FAIR Health Board Access Interview with John W. Rowe, MD
Dr. John W. Rowe is a distinguished leader in the healthcare industry who, among other achievements, has influenced policy and research in gerontology for more than 40 years. He is currently the Julius B. Richmond Professor of Health Policy and Management at the Columbia University Mailman School of Public Health and is chair of the MacArthur Foundation’s Research Network on an Aging Society. Previously, Dr. Rowe served as president and CEO of Mount Sinai NYU Health, president of Mount Sinai Medical Center and chairman and CEO of Aetna, Inc. Four years ago, as part of our Board Access interview series, Dr. Rowe spoke with FAIR Health regarding the changes in the healthcare sector following the implementation of the Affordable Care Act (ACA). With the healthcare sector in flux once more, Dr. Rowe recently had a follow-up conversation with FAIR Health about the opportunities presented by research in gerontology and the new challenges as well as opportunities posed by the current healthcare environment.
FAIR Health: As a gerontologist, your clinical work and research have focused on aging. With the launch, under your leadership, of The John A. Hartford Index of Societal Aging, countries can gauge their ability to adapt to meet the needs of populations with an increasing median age. What have been some of the key challenges presented by aging populations worldwide? How does the United States compare with other countries for which the Index is calculated? How might the Index influence policies related to older populations in the United States, particularly with respect to the Medicare and Social Security programs?
John W. Rowe: The challenges presented by an aging society comprise five domains. The first is keeping the older population productively engaged in society by getting them to stay at work. Work is good for both the body and the brain—and it’s not bad for the economy, either. Keeping older populations productively engaged also includes getting them to volunteer more because it is good for them and good for the people they help when they volunteer. The second domain involves enhancing the well-being of older persons by improving their access to competent geriatric care, which many people still cannot get. The third is equity—the gap between the “haves” and the “have-nots” in developed societies. The fourth involves the cohesion of and tension between generations—whether the older, middle-aged and younger persons are competing over limited resources, or are working together to support each other. Financial security is the fifth and final domain; in this country, it refers to Social Security and pensions.
My colleagues and I compared how the United States performs across each of these domains to that of other well-developed countries that are members of the Organisation for Economic Co-operation and Development (OECD) using the Index. The United States actually performed very well in certain areas, such as productivity. That is largely because people in the United States retire much later in life than they do in Spain or in other European countries. The areas of most concern to the United States—and targets for improvement—include equity, the distribution of resources amongst the elderly, and cohesion, the “war between the generations.” A large portion of the elderly in the United States is at risk for poverty. If entitlements become tighter, as they likely will going forward, this will create even greater tension in both of these areas. Policies that address equity should focus on food security, the various measures to determine the need for income support and the gaps in the educational level of older persons. Improving cohesion should involve building more housing that offers co-residence with different generations, providing tax incentives for inter-generational transfers and developing more social network supports in our communities for older persons. A great deal of attention has been paid to the Index, which is very gratifying. I have been asked to speak at the World Bank, the OECD and media outlets such as CNN, CNBC and the Daily Mail in London. FH: What clinical research findings show promise for influencing public health and social and economic policies directed toward aging populations?
JWR: Over the past 20 to 30 years, there have been substantial medical advances, such as those in cardiovascular and cancer treatments and the use of statins. Millions of people walking around today would otherwise not have been alive if not for this progress. Perhaps most promising is that many of these new advances are now being extended into the older population. When I was training in medicine many years ago, you did not operate on the hearts of older people. But, with new techniques, you can replace an aortic valve in an older person without opening his or her chest and with a mortality risk that’s in the low single digits. The technologies have developed to the point where older people have access to treatments previously unavailable to them because of their age or general well-being, which has certainly been the biggest advance.
FH: Since our conversation four years ago, a number of insurers have exited the ACA-mandated health insurance marketplaces. What solutions should be considered for stabilizing the marketplaces? What lessons have we learned regarding the ingredients needed for their successful operation?
JWR: In my view, an important step to stabilizing the marketplaces is guaranteeing the cost-sharing payments that are at risk. We need to renew the reinsurance program that was designed to help the insurance companies with adverse selection issues: member populations who were much sicker than they thought. These companies lost a lot of money—about 10 percent two years ago and 8.5 to 9 percent last year—and they are not going to continue these lines of business unless they see that they can do better than that. Maintaining the individual mandate is another important step. The mandate not only has to be expressed effectively, but there also must be a more significant financial penalty for not getting insurance—there are just too many healthy people who stay out of the marketplaces. There is substantial concern that we do not conduct enough outreach, and that some of the navigator programs established to promote outreach are not being supported. We have to do a better job of enrolling people, particularly healthy young people, because the market mix is unfavorable. All that said, I do not think the ACA is badly broken. If it were a patient, it would be out of the ICU, but still under close observation.
FH: You have witnessed the healthcare sector from the perspectives of payor and provider. What common challenges and/or opportunities are insurers and providers facing given the current uncertainties in the healthcare sector?
JWR: One of the common challenges is providing financial incentives that effectively increase quality and decrease overuse. A hospital CEO might say, “Fifty percent of my contracts are based on quality,” but looking closer at those contracts, it turns out that 98 percent of the payment is fee-for-service and only about 1 to 2 percent of the payment is dependent on quality. No CEO is going to spend hundreds of millions of dollars on a new IT system that can effectively track quality if only 1 to 2 percent of his or her revenues are at risk. If a greater percentage of revenue is dependent on quality, it will incentivize the institution to make investments in quality. Furthermore, we calculate that 30 percent of healthcare expenditures are wasted. We have not yet found a way to effectively target low-value procedures, because everything we do to reduce their utilization seems to affect high-value care as well as low-value care. Although there have been efforts to address low-value procedures by the American Board of Internal Medicine, the Centers for Medicare & Medicaid Services (CMS) and others, we have not seen much of an effect thus far.
The second common challenge is patient engagement, which has become the Holy Grail. It is quite clear that engaged patients get better care: decision making is better if it is undertaken jointly between a physician and an engaged patient; those patients also are more compliant with their treatment regimens. We are working very hard to develop effective methods to engage patients. One approach is through increased transparency, but it has proven to be difficult. When I was at Aetna, we were among the first companies to list for patients enrolled in high-deductible health plans the charges that they might incur for a procedure such as a colonoscopy or a mammogram when provided by different doctors who were in our network. The results, however, did not provide clear supporting evidence that we had moved the needle in terms of the decisions that patients make.
FH: FAIR Health has continued to lead as a source of independent and objective price and utilization information. Are you surprised about FAIR Health’s progress over the past few years and the role that it has come to play in the healthcare sector? Looking to the future, what do the next few years hold for FAIR Health?
JWR: I am pleased with the progress that FAIR Health has made. Its leadership has been particularly successful—we are all fortunate that FAIR Health has such an effective president. The information that FAIR Health provides will increasingly be used to improve the effectiveness of the healthcare system, though it cannot solve the whole issue. One of the new horizons for FAIR Health data involves the fact that care is now being delivered as episodes, in bundles of activities and procedures. For example, a cardiovascular surgical episode will start with giving informed consent and end with postoperative exercise with 50-something activities, each with a corresponding procedure code, that happen in between. An important challenge for FAIR Health will be to integrate its database of payment data with various new models of care in a way that is meaningful in the context of these new approaches to healthcare delivery. FAIR Health has already taken an important step in this regard by creating its episode of care benchmarks and analytics.