Jennifer Colamonico: Welcome to HMA's vital viewpoints on health care, concise conversations with experts that identify practical solutions to make healthcare and human services work better. I'm your host, Jennifer Colamonico, and I'm thrilled to be your guide as we explore new ideas for solving challenges that confound our uniquely American systems. Charged with delivering health and health care in a world that has far too much information and far too little wisdom, we'll aim to keep it simple, frank conversations about what it really takes to reimagine these systems of health and health care. Our HMA experts know how things work and don't work, and they have viewpoints on both the problems and solutions that are born from that experience. Vital viewpoints on healthcare is not just another podcast, it's your window into the minds of those steering us toward a healthier future. Subscribe now and together we will explore the hard earned wisdom that could change the way you think about your professional challenges. Our guest today is Tim Murray with Wakely Consulting Group. Wakely is an HMA company.
Jennifer Colamonico: Tim has been a health actuary for about 20 years, consulting, advising health plans. provider groups, solutions providers, and investors. As an actuary, he has a unique background in that he has seen the finance side, the equity side, the governance side, and the risk side of the business, so it gives him a more well rounded perspective to answer these questions and for our topic today around Medicare and value and how data can perhaps better steer Medicare toward an improved value for beneficiaries and for taxpayers. Tim, thank you for being with us.
Jennifer Colamonico: My first question is maybe a silly.
Jennifer Colamonico: One, but not unimportant.
Jennifer Colamonico: I find that while people sort of nod their head and understand what actuaries do, I'm not really sure that everybody always understands the value that actuaries bring.
Jennifer Colamonico: So when you go to a cocktail party and somebody asks you what you do, how do you explain what it is that an actuary does?
Tim Murray: Sure. Well, first, thanks for having me. And as you might imagine, actuaries tend to be kind of celebrities in cocktail parties, of course, so we're happy to fit that stature. When folks ask me, or even when kids ask what is an actuary? What does it mean? I'll generally describe it as we are professionals that use data and programmatic knowledge to predict the future. Sounds fancy and exciting, but we're using mathematical concepts and skills that are trained over many years to predict what is going to happen in the future. In the context of health actuarial services, which we hear at HMA for a few entities engage in, we're engaging in activities, trying to predict the future of healthcare costs, trying to interpret what different policy changes may mean for hospitals, for health insurance entities, for providers, for primary care providers, specialists, et cetera. So predicting the future is kind of the simple way to put it. And there's a lot of double clicking that happens to untangle what that actually means.
Jennifer Colamonico: So part crystal ball, part spreadsheet, is that kind of your tools of the trade?
Tim Murray: I'd say exactly. Exactly right.
Jennifer Colamonico: Based on everything you just said and all of your experience around the industry, you know, what do you feel like Medicare could be doing more of and less of to really sustain the program and continue to offer better value to beneficiaries?
Tim Murray: One thing that really stands out today is the intensive focus that CMS is putting on the supplemental benefits that are offered by Medicare Advantage plans. So really, the key differentiator that Medicare Advantage plans offer when you compare to Medicare fee for service is the additional supplemental benefits that are offered above and beyond the standard Medicare benefit design. These supplemental benefits look like a combination of dental, vision and hearing benefits. It includes fixed co pays, whereas if you show up at the PCP, generally speaking, in the Medicare fee for service world, there's a 20% part b coinsurance. Over the past few years, CMS has quite drastically relaxed the definition of what is permissible as a supplemental benefit. It's included a wide array of additional, I call them the fancy new supplemental benefits, but truly innovative service offerings, things like wheelchair ramps and assistance around the home. In home support organizations like Papa, their kind of tagline is family on demand. They're endeavoring to mitigate social isolation for seniors in the home, and a host of other examples of benefits that are offered. There's been an explosion in that space. The value of these benefits has doubled over the last several years, really since 2018. If you look to 2023 and 2024 statistics, the average value of those benefits has literally, literally doubled. CMS is looking back now and saying, well, we like the innovation, we like the creativity, we like the opportunity for health equity to improve through some of these really innovative supplemental benefits. But what do we have in terms of a basis for defining what's working and what's not working? And they've quite drastically and suddenly kind of throttled up the intensity and focus on data collection for all of the above, which will, over the, over time, enable them to refine and define what's actually working, what's not, which benefits. The use of those benefits are associated with good outcomes and more efficient delivery of benefits. This, this area is kind of a good example of headwinds that MA plans face in a sense, but also with a general interest by CMS of trying to evaluate where the healthcare dollar is going, really to supplemental benefits in this case, and whether it's generating the ROI that they, that they hope it, it would.
Jennifer Colamonico: So as an actuary, is that a good thing, to be able to have more data on these interventions to help better understand how to predict the impact on costs?
Tim Murray: Absolutely. I mean, over time, absolutely. No doubt about it. Having the encounter data, like really detailed data, which beneficiaries are using, which benefits when some of the benefits are more complex. So call flex cards or wallet benefits, where a member may have a debit card that enables them to deploy benefits towards an over the counter benefit at the drugstore, or they can use it to pay for dental co pays, or they can use it for some social determinative, health oriented benefit. Tracking where these dollars are going, when how they're being spent, is absolutely essential to enabling the robust analysis that's needed to figure out what's working and what's not. It's to the frustration of health plans that have seen the focus on supplemental benefit data collection go from kind of on a scale of one to ten, maybe from like a 1.5 to an eleven overnight. CMS recently clarified that supplemental benefit encounter data, as a Medicare funded benefit, was always the expectation, and they provided some incremental clarity and guidance around how plans could submit that data. But they released that information in February of 2024. Really effective for 2024 already or effective historically. Theres also an ask, which again, we think is a good one, over time for plans to share aggregated information on what supplemental benefits cost, how theyre contracted for. Theyre asking for information on how costs are broken down between administrative expense and service expenses for the supplemental benefit vendors that, that operate in the space. And it's really kind of caught the industry, the health plans, the vendors on their heels trying to react. Um, again, this, this is information that is absolutely necessary to study the efficacy of these benefits over time, but likely more effective if phased in and plans not caught off guard. So as we kind of advance and look ahead to 2026 2027 timeframe, I'm optimistic that we're going to have a really robust data set to evaluate what's working and what's not, but a lot of, a lot of complex times ahead, given all the headwinds that the plans face.
Jennifer Colamonico: So kind of sudden huge administrative burden to quantify and document these things in a different way.
Tim Murray: Yeah, I think CMS would argue that this is information that should have been kind of available all along. These programs are very complex to operate and administer. The rules are hard to navigate. If anybody in the Medicare Advantage world ever says this is the answer, this is the right answer, you can do this or can't do this, they lose credibility in my book immediately just because there's always exceptions to the rule and there's a lot to untangle.
Jennifer Colamonico: So collecting more data is certainly a good thing. But asking in the 11th hour to collect the data can be complicated. Why is this such a big deal?
Tim Murray: Yeah. One of my significant gripes over the years, particularly with some of the more innovative programs, is that well intentioned programs are launched into the world, often get a lot of excitement and participation. But the measurement methodology, the data collection requirements, are not always defined in advance. It creates a challenge where CMs, CMMI, other organizations are focused on ensuring that they get good value for the healthcare dollars that they're deploying out into the market without necessarily having defined what they're going to do in order to evaluate and answer that research question. In the case of Medicare Advantage supplemental benefits, the recent throttling up of data collection requirements leads us potentially to a future where we can evaluate the efficacy of benefits and interesting correlations between the utilization of those benefits and good outcomes, more efficient care delivery, et cetera. But the perpetual challenge that I've observed over my 20 years in the industry is the study methodologies, the metrics that are going to be used, the key performance indicators are not always defined in advance. In some cases, I'd say they're rarely defined in advance. And I'm hopeful that evolves and changes in the future. And we don't have these situations like we're dealing with now in the Medicare Advantage world, where plans are caught on their heels, supplemental benefit vendors are caught on their heels in trying to react to requirements that CMS is suggesting were kind of already in place, but practically speaking, have not been accounted for in plan operations.
Jennifer Colamonico: So just a kind of clarification point. So your point about Medicare Advantage, including a lot of these supplemental benefits. So in Medicare fee for service, you can buy, right, there are supplemental benefit program, right, you can buy vision, you can buy dental, you can buy all these other things. Is there the same robustness of potential data on the fee for service side as there is on the advantage side? They've been putting it all under the plan versus more of a choose your own adventure, I guess. Medicare experience. So is there going to be data parity with both fee for service and Medicare advantage on the effectiveness of these supplemental benefits.
Tim Murray: I'm skeptical that we'll ever get to parity just given the robustness and creativity of Medicare Advantage benefit designs. Even if we rewind into like 2018, there are still quite substantial supplemental benefit value being deployed in the industry. Part of the reason why Medicare Advantage has grown to now enroll more than 50% of those that are eligible. I think what makes Medicare Advantage and the data study opportunity unique is not only the supplemental benefits that are being offered and the opportunity to evaluate if I have a member, just for example, that has two dental cleanings over the course of the year. Is that associated with favorable outcomes, more efficient delivery of care? Is that because of member engagement or other variables? Usually hard to tell, but we want to identify what's kind of working and what's not working. There's also the opportunity, through these supplemental social determinants of health oriented offerings to collect additional data, right. To screen members in a more comprehensive way to identify what vulnerabilities do they have? Are their health literacy or language challenges? Are there food security issues that need to be addressed? Medicare advantages is kind of a natural experimental ground to collect those additional data variables. It's hard to find a perfect parallel on the fee for service side. Certainly some of the CMMI programs are innovating in the health equity realm and providing incentives to support health equity initiatives, but Medicare advantages are already so mature in this space, I think it's just a matter of completing the data story. By completing the data story, I mean collecting data on the supplemental benefits and also ideally, collecting data, incremental data on social determinants, markers for each of the beneficiaries that are supported in that program. Hard for me to see that ever kind of being on an equal playing field just given where Ma is.
Jennifer Colamonico: As of today, I feel like Ma is so misunderstood. I mean, you see, once people are on it, they love it, but people who are not on it really fear it, right? And it becomes. It's just interesting to me that, I don't know, like, I live, we live in New York, you and I both.
Jennifer Colamonico: Live in New York, right?
Jennifer Colamonico: And there's all this controversy about pension programs moving their retirees to Ma. And, you know, I've heard, I heard somebody recently say it's like they protest it, but then once they're on it, they love it and they kind of forget about all that protest. But why do you think that they're so misunderstood in the, you know, kind of in the broader Medicare conversation?
Tim Murray: I think it's health insurance entities just in, in general, you know, don't by default go to the top of the, the chain in terms of organizational reputations, even if they’re out there at fairly narrow margins trying to manage costs. Theres some kind of instinctive and general challenges there. I think the key variable that drives the program to be misunderstood are situations where a healthcare provider is out of network and it inhibits a member from receiving care from a particular provider. That sort of story played out in the media over a number of years, and a number of providers can obviously create some reputational challenges. The reality is that programs still have networks that are meeting network adequacy standards that are generally quite broad. And it's like you got to be in it and appreciating the supplemental benefits that are being offered and the quality of the network that the health plan is engaging with to truly have a basis for evaluating the options. Another thing that I think gets lost in the shuffle in the MA versus fee for service and med sub world is there’s an out of pocket cap that’s been in place in the MA world for quite some time. So if you enroll in an MA plan, your out of pocket cost, even if you have catastrophic healthcare events over the course of a year, will be capped at a particular level. Its range from 5000 kind of progressing up to the 7500 to 8000 neighborhood these days. And some plans even voluntarily offer a lower maximum out of pocket. So there’s really complex calculus in terms of which program is best for a particular individual. But I think it's like anything, it's the adverse stories and challenges that get the most attention and the kind of general population that's pleased to be engaged in an MA plan that has a bunch of supplemental benefits and has a predictable cost structure that don't get talked about on a day to day basis.
Jennifer Colamonico: If you had a magic wand, what is the one thing that you would fix to kind of get this, not necessarily get this on the right track, because arguably it is on the right track. It's maybe just on a wobbly track. So what's the one thing that you would fix that would sort of change the trajectory of how we're able to predict costs in Medicare?
Tim Murray: Yeah, without a doubt. If I had a magic wand, the thing that I would change, and this applies to Medicare Advantage in particular, but it arguably applies to other lines of business as well. It would be getting our health insurance landscape and publicly funded healthcare program landscape out of the one year pricing cycle, funding cycle. I realize that there’s a host of challenges that preclude that from being something that could happen overnight. But it's my magic wand and that's how I'm going to use it. I would shift to at a minimum, a three year pricing cycle where play through an example a member enrolls in a Medicare Advantage plan. It takes time for them to understand and learn how to navigate the benefits that are available to them. It may take time for them to engage in care management programs, for them to even be identified as having particular risk factors, right? To identify a member as having chronic kidney disease or diabetes that’s being exacerbated over time, and identifying those members in year one, kind of optimizing the delivery of care management in year two, and then from the perspective of the risk taker, whether that be the government or whether that be a health plan, reaping some of the financial benefits of an effective care model and ultimately driving cost savings for the taxpayer. Having a multi year cycle enables you to attract a member with a differentiated benefit package, activate that member into a host of programs, do the right thing in managing those patients effectively, and then consistently yield what's hopefully a steady financial reward for doing so, and whether it's the government benefiting from the savings or the risk taking entity benefiting from those savings. As a citizen less concerned with who benefits, as long as the overall cost structure is managed, we exist in this one year pricing cycle that makes it very difficult for plans to strategically invest in any of the above supplemental benefits, quality management programs, care management programs, and know that they will yield a predictable outcome that is sustainable over time. And just the fact that a member could switch plans, a member could switch programs. And it's kind of putting accountability for the management of a beneficiary in whatever program under one roof, and expecting and defining a multi year set of expectations for the organization supporting them is key. We are seeing quite palpable push towards integration and for example, the duals program. So organizations that are supporting those that are duly eligible. But there's a long way to go. And again, without a doubt, I'd focus on a multi year time horizon for pricing cycles.
Jennifer Colamonico: Does that require a multi year commitment on the part of the beneficiary?
Tim Murray: Possibly. And that's probably the biggest barrier to actually implementing such a program. Finding a the programmatic design that would make it compelling for beneficiary to stay within a plan and reap either some financial or supplemental benefit incremental reward from staying with it with a plan. That would be a requirement here to test out this multi year theory and I can certainly appreciate the kind of consumer perspective of forcing the entities involved, call them Ma plans in this case of delivering consistent customer service or risk losing that member. And so that's a challenge if, again with the magic wand, I create an ecosystem that forces the member to stay with a plan for multiple years, assuming the plan is fulfilling their obligations, kind of their basic compliance obligations, of delivering the benefits that they commit to, but provide some sort of financial incentive to that member for their loyalty to the plan. That could come in the form of an incremental part b premium buy down that progresses up over a three year period. Just some ideas that I’ve thought about, but so many structural barriers to that actually coming to fruition. But I think it would be key to really driving sustainable value in this program.
Jennifer Colamonico: Well, its funny because it seems to me like, I guess it would take magic at this point, but when I hear you describe that, I feel like, well, isn't that just kind of a good customer service and, you know, serving what the member needs and providing something that, like, couldn't you create that today? But you're saying that there's the structural barriers that really work against somebody from choosing what, I mean, they could choose to stay in the same plan for three years, but you're saying there are structural barriers to like creating this as like, here's your contract. Here's your three year contract, right?
Tim Murray: Yeah. And there's certainly MA members are sticky. So there's plenty of members for which this experimental ground that I'm describing is sort of already organically in place. But like, the big investments that could come from knowing that you have these members locked in for a multi year period, it might change the tenor and willingness of organizations to just really double down. Right. We all recognize the importance of social drivers of health, but we're really seeing kind of these. When you look at the dollars that are being invested in innovative benefits and food as medicine programs, they're really off on the periphery. They're not really core. What if we set up a three year plan where we took a set of chronically ill members and we said we're going to medically tailor your meals for this three year period and test it out? Is this actually going to work? That would cost leaps and bounds more than the amount of funding that’s flowing into the programs today. But if a MA organization realizes that they could reap the benefits, the financial opportunity of managing costs effectively through these innovative programs, and they know for sure that these members are going to be enrolled in the plan, there might be a higher willingness to partake. One other point id raise is just in todays world, there’s been so much growth and innovation in the Medicare advantage space that its oftentimes the broker channels the field, marketing office, organizations that are the entry point and contact for beneficiaries as they navigate which plan they should enroll in for a particular year. And so you may have a member that's perfectly happy with a particular MA plan that they're enrolled in, but their broker, who may be one of their trusted contacts looking out for that member, says, hey, there's this other plan that has these additional benefits that creates disruption in my magic wand sort of multi year case here, and not necessarily bad intent that's driving those kind of broker steerage efforts. Another area that's seeing a lot of scrutiny by, by CMS, probably justifiably so, lots of variables to untangle well.
Jennifer Colamonico: And so taking it back to the data. So you've got a sticky program where you do have examples of multi year participation. You now have even, you know, before this new requirement of data, but you have more data, right? Generally we have more data in healthcare today, more ability to, certainly not perfect yet, but more ability to pull data together from different sources and to sort.
Jennifer Colamonico: Of prove the case right.
Jennifer Colamonico: If at the end of the day we want to be able to better predict, doing the analysis on these data sets will be important. So are you optimistic?
Tim Murray: Cautiously, yeah. I mean, over a five to ten year period, I'm optimistic that we can get to a point where the data that's being collected on, for example, supplemental benefit encounters will improve in quality, will improve in sort of its comprehensive nature to enable the sort of studies that can more effectively steer funding and resources towards those things that are working and not working. So I'm optimistic that we can get there. I do think like everything else in healthcare in the United States, it's going to be a slog. And I struggle with all of the headwinds that Medicare Advantage plans are facing as we look ahead into 2025 and 2026. We've got new risk adjustment model, we've got star rating program, technical changes that have been adverse to some plans. We have benchmark payment rate updates that are glaringly lower than the recent medical trends that plans are facing. We have enhanced scrutiny of broker channels, we have supplemental benefit encounter asks for data collection. So there’s a lot that plans are grappling with and some of them have sort of existential challenges in terms of managing all the risks. I didn’t mention the Inflation Reduction act, which we could spend probably 2 hours more on, but may also put the audience to sleep. But that’s also a well intentioned but disruptive force in terms of programmatic and planned design and potentially financial challenges as well. Theres a lot that plans are grappling with now. So in the short term, I’m more pessimistic on the administrative burden that plans face to deal with all of the above over a multi year period. If CMS continues to focus on defining its data needs and defining its study methodologies in advance of launching programs, or in the case of supplemental benefits, relaxing what can be offered, then I think we have a sort of brighter healthcare future ahead in the distance. I will be more optimistic if, as we move ahead as a group that operates in the government sponsored healthcare space, if the programs that are released, and I joke about CMMI pushing out a new program every few months, I think we will be better situated in terms of defining programmatic design features that work and don't work. If we, in advance of launching programs, define the data collection parameters, the study methodologies that are going to determine what's working and what's not, oftentimes we're launching these programs that are well intentioned, they drive innovation, they drive a flood of funding. Then you look back and say, oh wait, we should have collected a bunch of additional data in order to evaluate what's working and what's not working. So a little bit of a meandering and some would say not so optimistic response here, but I'm optimistic that we can address some of those fundamental, forward looking parameters of defining what data is to be collected in advance of actually implementing these programs. Then we can look towards a brighter, more efficient healthcare future that seems like.
Jennifer Colamonico: An appropriate place to be for somebody who’s predicting the future, right? You can only predict the future again, the spreadsheet side, not the crystal ball side, right? Given that the spreadsheets probably more important in your work, having the right data makes a lot of sense.
Jennifer Colamonico: Well, thank you for your time today.
Jennifer Colamonico: Thank you for your insights, and we appreciate you. We’ll look forward to the slog here. Gives us plenty of things to talk about in the meantime. Right.
Tim Murray: Thanks for having me.
Jennifer Colamonico: Thanks.
Jennifer Colamonico: This episode of Vital Viewpoints on Healthcare is sponsored by Levitt Partners DC Direct. Are you looking for weekly insights on health policy developments in Congress and in the administration? DC Direct, federal policy intelligence services help clients understand not only what key developments occur each week, but also explain why they matter. Visit levittpartners.com for more information. Thank you for tuning in to another enlightening episode of HMA's vital viewpoints on healthcare. We hope today's discussion has sparked new insights and perspectives. To learn more about our esteemed guests, please be sure to visit healthmanagement.com podcast. Until next time, stay informed, stay curious, and keep searching for the wisdom that will help to transform our healthcare landscape. This podcast was produced by myself, Jennifer Colamonico, along with Tiffany McKenzie, in collaboration with our guests. The content is the property of Health Management Associates.
