A Conversation with Ezekiel J. Emanuel, MD

Zeke on Health Care: Make It Simple, Make It Affordable, and Stop It (At Least Some of It) for Me at Age 75

The architect of the ACA waxes defiantly about how effective the law has been and what can be done to make it more so. Also, he is OK with Medicare for all but not the Sanders version.

Interview by Peter Wehrwein
Editor

He talks in torrents, organizes his points in rapid-fire numbered lists, and seems to relish verbal combat. And he is most definitely not boring. Ezekiel “Zeke” Emanuel, MD, a Harvard-trained oncologist and prolific author, is chair of the Department of Medical Ethics and Health Policy at the University of Pennsylvania. He is probably best known for his work as a top-ranking health official in the Obama administration during the creation of the ACA. Emanuel is the older brother of Rahm Emanuel, the former major of Chicago and President Obama’s chief of staff during most of his first term. He is currently working on a book comparing health care in different countries that is titled Which Country Has the World’s Best Health Care?

You’re sometimes called an Obamacare architect, so how do you feel about your building now? It’s still standing, but is it wobbly?

Let me make three observations, and then talk about an overall assessment. The first observation is that 22 million people got coverage through the ACA who didn’t have coverage before. Could it be higher? Should it be higher? The answer to both questions is yes. The insurance exchanges could get more people [covered]. More states—especially Texas, Georgia, and Florida—could expand Medicaid. And states could do a better job of enrolling people who are perfectly eligible but have not gotten coverage through lack of information, complexity of enrollment, or whatever. So, access has improved, but it could be improved further.

Second, and I think much less reported—and I wrote an article for Stat on this, and I think it just hasn’t been well recognized—the ACA has made a huge difference in terms of cost and cost control. As I have pointed out, one month after passage of the Affordable Care Act, the Office of the Actuary at HHS projected health care costs for the next decade. And if you look at 2017, the last year for which the Office of the Actuary projected total health care spending in the U.S., the actual costs came in $650 billion less than what the actuary projected they would be. The accumulated savings have been over $2 trillion.

Lots of people, when we passed the ACA, said, “Oh, it’s 90% coverage, no cost control.” In fact, it’s been extremely effective at cost control. Is all of that cost savings the ACA? No. Is a large portion of it—at least 30% and maybe 50%—the ACA? Yes.

The third thing I would say is that there’s actually been, over the last few years, a considerable amount of innovation started—not finished—in terms of alternative payment models, in terms of delivering higher quality care, and many other things that are beginning to pay off and will, over the next decade, have a much greater payoff once we really identify the best innovations.

Now, having said all that, there are many things we could fix with the ACA. I’ll give you one example we screwed up on because of—who knows exactly why; there are probably multiple good reasons. But the eligibility criteria for the exchanges and the eligibility criteria for Medicaid don’t match. So, Medicaid, you have monthly income. The exchanges, you have last year’s annual income projected with a claw-back provision. We should have said monthly income for both Medicaid and the exchanges.

I want to ask you about your second point—your contention that the ACA is saving money. I’m familiar with some of those cost trends. Some people attribute the slowdown of the increases in health care expenditures in the early ACA years to the recession. My understanding is that as coverage has expanded and the economy improved, the increase in health care spending is again rising—some of it, maybe a large percentage, due to drug prices. But the idea that the ACA has put the brakes on spending, I believe, is disputed.

Well, I don’t think that’s right. We are, what, about 10 years after the recession? You can’t say the savings today is because of the recession 10 years ago. That makes no sense.

We’ve added 22 million to people who have coverage, and yet, costs are well below what they were projected to be. Even if you look at 2017, costs are below projections. Where are the increases in expenditures? They’re mostly prices. Prices of drugs are number one and prices for hospital care on the private side are number two.

Utilization has come down. That isn’t the recession; that’s a change in practice by doctors. [Having] more high-deductible plans has also affected utilization.

I’d say a third for the decrease in expenditures—and this is an unheralded point—is the psychological change in the whole health care system. It went from “more, more, more” to, yes, we have enough money in the system, we need to use it better, more value-based pricing, and therefore, rethinking how we’re delivering care. There are lots of little experiments out there which have yet to coalesce, but I think [they’re] having some impact.

I watched the video of your recent Atlantic magazine interview in which you talked about Medicare for all. One of your chief points is that you didn’t think it was practical—

Politically.

Yes, politically. One thing that you said that stuck with me is that you’ve never seen a country put a trillion-dollar business out of business.

Right.

But say there was political will. I’m wondering what value you see insurers adding to health care in this country. Sanders and Warren want to sweep it all aside because they see insurers as sucking profit out of the system. Do insurers add value to American health care? Or do they just add complication and expense?

I don’t think they just add complication and expense.

The mess we have around billing and insurance-added cost—that can be improved and that has to be done. I’m not sure that’s only an insurance problem. It is also an employer problem. Employers like to select their benefit package and have a distinct benefit package. That adds a lot of complication to the billing side of the world. I think we need to standardize the benefit packages. We need to standardize the billing and insurance claims forms and create a clearinghouse. That could help.

We have to stop thinking that Medicare fee for service is like some nirvana. We know that there are huge problems with Medicare fee for service. Everyone talks about how it’s administratively cheap. The fact is, it’s not as cheap as portrayed. There are lots of hidden administrative costs in there. Second of all, there are a lot of things that, because it’s so administratively lean, it doesn’t do, like update the RVU system, on a regular basis and revalue suspect codes.

There’s plenty of fraud in that system that private payers are better at picking up than Medicare is.

The other thing I would say is that we know that patients, especially patients with chronic illness, do not have good coordinated care on Medicare fee for service. They’re often seeing seven to 10 doctors. I would say one thing that managed care does better in the private system is coordinate care. Or at least [it] has the potential to coordinate care better and in some cases does coordinate care better [in Medicare Advantage].

If you ask, “Is Kaiser-delivered care in a managed care environment better than fee for service in Medicare?” “Is organized care with high-quality, high-efficiency providers more likely to be the future, or is unmanaged fee for service more likely to be the future?” I think more people would vote for the organized managed care with high-efficiency, high-quality providers than an unregulated fee-for-service environment.

What Sanders is looking for is an unregulated fee-for-service environment. I’m sure it’s not the optimal way to manage patients with chronic illness—and patients with chronic illness account for the vast majority of health care costs. So I don’t think, from a policy standpoint, that would be the way I would go.

I think you have taken a position in favor—or at least signaled support of—Medicare for America.The Medicare for America plan would let Americans enroll in Medicare but would leave employer-provided insurance as an option. It would also allow private companies to manage the Medicare benefits as they do now in Medicare Advantage.

Yes.

So would you favor a single-payer system but have it privately managed, so people would be in some sort of a Medicare Advantage plan or a Medicaid managed care plan?

I could endorse that idea as a better approach than Medicare fee for service or Medicare for all.

Would that be your platform?

First of all, I do favor simplifying the system, and I think moving in the direction that you just mentioned would simplify the system. That’s the first thing.

The second thing is, I have no objection—and again, lots of countries do this. You have a single payer that then funds—in our case it would be managed Medicaid, Medicare Advantage plans that people could choose from, or private insurance. Having those three basically be the options that people have—I think that would be a simpler system. It would be a system that Americans could understand. The chances of people falling through the cracks are lower. And then, we could also see the benefits of care management.

Remember, on the senior side, more seniors are opting for Medicare Advantage now than traditional Medicare, and it’s becoming less tenable to say, “Oh, no, those people are somehow, they’re making a mistake. We want to put everyone in traditional fee for service because those managed care plans are bad.”

That just doesn’t seem to be the direction of the country, and it seems to be a regressive direction to an old-style delivery system that we don’t want to have and shouldn’t defend.

Some say Medicare Advantage is popular because it is overfunded.

I agree that Medicare Advantage has been overfunded for years. And I am on record that we should move to competitive bidding without a benchmark. We should simply have competitive bidding, and the plans should give us the price. I am all for that. Absolutely. I agree with that. We should not be overpaying Medicare Advantage. And let’s inject more competition into the system.

I do think that for a lot of people, its simplicity is part of what is appealing. And as I said, we have an incredibly complex system, and one of the things we have not prioritized, and I think we need to prioritize, is simplification of the financing and benefit designs.

I know you’re not a political scientist—

Well, I do have a PhD in political science. [Laughs.] I’m joking. That happens to be true, but I don’t consider myself a political scientist.

The Democratic Party has moved left. Medicare for all, which would have been a nonstarter, is now a litmus test–type question. What’s your sense of what health care politics are going to do in 2020? I know you have mentioned that Medicare for all seems to be attractive because [of] the security that people are looking for. But you also said that people tend to disagree with Medicare for all when they hear the details, like getting rid of private insurance.

Yep.

How do you think it’s going to shake out next year?

I think the idea of Medicare as an option for the uninsured and Medicare as an option for people who have private insurance that don’t like it or can’t afford it—I think that is going to be a plank for everyone on the Democratic side.

I similarly think that fixing parts of the ACA, some of the things we’ve mentioned, is going to be a plank for the Democrats. So, for example, getting rid of the insurance exchanges because they’re stalled at about 11, 12, or 13 million people, and folding that into Medicare—it’s not an implausible idea.

Remember, 290 million Americans have health insurance. What they want are two things. They want the security to know that if, God forbid, a recession comes and they lose their job and health insurance, they have something—Medicaid or Medicare—some safety net that is really solid, regardless of any disease they or their family member has or their employment status.

The second thing, maybe even more important, is they want affordability. The system is becoming unaffordable. “Dr. Emanuel may say that costs have been under control for the last few years, but my deductibles are up, or my total out-of-pocket expenses, they’re up. I need more affordability.” So, I think you’re going to see an increased emphasis on, “Here are the policies we’re going to introduce to get more affordability.”

“The federal government gives drug companies a monopoly, and we let them set the prices. Economic theory and practice tells us that is a recipe for exploitation.”

How would you make American health care more affordable?

I would advocate four policies.

One, you have to do drug prices. Drug prices are a huge cost and cost differential with other countries, are going up, and are out of control. The federal government gives drug companies a monopoly, and we let them set the prices. Economic theory and practice tells us that is a recipe for exploitation, and we have to stop it. Even a 10% drop in prices saves about $50 billion.

Second, we need to cap hospital prices for private insurance. We need to set an upper limit. Again, we have local monopolies that drive the prices up, and we have not had good antitrust enforcement. And I don’t think we’re ever going to get great antitrust enforcement, and therefore we need a cap on those prices. That can save, again, tens of billions of dollars.

Third, we need administrative simplification in the billing and insurance-related cost. Again there are tens of billions in savings in creating a claims clearinghouse and standardization across all companies.

And we need to continue with the payment reform, moving off fee for service to alternative payment models where doctors are more responsible and hospitals are more responsible for the total cost of care, have downside risk for high spending, and have to focus on delivering high quality that is measurable and being accountable for that.

I think those are the four things that will get us a much more affordable system and save hundreds of dollars, if not thousands of dollars, per American.

Let’s talk about your book. You’re grading health care systems on 19 different dimensions.

How do you know that? Where did I say that? [Laughs.]

What is the point of all this besides racking up frequent flyer miles?

I wish I racked up more frequent flyer miles.

I resisted this for a long time. But audiences, both doctors and the lay public, frequently ask me, “Which country has the best health care system?”

I think these questioners have two motives. One is, let’s take what they have and use it here. The other is, you know, “Where do I go to get my cardiac surgery?”—or something like that. Medical tourism.

In any case, for years I resisted answering those questions. But actually going out and studying other countries does help in a lot of ways. It helps illuminate certain strengths of the American health care system. I know there are cynics who say, “There’s a strength to the American health care system? Name one.”

I can name a few. We are more innovative in developing payment systems and developing alternative delivery models than most countries.

We’re more innovative because hospital care is so expensive. Talk about necessity being the mother of innovation! No wonder we’re doing outpatient joint replacement.

I agree the problems with our system are spurring innovation. What is the problem there? At least we’re trying new things. And if you look at places like Switzerland or some other countries that have higher average costs but are not trying new things, you say, “Well, the U.S. does at least have an advantage in innovation.” It may not be the only advantage you want. You definitely want to have other characteristics like universal coverage, more equity in the financing of health care, and a more rigorous assessment of drug costs. But don’t dismiss innovation.

Second, I do think there are other areas where we’re actually doing well or better than other countries. I would highlight some of the experiments we have in mental health provision and integrating it into regular care. Some of the work we have done on chronic care coordination is ahead of other countries. The Netherlands tends to be as innovative as the U.S. in chronic care coordination, but most other countries are not.

Again, I mention the complexity of the system. It just hits you between the eyes. If complexify is a verb, we have complexified our system beyond belief. We need to pay attention to making it simpler because you lose fewer people if you make it easier for people to navigate getting coverage and using the system. I think there is a lot of wasted spending because it is so complex people do not know how to use the system.

We’re sort of at the breaking point. I mean, people are just groaning because of the complexity of our current system.

When is the book coming out?

April 2020.

Are you going to identify the country with the best health care system?

You really think I’m going to tell you? Come on.

Are you advising any campaign right now?

I’m not talking to you about that.

Why not?

Because I don’t want to. You think I have to answer every one of your questions? I’m not under obligation, or court order, or a subpoena by Congress.

Are you open to consulting with certain campaigns?

I want the Democrats to win because I think the Republicans have shown that they are not serious about fixing the health care system. They don’t have a plan. I do think that there are some things that CMS has been doing to improve the system. But on balance I think that the Republicans don’t have a plan for expanding access, getting us to the 95% insurance level, and controlling health care costs and improving the patient experience.

What do you think about the Republican push for non-ACA compliant health plans?

Terrible. Terrible.

Do you see that as junk insurance?

Yes. And that’s part of what we tried to get away from with the ACA. They have made it quite clear that they are trying to evade the essential benefits and other requirements of the ACA. They’re trying to evade the law. It’s the law.

What about Medicaid work requirements?

Horrible idea. I do think there is a question about whether getting people to work, the regularity, expectations, and social connections that come with work, would enhance the quality of their lives. I think that’s an important question.

But all the evidence is that the number of people on Medicaid who these work requirements would affect is a tiny proportion—1% to 5%. You’re going to spend more than you’re actually going to save because of the onerousness of the monitoring system. And, I think there’s also a lot of people who are going to lose insurance coverage because of these work requirements.

So, while I think there may be an argument that getting people to work is a good thing, using Medicaid—or food stamps—as the stick is a terrible idea. I’m totally opposed to it.

On the other hand, if we’re going to do it, we better damn well do it in a responsible manner that’s rigorously evaluated, so once and for all, we get an answer to the question about whether it helps or doesn’t help.

Price transparency and that sort of thing—using...

Oh, come on.

...shopping as a way of influencing utilization and price. Is that horses---, or is there something to it?

Well, that’s your term. You probably got your language skills from my brother. But that’s a pretty good word to describe it.

It’s one of those opiates of the politicians, which is, well, you know, “Let’s get transparency, leave it to the market, we won’t have to intervene, transparency will take care of high prices by itself.” The only problem is that there’s absolutely no data that that’s true. The best study was of patients who were referred for an MRI. The doctor had to fill out a prior authorization, which then triggered a patient representative, who called the patient and told them where they could get a cheaper MRI. It ended up saving $200 per patient. That is not price transparency. That is called concierge care.

If you go out and make me an appointment at a cheaper place, yeah, that might be good. It saves me calling and arranging things. You might even arrange my transportation. Whoa, that is a great, great service, but it’s not price transparency.

Price transparency is when I put the prices up on a website like Amazon and then you go and look for a cheaper price. That experiment—multiple instances of that experiment—have not worked to reduce costs. And people don’t use those sites. Even in the best site, it’s like 12% of people use it. And a lot of those people are window shopping—they are not actually ready to use a medical service. And only 40% of medical services are shoppable.

If I need chemotherapy for cancer, do I ask which oncology office offering cancer chemotherapy is cheaper? If I need a cardiac catherization, I don’t go, “What’s the cheapest place?” That’s not a patient’s primary consideration. So I think price transparency is not going to work, and the psychology is wrong.

“I am willing to give up years of low-quality life. I don’t want to be bedbound or to have moderate or serious dementia. And I do not want my kids to remember me like that.”

By my count, you have 13 years left to live.This a reference to a 2014 article that Emanuel wrote for The Atlantic titled “Why I Hope to Die at 75.” Emanuel has expressed disagreement with the headline. In the article, he says he will forgo some preventive and curative services starting at age 75.

The answer is, I have not changed my opinion. It’s a f------ stupid question. There you go. Now you made me use your language.

But I did read the article, and you did talk about stopping preventive services and curative care at age 75. But no pacemaker? Really?

Yeah. Really.

A pacemaker at 75?

Yeah. Really. Yes. Really.

If you make it to 75, statistically you’re going to live until 92—

Excuse me. When was the last time you went to a nursing home? Until you tell me, “I’ve been there, I’ve seen what those places are like,” or “I have a relative who is shuffling around in a nursing [home] and I want to spend the last few years of my life there,” then we can talk about my not wanting life-sustaining treatments after 75. The idea that oh, my God, you’re going to give up years. Yes, I might give up years, and maybe I won’t give up years. Who knows? And I am willing to give up years of low-quality life. I don’t want to be bedbound or to have moderate or serious dementia. And I do not want my kids to remember me like that. That is my view. I think it was David Brooks who said, “Zeke Emanuel is an idiot because the latest data show that 82-year-olds are the happiest people out there.” And I’m like, oh my God. First of all, what’s the selection bias in that data? If you’re interviewing 82-year-olds? You’re not interviewing any 82-year-old in a nursing home, or who is locked into their apartment. It’s just a hugely biased number.

Emanuel doesn’t want his old age to be only about having fun.

Secondly, look at what most 82-year-olds are doing, even the ones who are mentally and physically functional. The New York Times had this big story about the Fountain of Youth that was published just after my article. They went to some place in Arizona where they reported on this woman riding a motorcycle and this guy scuba diving, all in their 90s. Basically, those people are having fun. They’re not doing anything that is contributing new ideas, new contributions, or mentoring younger people. They are enjoying themselves. Which is great. But not if it is all of your life.

Personally—this isn’t a health policy, this is my personal policy—I personally don’t want to just be a consumer. I want to be a producer. That’s what I think gives my life meaning, producing new ideas and mentoring younger people. If I become solely a consumer and pursuing life exclusively for fun, that tends to be, in my view, vacuous.

Lots of people think, “I’ve got to live as long as possible,” that length is the metric. I don’t get that longer is necessarily better. I don’t find length—after a certain point, 75 for instance—an important element. It is important to get to 75, but after that longer is not better. I don’t run marathons for that reason.

I don’t think length is the important metric. There are other things that are necessary to have a meaningful, fulfilling life, and just living as long as possible is not one of them.

OK? You got it? I’m glad. We’ve had our conversation. No pacemaker. All right. Take care.

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