Leading GOP Health Policy Strategist, Lanhee Chen, Analyzes Way Forward For Health Reform

Lanhee Chen

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

Margaret Flinter: And I'm Margaret Flinter.

Mark Masselli: Well Margaret we are seeing some consequences around the
uncertainties surrounding our nation’s National Health Policy. The insurance
industry isn’t waiting around to see what directives might come out of
Washington in the coming months; some of the larger corporations are taking
action now as they make the necessary preparations for the 2018 insurance
market.

M argaret Flinter: Take Aetna for example they announced last year that they
were pulling out of 11 state insurance market places around the country and
Aetna has just announced exit from another state Iowa. This is a blow to
consumers who now have just on e insurer to purchase coverage through in that
state and it seems this is going to be a growing problem marked for a number of
states.

Mark Masselli: A larger. Insurers are pointing to uncertainty in Washington for
the decision to withdraw from the Obam aCare ex chan ges . They simply can’t
calibrate their rates or do accurate forecast without knowing what kind of
subsidies will be available from the Federal Government .

Margaret Flinter: GOP leaders made another attempt just before the Easter
recess but were still unable to break through the stalemate and analysts expect
that the approach will now be more of the chipping away at certain aspects of the
law so uncertainty is still the operative word here.

Mark Masselli: Health Policy strategy is somethin g our guest today is quite well
versed in. Lanhee Chen is a renowned GOP strategist who oversaw policy
issues for Governor Mitt Romney ’s as well as Marco Rubio’ s presidential bid. He
is long been a thought leader on the GOP approached health reform. He brings
some important insight into what might be available approach for the GOP
leadership moving forward. Looking forward to his insights , Margaret.

Margaret Flinter: And to Lori Robertson, the Managing Editor of FactCheck.org,
will stop by. But no matter what the topic, you can hear all of our shows by going
to chcradio.com .

Mark Masselli: And as always , if you have comments please email us at
[email protected] or find us on Facebook or Twitter, we love hearing from you.

Lanhee Chen

Margaret Flinter: We will get you our interview with Lanhee Chen in just a
moment.

Mark Masselli: But first, here is our pro ducer Marianne O’Hare with this week’s
Headline News.

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Marianne O’Hare: I am Marianne O’Hare with these Healthcare Headlines.
Members of Congress are home for Easter recess for two weeks and are
spending time in front of constituents , who are likely to weigh in on Health care.
Some eager to see the appeal of the Af fordable Care Act as promised by the
incoming leadership and others angered over the GOP plans to roll back
advances under ObamaCare that led to 20 million Americans gaining coverage.
While the American Health Care Act failed to make it out of committee b ackroom
discussions continue on coming up with new approaches to Health Policy that
will appease both members of the conservative Freedom Caucus as well as
more modern Republicans. Quoted in the most recent kinds of health tracking
poll, it suggests that while three quarters of the US population wants President
Donald Trump and administration to make the Health Law work, 54% of
Republicans said it was a bad thing, 58% of Republicans said the bill did not go
far enough to end Obama Care.

Meanwhile speaki ng of the Kaiser Health Tracking Poll the insurance companies
aren’t necessarily in the debt spiral being touted by certain people in the
administration. Survey have insurers who have weathered the first few years of
the online market places have begun to figure out how to minimize their losses.
Now they have understood better where insurance rates need to be set. For
those consumers , economist , Deepa Banerjee , authored other reports as the
markets are still fragile ; however and need clear direction from the administration
on what their future directives should be. Meanwhile, approximately 10% of
college age students suffer from either debilitating food allergy or Celiac disease
which triggers painful abdominal symptoms when exposed to gluten. A couple of
notable colleges have called on to the gluten free trend. Cornell University and
Kent State in Ohio, the first colleges to open gluten and allergen free dining halls.
According to an article on The New York Times on the topic just one allergic
episode can send them into a major health crisis and the strategy seems t o be
paying off another way. Gluten free offering has made these schools more
desirable to kids in that sector, having a positive effect on enrollment.

I am Marianne O’Hare with these Heal thcare Headlines.

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Mark Masselli: We’re speaking today with Lanhee Chen at the David and Diane
Steffy Research Fellow at the Hoover Institution, Director of Domestic Policy,

Lanhee Chen

studies at Stanford University. Most recently Mr. Chen was the advisor to
Senator Marco Rubio, 2016 Presidential Campaign, also the Policy Director for
the Romney Ryan Presidential Campaign. He is an attorney with the firm Arent
Fox. Mr. Chen currently serves as a presidentially appointed Member of the
Social Security Advis ory Board , a bipartisan Panel that advises the President,
Congress, and the Commissioner of Social Security on income matters. Mr.
Chen earned his PhD in political science from Harvard University. He is J.D from
Harvard Law School. Lanhee welcome to our Conversations on Health Care.

Lanhee Chen: Thank you having me. Good Morning.

Mark Masselli: Yeah good morning to you. You know you have been lending
your considerable health policy advice to many of the current year peer leaders
in Washington, ma ny Republicans including President Trump campaigned on the
promise to repeal and replace the Affordable Care Act but as we have seen it’s
proving a bigger lift than they may might have bargained for, and you recently
said in an interview that they only ha d themselves to blame. I am wonder ing if
you could share with our listeners what you meant by that.

Lanhee Chen: Sure well you know I have described the failure of the American
Health Care Act as a sel f inflected wound as well and Republicans had an
opp ortunity here to advance legislation that would have taken steps in the right
direction I think in terms of thinking about our health care systems. There
certainly was an opportunity to advance some important goals for example
reform of Medicaid curbing s ome of the reg ulatory regime created by the
Affordable Care Act etc. And really this is one of the situations where
Republicans knew that Democrats were going to oppose the bill a nd do so with
relative unanimity . For Republicans though , they were the one s who ended up
hold ing this bill up and whet her you blame some of the moderate Republican
actions or some of the more conservative hard lying Freedom Caucus . Either
way Republicans really were the ones who prevented this legislation from
advancing and so w hat’s disappointing about this was the inability of Republicans
to get together and agree that the American Health Care Act wasn’t valuable
vehicle moving forward and th e n it was the start of an important conversation.
The bill got polled and we are in a situation now where any progress on repeal
and replacement of the Affordable Care Act has become that much more difficult.
It was a very disappointing outcome, the Republicans in favor of repealing and
replacing a law.

Margaret Flinter: Well Lanhee let’ s look at some of the hallmarks that the GOP
reform approached that you felt were very necessary steps advancing a more
conservative flavor in American Health Policy . One: Removing the individual
mandate requiring Americans to purchase insurance . T wo : Eli minating the
essential benefits that require d insurance companies to cover a number of
preventive services. You have said these were fundamental flaws that made
ObamaCare so unpopular with conservatives and that they were just too costly to

Lanhee Chen

maintain. Can you describe why these measures and others needed to be
removed in your opinion?

Lanhee Chen: Well one of the challenges with the Affordable Care Act with
ObamaCare is that it created a significant federal overlay, the two provisions that
you have menti oned, the individual mandate which required every American to
have essentially a certain kind of health insurance as well as what’s known as
the essential health ben efits requirement where you had the Federal Government
dictating exactly what every plan ha d to look like and further from that there were
additional requirements known as guarantee d issue and modified community
rating that also dictated that health insurance companies offer coverage to every
single person who showed up. Warning is now on the s urface a lot of these
things may sound great but the realty is that what they do together is they apply
uniform standard that raises premiums in many situations and limit the amount of
choice that consumers have now. There are consumers that that may opt for
plans that are richer and more generous in which case they should certainly have
access to those. The question is whether we are to have health insurance
system where every single American essentially has to subsidize the decisions of
every other Amer ican, if they want more generous coverage, they should have
access to more generous coverage. But that in return comes with some
additional cost means there is some on the left, some hysterical arguments about
people on the right who make this argument say ing l ook you must not want
people to have access to basic heath insurance , that’s not the case at all. The
point I am trying to make is people should be able to have access to health
insurance that suits them and ultimate ly the Affordable Care Act simply made
that more difficult.

Lanhee Chen : And ultimately the affordable care act simply makes that more
difficult.

Male speaker: Lanhee, one of the things that led to the swift demise of the
American Health Care Act was the bipartisan congressional budge t office report
that predicted the GOP plan would ultimately lead to 24 million Americans
loosing health coverage as well as a significant spike in premiums for American
health consumers, especially older, sicker people you say the CBO report was in
many w ays misleading. What did they get wrong in your estimation and is there
a better independent source that the public could look towards in any analysis of
future legislation?

Lanhee Chen : You know I have a lot respect for what that office has done and I
think that with any economic analysis its not going to be perfect I think, even if
you look back to CBO’s own estimates of ObamaCare from when the law was
first passed. Their estimates regarding the number of people who would be
covered by health insuranc e is off by millions. So, my view about the CBO
analysis, first of all, I think it is the case that The Republican legislation The
American Health Care Act did have improvements that could have been made to

Lanhee Chen

it so I’ve often times said that one of the Chan g es I would recommend to The
American Health Care Act is to look at how to make for example the subsidies for
coverage more generous for people at the low end I think that that is an
important factor so I don’t want to share it about this I think that certa inly it is the
case of The American Health Care Act would have covered fewer people than
ObamaC are. The question though is what the additional cost was of
ObamaCare to get that coverage and second of all, there were improvements to
the American Health Car e Act that could have made it a little bit better when it
came to coverage and I certainly think that that’s something that would have
been important.

Margaret Flinter: Well Lanhee lets step back and take a little bit longer view of
the trajectory of hea lth reform. You served in an advisory capacity to
Massachusetts governor, Mitt Romney’s presidential campaigns and for a time
you served at the Conservative Heritage Foundation which formed the
Foundation for Romney Care in Massachusetts which then provid ed much of the
blue print, it seems for The Affordable Care Act. How did a health reform
initiative that had such really pretty significant conservative roots become a policy
that has become so unattainable to Conservative policy makers?

Lanhee Chen : We ll, first of all, the reform that were passed in Massachusetts by
governor Romney, those worked very well at the time certainly for people in
Massachusetts and the point I’ve often made is its very difficult to take something
which worked at a state level and then try and replicate features of it at Federal
level and say well this is the exact same thing. This is an argument that I think
people on the left have used in a misleading way to try to say well look,
Republicans are in support of ObamaCare because the exact same thing
happened at Massachusetts. First of all, it ’ s not the exact same thing and I think
the challenges you saw with the Affordable Care Act that you’re seeing with the
Affordable Care Act has to do with the exact difficulty of translating reform that
may have looked good in elements at the state level to a Federal Reform.

Mark Masselli: We’re speaking today with Lanhee Chen , the David and Diane
Steffy Research Fellow at the Hoover Institution and Director of Domestic Policy
Studies at Sta nford University. You know there’s just an incredible set of
circumstances that have happened that I am sure that have taken the GOP
somewhat by surprise. We’ve seen a rise in the pool around the popularity of the
Affordable Care Act. Many of the Republi can governors in States that had done
expansion fighting about the loss of the financial coverage and I’m wondering
what do you think the next steps are going to be for Congress? What do you
think their next steps are?

Lanhee Chen : Well I think that for the Congress and I think they have to really
seriously consider whether in fact they’re committed to repeal and to replacement
of the law of ObamaCare and if they’re I think they have to ask themselves what
are the measures and steps they can take that put them in a good place to do

Lanhee Chen

that. I think first of all, there are things about ObamaCare that suggest that in
some markets there is some serious issues and those issues may be ought to be
addressed first; for example, the stability of insurance markets in many states.
The other question in my mind has to do really with what can be done
administratively by the Trump administration and it seems to me that there are
whole set of ways that the Trump Administration for example can try to open
things up for stat es you know one of the things that’s interesting about the
Affordable Care Act is even if it ’ s never repealed, there is a provision in it that
allows states to create innovative Health Reforms on their own and that’s
something that I think the administrati on in Congress ought to look at more
seriously which is in the absence of a Federal Consensus around how to reform
an ObamaC are. Are there ways that various states can pursue their own reforms
that are consistent with what people in that state want, even if it is different from
the architectural set up by Obama Care.

Margaret Flinter: Well Lanhee let ’ s talk about also the insurance market place
certainly the insurance industry has been showing some significant reluctance to
stay in the insurance exchange market places. We have seen large insurers like
Aetna and United Healthcare pulled out of many state based market places.
You’ve done some analysis on how best to stabilize that insurance market place.
Can you share with us how do you think we do that?

Lanhee Chen : One of the challenges we’re seeing that is because insurance
companies believe that the market places simply are not a good economic
proposition for them for having to cover essentially a bunch of people who they
know are going use services, the structure of ObamaCare such that the original
intent was to bring young and healthy consumers into the market place to help
balance the cost of older and sicker consumers but instead because of
ObamaCare structure a bunch of people who will need health care services were
older and sicker coming into the market place while those who were younger and
healthier have by large stayed out; so I think we have to look at are there ways to
continue to make hea l th insurance more affordable for people. There are set of
me chan ism in the Affordable Care Act that potentially could expand affordability
of things like cost sharing subsidies in the Affordable Care Act that help to offset
some of the cost sharing the beneficiaries have are those things that
Republicans believe are important to commit to. There are disagreements about
whether it makes sense to continue the fundamental structure of the Affordable
Care Act but in the absence of any agreement about how to move forward in
terms of repeal and replacement, I t hink there’s a broader political question here
which is if ObamaCare fail, do Republicans pay a political price when that
happens but certain ly there are options to stabiliz e the market place that they
could take advantage of if they want to.

Mark Massell i: Lanhee let’s pull the thread a little more on the Medicaid
program. Medicaid expansion brought coverage to millions of Americans also
put more dollars in stake offers obviously secretary Price and the new CM

Lanhee Chen

administrator , Seema Verma will be ushering in a new era of Medicaid caps in
block grants as a way of curbing Medicaid costs so how do you protected millions
of consumers who were benefitting for the Medicaid expansion as well as
Stewards or state budgets who were supporting those coverage needs.
W ondering if you have seen any initiatives at the state level that you’re excited
about?

Lanhee Chen: Well I think there are many things that states are pursuing that
are innovative if you look at Medicaid you know whether its efforts to migrate
payment f or Medicaid services away from volume and toward value or efforts to
expand private market place invol vement in the Medicaid program to lower cost
and expand choices to certainly you’ve got many states both red and blue states
whether its California or Ark ansas, who are pursuing interesting reforms in
Medicaid programs that are worth looking at. With respect to what Republicans
want to do with Medicaid I fundamentally reject the notion that this is about
cutting people off coverage. The reason why we need to reform Medicaid is
because the programs are physically unsustainable both the State and the
Federal level, so I think the question is how do you deal with the Medicaid
program and the answer is first of all, to give state freedom and flexibility to put in
place more innovative programs to deal with Medicaid but the Federal level to
have a fair but kept way of determining what the Federal financial obligation is
going to be going forward and that’s why this system of per capita caps has
come into existen ce because what that system tries to do is to say look, we look
at a state and we determine that they’ve got a certain number of people on
Medicaid and we also take into account by the way what the health statuses of
those people rather than a formula whic h right now is essentially an open ended
entitlement to infinity so the idea is how do you create a truly value driven
program in Medicaid while also making a fiscally sustainable for that Medicaid
beneficiaries and generations to come have a program to re ly on.

Margaret Flinter: Well I think we would all agree we’re in an era of significant
innovation and potential for doing things better and a lot of these innovations as
you just noted relative to Medicaid surround how we pay for health care and the
shi ft towards more pay for value versus fee for service, so you could say from a
Conservative landscaper just generally what do you see as the real interest in the
move towards value based care?

Lanhee Chen : I think that the Conservatives and progressives a re like agree that
our health care system does need to migrate away from a traditional system
where we compensate for the volume of care toward a system that pays for
things other than volume, whether it’s the value provided by care, the quality of
that ca re, these are all the kinds of things that are going to very very important
and I think that you’ve seen bipartisan support for this sort of an effort, for
example, if you look at law called MACRA which was passed I guess in 2015 that
attempts to reform th e way that doctors in Medicare are compensated for their
services, now that law and I think is perfect but it did have large bipartisan

Lanhee Chen

majorities and I think the basic notion in that law is quite simple which is we
ought to move away from a system where w e’re literally just paying for
procedures and one where we’re trying to pay more for management of the
patients health overall and I think these kind of trends on the regulatory side
match the kind of trends you have seen on the private health insurance th e
commercial side which is an effort to move away from a piecemeal compensation
structure towards one that more incentivizes holistic care for an individual and if
we move away from the fee for service system we’re not just going to be
benefitting the Fede ral coffers from a fiscal perspective, we’re also going to be
benefitting people in the united states, we’re going to be benefiting patients
because we want to have a health care system at the end of the day that tries for
getting people healthy yes but ke eping people healthy in the first place. And
that’s something that I think both Democrats and Republicans hopefully can
agree on.

Mark Masselli: We’ve been speaking today with Lanhee Chen, The David and
Diane Steffy Research Fellow at the Hoover Institut ion and Director of Domestic
Policy Studies at Stanford University. You could learn more about his work by
going to hoover.org/profiles/lanhee - j - chen or you can follow him on twitter at
LanheeChen.

Lanhee thank you so much for joining us on conversation s on health care.

Lanhee Chen: Okay thank you.

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Mark Masselli: At Conversations on Health Care we want our audience to be
truly even know when it comes to the facts about Health Care Reform and Policy.
Lori Robertson is an award - winning journa list and managing editor of
FactCheck.org, a nonpartisan, nonprofit consumer advocate for voters that aim to
reduce the level of deception in US politics. Lori, what have you got for us this
week?

Lori Robertson: Well in criticizing the Affordable Care Act, President Donald
Trump said that “ M any of our best and brightest are leaving the medical
profession entirely because of ObamaCare, ” but the number of physicians has
increased since 2010 when the ACA became law. The executive vice president
of the Ass ociation of American Medical colleges told us that the group has seen
no significant number of physicians leaving the profession because of the Health
Care Laws. In fact data show the total number of active physicians has increased
nearly 8 % under the Hea lth Care Law. The number jumped from 799501 when
the ACA became law in 2010 to 860939 in 2015; since 2010 the number of
physicians in internal medicine are providing family in general practice care the
two largest specialties also has increased more than 4 %, the AAMC also told us
that there is no evidence of declining interest in medicine since the ACA was

Lanhee Chen

enacted. Medical school applicants and enrolees are adding all - time high. The
AAMC has projected a physician short fall in coming years to primarily to an
ageing population but to address this issue, the group set a goal of increasing a
first year medical school enrolment by 30 % by 2015 - 2016 up from the 2002 -
2003 level. It is expected to reach that goal by 2017 - 2018 nearly on schedule
and that’s my FactCheck for this week. I'm Lori Robertson, managing editor of
FactCheck.org.

Margaret Flinter: FactCheck.org is committed to factual accuracy from the
country's major political players and is a project of the Annenberg Public Policy
Centre at the Uni versity of Pennsylvania. If you have a fact that you would like
checked, e - mail us at www.chcradio.com . We will have FactCheck.org's Lori
Robertson check it out for you here on Conversations on Health Care.

[ Music ]

Margaret Flinter: Each week Conversations highlights a bright idea about how to
make wellness a part of our communities and everyday lives. Diabetes is a
ch ronic illness for which behavio ral choices such as diet and exercise are
extremely important. By i ncentivi zing behavio r chan ge on large patient
populations is very challenging. A recent study done by Amery University and a
non - profit organization focused on improving the health of India’s population of a
billion people found that text messages sent th rough smart phones might be a
powerful tool in promot ing diabetes prevention behavio rs they partnered with
India’s leading provider of mobile phones Nokia to harness over search cohort of
a million clients received diabetes prevention text messages.

Nalin i Saligram: So the text messages themselves were developed with Amity
University’s Rowland school of public health because we wanted them based on
science and behavior c h a n ge theory.

Margaret Flinter: Now Nalini Saligram CEO of the Arogya Foundation , th e text
messaging study was designed to generate improved activity around four simple
goals, consume more fruits and vegetables, avoid fried foods and exercise
regularly.

Nalini Saligram: You know the messages themselves were quite simple. We
ended up se nding it twice a week for 6 months .

Margaret Flinter: Participants who received just two text messages per week
showed an average 40 % more compliance with those activities than those who
did not receive the messages. Dr. Saligram says , it could prove a useful tool for
clinicians trying to affect behavior cha n ge across large patient population. A low
cost targeted text messaging system sent directly to consumers reminding them
of the power they have to maintain simple lifestyle Ch a n ges that can improve

Lanhee Chen
their c h a n ces of preventing or better managing diabetes and other chronicle
illness linked to life style, now that’s a bright idea.
[Music]
Margaret Flinter: This is Conversations on Health Care. I am Margaret Flinter.
Mark Masselli: And I'm Mark Mas selli, peace and health.
Conversations on Health Care, broadcast from WESU at Wesleyan University,
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