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Entrepreneurship in Society. >> Jeanan Yasiri: This is
through the University It is a course that is offered
School of Human Ecology. of Wisconsin
As we begin today, I'd like to I'm Jeanan Yasiri.
in supporting this course. extend thanks to our partners
Relations, the UW College of The UW Office of Corporate
support, and the Ewing Marion EKauffman Foundation for theirl
financial support.
committed to advancing academic education in entrepreneurship.
Additionally, we'd like to thank
Public Television and their University Place crew for taping
today's lecture.
our special guest today, Kevin I am quite pleased to introduce
State Sponsored Business. WellPoint is the largest health
insurance company in the United States.
In his role with WellPoint, Kevin leads the group's Medicaid
business which currently serves 1.8 million members in
10 states.
management of health coverage through government programs such
as Medicaid, the children's health insurance programs and
other publicly funded programs
underserved populations. for the uninsured and otherwise
under Governor Jim Doyle, Kevin served as secretary of the
Department of Health and Family Services for the state of
Wisconsin, leading all public health and care delivery
services to over 900,000
And for a decade prior to that, he served as president and chief
administrative officer at Dean
multi-specialty integrated Health System, a billion-dollar
a physician group practice of healtmore than 500 doctors with
and 3500 employees. I asked Kevin to join us today
as we conclude our semester and discuss entrepreneurial thinking
in the healthcare industry, particularly in this era of
healthcare reform.
Kevin Hayden. Please jo[APPLAUSE]elcoming
Kevin Hayden: Good afternoon. I should disclose also, I'm a
proud graduate of the University
privilege to live in Madison of Wisconsin in 1984, have the
it's great to connect again with and, on a deeply personal note,
position to have a conversation with you today about a topic
that you may not be thinking a
of millions of Americans that literally, as we sit here todays
and have our conversation, don't
be pregnant, are concerned about have access to healthcare, may
they don't have the ability to the health of their child but
So I want to begin a get care.
Medicaid around the business conversation with you to discuss
affects Americans. practices of Medicaid as it
are currently on Medicaid. And we have many Americans who
to identify yourselves, but I Ansuspect some of you may haveou
direct experience with public assistance programs either
through family members or people
And what I want to make certain that we leave the conversation
today with the ability to answer
you enter this society around the innovation about Medicaid
and the transformation of Medicaid as it becomes a very
rational delivery mechanism to
income Americans. As Jeanan alluded to, I have a
unique background and a viewpoint on this.
The company that I represent we provide Medicaid managed care
services to almost two million
We do it in Wisconsin in the Americans in the 10 states.
We also do it in far away places greater Milwaukee area.
for many, many Americans without like southern California, where
their lives would be the safety net of Medicaid,
So I want to talk today about where Medicaid is going and also
where it's been, but most importantly how it fits into the
discussion around healthcare
And as we approach, again, reform.
the issue of healthcare reform another presidential election,
Americans to understand and afford healthcare, Medicaid is
going to become, I'll suspect,
So I want to educate you on and have a conversation with you,.
and then I'll have plenty of
counsel about what you see.
Oops, excuse me,
I'm just going to-- Excuse me for just one moment,
please. I just clicked ahead a little
fast, so I'm just going to start
Thank you. from the beginning.
background. II also want to talk aboutt
demographic challenges so you understand that, discuss reform
and be in a position to talk
And I must say, while I just about technology and innovation.
because I never had the ability turto have computers in myold
classroom when I was in college here, and so as you take notes
or understand things, you understand exactly where
technology fits with healthcare.
Medicaid is I want you to understand the role of Medicaid
in our system, who's covered, what drives the cost of
Medicaid, and what is covered under Medicaid because many of
you, I suspect today, are carrying some form of insurance,
either that you provide yourself
someone supporting you, and yet ofor folks who are on Medicaid,r
they're supported by the
First of all, Medicaid was a government.
as part of the Social Security program that was created in 1965
It's known as, in the government Act.
It's a program that, as we think parlance, Title 19.
have more citizens who become either unemployed, do not have
access to the private healthcare
the government for coverage. insurance markets, they look to
experiencing a multi-year recession in America, tens of
millions of Americans look to Medicaid as their primary form
of health insurance.
who are part of the Medicaid It also covers moms and babies
It also covers the disabled and members who require long-term
care. Many Americans who are in
nursing homes today are publicly
program. funded through the Medicaid
to you is it covers and spans So tboth the old and youngerake
generation of Americans.
federal funding to state It also is the largest source of
As you know, with 50 states and six territories, the federal
government is a business partner
and the majority of the funding wfor the Medicaid program comes
from the federal government.
the economy as we have citizens who lose their jobs, do not have
access to healthcare become financially eligible for
Medicaid, Medicaid is counter cyclical to the economy.
So the better the economy does, the less people need Medicaid.
The worse the economy does, and unfortunately that's the
environment we're in right now
Americans are seeking healthcare in America, more and more
This is a fact that you may not and phave thought about.caid.
Who's covered right now?
are covered in Medicaid. One in three children in America
your neighbors, people don't And the fact is that they are
card around with them to promote usually carry their Medicaid
covers so many children. that, but the fact is that it
able to address the needs of So the idea of prevention, being
certain that the young mom who children and moms and making
that delivery to term and that is pregnant and she can carry
at 23 or 25 weeks, which, we dunfortunately results invery
extraordinary expense and incredible hardship for the mom
and baby, our job in the
to identify that mom, get them Medicaid management business is
need so that they deliver a thealthy very, very productivey
baby. The other spectrum is that the
program covers over eight million Americans with
disabilities. These are usually members who
have needed care from literally birth and their funding stream
and source of services they receive come through the
Medicaid program. And then at the end of life
services, almost 70% of people
covered by Medicaid. in America's nursing homes are
while Medicaid is not talked a So the point of this is that
parlance, it's very, very important both from a standpoint
of coverage for many Americas and also provides the basic and
necessary insurance coverage for
What's covered? It's like, generally, the
insurance card that you may have.
It covers a comprehensive set of
It's also because it covers both services.
services between those age young and old members, the
the Medicaid program. specAnd it provides from ad by
behavioral health standpoint
mental health services in the almost 2United States.ing for
And so it's one of the programs that when you talk about
Medicaid, the historical
for those poor people. viewpoint is that well that's
through this presentation is Well, as I think I'll show you
respectable and, frankly, increasingly important level of
insurance coverage for many Americans.
What drives the cost? And this is the point I tried to
make before the slide had a little administrative problem.
The fact is it's
The better the economy does, counter cyclical.
If we have a recession like we're in now, more Americans are
eligible because of their lower income levels for Medicaid.
And as we look at the coverage
more groups like the disabled that are looking for additional
coverage because their income or
does not improve. And you also then have, just as
you have within the general medical population, you have an
ever increasing need for
improvement of quality of life technology and better
cost structure for Medicaid goes for members, and therefore the
It's one of the fastest growing programs in the federal budget.
So the slide portrays the number
categories. of pAnd as you look at all by
individuals, it covers almost 25% of the near poor, and these
are categories based on income
families, it covers, for levels, and as you look at then
income children and then 70% of inpeople in nursing homes.w
And this slide only portrays the
spectrum of coverage and covers many Americans, whether they're
young or old or where they
their own home or in a nursing happen to reside, whether in
So how do you become eligible for Medicaid?
It's income driven and it's based on the moniker known as
the federal poverty level.
a family of four, approximately And tha$23,000 in income.ay, for
So if you have come from a
below $23,000, actually $22,350, family of four, your income is
And it is, as you look at the national levels for children,.
because the program has been
that all children regardless of income have coverage, across all
states, as you look at all 50 states, generally children who
are covered under Medicaid if their incomes are about 250% of
poverty.
So if you're at an income of 241% is the exact number.
family of four, those children about $60,000 a year for your
the parents may not be. areAnd that is another policyeit
driver behind the creation of Medicaid was to make certain
that pregnant women got early coverage and great coverage for
themselves and their baby.
pregnant women of almost $40,000 And so you see coverage for
If you have $40,000 a year of income, you're eligible for
Medicaid coverage.
been added over the last 10 years really deal with what we
refer to as working parents or
incomes, they lose their jobs, jobless parents so that as their
also covered in Medicaid. And I show you this because this
is, if we were here 10 years
focus in on the jobless members ago, yor working parents.en the
And those are known as childless
But the point of this eligibility is that it's driven.
by income and as members' income
it's tested by the government, increases on an annual basis as
you may be eligible to continue on Medicaid or you may drop off
of Medicaid based on your income
insurance markets. and go into the private
Within the low income families, prenatal care and delivery.
You've got the focus on children
proper things that I suspect through immunizations, all the
child, and being in a position you've had when you were a
the ability to deal with the to make certain that they have
child. unexpected challenges of being a
hospitalization are covered So ER counder that.tal care,
Individuals with disabilities are covered.
Autistic children are covered.
HIV/AIDS patients. Children with cerebral palsy,
services, etc. Prescription drugs for those
only to show you the broad And I bring this slide to you
is afforded. coverage that a Medicaid member
individuals that are covered by Medicaid, many of them are based
in the community, and the idea
members is that the best way to take care of an older citizen is
to not put them in the nursing
their home and have them home, but rather keep them in
daily living. prAnd I know some of these aref
awkward topics, but many senior citizens end up in nursing homes
because they don't have the physical support to be able to
go to the bathroom by themselves
provided by an in-home caretaker so they need additional services
program those services are that through the Medicaid
So the member has a better provided.
home as opposed to having to go quato a nursing home becauseheir
there's no one there to help
And so you see now much more of a focus because of the aging of
our national population, both at
level, where many members are thbeing provided care in theirte
house as opposed to leaving the nursing home.
And as you look at the role of
reality of them is that many of them are old, they're funded by
public dollars and they cannot, frankly, compete with the more
private pay nursing homes that
different type of population. And the fact is that as you
watch the Medicaid program over the years ahead, you'll see more
and more of a focus on investing
at home as opposed to being in a in services to keep the member
And any of you who have relatives or friends who have
been in nursing homes, I think
I'm speaking to from a quality you understand precisely what
And then we start to look at of life standpoint.
And long-term care payments are, long-term care payments.
long-term care, services such as again, those services for
services that supplant nursing nursing home services or in-home
And the reality of it is that the nurse long-term care
industry almost half of the funding nationally comes from
the Medicaid program. So as you either go back to your
home here in Madison or return
live over the holidays, think about nursing homes that you see
as you're driving by them, etc, and think about the fact that
almost 50% of the funding for that facility comes from the
federal government through
low income Americans that's Mwhere they spend their final
days in the Medicaid nursing
The reality of it is that Medicare, which is the other
partner to the Medicaid program,
the predominance of the funding alscomes through the Medicaidbut
program.
important is that the Medicaid The other item that's very
partnership between the state and federal government.
And so for every dollar that is spent on Medicaid, roughly
43-cents of that dollars comes
comes from the Feds. from a state government and 57%
the budget deficit discussion right now as we watch TV tonight
or on the Internet, the discussions around how do we
fund healthcare going forward is
the spend of dollars for really based on the dilemma of
that are now on the Medicaid Americans who are out of work
come up with more of their program states are needing to
the federal government has to percecover more of that.g and
So you see the direct effects of
money also being matched by the federal government and you see
then the indirect of the
Medicaid members seek care, they Medicaid program because as more
partners to provide those clinical and other sociale
services so jobs are created by that and you also have employees
who are now in the healthcare sector serving the Medicaid
member. So the Medicaid dollar is not
only fueling the direct investment in the member but the
downstream effect on jobs and other, if you will, community
investment assets.
but this one I want to leave you I hope I make a couple points,
As you think about Medicaid, the with.
counter cyclical to our economy. increase of Medicaid is
amount of dollars that have been The last three to four years the
dramatically because our economy spent on Medicaid have risen
And so as we recover in our economy and the economy gets
better, the Medicaid program
off. investments generally taper
So as we have a good economy, Sless Medicaid spending..
Unfortunately, now a challenging
And the reality of it is that 1% economy, more Medicaid spending.
rate equals a decrease in 3% to 4% of state revenues.t
Well, why is that?
collecting taxes from workers so It's because the state isn't
they're not paying payroll when people are unemployed
state income tax, and therefore tstates have less dollars.nd
So therefore the reality of it
unemployment means another is that 1% of increase in the
health programs. million Americans are in public
is very critical as we think The counter-cyclicality of it
And this is why, regardless of about the funding issues.
the focus in on what do we do whatabout funding the publicad,
assistance programs, as Medicaid
so critical because millions of Americans are out of work, they
are not paying taxes but yet
healthcare. theAnd that's why Medicaid isfor
counter cyclical to the economic
The other significant point is cycles that affect the nation.
babies are generally pretty that very healthy. moms and
The majority of births are
reality of it is that the dollars that are spent in the
Medicaid program are spent by a disproportionate number of old
folks.
generally don't spend a lot of So my point is that children
The elderly citizens spend a resources.
And this slide indicates that as tremendous amount of resources.
population splitting it, 25% of the population spends 70% of the
funds in the Medicaid program.
towards the elderly population And the dollars are skewed
on a daily basis and the acuity becauof their healthcare. have
So the constant 24/7 care that a
home is quite different than a member requires in the nursing
and the baby and the mom go home mom who has a normal delivery
And the point is that this is so three or four days later.
in the years ahead because as imyou hear about the Medicaidout
program and the national debate or the debate in your state
about healthcare, a lot of the
what do we do about this spend focus from the policymakers is
are aging, we will consume more at thealthcare resources ands we
therefore the ability for the state government and the federal
government to fund this is
And I think we all know in this room the demographic trends
around aging. So this slide, if I came back
five years from now and we came back for a reunion with Jeanan's
class, the reality of it is I suspect we'd see this proportion
driven even higher, a smaller proportion spending a lot more
of the healthcare dollar. Population health factors are
very, very critical.
where we live, the socioeconomic And the reality of it is that
drives a lot of the cost issues statusof our healthcare.born,
And I can tell you, and I know I
from Madison or from Wisconsin don't know how many of you are
Wisconsin is a very healthy histostate as a state.rally
However, if we were to jump in a
miles to the east in Milwaukee, Uor frankly to be very candid5
with you, 10 miles from university campus, parts of
Madison, you'd find a whole different story.
You'd find children that are
they've got, their home environment and all the things
that drive good development of
missing, it creates more expense children, if those factors are
And the reality of it is that people of lesser income are
affected more due to the
which they're born. And so the discussion around
poverty and socioeconomic issues
in trying to improve the quality are key drivers and key partners
members. of life for our Medicaid
because living in an environment And I really like this quote
undermines healthy practices and that often fails to support
And the point here is that our behaviors.
our cost factors which are life condition drives a lot of
health factors. So as we look at Medicaid, whenn
Medicaid was created in the 1960s by President Johnson, the
theory was let's take care of moms and babies and make sure
that young moms can have healthy
person in this room or in the chiUnited States that wouldt a
disagree with that ambition.
society has continued to age is Thethat there's, not only theour
current population of children
care of, but the new poor. and moms that need to be taken
friends that three or four years And these are folks, and I have
UW Madison, that were engineers athat worked for an auto plantf
maybe about 50 miles from Madison, their children are on
CHIP, Children's Health Insurance Program, publicly
funded Medicaid program.
did they think that their kids Never in their wildest dreams
program, but they lost their would be on a public assistance
healthcare, their benefits ran jobs, their children needed
eliminated, they couldn't find out after their jobs were
needed care and their kids on work are on Medicaid.ldren
I tell you this not to spook you
because this is a whole new orconfounding factor of theat
challenges with our economy in
Citizens who never thought with their good degrees and education
that their children would ever
assistance program. We then have the aged, blind and
disabled and these are the
genetic and birth challenges are members who are because of
support from the federal in a position that require 24/7
through the form of Medicaid. goThe emerging cohort, and thet
cohort is a term that we use to segment the different types of
population that we serve, is a
And ladies, you can pause for a moment, this won't be addressed
to you. Childless adults are generally
males between 19 and 64.
occupations that are a little more high risk, high risk being
defined as auto mechanics, other
where there's a little more jpotential for personal safety,
challenges, and these are members that have not had health
insurance ever. And they tend to be the fearless
that I don't need to go to the
immunizations, I tend to smoke doctor, I don't need to get my
average person, and these are afolks that have not had accesse
to healthcare because their employer doesn't provide or they
couldn't frankly afford the premiums.
I can tell you when I was 19
premium of $1,000 a month for healthcare for myself or even
$150. And I tell you this in the
spirit of this population now,
cohort is now being offered insurance through many Medicaid
programs, and let's think about this for ourselves.
If we have not had the ability
we've been scared of the bill that we're going to get from the
ER or the physician, we're in a position that we tend to avoid
healthcare, we don't get our
annual checkup, etc, and as that immunizations, we don't get our
through the Medicaid program, I tend to go to the doctor, get my
knee fixed, get the prescriptions I need, get my
allergies taken care of because prior for having my Medicaid
card life was pretty difficult
I was always avoiding the ability, I don't want to go to
the doctor because I can't
So these folks, when they receive their Medicaid insurance
card, they experience what's
For every dollar that they called pent up demand.
three dollars in healthcare receive in expenses., they spend
They're getting their knees fixed, they're getting their
prescriptions, etc. And the childless adults is
another coverage pool of members
Medicaid programs. who are now covered under many
they don't get coverage through Athe Medicaid program and theyf
end up going to the emergency room or to a hospital without
coverage, they're going to be in
ends up having a large bill that the position that the hospital
hospital cost shifts those can't be paid, and therefore the
the private sector who have insurance which drives up the
cost of health insurance. And this is one of the
fundamental discussions going on
what's the proper role of in Medicaid and Medicare andout
private insurance in how we deal
healthcare funding. But I point this out that thesen
populations are distinct, they're different, but yet
they're interrelated because
funding to move forward. they rely on state and federal
is depending on the leadership, Teither republican or democrat,t
democrats tend to have more of a
coverage for more Americans is political view that more
republican view has been less becoverage, more focused onal
certain populations like
in a position where it's children and moms but not being
And I don't mean to give you a a full coverage for all folks.
a dynamic that depending on what political observation, but it's
program will have a philosophy state you're in, your Medicaid
reinforced by the political leadership about their views of
federal funding and entitlement.
challenges to effective care There's also incredible
Within the Medicaid population, and again I'm speaking at a high
level, we'd have to break this
generally you have higher rates of asthma, premature births and
hospital readmissions.
challenging is that contrary to the insurance card that you mayy
be carrying, either yourself or through parents or someone
supporting you, is that many
the program for less than eight membersmonths on average.stay on
So when we talk about moms and
program, the mom starts with babies, they're normally on the
She is known as presumptively eligible because she's pregnant
which is, in effect, a coverage category for Medicaid.
She delivers the baby, the baby becomes Medicaid eligible upon
birth, and depending on, and
of Medicaid is difficult, in this is where the administration
then only stays with the program many cases the Medicaid member
It's because they must re-enroll less than a year.
In many cases they have to go to on an annual basis.
office. And I think if I asked you could
you tell me where your local
I don't know if all of you would county human service office is,
must go through that process and know the answer to that, but you
etc, to do that, and for many eAmericans just like you and I,
that's too much of a hassle, I'm
So they drop off of Medicaid, they're not covered and then
they're uninsured.
cases these members are The other transient.at in many
They don't have permanent homes and to be very honest with you
we don't have to go further than
Medicaid members who are downtown Madison to meet
they're not on Medicaid because they haven't gone to the publict
office to sign up or they don't have a phone number or the paper
work that was sent to them never
moving between shelters. got to them because they're
sort of a woe is me sort of poor And if you think I'm presenting
all. social service viewpoint, not at
of this is how the Medicaid member in Madison is affectede
today.
programs is multiple languages, Thmultiple cultures, multipleaid
ethnicities, and so the program is challenged by dealing with a
population that's very, very
The challenge to the Medicaid business, and again just to give
you a very quick preview of our business model, our company,
WellPoint, we're known in the local markets as Anthem or
UniCare, our company will respond to a request for
proposal from state government. And what they will want is an
insurance carrier like ours to
of the services that we'll give them pricing and a vision
residents. provide to serve their state's
business in Wisconsin or Indiana And so whether we're doing
RFPs require us as a company to commit to a provision of level
of services, a level of access
hospital and physician networks into support the needs of ourper
members and then all the social service supports they require as
well. But the challenge is that you
have not only state budgets that, again as state budgets are
challenged with funding Medicaid, the level of funding
and the eligibility levels are
people covered, you have the decreased so that you have fewer
management challenges, which I issues of population-based care
from state to state. alluded to, and programs very
has historically been viewed as Ana quite generous Medicaidin
benefit state.
the deep south, you would find a Whereas, if we went to parts of
structure provided for Medicaid different ormembers.inny benefit
And that's driven, not only by
also by the political philosophy the revenue of the state, but
either governors or state of the slegislators. who are
And I tell you this because depending on which state it is
and which election has just occurred, you can see a strong
flip in viewpoint towards how Medicaid members are served.
The other item is that we have
Not only the great technology is skyrocketing medical cost.
afforded to Medicaid members, but the reality of it is that
the cost structure in healthcare
federal government and state far exceeds the ability of the
And as you experience in the government to fund that.
we simply have a shortage of traditional insurance markets,
care in the specialties of doctors, particularly in primary
internal medicine. family practice, pediatrics and
gentleman or lady climbing the So as we think about this
we are, from a business laddstandpoint, very, verythat
challenged because the risk related to serving Medicaid
members is much different than
insurance population. seSo, we now are in the pointial
where we're talking in the
where we're going to be with neighborhood of 2012 to 2014
And I'm not here at all to healthcare reform.
that, but there have been lots discuss a political viewpoint on
really based on the example of of things about reform that are
agent of change. what's called discontinuity
crisis creates a different And this is something where a
We saw this and I've identified three crises that I think we're
all familiar with.
when there was a potential that the Tylenol that you took waso
not good for you; it was
taking aspirin. We saw the Lehman Brothers issue
with what happened the stock
and then the offshore incident market a couple of years ago,
the Gulf two years ago. witThese were major crises.in
From that, you see then in
something forces a big change. discontinuity is the idea that
certainly carry one myself, is Examples of that, and I
innovations. the iPad and all the Apple
driven through discontinuity. AAnd out of that then you alsore
have the idea of creative destruction where an industry,
is anyone here carrying a camera
Well, it's because we all carry that digital cameras. now?
10 years ago, if I asked the
out our camera with film. same And so you saw digital pull
photography basically replace Kodak.
You see the same thing happening
there's major changes that in the airline industry, and
industry performing and being dreplaced by something else.n
And the point here is that we see healthcare reform in this
same view.
that's been in existence for a It's going to replace something
So as we think about the long time.
and the Affordable Care Act which the president signed into
law in March of 2010, is I will tell you, folks, while we might
have a couple years of age
to share with you I think it is difby far the most disruptiveing
public policy that we're going
Not in a negative or positive sense but because of the overt
attempt to make certain that
healthcare. And regardless of your political
viewpoint on republican,
not framed around that, it's the democratic, etc, my comments are
going to have almost 20 million Americans that are eligible and
will be carrying an insurance card for the first time.
And, again, some of you in the
to this with yourself or with rfamily members or loved ones,d
where you avoid care because you
for care. You don't go to the doctor, you
don't get things fixed, you wait
infection because you just don't out the cold, you wait out the
20 million Americans in 2014 who have the ability for the funds.
will not have to do that. And the Affordable Care Act,
regardless of your political
program, its past practices and its policies, as an expansion of
coverage lever for those
It also is going to be looking Americans.
insurance that we're used to in health insurance, it's also
going to be affecting the ability to deal with long-term
care and the provision of those services for members who are
seeking daily assistance and
But it's almost a one-third expansion of the population
that's going to be eligible today for insurance.
So if we're sitting here in 2015, there's 20 million more
Americans, many of them in the
have insurance coverage for the stfirst time because they arenow
eligible from an income standpoint.
And it is, and I was only seven years old when the original
Medicaid Act was passed in 1965,
I'd be lying through my teeth, and if I told you I remember it,
look back if we met 10 years but I'll suspect that when we
conversations around healthcare from now andreform?member those
I think this is going to be from
debate standpoint one of the a public policy and national
contentious discussions around richest and frankly most
government to expand coverage for Americans and have the
federal government pay the
And so it's going to be a debate majority of that share.
in and paying attention to, but tthis expansion is, this is ad
mega trend in our lifetimes.
look out into 2019, we're going Tto have approximately 28% more
people covered and we're going
spent by the federal government because one of the overt aspects
of ACA, the Affordable Care Act as that acronym is known as, is
the fact that states don't have the money to do this, and so the
federal government is overtly accepting the responsibility
under current federal law to
that 28% of Americans. fund the expansion of almost
citizens because the federal So this is a big deal for us as
for us to put it on our tab to government has said it is time
have coverage. cover these American who do not
expansion is that if everyone has insurance, the cost shifting
that currently going on in the
one who carries an insurance current system, meaning I, as
insurance because you don't have card, I pay more for my health
they're trying to get at. It's a very detailed discussion.
I could go on for a couple days about the politics and policy
behind it, but the reality of it
passed with the intention of the is the Affordable Care Act was
and saying it's our job to pay federal government stepping in
And that's what spawned the extraordinarily contentious
debate around the proper role of
therefore states to fund it. the federal government and
solutions coming out of the We also aexpansion.o see new
And the eight nodes that I've identified is really the
emphasis around evidence-based
For instance, when you go to the care.
and maybe some of you are training to be doctors if youd
have that privilege, most of
evidence-based algorithm. The science says if I do this, I
will get this outcome.
that because in the hands of the There's going to be much more of
electronic medical records, web-based technology, things
that today are still emerging but over the next 10 years
you'll see these things become, frankly, very, very standard.
And the ability to manage not just simply your cold but if you
have diabetes, which is known as
enabling technology and evidence a chronic care disease, that
the position to really try to deal with the cost issues going
forward.
of knowledge around, not only Athe basic disease issues, buton
emerging issues, whether it's stem cell research, etc, there's
so much more knowledge in the body of medicine that we will
see really demanding new
that. And I can tell you as one whot
has been intimately involved in prior life with the
implementation of electronic
records, when you move to that health records and medical
from paper, it's much better for new environment and you're away
for the patient and, frankly, for myself on my iPhone I canr
talk with my doctor right now if
couple examples of that. I need to, and I'll show you a
spare time of healthcare reform Nwe've talked a lot about the
exchange. And the exchange is a
marketplace that will allow a consumer to purchase or
understand the choices in front of him or her about health
insurance.
cases, electronic web-based, and And it's going to be, in most
be able to go to an exchange, whawhich will be in effect a to
shopping mart, you will simply
yourself, your age, where you reside, you're male or female, a
couple other variables, and you'll be able to go out and say
based on what you just told the database, it will come back to
you with the options based on your income of the health
insurance that you could
And what's really critical, where Medicaid becomes so
critical to discussion around healthcare reform is that the
federal income levels have been set so that approximately
20 million more Americans will
federal subsidy, meaning the be eligible for some form of
part of your health insurance federal govpremium.paying for
So if you have not had access to
in 2014 based on your income. heaLet's give you a specificly,
number. If you're single and you're
making $30,000 a year and your
insurance, you'll be able to go to the exchange, to the website,
and based on the information you
will insure you. provide them, pick a plan that
critical because Medicaid members, the fact is they don'ty
always remain poor and stay in
As their income goes up, they'll Medicaid.
subsidies from the federal be able to receive federal
insurance in the insurance government to purchase private
Our company has a lot of private markets.
government business. insurance outside of the
certain markets where you'll be Anable to access both ourin
government business if you're on
insurance. Medicaid and then private
candid, it's an emerging policy And the exissue. is, to be
The federal government is spending a large amount of money
and lots of resources developing
it, but in essence it blurs the tconcept of you're in Medicaidd
and I'm not.
into Medicaid, you'll see Andmembers moving away fromng
Medicaid into the private insurance markets.
And this all starts in 2014.
national healthcare debate in the next presidential election,
a lot of it is around how do
Now, because in the United these exchanges work.
propensity toward state government control and states
control a lot of the decisions
to have 50 different exchange for their cimarkets.we're going
So what you see in Wisconsin may
see in Minnesota. be And let's say you live inyou
Wisconsin one year and you move to Minnesota the next, that's
going to impact you as well.
said they do not wish to Certain governors currently have
of an exchange. paThey don't believe in theent
philosophy of that, and so at that point the federal
government has said they will run the exchange for that state
that chooses to demit their opportunity to be in the
exchange business.
speaking to is very confusing Andand I'm doing it at a highI'm
level, but I'm trying to give you a sense of the impact where
Medicaid fits in emerging policy.
It really becomes a foundational
how more Americans become element for covered. think about
The other piece of it is that as
take notes electronically, I alluded to your ability to
them. pYou expect it in your health
insurance opportunities as well.
that poor people don't carry There's been historical bias
Well, the fact is that even though $35,000 is a lot of
money, when you start to rank income it's still in the lower
quadrant of income, 60% of those
And the reality of it is adults who live in poverty tend to only
have wireless service.
old land line. They don't have what we call the
line. Our family just got rid of the
land line because we decided we don't need it anymore.
And I tell you that because technology is also driving a lot
of the consumer choices for the Medicaid consumer.
We are looking right now and
if you have a smartphone and our have just announced the ability
in Medicaid, we can talk with company syou via video.a member
You can talk with a nurse about what your needs are.
It's in an encrypted, secure
smartphone to do that. manner, but it's on your
believe, become game changers because rather than in the
middle of the night when you're feeling horrible have to get up
and go to the emergency room and
one of our care managers say what do I do, you can call
you'll be speaking to a live electronically by video and
access to your healthcare information, and while we cans
argue is it as private as being in the exam room behind closed
doors?
it's quicker, it's more effective and it's in a way that
you want the information
And we really believe in this next phrase that we're trying to
connect Medicaid consumers to the right care in the right
setting at the right time.
the role that cell phones and Iother mobile technology play
in healthcare delivery. And a couple other examples for
you. Anybody here watch Jeopardy! ?
Well, Jeopardy!,
Watson basically beat the previous members, some of ther
smartest Jeopardy!
Our company, I'm proud to announce, is in a partnership
with IBM which owns Watson, and what we're using it for is, and
again I know some of you have been through this and it's a
very awkward discussion, but
diagnosed with cancer and your assume that you've just been
level of treatment for you and oncologist is deciding what
And again I don't want to be too what to do.
details, but the reality of it transparent on some of these
Watson, as a supercomputer, can read millions of pages of
clinical data, scour the
information on oncology treatment, cancer treatment, and
then provide an oncologist, the physician, with potential
sources of what to do about treatment.
And our company has just
IBM recently and we intend to, announced this partnership with
of this, this will be something asthat for consumers both innt
Medicaid and in the traditional insurance markets will allow
physicians to use technology
And some are very skeptical about this and have taken a lot
of shots at the idea of Jeopardy! in healthcare.
We see this as a very innovative
supercomputer to literally scour idea because of the ability of a
and evidence-based protocols to through gimprove ideas.ocuments
And while we may want to laugh
it's my kids or my wife, I want at the that right now.l you if
And so as we think about these
market to you about this things, I don't do this to
the idea of the orientation and the marriage between technology
and improved clinical care for
physician and hospital partners do their jobs more effectively
and more accurately.
programs where you have, if you Whave 4G, you can't have 3G,c
I'm sorry, if you have 4G technology, video chat
capabilities, in two to three years 4G will not be the
entrance point, it will be
Text messaging reminding the across all mobile technology.
prenatal vitamins every day. pregnant mom to take their
regularly. Sending them a text message
members that are, and these are not the top of the line Apple
iPhones.
phones that we can give to They're very solid quality
programmed to your nurse members that button one is
another physician that you may manager, number two is to
care manager you can call 24/7, and you actually get some free
minutes on that phone too.
cute about the role that cell phones play, but for many of our
members, they don't have
And for those who don't have technology.
them a cell phone with access to a cell phone, giving
is a 24/7 lifeline. prI can share with you, if Irs
had more time, specific stories where we both improved life for
folks and, frankly, saved a couple lives.
We members who were suicidal on the phone, were really having a
tough day and we were able to get a behavioral health
specialist on the phone to speak
improvements. And these are Medicaid members.
These are what society calls the
And so I'm very proud of our poor people.
industry that work to provide comthis level of technologyis
regardless of income. And then using visual
assessments for signs of disease
You've got a rash and being able or health.
and that's sent back to the nurse so that they can diagnose
what you got going on.
lifetimes very commonplace That stuff is going to be in our
Then we also, in Medicaid, clinical protocols.
delivery systems, we also work contrary to the traditional
called federally qualified very, very closely with what are
community-based centers. health centers or
city, you've seen these. And if you're from a larger
Community Health Centers, and Inthese are community-basedss
clinics that primarily serve
And they are set up to deal both people of low income.
income Americans but also be in the position that the member has
a full complement of services.
funding level from the federal And they receive a different
payment system does, but they gare very, very vibrant because
without those, and again whether
Milwaukee or New York City, many you're in Madison or you're in
lifeline and safety net, and of these clinics are the
clinics, to millions of Americans that that's where they
get their care and their family gets their care.
Also, in long-term care, which I
step back in our Medicaid quiz, sthere's fewer long-term care
members in Medicaid but they
the money in the Medicaid spend almosprogram.quarters of
In family care, which is a
program was designed under the program in Wisconsin, this
So if I am a elderly resident pand the choices are, you know,.
Kev, you got to go to the nursing home or you want to stay
in your house.
house. Well, I'd like to stay in my
partnership with the federal The state designed a program in
the member to determine what government that allows myself as
basis for the state to provide level of care I need on a daily
I'd be able to stay in my house being healthy, more functional,
not being in a position where I'm sent to the nursing home
where I frankly don't want to be, I'm isolated from my family
and care givers.
ability of long-term care Aservice traditionally provided
in a nursing home to be in my house, and, frankly, as a
long-term care person that needs
better quality of life. I'm not in a usually a 30- to
40-year-old building, known as a
in the room with hardly a flat nursing home, that has two beds
watching TV with someone I don't screen TV and I'm sitting there
And I say this not to criticize the current nursing home
industry, but the reality of it is if you've been exposed to
that, it's not a great
And so you see in Wisconsin and you see other states doing this,
a tremendous and profound respect for the person-centered
care model which says the member
state then helps in partnership with providers to provide that.
And I saw in my brief tour of duty in state government an
incredible quality of life for
these type of programs. tAnd this is the direction that
the long-term care programs are going across the nation because
the recognition that the best use of the dollar is not at the
end of life in a nursing home,
statistic, but this is an ainteresting one is in the laste
six months of your life you will
away through your paycheck in spend 85Medicare taxes.s you put
And so the point is as you get
spent historically is the last older, most the money that's
And so what we've tried to do in six months of your life.
do this is to make sure the Wmoney is invested to give thet
quality of life for the member
determine what goes on as opposed to I'm going to spend my
last few days in a nursing where
friends and the environment that I'm isolated from my family,
So we're hopefully driving down a road, and I put a turn in the
road because I can't tell you what's around that turn but I
suspect what it is, is we've got
healthcare and technology. an incredible intersection of
once was astronomically expensive we couldn't even talk
about that now has a return on
healthcare that's a great investmopportunity.mber in
You know better than I, as well as I, the issues around what
Facebook and Twitter and others provide for being able to keep
track of my exercise and diet routines.
Digital tools such as pedometers, scales for
chronically ill members who have
You step on the scale, it's transmitted via a wireless unit
to your physician and they can
two pounds over the last couple say it looks days.you picked up
They could say, did you eat too much?
No. What you've got is you've got
fluid retention in you and you
your kidneys. miThat's the type of earlyth
intervention with a wireless
save admissions that may cost dev$200,000 in healthcare. can
So we're going to see so many of
because of the promise of the intersection of technology and,
frankly, preventive management
And we see technology as really an open road and it's the
emphasis on it's not just for people that can afford private
insurance, it's really about how
partnership with the Americans do we make sure we have a
primary form of insurance. who see Medicaid as their
for your questions, your So with that, I'll leave chance
I deeply enjoyed the opportunity comments, and on a personal note
you this afternoon. >> So the students know that I
walk around with the mic, and you can applaud for Kevin.
[APPLAUSE]
applause. In fact, we have some of our
students in the back saying how much they appreciated kind of
your explanation of some of the topics that are more complex.
And I know that Kevin has a particular ability to be able to
do that.
questions, just raise your hand and I'll be happy to hand off
the mic, and I think that he's
almost anything. demonstrated he's able to answer
to Kevin that's somewhat broad, I'm but it does feed to theg out
Affordable Care Act, and you've sat on both sides of the fence
as a public servant and certainly as a steward of the
private sector of both medical
insurance side, when you think group practices as well as the
accomplish, what do you see in about what the act is hoping to
do you think it fails? terms of it succeeding and where
been enacted yet but from a high And I know it's not completely
Well, it's clear that if it's enacted in the current proposed
definition that you will have many, you'll have millions of
Americans that now have the proper right to seek care from
doctors and hospitals without worrying about how do I pay for
the bill. Because they have a form of
insurance that will allow for that.
The challenge is going to be the
for this because this is a major sustainability of the funding
talking about, as I alluded to investment and when you're
gentlemen who did not have the childless adults, these
and we know from our company and insurance, evidence suggests,
Indiana, it was called the supporting the program in
were childless adults that Healthy Indiana Plan, and these
spent a lot of money on getting didn't havecare.rance, they
And I think the issue is the
going to cost and how do we agree to commit to that funding
going forward.
investment. >> You know, if we were to havee
time to dissect Medicaid
necessarily had time today, but those who do sometimes say, well
they are the richest benefits in
People who are on Medicaid have access to so many different
opportunities that maybe some of
insurance would not have. From that perspective, Kevin,
and again from both of your hats, both public and private,
why don't we start to do some cost containment by cutting back
what Medicaid beneficiaries would have or forcing some cost
sharing?
that? A>> I didn't discuss this today
because this would take another hour, but as one moves up the
income scale, there is going to be the opportunity for more cost
sharing by the member.
Medicaid program was built But, again, I think that the
moms and children. primarily initially to serve
immunizations for children. And when you really stack up the
Medicaid benefit next to a
discussion becomes how did the private insurance plan, the real
insurance plan. eThey had the choices to either
add or subtract from that benefit menu, the federal
government has taken more of a
you're in Medicaid you provide uniform approach and said if
So employers, based on their this level of service.
include certain benefits that fare, in some cases, equivalent
or less to Medicaid or increase them based on their ability to
pay.
private sector discussion. And one of the things, that's a
right. The employer does have that
employer and they provide health When I go to work for an
based on their philosophy, their insurance, I'm getting benefits
those. financial capability to pay for
described in the course of >> One of the groups that the
happened to be those childless describing who's on Medicaid
becoming a vulnerable group abecause many of them will losey
their benefits in some states,
is a pare-back on Medicaid. likCan you describe for there
students what's likely to happen, at least for that
temporary time, if temporary, they start to lose their
benefits. Where will they go?
I think evidence would
care because they don't have suggest that they will not seek
which will further exacerbate the their clinical or healthfor,
problems that they've had, and
a hospital or clinic and say their ability to walk into
but I have no ability to pay I'd like to get my healthcare,
they exhibited before. for it, that was the behavior
not seeking care, which then So I think that you'll see folks
schronic care management, etc.n
It's possible it's a step backwards.
Hi, Kevin.
You mentioned that in the news My name is Brian.
healthcare reform and on more of recently we hear a lot about
about BadgerCare, can you maybe describe a little, just briefly,
I know it's a really complex
what BadgerCare is compared to issue, but basically kind of
That's kind of a big question. what Medicaid and Medicare is?
answer but a great question, but >> BadgerCare, it is a long
an expanded set of benefits and options above the basic Medicaid
program, both in terms of eligible, meaning those who are
eligible based on levels of federal poverty, and the benefit
schedule in which they receive
Medicaid. And the direction was made in
Wisconsin, and I believe you had
recently, he was one of the architects of this, was that the
focus was in on certain benefits
uninsured before BadgerCare of the poneeded.n that was
And what's facing the state right now is the ability to pay
for the schedule of benefits
benefit standpoint. tBut it's an enhanced programa
above the basic Medicaid
And extra eligibility, meaning benefits.
traditional Title 19 definition. covering more folks than the
Yes. >> Question over here, Kevin.
My name's Malka. >> Hi, good afternoon.
the Medicaid programs reimburse hospitals because I know there's
a certain amount of money allotted to each
Medicare/Medicaid program, and
and doctors can't get reimbursed what do you do when hospitals
expenses? toBecause I know you said foral
every dollar that they spend, you guys spend three dollars on
them. So I just curious how that works
and what would you do in a
necessarily afford it? situation where you can't
happen, so if you could answer I don't know if that does
Well, from a payer kind of both of those questions.
manage care company, we contract standpoint, meaning our Medicare
financial reimbursement amount. And that may be on a globalc
what's called DRG.
clinical condition that fits So if you have a certain
hospital a fixed amount of this category, we reimburse the
And it's the hospital's obligation to manage within
those funds.
we had hospital executives in the room, they would counsel mef
that in most cases, Medicaid
cost of the services they reimbursemenprovide.ot cover the
But it is, from an accounting standpoint, contributing to a
payment toward overhead of the
the member having no coverage, hospital, whereas contrasting
benefit from that. they would have no incremental
hospitals, and they're in a very The reality of it is for
tell you and I don't know if difficult position and I can
tell you that I think the yWisconsin Hospital Associationn
in our state has been a national
leaders to deal with the issue leader in working with our state
non-compensated care. Non-compensated care is a
sanitized term for not getting
member comes in. paid for the services when a
and are admitted to the hospital And if you break your leg today
could easily be $10,000. for a couple days, the bill
hospital would not receive that Ufull charge, they'd receive ae
fraction of that, but that is an
money versus having no reimbursement for the memberf
who's uninsured.
in Medicaid, under federal law, Anhave to have the ability toate
serve the poor and needy as part
But it's very difficult because in some markets we're paying 10%
of the total hospital cost or stay.
So the bill that the member would receive, Medicaid pays
10% of it and that's what the hospital accepts.
Well, oh, go ahead. >> I wanted to make sure I
answered your question. >> Oh, yeah, you did.
Thank you.
join me in thanking you. >> Well, I know the students
from WellPoint. Once aga[APPLAUSE]Hayden,
Kevin, the students and I wanted
to offer just a quick gift.