Stuart Altman, a leading health-care economist, on meeting the future demands under health-care reform.

Mark Masselli: This is Conversations on Health Care. I am Mark Masselli.

Margaret Flinter: And I am Margaret Flinter.

Mark Masselli: Well, Margaret, now that Health Care Reform is the law of the
land, the baton has been passed on to the states to implement some of the key
components. The first is the process that involves the states setting up their own
high-risk pools, a temporary way to cover adults with preexisting health
conditions who lack health insurance.

Margaret Flinter: This is to going to be such welcome relief for people who have
really suffered from not being able to get insurance because of those preexisting
conditions. But, of course, there are lots of unanswered questions about exactly
how the states are going to do this, how much it will cost, and how many people
would be included in the pools. The Department of Health and Human Services
got the ball rolling last week when they reached out to the individual states to
start learning about their plans for setting up these pools. What is known, these
st
high-risk pools have to be up and running by July 1 of this year, just a few short
months away. Then by 2014, the law replaces these state-run plans with new
insurance exchanges.

Mark Masselli: You know, Margaret, that’s a very tight timetable, 90 days from
the signing of the bill. We also know that different states have different options
for setting up the pools, since some states, I think 35 already have high-risk
pools. Those states can add a new pool. States can also build on their existing
programs. But if a state opts out HHS, will take over and carry on its own
program in that state, it sounds like a public option to me.

Margaret Flinter: It does. And one concern that it really answers is how quickly
can we make something happen. So, that July timeframe really is tight. And of
course, there are some concerns out there. Former HHS Secretary Dr. Donna
Shalala from the Clinton Administration said it's going to be hard to implement
this kind of thing but it has been done before there is precedent. The states have
implemented the prescription drug benefit, welfare reform and the children’s
health insurance program working in collaboration with the Federal Government.
And the Department of HHS, they are very used to doing waivers and working
directly with the states to make these kinds of changes.

Mark Masselli: They have got some great leaders there at HHS, but there is still
no administrator for the Center for Medicare and Medicaid, a critical area in the
department that needs that leadership. We announced last week that Don
Berwick was going to get the seat, but apparently, we have to wait for the White
House and the President to make it official. Hopefully, that announcement will
come in the next few weeks as there is a lot of important work to be done.

Margaret Flinter: And Mark, I have to say that if there is one decision in health
care that so far seems to have unanimous agreement is that Don Berwick would
make a fantastic leader for the Center for Medicare and Medicaid Studies.

Mark Masselli: That he will.

Margaret Flinter: At the end of the day, it's all about investing and making health
care better and setting up these high-risk pools is just one piece of it. We have
got a leading health care economist with us today to help sort through some of
these bigger questions with the new legislation, Dr. Stuart Altman, Professor of
National Health Policy at Brandeis University. He has been involved in designing
Health Reform as far back as the 1970s and just in the last few years was
instrumental in helping to design the Massachusetts Health Care Plan. We are
happy to have him speak with us today.

Mark Masselli: No matter what the story, you can hear all of our shows on our
website Chcradio.com. You can subscribe to iTunes to get our show regularly
downloaded. Or if you would like to hang on to our every word and read a
transcript of one of our shows, come visit us at Chcradio.com.

Mark Masselli: And as always, if you have feedback, email us at Chcradio.com,
we would love to hear from you. Now, before we speak with Professor Altman,
let’s check in with our producer Loren Bonner with our headline news.

Loren Bonner: I am Loren Bonner with this week’s headline news. Medicare is
on a lot of people’s minds this week starting with lawmakers who are back in
Congress, trying to resolve a provision and a bill separate from the reform that
just passed to reduce Medicare reimbursement rates to doctors. Physicians face
a 21% cut in their Medicare payments, unless the center approves legislation to
stop the schedule reduction. In a more positive light, the Center for Medicare
and Medicaid Services has launched a new website offering researchers access
to data on the cost and operation of health care services around the country. It's
part of the administration’s open government directive and will help decision-
makers quickly compare utilization rates of hospitals in each state so that ways to
improve efficiency in health care can be more easily accessed. CMS launched
its own video to explain --

Imaging what this could do for our healthcare system as we think about
delivering better healthcare across the country. Imagine if you are able to go
online and compare the cost of a knee surgery whether it's in Seattle or in
Boston, whether it's in Los Angeles or in North Carolina, democratizing data and
shining white on the operation of CMS is going to allow the American people to
engage in seeing where their tax-per-dollar is being spent and what types of
results they are producing.

Loren Bonner: To learn more, visit Cms.govdashboard. Let’s turn now to a
group of consumers that will be dealing with an immediate benefit of Health Care
Reform young adults. By September, insurers must allow children to stay on or
return to their parents’ insurance plans until age 26. This will allow an estimated
two million young adults coverage by their parents’ policies and assure to help
out many college students who graduate and lose their insurance before they
find a job. I went to the campus of Wesleyan University right here in Middletown
to get some reaction.

I mean I personally feel okay with it because I have a job and they are going to
cover me health care wise which is nice and not the situation for most people. I
think that it's definitely an improvement because I know that a lot of mine friends
before health care reform were like supposed to begin enactment were worried
that like, or there is just kind of this stigma that like there is this post collegiate
like I want to have health care and I am a young healthy person and I can like be
fine without it until like I am older and can afford it. And that’s something that it
was definitely not a safe approach and I think that the way that this works to help
people get health care for younger people is definitely beneficial and safer and
more fair.

Well, I mean obviously the health ______ 6:59 justice for it.

Well, I thought it would be a benefit because we can stay on our parents’ health
care insurance longer till we are 26. But overall, I thought it would benefit
everyone as a whole.

Loren Bonner: We will continue to follow how reform is enacted in the coming
months. For now, let’s listen to the interview with today’s guest to learn more
about this Health Care Reform’s overall goals for the future.

Mark Masselli: This is Conversations on Health Care. Today, we are speaking
with the Stuart Altman, Health Care Economist and Professor of National Health
Policy at Brandeis University. Welcome, Professor Altman. With the passage of
National Health Reform, we expect new pressures upon the health care system,
particularly in the primary care field, as up to the 30 million Americans will be
coming into the system. You were involved in the Massachusetts Reform Effort
and they experienced considerable pressure on their primary care infrastructure.
But it seems to me that the difference in the federal reform effort is the plan to
invest $11 billion over the next five years in building the capacity at community
health centers, a major source of primary care for the uninsured. Do you think
this investment will mitigate the problems? And if not, what are some of the
strategies to help address the primary care shortage problem?

Stuart Altman: We did, in Massachusetts, witness not problems, not across the
whole state. As a matter of fact, those areas where they had expensive amounts
of community health center, the pressure was much less. But out in more rural

areas in the western part of the state where there are both few primary care
physicians and few health centers, that’s where we saw the biggest problem.
Now, when we get to the federal level, the Federal Government realizes this and
so they have made major investments in several areas. One, you mentioned,
which is to expand the number of community health centers, particularly in rural
areas where they have traditionally not been and where we are likely to see big
increases in demand. But the more fundamental problem is how do we both get
more providers into primary care and how do we restructure primary care so that
the number of providers that are in it can do a better job. And I think in both
fronts, the legislation tries to deal with it.

Margaret Flinter: Mr. Altman, let’s focus on Massachusetts for just a minute more
if you will allow us. You co-chaired the Massachusetts’ Health Care Task Force
for a number of years and ultimately Massachusetts was able to enact major
health reform several years before President Obama tackled it. Many people
have compared the Massachusetts’ process with the National Health Reform
process, but there is one really compelling difference and that’s the bipartisan
support that the Massachusetts’ effort received really right up until the enactment
of Commonwealth Care. Can you share with us what was fundamentally
different that such a level of bipartisan support was possible in Massachusetts
and that we just didn’t see that on the national level? And has that bipartisan
support remained constant in these first years of implementation?

Stuart Altman: Remember, we had a Republican Governor Mitt Romney, who
actually was very much involved and was really much of the force that got this
going. So, from the very beginning, we had Republican support. Second,
Massachusetts was in a different place. It already had a very expensive insured
population. So, the lift, if you will, to go from where we were to where we want to
be is much smaller than nationally. And then third, and most people don’t realize
it, we had a rich uncle that helped us make the Massachusetts plan work and
that’s the Federal Government which helps support the Massachusetts reform.

Mark Masselli: Professor Altman, the role of health care economist is a little
large during that Health Care Reform today. We were pleased to interview some
of your colleagues, including Dr. Davis and Dr. Reinhart here on Conversations.
It seems the question to the economists have not just been what it will cost but
how would people behave post Health Reform? How can we motivate people to
behave differently as in using primary or preventative services more? And how
can we change our financial incentives to reward better health outcomes, not just
doing more procedures?

Stuart Altman: So there is no question that we, as patients and as consumers,
could do a better job. On the other hand, most economists, that I know of, do not
believe that at least in the short run, prevention could really fundamentally
change the cost curves. Over long period of time, no question about it, but we
are talking about decades. Even if we were to change and change our eating

habits and our exercise, it's a long-term process. And unfortunately, a lot of us
get sick from things that have nothing to do with our own conditions. And it's
when we get sick that we spend most of our money. So again, we need to look
to much better understanding of what motivates people to change. Economics
has a role. I think incentives make a difference, financial and otherwise. But I
would not expect that even if we do change the cost curves by themselves will
bend that much. And in the short run, they probably won't bend at all.

Margaret Flinter: Dr. Altman, your involvement in National and State Health
Reform really goes back a long way. You were at the old Department of Health
Education and Welfare in the early 70s, maybe with Dr. Davis, and many others
who helped shape the legacy of community health centers and the other War on
Poverty programs. I have read that you designed President Nixon’s HMO
Legislation and even drafted a plan to offer all Americans a federal health
insurance option, something oh we might call a public option in today’s world.
But you did not support the Clinton Plan, as I understand it, because it called for
a much too massive restructuring of the health care system. Help us understand,
if you will, why this Health Reform Legislation we just passed one-year support,
was it the right legislation or, as to paraphrase Winston Churchill, can you can't
on the Americans do the right thing when we exhausted all other possible
options?

Stuart Altman: The Clinton Plan really was a massive restructuring of the whole
delivery system from the ground up. And well, it was ingenious and I am
marveled at the ingenuity of it. I just felt that the American people were not
willing to take that much of a radical change. It was much more than just
financing. It was actual delivery, fundamental delivery reform. And my
cautionary note to them, which they didn’t listen at the time, was this is too much.
You see the Obama people and the Hillary Clinton people when she was running
learned the lesson that they needed to leave the delivery system alone, that this
was to be a financing system. Now, many people have criticized the current
legislation because it didn’t do enough to control health care cost, and that’s
correct, they didn’t. And from my point of view, they were absolutely right. Had
we tried to fundamentally change the delivery system plus covered everybody,
we would have run into the same set of problems that the Clintons ran into.

Mark Masselli: Today, we are speaking with Stuart Altman, Health Care
Economist and Professor of National Health Policy at Brandeis University. I think
we all heard the slogan of this summer “tell the government to keep their hands
off my Medicare.” You have devoted a lot of study to strategies to preserve and
protect Medicare. You have also written about the need to reform the payment
system in Medicare. I am not sure our listeners understand the ideas upon
bundled payments and accountable care organizations or even the old DRGs are
just so much jargoned to non-health policy people and health professionals alike.
Can you make it simple for our listeners, how could change in the way we pay for
improved care and save money?

Stuart Altman: When Medicare was set up, it became a cost-based system. If
you spent the money as a hospital, you got paid for it. If a doctor could charge
whatever they normally charged and the government would pay for it. Now, over
the years, that system has been modified and substantially changed, so that now
hospitals for example are paid a bundled payment. So if you, as a Medicare
patient, go in and you have particular illness, that illness is categorized as a
certain diagnosis and the hospital was paid a fixed amount of money for that
whole stay. The government no longer pays the hospital just whatever their costs
are and it doesn’t pay the hospitals by each individual service. And as a result,
hospitals have an incentive to try to find the most efficient way to provide the
care. The problem is that that technique is only for inpatient care, it does not
extend out to outpatient, day-to-day care from doctors before you go into the
hospital, it doesn’t extend out to long-term care or post acute care. So the idea
is, can we develop a bundled payment which is more inclusive. Now, it could be
based on a diagnosis. So if a patient is suffering from diabetes, there would be a
certain amount of money that the providers who provide the care to the diabetic
would receive a bundled and then there would be an allocation among the
providers. Again, the hope is that by doing that, we would not see a lot of
questionable care that’s given, because let's face it, a lot of care that we receive
really is the limited use.

Margaret Flinter: Professor, we talked a few minutes ago about the role of
community health centers, particularly around accessing and meeting this surge
and demand that we might see. But I would like to get your thoughts on and as a
delivery system as well, the legislation, as Mark had mentioned, has an
unprecedented investment in funding the growth and expansion of health
centers. But they really represent a delivery system that’s different than what
exists as a dominant form in the United States which is still the small
independently owned practice. And instead, it's a pre-model for the providers, it's
a team model, certainly nurse, practitioners, physicians’ assistants or primary
care providers along with the physicians. And maybe even more than that, they
have really embraced some of the concepts like planned care and the chronic
care model. What are your thoughts about the health centers as a delivery
system model in the United States? And do you think that that model is going to
become the dominant paradigm in primary care?

Stuart Altman: I think we need to separate this out. The health centers have
been and probably will continue to be an important component of care, primarily
in lower-income areas, primarily in areas that are very hard to serve. They will
not be the dominant delivery system for the majority of Americans. The reason
why there was an expansion of primary care in these areas is that many of the
uninsured live in these areas. So it made sense to build up the delivery system
in those parts of the country and those components even with all parts of the
country where the uninsured are going to live. However, we have a primary care
problem for all of us. And what we need to do is to change the delivery system in

the community hospitals, in the physicians’ offices, in the clinics where we, the
majority of Americans live, because this problem is not unique to the uninsured.

Mark Masselli: I’ve been concerned a great deal about the character and the
quality of the next person who runs the center for Medicaid and Medicare
Services, CMS. What are your thoughts on the name being flooded by the White
House, Dr. Don Berwick, who currently heads the Institute for Health
Improvement?

Stuart Altman: Well, I’ve known Don a very long time and I have tremendous
respect for him. So I don’t know any other American that has had the impact on
our health care system that Don Berwick has had. I mean he created IHI, the
Institute for Healthcare Improvement, to focus primarily on the increasing safety
and the quality of care. And according to many estimates, as a result of the work
that he and his staff have done, more than 100,000 Americans a year are alive
as a result of the delivery system becoming more concern with safety and with
improving the basic level of cares so the quality improves. Now, with that said,
he is going to have a very tough job. Medicare is critical for change in the
delivery system, not only for Medicare recipients, what most people don’t realize
is that we are so intertwined. So for those of us who are not on Medicare, how
Medicare pays, what it doesn’t pay for, what kind of incentives it sets out affects
us all.

Margaret Flinter: Well, it's an exciting nomination and we will be following that
one closely. Professor Altman, we like to ask this question of our guests who
have such a great pulse on what is going on. When you look around the country
and the world, what do you see that excites you in terms of innovation and who
should our listeners at Conversations be keeping an eye on?

Stuart Altman: What I am excited about is innovating in the community and
making our community-based system work better. And one thing that’s in the
legislation that I hope works, and Don Berwick will have a lot to say about this, is
that Innovation Center in Medicare that will allow Medicare to sort of behave in a
different way than it’s done in the past and be much more experimental in moving
these unique delivery systems out to the community.

Mark Masselli: Today, we have been speaking with Stuart Altman, a Health Care
Economist and Professor of National Health Policy at Brandeis University. Thank
you for joining us. Each week, Conversations highlights a bright idea about how
to make wellness a part of our communities into everyday lives.

Margaret Flinter: This week’s bright idea takes a look at our very own Wesleyan
University and the change in the dining hall that’s saving the school money and
improving student health. Last fall, Wesleyan’s main dining hall in the campus
center did away with its plastic food service trays joining scores of other

universities that have made this move. One student, senior Sid Berkman, who’s
experienced the change, thinks it's a good thing.

The main reason that is given I think is to save water and like keep from cleaning
in things, but I think it's more beneficial health wise because you can’t carry as
much food without it so you are not like feeling the necessity to like finish
everything you crammed on to your tray.

The change was spearheaded by the Wesleyan Student Assembly Dining
Committee with help from the Environmental Organizers Network after
ARAMARK Higher Education Food Services released a study on the benefits of
going trayless. The study of 186,000 trayless meals at 25 Colleges and
universities found that traylessness reduced food waste by 25% to 30%. Going
trayless also eliminates the half gallon of heated water needed to wash each tray
after use. In one semester, the average school saved up to 200,000 gallons of
water. While the Trayless Initiative was first supported for these environmental
and economic reasons, the health benefits of eliminating trays also abound.
First, traylessness makes it easier for students to make healthy choices about
their portion sizes. Instead of piling different plates and bowls and cups of food
and drinks on their trays without much thought, students are now more conscious
of what food they chose. This means they are less likely to overeat making the
threat of the Freshman Fifteen a little less problematic. The money that dining
service saves through reduced waste and water energy use also helps ensure
that schools can afford to continue providing students with a wide variety of
healthy food options, including fresh locally grown produce. Wesleyan’s decision
to do away with trays is part of a larger nationwide movement. Middlebury
College in Vermont led the way in 2006 and was closely followed by Skidmore
College and Brown University as well as many more. Over 100 schools have
now made the change and colleges and Universities are not the only places
going trayless. Last month, New York City Public Schools announced trayless
Tuesdays, a once-a-week experiment with traylessness. Although some
students at Wesleyan and elsewhere initially bogged at losing the convenience of
trays, they have since settled into a new healthier routine. Reducing waste and
improving student health, now that’s a bright idea.

Margaret Flinter: This is Conversations on Health Care. I am Margaret Flinter.

Mark Masselli: And I am Mark Masselli, peace and health.

Conversations on Health Care, broadcast from the campus of Wesleyan
University at WESU, streaming live at Wesufm.org and brought to you by the
Community Health Center.