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Health Affairs This Week places listeners at the center of health policy’s proverbial water cooler. Join editors from Health Affairs, the leading journal of health policy research, and special guests as they discuss this week’s most pressing health policy news. All in 15 minutes or less.
Hello and welcome to Health Affairs This Week. I'm your host Jeff Beyers. We're recording on 05/01/2025. Just as a heads up, if you haven't already heard, we have an insider event happening on May 29. It's on the FDA's first hundred days under the second Trump administration.
Jeff Byers:It's, gonna be moderated by Rachel Sachs, and the panel will include Richard Hughes the fourth and Artie Rye. Today, I'm joined by Aledade cofounder and CEO, Farzad Mastashari. Before starting Aledade, Farzad helped usher in the use of electronic health records in the health care setting as national coordinator for health IT. He's always had an active social media presence from what I can tell, and I saw him reflecting on the latest med pack report on value based care on X and LinkedIn respectively. So it sounded like he had a lot on his mind, so I invited him to discuss these topics and more.
Jeff Byers:Farzad Mashashari, welcome to the program.
Farzad Mostashari:Glad to be here.
Jeff Byers:Thank you. Yeah. Thanks for joining us. So this is somewhat a Podestian question, but I have to assume that every episode could be someone's first, and every episode could be someone's first entry into health policy. So when I was a business reporter, I never really saw any clicks on this topic.
Jeff Byers:So I wanted to ask you, why is the med pack report important?
Farzad Mostashari:I mean, I'm always shocked at how good it is and how full it is and what good kinda honest, not not overly fussy analyses, but but pretty honest and and down the middle, and they blend, the reporting of what you can be observed and in some cases using data that only they have access to with what should be done. So I honestly, I'm mystified why everybody doesn't read the med pack report the second it comes out. I can't help you there.
Jeff Byers:Yeah. Well, what what is the med pack report?
Farzad Mostashari:Yeah. It's it's it's the Medicare Pain Advisory Commission. They are their their job is to make recommendations to congress, actually. It it one of the things that I didn't understand when I was in the administration, I thought they were talking to us. Turns out that that by law, by statute, they're not really talking to CMS.
Farzad Mostashari:They're they're talking to congress. But, obviously, policymakers pay a a fair amount of attention to what they say. And I gotta say, under Chernu, more so now than perhaps in a decade ago. I think med pack has spoken more clearly, and I think that has helped actually, not kinda hiding the ball as much in kinda technical ease, but but doing mic drops like the, you know, like, the stars, the quality program is broken. We have no idea whether it, you know, whether it it it measures quality or not, you know, that kind
Jeff Byers:Mhmm. And then they just walk away.
Farzad Mostashari:Exactly. Then they're like, fix it, congress.
Jeff Byers:Well, you posted a tweet storm. I don't know if we call them tweet storms anymore, but anyways, posted a tweet storm. What are some about the MedPack report, the latest one, what are some of the biggest takeaways of that report that you took from looking to future health care policies?
Farzad Mostashari:Yeah. So the the areas I mean, obviously, it's a huge report. It covers a lot of stuff that I have no particular insight into. But the areas that I focus on is what they say about primary care, what they say about alternative payment models, what they say about Medicare Advantage, and then competition consolidation. So those are the kind of the four areas that I I know something about.
Farzad Mostashari:And so I I kinda pay pretty pretty close attention to. I think on primary care, the the kinda key insight there was around just how fee for service is is a losing game for primary care. And they they keep trying to help. Right? Like and now they're trying to, you know, do a safety net add on policy, and that's gonna help increase the fee schedule by 5.7% for primary care clinicians.
Farzad Mostashari:And they're just even though they they recognize it, they're just trying to patch what fundamentally they recognize doesn't really work for for primary care. That primary care is consistently paid less than the value there that they could be creating in the system. The other thing that they talk about is the kinda average payments for clinicians, and they say, you know, clinicians are paid a 40% of Medicare by commercial plans. What's interesting is that that's an average, and what I wished they would actually do is look at the, price transparency data that health plans are now required to post and just see how much variability there is around that because there are plenty, let me tell you, of independent primary care practices who are paid at or below 100% of Medicare. And so I think the the report does focus on the the adverse effects of consolidation, but I wish they would take it actually that next step forward and break out independent primary care practices versus kind of the payments that are made to health systems for primary care, much of which never flows down to primary care.
Farzad Mostashari:Even if you increased primary care fee schedules, it never makes it to the primary care diocese. It gets kinda absorbed by the system.
Jeff Byers:And is that a kind of result of consolidation?
Farzad Mostashari:Absolutely. It's not only a result of consolidation, it's a driver of consolidation. Because when you underpay primary care who's independent on the commercial side, right, they then get bought up by health systems who not only charge more for those services, but it now they have kinda the captive in terms of the referrals, the scans, the in house services that further consolidates and increases their market power and their leverage. So I do think we have to take competition consolidation very seriously.
Jeff Byers:Yeah. We've had a lot of episodes on consolidation as well. There's a lot of research from health the pages of health affairs on consolidation as well. You talked about Medicare Advantage, and one of the things I wanted to ask you about, there's a lot of, news, studies, just like maybe potential criticisms of Medicare Advantage these days. What did what did you see in that area in the med pack report?
Farzad Mostashari:Yeah. Again, I I really appreciated their, like, very cool, balanced like, they're like, look. We we pay more for when a when a senior joins a Medicare Advantage Plan, the the idea had been that that the government saves money. In fact, the government spends more. So that's that's a fact.
Farzad Mostashari:And and they go on to describe the portion of that that's due to risk adjustment. The portion of that is due to selection effects. But they also, like, very they're they're not trying to be advocates. They're like, look. And seniors get more.
Farzad Mostashari:Right? Like, because of the the increased payments, the MA plans offer benefits that patients in traditional Medicare don't have. And there is some evidence of, particularly in value based models, of lower ER and acute care, utilization and so forth. So I think they're trying to strike a a pretty good balance in in talking about it. And I think it's, the the details are where I think it gets interesting.
Farzad Mostashari:Right? It's like, what should be done for this? And so, for example, one of the things they point about to is, that there isn't guaranteed issue for MedSup once someone switches from traditional Medicare to Medicare Advantage. There are some states that have it, but, you know, if you if you wanted to create more choice, perhaps you would extend that guaranteed issue for MedSup for so people go to the MA. They could go back to traditional Medicare with the MedSup plan, make that more more feasible.
Farzad Mostashari:They also talk a bunch about, risk adjustment. And and I think it's a it's a super complicated question of what to do. But I I thought there were two points, that actually Abe Sutton, who's now the CMMI director, made very well, as well, which is one that there isn't just a problem with overpayment with risk adjustment, but what MedPAC calls heterogeneity. Meaning, some plans are a lot better at than at this than others, and then that creates downstream effects that those plans that are kind of the sharks against the guppies are able to offer more benefits and grow more and have higher margins and have more consol right? So that is the it's not just enough for the government, for example, to increase the coding intensity factor and claw back, some of the overpayments on risk adjustment.
Farzad Mostashari:If you simply increase the coding intensity factor, you'll actually exacerbate the sharks versus guppies. You'll drive more of the clients who don't focus on risk adjustment out of the market, out of business, and you'll increase consolidation. And so they're calling for things like, you know, looking at in home assessments as something that might be a specific policy that would help in a sense level the playing field.
Jeff Byers:Yeah. I'm glad you touched on that because I did wanna ask you about risk adjustment and quality measurements. You had mentioned that there's a window of opportunity now to reform quality measurement. Can you drill down into that? Like, why is that window now?
Jeff Byers:And, like, what can be done about it? I mean, you kinda talked about what can be done about it, but, like, why is the opportunity now?
Farzad Mostashari:Well, I I I do think that the Overton window of what's possible is just wider wider today. And and I think the opportunity now to substantially reform quality measurement, not only to bring more meaning to it, but also to reduce the cost and the burden of data collection, to remove these silly cliff effects, to focus more on outcomes. That was actually one part where I thought the the med pack report a little bit, they were like, they got tired. And at the end, just kinda like mailed it in and they were like, so anyway, what we said before. And I'm like, no.
Farzad Mostashari:No. No. Now is the time because I do think that they they just say, like we said in June of twenty twenty, congress should replace the current MA quality bonus program with a new MA value incentive program that scores a small set, please small set, of population based measures, evaluates quality at the local market level, and establishes a system for distributing rewards with no cliff effects. So, yes, but let's get more specific. And I think in particular, you know, this is the time where delete, delete, delete might make sense to folks in the administration.
Farzad Mostashari:And if there are measures we published a a a an article talking about, the medication adherence measures. And it just they don't make sense anymore. Like, we have a we have blood pressure control. We don't need a medication adherence for blood pressure control measure that is triple weighted, that that is topped out, that, is frankly roughly uncorrelated with actual blood pressure control. Like, we don't need that measure anymore.
Farzad Mostashari:Delete it. So I I I think there's a lot of the the window's open now to make more bigger changes than would normally be possible.
Jeff Byers:Well, thanks for laying that out for the med pack report. That that that helps me learn a lot. Again, I I didn't know that much about it, so hopefully, the listeners learned something as well. You published a piece on LinkedIn outlining some thoughts on value based care in an article published in New England Journal of Medicine. And it made me wonder, you're instrumental in crossing the chasm for EHRs.
Jeff Byers:There are financial incentives there. But for value based care and the adoption of AI in health care, what are the similarities and differences between the adoption of EHR and value based care?
Farzad Mostashari:So when I joined the administration in 02/2009, it was pretty rare for docs to be on electronic health record, like one in five was using it. And by the time I left five years later, one in five was not using it. So we got this kind of fundamental, like, flip, right, from only only early adopters to basically only late adopters not having it. What happened there? And we took some lessons from that with the author of actually the the kind of seminal business book, Crossing the Chasm, Jeffrey Moore.
Farzad Mostashari:And, one of the things some of the things that we outlined in that one was, it's not just about financial incentives. I think I was actually talking to some doc who said, yeah. You know, well, we were there was a mandate to switch to EHRs. And I was like, well, do do you remember what the what the dollar amount was? He was like, no.
Farzad Mostashari:I I don't. I was like, it was $9,000 a year. This is a this is a doc who's getting a a check for over a hundred thousand dollars from us for value based care. Right? The for the size of the financial incentives for primary care to adopt value based care is so much bigger than what the financial incentives were for EHR adoption.
Farzad Mostashari:So it's not that. Right? It was we created a sense of inevitability. We spoke really clearly about we want, like, paper kills. Right?
Farzad Mostashari:EHR is better than paper. Right? And I and I think there's a little bit of opportunity in CMS who controls both the fee for service side and the alternative payment side to say, we think unmanaged fee for service is bad. We think it's bad. We think everybody should get out of that, and and we want all primary care docs in an alternative payment model.
Farzad Mostashari:I mean, Congress kinda said that in MACRA, and I think CMS didn't really follow through with that. There were no penalties really for the low performers, and they didn't really make fee for service uncomfortable. So I I think there's an opportunity there. The other thing that we talked about is don't keep, you know, shipping bells and whistles. Like, the more new programs you have, in a way, the more you confuse the issue.
Farzad Mostashari:There was one meaningful use program, period. We want you to do meaningful use. And right now, every time, honestly, CMMI introduced, you know, a a new model, it confused people as to what they're supposed to be doing. And our strong recommendation is focus on the Medicare shared savings program as the chassis and encourage everybody to join that for primary care at least and focus CMMI on specialty models. That's where we need more experimentation.
Farzad Mostashari:Great. When it comes to primary care, we have the chassis. It's the Medicare shared savings program. And then, you know, removing the the obstacles, but also simplifying it. And in the case of the electronic health record, it was pretty complicated making that decision.
Farzad Mostashari:And cofounder, actually, Matt Kendall, set up 60 regional not for profit extension centers that helped primary care docs That's right. Adopt the technology. 33,000 primary care docs made the switch, successfully to meaningful use through those regional extension centers. We spent a billion dollars on that in the federal government, and that was money extremely well spent. Right?
Farzad Mostashari:That's what essentially Aledate is trying to do. We and other enablement partners are trying to be the simple button for this transformation where the docs don't have to try to figure out the technology and the data and the rules and the policies and the regulations and the playbook, and we just say, hit the easy button, and we'll help you get there. But there isn't really a program the way there was with EHRs for CMS to explicitly acknowledge and enable and empower those enablement partners.
Jeff Byers:Yeah. Well, I'm glad you brought up your work with Alidade with that because I and also the regional extension centers, which also reminded me of, like, how much of a coordinated effort that is. How does that work getting people to take the journey with whether it's technological advancement or how payment is changing in health care?
Farzad Mostashari:Yeah. I mean, look. We we bring in more people into the Medicare shared savings program than anybody else. We added 500 new practices last year into the Medicare shared savings program, and 80% of those were new to the program. They weren't coming from one group to the to to us.
Farzad Mostashari:And so we we know a lot about what those practices, are are looking for, and one of the things they're looking for is stability. And they're looking for the the proven solution. Right? And so the fact that we've been around ten years, the fact that we we have a demonstrated track record and they can find others in in their neighborhood who have joined and have been successful, I think, is a is a big part of it. But it's also kinda the feeling of trust.
Farzad Mostashari:And, being an independent practice is hard and getting harder. And when there are disruptions like COVID, like the change health care attacks, like a hurricane, those are the times when both people realize fee for service is not a great way to run a business, when those disruptions happen. But also that they are they feel alone, that there's no one advocating for them. There's no one on their side. There's no one looking out for them.
Farzad Mostashari:They're not part of anything bigger, and they don't wanna be consolidated. Right? They don't wanna have someone else take over their clinical autonomy, take over their schedule, take over their you know, push them on RVRUs. And, it was there was actually a very interesting section in the med pack report that talked about why they sell them themselves to practices. And they basically say they sell themselves to hospitals because the payer rates are low, but they don't get more pay.
Farzad Mostashari:They see fewer patients. They have less autonomy. They don't like being unproductive, and they hate being micromanaged. That's the summary of the evidence of consolidation as it affects these independent practices. And I think what we offer them is a way to stay independent but be part of something bigger.
Jeff Byers:I remember back in the day, I can't remember if it was an ACO. Yeah. Talking about ACOs, I think there was something like, you've seen one ACO, you've seen one ACO. So have we come to a central definition of ACOs and how do they actually save money?
Farzad Mostashari:There there actually was a recent article in JAMA that they did a follow-up study on ACOs in in the Medicare shared savings program, and the evidence is strong and getting stronger every day that they they are saving money. And the the more independent ones, the nonhospital ones are saving more, and it it is billions of dollars that that are being saved. And in terms of, like, how they're doing it, there there are some differences, but the one commonality is primary care access. And I appreciate the MEDPAC for trying to say, like, look, seniors can access care in Medicare. But according to the data they showed, Medicare beneficiaries, fifty two percent of them said they had a problem finding a primary care provider who would treat them.
Farzad Mostashari:Fifty two percent. So the med pack compared that to commercial and said, hey. It's not bad. And I'm like, yeah. Well but for a senior like my mom, know, who's 80 years old and has multiple chronic conditions, like, to wait many weeks to see twenty two percent had to wait more than eight weeks for their next primary care appointment.
Farzad Mostashari:Like, that is a that is a big problem. And if there's one commonality between different approaches for accountable care that work, It's just access. Just elderly seniors with multiple chronic conditions need to be able to see a primary care doc who knows them, who knows their conditions, who knows what's happening with them, and cares about preventing them from ending up in the hospital and says to them, look, call us first before you go to the ER, as opposed to when you call the number, it says, go to the ER. You got a problem. And I think that is it's it's like the big difference in how more prevention, more primary care leads to better chronic disease management and fewer acute care complications.
Jeff Byers:Great. So Farzad Masashari, as we wrap up, you're a physician, a researcher. You were the national coordinator for health IT and now business owner with Alidade. Had a question. You mentioned that Alidade has been around for ten years now.
Jeff Byers:Coming out of government service and physician and research, people like to say, you know, making a business in health care is hard. You've done it. How hard has that been building a business? What was harder than what you expected? What's been easier than you expected?
Farzad Mostashari:I guess I would say the continuity for me from ten years as a public health person in New York City, Five Years as a federal policymaker, eleven, twelve years running this public benefit corporation, Aledade, the commonality has been more than the differences. It's it's about setting the vision for how do we save the most lives, has been the kind of the animating theme and finding different approaches to that. But at the end of the day, setting that vision, inspiring and and motivating people to climb on board, believe in in that postcard of the future, and then using honestly technology and creativity and financial alignment, to to to to try to find our way there. It's not a straight path, but it is the most meaningful work we could do.
Jeff Byers:Well, that's a fantastic place to wrap up. Farzad Mashashari, thanks for joining us today on Health Affairs This Week. And if you, the listener, enjoyed this episode, please send it to a friend. With that, have a great rest of the week, and we'll see you next time.