to hear about the states that are failing tell us about also the
states that have been doing well on it.

François de Brantes: So, why is it an im p ortant ? W ell, principally because the
percentage of consumers who are paying the significant percentage of medic al
expenses out of pocket has risen dr amatically over the past decade and it’s s c heduled
to continue to rise over the next high deductible health plans and other consumer
directed health plan s proliferate. So as a result of which I think th ere's b een a growing
disconnect between the role the consumers have assumed and managing health care
expenses and the lack of information about the prices of health care services . So,
where as in pretty much on the other purchase you g e t to know the price of a g ood
before product before you buy it today in health care that 's simply not the case . And
unfortunately unless states take very proactive action to assemble data so that they can
offer this information free of charge to individuals it’s unlikely that they are going to get it
any other way. So, the states that have been doing a really job s are the ones who have
has legislation enabling what are called all pair clients databases which collect
information from all the health plans operating in that state. B ut beyond an acting
legislation you have to implement it and here the example last year was New
Hampshire u nfortunately this year they got a failing grade because they change vendor s
some point last year and their website has been down since then and it just really what
we’re trying to do now is look at health care information and what’s available through
the consumer 's eyes and unfortunately through that l ens there is no state in the country
that actually does a model job.

Margaret Flinter: Well I'm l o ok at the work that you 're doing and we think about Steven
Brill’s work who we had on the show who w rote Bitter P ill why health care cost are
killing, really outline this gross lack of price transparency and the wildly different prices
that are paid . I gu ess the question is beyond knowledge what do we see in terms of
action do we have any evidence to suggest as we look at the states where th ere h as
been more transparency o f the two s tates with a passing gr ade i s there any evidence to
suggest that it makes a difference ?

François de Brantes : The prove at this early evidence from New Hampshire's work
suggest that variability in p rices does decr ease when you have pricing transparency and
that shouldn’t surprise us a whole h e ck of a lot . Because if you’re an outlier if you’re
really expensive relative to your pe e rs you are going to have a lot of more questions to
a nswer than if no one knows about it . And so in variably price transparency has that

effect . Bu t again it’s only a partial solution because ultimate ly the manner in which you
can help reduce overall variability is by changing the way providers are paid in the way
consumers incentive s work in accessing medical care . And so , you know, as the -- not
to o subtle title of the book suggest. Rotten incentiv es actually do screw up the health
care and that’s priority number one and transparency is one of it . So I think we are on
the pathway there but we still have a lot work to do in the other areas.

Mark Masselli: You know, pick up on the threa t that healt h care cost are really
st rangling the country -- people having to make a very difficult choices . And the health
care law ' s hopefully starting to shift some focus from fee for service model towards
rewarding better outcomes but I think we had for Massachusetts governor noted that
that in their first round of legislation that really was about access and it only recently
have they s tart ed to look at cost control is that true in the federal model ?

François de Brantes: Unfortunately the Affordable Ca re Act legislation provide d the
Federal Government with incredible leeway and testing new p ayment model and then
broadly disseminating them th r oughout Medicare . A nd the center for Medicare
innovation has un equal powers in that respect and it has chosen at least to date to take
a relatively modest approach , they have a primary care initiative , they have a c c ountable
care organization initiative , they certainly have a bundle payment initiative . A nd so all
those are ongoing it ' s progress but the late st calculations that we did put to combine
effect of all of these implementations at most 15% of all Medicare spent. So, there is a
long, long way to go.

Margaret Flinter: Well, François beyond ACA there is ACO the Accountable Care
Organizations care de livery s ystem that's supposed to reduce cost by better
coordinating care and then we have the patient center ed medical home s and the focus
on co ordination with in primary care. But, you’ve said that both of these models put the
car t before the horse. So, I guess the question where is payment system reform
happening at a scale that 's significant enough to shift toward s this none fee for service
system?

François de Brantes: Well, there are few . And it’s actually the better news is that it 's a
mixture of b oth public and private initiatives much has been said and written about the
efforts of Arkansas but they have been followed by similar efforts in Tennessee a nd now
in Ohio where the governor’s office directly right , because we think that from what we
seen that what 's you need . You need t he leadership from the governor ' s office and so
from the governor’s office down there's a very clear stat ed objective to move away from
fee for servic e and to use the p urchasing power of the state thought the state employee
benefit plan and through M edica id to effect that change. So, that right off the bat
usually the largest employer in the state. So, the state as an employer and Medicaid
combined really do represent a significant purchasing power that can be use d to modify
payment at a scale d level for providers. So, those states are doing a great job and
they’re continuing to experiment and grow and push on the pure private sector sites
some health plans have really embrace to the concept of -- and the implemen tation of
different payment models and they have very clear strategies to move aggressively

away from fee for service and they’re doing it throughout their enterprise and throughout
their network. So, it’s happening but it’s not happening if you add all o f these up you 're
still on the fringes initially of what constitute anything close to a critical mess.

Mark Masselli: We’re speaking to day with Health Economist François de Brantes the
Executive Director of the Health Care Incentive Improvement Institute not for profit
organization focusing on improving health care through targeted models payment
reform . François we’ve talk ed a little bit about the pa ir, now we’ll talk about the people
and you ’ve said that the largest untapped resources are the consumers themselves and
increasingly consumers shouldering larger responsibilities for choices regarding their
health care coverage in their shopping online f or health insurance plans , they’ re paying
highe r deductibles . And you say to generate real transformation in health care systems
we need to unleash the consumers as a true agent and you say price transparency is
one important step what are the other tools in their tool kit and how do you feel the
soci al media ' s playing a role in that , how our people really getting this information in
ways that they can digest it .

François de Brantes: So, first of f the industry is in its infancy compare to every single
other industry consumer based industry and the re st of the economy . T hink about the
lack of engagement of any real r obust social media round w hether it’s opinions on
different providers or the only area w here that has had an a ffected aid is for treatments
and very specific di seases where you have a very , very powerful social media effect in
brining parent s of patient s or patient s themselves together . So that 's one aspect of
consumers and but ultimately what this consumer is in other industries mean s, it means
that as a p urchaser you 're making a conscious decision , and you 're making that
conscious decision because you’re paying out of pockets some more portion and you
have information about quality. So, you’re accessing value some of it is objective
because it’s information that’s provided by a t hird party that you respect and trust and
some of it is subjective comments by other consumers who have had an experience .
it’s un varnish ed and it gives you a sense of what was their tru e experience with that
particular supp lier. And I know that p hysicia ns and other clinicians and hospitals don’t
necessarily like to think about themselves as suppl iers but that’s what they are they’re
supplying a service and that service happens to be health care to 300 million
consumers . A nd we’ve taken the consumer out of the equation by either shielding them
from the information only providing them with partial information and we re moving their
sensitivity to the purchase or giving them full sensitiv ity where it doesn’t matter and no
sen sitivity when it does .

And I ’ll give you an example. So, in many consumer directed health plans, high
deductible health plans chronic care is paid out a pocket as part of the deductible
expense . A nd a fr iend of my has a child with type - 1 diabetes so obviously he need
insulin in order to live . T hat’s expense that 's paid out of pocket all the way thought the
deductible, I don’t think any would argue that , that makes any sense whatsoever . O n
the flipside prevent ive care which has marginally utility for that particular person is
covered in full. So, we are giving no price sensitivity where it doesn’t really matter and
when creating price sensitivity where we shouldn’t and then it that person actually

need s a significant operation they will go to their deductible and then they will be
com pletely insensitive as to whe ther or not you're ge tting it done in a high value location
where both of you have , you know, competitive pricing and high quality or a low value
location where you have high price and potentially low quality. So, it just bad, you
know, it’s badly design ed and it can and should change unfortunately I don’t see that
happening anytime soon because there’s no one really out there doing a lot of
innovative work around employee benefit designs . S o this is a big issue because I thin k
we can in fact and there's lots of evidence and when you do put the consumer in charge
of a lot of decisions with the right information markets work , and it’s mess y and it’s not
always right but it works and we constantly, constantly try to prevented tha t from
happening in health care and we just have to find a way to get it done.

Margaret Flinter: Well, François you do see some br ight spots on the horizon in your
writings in spite of the paucity of available health care pricing and performance data
ar ound the country . And I know that you’ve reference the Robert Wood Johnson
Foundations aligning forces for quality effort which keeps remains one of the few br ight
spots across the United States and providing transparent quality information to
consumers which is equally as important and maybe more than the pricing information
test about that pilot program and what might w e learn from their success.

François de Brantes: So, it’s a great reference and yes it's one of the few bright spots
because you have publicly available information on quality of health care . F or the most
part that is highly centered around primary care it only represent s at most 20 to 25% of
all health care delivered in the cou ntry . And so we need to do a better job collectively at
going beyond information on primary care services and d elving into what is t he same for
specialty care and so for when a patient has an advance chronic condition they need
speciali st . And we need to sometimes try to ignore that and say well the primary care
facilit y or the primary care practice's going to take care of it. N ot always, t hey shouldn’t
always take care of it and in fact they should work collaboratively with specialist in the
management of those patients , but again it usually highly, highly contain to one
specialty a couple of specialties mostly primary care and we have to go far beyond that.

Mark Masselli: You know François I want to get your thought on payment reform we
talk about sort of achieving an Affordable Health Care you say that we would have to
remain at our current levels spending for probably a decade . And that maybe d oable
giv en the last couple of years but cer tainly not over the trend line if you look back over
the last couple of decades. And I wonder obviously there is a big shift trying to move
from volume to value but sort of under p inning all of th ese is , it’s 17% of the GDP and it
support s a lot of people . T ell me th ere what you r thought is about one -- on one hand
how to control it and the other hand the politics of a such a large share of the GDP and
the political realities of dealing with that.

François de Brantes: Well, look so this is why I am so ad amant about unleashing the
consumer because nothing can stand in the way of 300 million people . And I actually
think that it’s the reason why the re isn’t as much consumer is in health care is because
the level of threa t that it represent s to the incumbent s. L ots of question would have to

be answer ed from lots of people who eith er haven’t done their job well, fail to do what
they should have been doing . And until you get to that point it’s unclear that the forces
of the status quo can be changed. For every dollar that spent that mean it’s going into
someone 's pocket and those people aren’t going to g ive it up willingly. So, the
hypothesis that you could maintain current tr end rates or current spent per capita at its
current level for decade I don’t it 's a un re as onable hypothesis at all. T he only way that 's
ever going to happen however is if you truly unleash the consumer and that’s not going
to happen unless there's full price transparency and full quality transparency and on that
respect they all fai l . I mean if you actually have that and it was recognized in each state
as truly an unbiased source at that poin t first of all, all of the health plans would
probably default to that information as opposed to whatever they can lean internally
which is hig hly and precise . And from that point value decisions can be made with
consumers the solution itself is not particularly complicated like the politics are and
ultimately it will take the leadership of several governor s across the country look ing at
their o wn liability to stay , you know what we continue to subsidies the few incumbents at
the expense of every single tax payer in the stats or we flip this on its head.

Margaret Flinter: We’ve been speaking today with Health Economist François de
Brantes , Executive Director of the Health Care Incentives Improvement Institute and not
for profit organization is focus on improving health care t hrough targeted models of
payment reform you can learn more about his work by going to hci3.org. François thank
you s o much for joining us on Conversations on Health Care today.

François de Brantes : Well, thank you.

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Mark Masselli: A t C onversations on Health Care we want our audience to be truly in the
know when it comes to the facts about health care reform and policy Lori Robertson is
an award winning journalist and man aging editor of FactCheck.org a non - partisan and
nonprofit consumer advocate for voters that aim to reduce the level of deception in US
politic, Lori what have you got f or us this week.

Lori Robertson: Well, we've seen a lot of viral emails about the Affordable Care Act the
latest to hit our inbox is one claiming that the law requires Medicare beneficiaries over
age 75 to be admitted to the hospital by their primary care physicians . I t’s not true the
email wrong ly claim s t hat a n emergency room doctor can’t admit a senior to the hospital
and have the co st covered as a hospitals sta y that a primary care physician would have
to be the admit ting doctor . B ut there is nothing in the law that says that , we spoke with
the non - partisan center for Medicare advocacy and a policy attorney the re told us
without hesitation that the claim is fals e and that there is no such requirement in the law .

T he C enters for Medicare and Medicate S ervices also con firm that the l aw says no s uch
thing . Medicare part A covers hospitals services when a doctor makes an order for
treatment it doesn’t require a primary care physician to do so. We are not sure how this
particular viral c laim came about , but we do know th at th is anonymous messages of ten

refuse to die . The version we 've receive d from readers i s an anonymous message that
include s old bogus claim s from 2009 including the false said that seniors age 76
wouldn’t be eligible for cancer treatment , that claim can be t race t o now 5 year old letter
to the editor from a form er judge in Texas who misread a health care bill in the house .
E ven the judge had said that his l e tter isn’t accurate and he wishes the viral version of it
would just die . We too advice a healthy use of the delete key and reading your inbox of
such claims and that’ s my f act c he c k for this week, I am Lori Robertson Managing
Editor of FactCheck.org.

Margaret Flinter: FactChek.org is committed a factual accuracy from the countries
major political playe rs and is a project of the Annenberg Public Policy Center at the
University of Pennsylvania . If you have a fact that you would like check ed email us at
chcr adio.com w e'll have FactCheck.org Lori Robertson check it out for you here on
C onversations on Health Care .

(Music)

Margaret Flinter: Each week conversations highlights a bright idea about how to make
well ness a part of our communities and to everyday lives. The flu doesn’t just exact a
toll on public health impact s a meaningful punch on the economy every year as well .
C omprehensive vaccination programs have had an impact on curtailing flu outbreaks
but there is still a lot of roo m from improvement. In 2011 an estimated 100 million work
days and close to 7 billion dollars and los s wages were attributed to the flue. Largely
because many employees without paid sick leave are more incline to work while sick .
An estimate d 80% of those who come down with flu like symptoms ignore doctor 's
orders and go to work , leading tomorrow wide spread co - infe ctions . And a fi r st of its
kind study researche rs at the U niversity of Pittsburg School of Public Health decided to
analyze the impact on flu outbreaks in the work place and to ask what would the
difference be if there were universal access to paid sick l eave .

Lead researcher D r. Supriya K umar says their study showed a pretty dramatic link
between access to paid sick leave and reduction in flu outbreak in the work place, the y
also created another option what if there were a new sick leave category focusin g just
on flu days . T heir mode l show that if th o se work er specifically diagnose with flu we
guarantee just one pay day off to recuperate there w ould be a 25% reduction in the
sp read of flu . A nd when worker were guarantee d two pa id d ays off the number s we nt
up to a 40% reduction in co - infection . A universal paid leave program for all worker s
that has the potential to greatly reduce flu co - infection in the work place positively
impacting both publ ic health while saving billions of dollars in the overall economy now
that’s a bright idea.

(Music)

Margaret Flinter: This is Conversations on Health C are, I'm Margaret Flinter .

Mark Masselli : And I am Mark Masselli . P eace and H ealth.

Conversations on Health Care, broadcast from the campus of WESU at Wesle yan
University. Streaming live at www.wesufm.org and brought to you by the Community
Health Centre.