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Optum's Evolution and Lessons from Obamacare and COVID: In Conversation with Andy Slavitt
On the latest Vital Signs, Nikhil and I chatted with Andy Slavitt, former Optum EVP, head of CMS, COVID advisor and healthcare.gov saver. We hit on public/private collaboration, Optum's evolution, lessons from COVID and the ACA and more. We also hit on his career journey, what Andy would do if he was running United today and how the private sector can work better with the public sector. You can listen to our conversation on Apple and Spotify. Check out some highlights from our conversation below:
Highlight 1: On the growth of Optum and payers following similar strategies
"Insurance generates a tremendous amount of cash. You either have to spend that cash to grow or you're going to have to give it back to shareholders. When you do that, you're not an 18 multiple stock, you're a 10 multiple stock. You're generating literally billions. In the case of United, 25 billion of cash flow every year. You need to do something with that. There's a growth imperative. And because the Justice Department has effectively said you can't really buy each other given the Aetna-Humana merger and Anthem-Cigna merger were rejected, they had to basically move other places. There aren’t just many more people to insure each year. You can fight for share in Medicare and Medicaid, but how else are you going to grow?"
Highlight 2: On the private sector’s relationship with government
“I'll tell you that the private sector in healthcare viewed its job as to resist all change to their status quo. But every time there is a change, they figure out how to make even more money.” More here.
Highlight 3: On the difficulty of getting SDOH in state budgets
"I think what a lot of governors would tell you, particularly Republican governors, is they want to blend the budget together and say, 'Hey, let me invest more in preschool and let me invest more in safe homes and let me invest more in all these other things and I'll have to spend less on health down the road.' There's a compelling intellectual argument there. The reason the Democrats don't like it, by the way, is because the history is that those programs are cut and the money is never reinvested in people again. They don't trust that the money gets there and so they require that allocation."
Highlight 4: How Democrats could have communicated better around the ACA
"I think for a lot of Democrats, they think, 'Hey, if we just say this is really good, it's going to help low income people.' People will get it and say, 'Why not do that?' But in government, people have to see themselves in the problem. Say, 'Look, you're going to want preexisting condition protection because someday, you might leave your job and someday you might do this and someday you might do that.' And all of a sudden, you're casting it in peoples' terms and it was a much more powerful argument. Indeed, over time, the law's gotten more popular in part because people understand those things about it. They don't have to understand everything about it. They just have to understand the part that's relevant to them."
Here’s a full unedited transcript below:
To kick things off, you really have done it all in healthcare. Before we dive into some of our specific questions, we'd love to hear the story from you about initially entering healthcare and what motivated these different career changes you've had from the Health Allies/Optum world to the public sector.
Well, the first part of my career was about as boring as you're ever going to hear. Goldman Sachs, Harvard Business School, McKinsey, really bold steps on my part. I did end up running a company that I took public in the '90s. It wasn't really until late '90s when my college roommate one day called and said he was feeling numbness in his arm and he couldn't feel his fingers on his left side. We were both 31 at the time. He had twin one-year-olds and I had just gotten married myself and we had a new baby on the way. It turned out he had a brain tumor and he died five-and-a-half months from the day he called me.
His widow and their twin one-year-olds moved across the country from Baltimore to live with my wife and I and our little newborn. So my first year of marriage, I had two wives and three kids, which I'm not going to recommend. The process of putting her life back together ended up giving a cause to leave what I was doing and start the company I started, which is basically for people who were underinsured and getting smacked with medical expenses because they were asked to pay rack rate. I started a company. Just to put a quick cap on that first part of that story, the twins, Josh and Judy, are now 25 years old. Judy's studying to be a doctor. Myself and a few of our friends put them through college so they graduated debt free even though they had no money.
Health Allies, we did it before the Affordable Care Act when there were a lot more people without insurance and a lot more people going bankrupt from not having insurance. And it was a good idea. Never got exceptionally big. I sold it to UnitedHealth Group. So began the next stage of my career, which was the corporate stage. This was a few years before the birth of Optum but there were some businesses that were the kindling that became Optum. I ran one of them and then we put them together. As you said earlier in the introduction, the other CEOs left and I became the group EVP.
Took the ride from about 1 billion to about 40 billion at Optum. Learned a lot about running a scalable business. It was a little soul sucking at times, but fun. Then one day at 2013, and I'll leave the story here because I'm sure I'll pick up on it, if you'd made a faithful phone call to Washington and said, "Boy, you've got a problem with healthcare.gov. It's crashed. Do you need any help?" Three days later, they announced that I was going to lead the turnaround.
To start with, the Optum experience, it's really interesting. You were there at the inception and then the kindling that became it and then really scaled that business. I feel like Optum's one of those organizations that everyone in healthcare is exposed to in some way. They do so many different things. I'd be curious to give a bit of an overview of just how did Optum come to be Optum and the evolution to become this massive entity that it is today?
It's really Steve Hemsley's genius. A lot of people will claim credit in some form or another and a lot of people probably deserve credit. But Steve had this vision at the time. I think Steve would even tell you that it's not so much... He never really valued vision very highly but it was the execution of a model, which the original conception was we should have an unregulated entity that at the time, as insurance companies were being increasingly regulated, that can capture and add more of the value. But more importantly, can provide the services, the data, the technology and the backbone to help modernize the healthcare system.
I likened it to what happened in the financial services sector. It was desperately needed in the healthcare sector where you went from no ATMs, talked to each other. We had 401(k)s that were invested. There was no sophistication, no connectivity. The finance industry through FinTech and a lot of other things became modernized and provided much better consumer experiences and much better connectivity. Then that needed to happen in healthcare so there was a vision for Optum to do that. Some point in the mid-2000s, I remember going to the United Board and asking for $10 billion to start buying primary care practices.
At the time, this is before Oak Street and others, people go, "Why would an insurance company want to own primary care practices? Primary care doesn't reimburse very heavily. What's the story here?" And we had to explain to the board that we thought the way primary care worked was going to change. That people with primary care had the ability to influence the entire healthcare journey and we were underclubbing it. And people with primary care who were doing primary care for a living and could keep people healthy should be making a lot more money and preventing people from going to the hospital needlessly. This was right around the dawn of Medicare Advantage really beginning to take off. That was probably one of the most... We placed a number of bets, that was only one of them. That was a bet that obviously paid off quite significantly.
It seems like United actually has thought through this very early on and segmented how they went about doing this. Now in the last maybe three, four years, all the other payers are trying to do their own version of this. You have your Cigna buying Express Scripts, you have your CVSs buying Aetna and all that kind of stuff. Most of them seem to just be trying to carbon copy, inorganically acquire these entities to copy the Optum strategy.
As United has become this overarching player in every single segment, do you think other people copying the strategy will work? Do you think there are strategies that are untapped by other payers? I mean, maybe Humana is one of the exceptions here, which is really, really doubling down on government programs. They sort of focus on models that focus on that. But if you're another payer in this landscape, how do you compete with United? Do you even need to? Is the pie big enough to support all of them?
Well, you have to step back and recognize what's going on. What's going on is this is an industry that generates a tremendous amount of cash. Some might argue too much cash. You either have to spend that cash to grow or you're going to have to give it back to shareholders in some form or another. When you do that, you're not an 18 multiple stock, you're a 10 multiple stock. You're generating literally billions. In the case of United, 25 billion of cash flow every year. You need to do something with that. There's a growth imperative. And because the Justice Department has effectively said you can't really buy each other for very long, this was when the Aetna-Humana merger and what was at the time called Anthem and Cigna merger were rejected, they had to basically move other places.
United was early to it and maybe was there for other reasons in addition. But everybody is moving there because they see that's where the risk dollars are because they need to continue to grow and they can't really grow organically in the US. They're not making many more people, the employer markets aren't growing more. You can fight for share in Medicare and Medicaid, but how else are you going to grow? A lot of these have to be looked at as a reflection of was there really a coherent strategy to begin with or was this just let us find the best growing acquisitions we could? And oftentimes, those are the acquisitions that we're least likely to screw up.
I think Optum has become this amalgamation of the care providers themselves, the PBM side, a bunch of software and insights, analytics tools. If you were back there today and getting another $10 billion from the company, where would you take the organization? Where do you think are some of the more interesting growth levers for payers today?
Look, I had a question for anybody, not just United. I mean, the place where we're deeply underinvested in this country is in care for populations that don't even have access to basic care and they have very little access to specialty care or chronic care. And as a result, they're getting very, very sick. You've got upwards of 100 million people in this country that are dying 10 years earlier than people who are well. And I'm talking about people who work by the hour instead of who work salary jobs. I'm talking about elderly low income people. Talking about people in rural America. We have not done a good job. These are practically green field opportunities to serve those people and serve them well and serve those marketplaces. That's what we do at Town Hall. That's a bit of our thesis mandate I snuck in.
But finding those categories and opportunities are people that have incredibly high expenses. And they have incredibly large number of visits to the emergency room and to the hospital that are not well-reimbursed. It's nobody's interest for them to get their care there. The most interesting thing is constructing a model to serve them isn't about medical science. I mean, if you are low income and have diabetes and you are high income and you have diabetes, you have the exact same disease.
What's different is not how we treat you medically. What's different is how we connect to you in your lives. What's different is how well we bring healthcare system, which doesn't... Let's face it, it's pretty brutal for any of us to deal with but it's incredibly brutal to deal with if you're a single parent with a low income. How do we reinvent that healthcare system to give you access to the services you need in a way that's more creative and more trustworthy and more of the way you do things? I think that is bar none the place that requires the biggest investment in our country right now.
You've obviously spent time on the public sector side, which we'll get to, you've done the founding thing, you've done the investing thing. We've had a bunch of founders come on that have built different models that are for rural-care-specific, or for XYZ-demographic-specific. A lot of this is dependent on very good public-private partnerships. From what you've seen and the companies you've worked with, what makes a good public-private partnership and are there companies that you think are doing that really well? What is the secret sauce to actually doing a public-private partnership where you have to interface with the government for most of it?
You know who does it well? Lockheed Martin. Think about that. The US government can't build a fighter plane. They can allocate the funds, they can allocate the specifications, they can interview vendors. By the same token, CMS, which runs the Medicare and the Medicaid programs, oversees a trillion dollars, has all of 6,000 employees. United has 6,000 employees in Bangalore. I mean, you can't manage a trillion-dollar budget with 6,000 employees. Then the state analogy is even more grim. You go to a state like New Hampshire and walk into their Health and Human Services office and you find that the Secretary of Health and Human Services is making photocopies.
These are not people with lots of resources. There is no greater need anywhere in the world for the private sector than in the United States. The opportunity to work with government to solve their problems, to build the best fighter jet, is abundant. I think people put their head in the sand when they think of healthcare as not government contracting business. It is a government contracting business. You are working for the government in one way or another, no matter what you're doing in healthcare. And you're probably not as sophisticated as Lockheed Martin who basically understand that the government is not just a regulator but it's a customer.
And if you treat the government like a customer, listen to their needs, solve their problems, provide solutions, you can do a hell of a good job and make a really good business. Why doesn't it happen? It doesn't happen because there are not a lot of people that have lived in both worlds. I can tell you, people in government don't really understand and appreciate the private sector and what it can do. People in the private sector certainly think that the government doesn't know what it's doing oftentimes.
More often than not, it's just very simple conversation about people's needs and breaking through all that. You've had Adam Boehler on your podcast, I saw. Patrick Conway, Adam, there are more people now who have lived in both worlds. I think they would all probably tell you that those are some of the most significant opportunities that we have right now if you can figure out how to make those things work well.
I feel like when these things work best, it's government, whether it's CMMI or others setting up a new program and then lots of folks building against that, whether it was with ACOs or whether with some of the new value-based kidney care models, it seems like there are starting to be more government setting programs, private payers quickly following. Then from there, a bunch of companies emerging.
Here's what's happening. If this were 20 years ago, the early 2000s when I was at United, if you wanted to do something with the government, you needed Congress or a state legislature to pass a law allowing you to have a new opportunity. Three things happened since then. One is Medicare advantage, the second is Medicaid managed care, and the third is the Centers for Medicare and Medicaid Innovation, CMMI. Those are three entities that the government has basically said, "You have the power to not come back to us for more money, for more rules. You got to keep updating your regulations, of course, but you can go and innovate and partner with the private sector without having to come back to Congress."
Which believe me, it is a huge impediment to any kind of innovation and any kind of predictability, and nobody could build a business around it. But now that you have 75% of Medicaid recipients on a managed care plan, now that you have Medicare Advantage, which is becoming an increasing majority... I think there will be limits to that, but it will be a majority or with large numbers of members, and you have CMMI which can put these models out for Medicare fee for service and Medicaid, people could say, "Hey, I can build a predictable business with predictable levels of income, with predictable levels of amount of growth, with a program that isn't going to be taken away or unlikely to be taken away if we do our jobs well."
I think the thing I struggle with a little bit is that as long as commercial is carved out as a totally separate thing compared to Medicare, Medicaid, and CMMI, it feels like a lot of companies, payers, etc. will basically jack up commercial prices to offset a lot of the things that happen in Medicaid, Medicare Advantage, etc. I don't know. I mean, I think it's awesome, but-
You're arguing for single-payer.
I mean, in some capacity, right? That is the main argument for single-payer, people shifting to-
Or like Maryland and all-payer system.
Yeah, all-payer, whatever. Some government system in which you're capping prices or negotiating. Look, I think the CMMI programs are awesome, but the dent they've made in spending is hard to figure out because a lot of those prices just end up shifting somewhere else.
Look, every time someone would propose something like that or even propose that Medicare Advantage become more efficient, that you say, "Look, we're going to pay you $1,500 a profit per member," that's unheard of in the government program. It's crazy. “And we're not requiring you to become more efficient every year,” you expect your rate notices to see increases, not improvements in productivity. Anytime that gets questioned, there comes a rate notice where rates don't move up enough or there's a proposal to create an all-payer type system, the private sector freaks out. I'll tell you that the private sector in healthcare views its job as to resist all change to their status quo. But every time there is a change, they figure out how to make even more money.
You watch it in the Affordable Care Act. "This is going to be a disaster. If you can't underwrite, we won't be able to keep money, we won't stay in business. No one's going to get insurance. People are going to lose coverage, not gain coverage." The opposite happened. That's because these companies are clever. They game the system. Policy has to be done in a way that's sensible. Not perfect, but sensible, and allows people to make money for doing the hard things that we want them to do as society. Taking care of dual eligible patients, taking care of nursing home patients and PACE programs, things of that nature that aren't getting done. We should set policy, pay people to improve their care and improve their quality of life.
You're talking about it both in the opportunity for United around some of these complex patient populations now on the policy side, too. I feel like health equity is a theme that's united a lot of the things you've done in your career, whether it's your public sector work running CMS. You invest at Town Hall in a lot of these businesses, you ran Cityblock for a bit, you work with the Health Equity Coalition. I guess we've all seen the sobering statistics around health equity. What do you think is required to make meaningful progress here? Across all those different entities you've worked with, what gets you the most optimistic about making progress here?
Nothing improves health equity like putting more money in people's pocket. So far, there's been no single measurable event that's closed equity gaps greater than Medicaid expansion. If family medical leave and the Child Tax Credit were passed and allowed to stay, they would probably be the single biggest difference in improving people's lives and their quality of life. That's the commitment that the country would have to make. During the COVID pandemic emergency, we decided, "We're in emergency, we should not make people have to worry about paying for a vaccine or a therapy or a treatment." Guess what? We were able to close the equity gap really rapidly. Low-income people, people of color actually got as good an outcome after a point as others. But only because we made it financially meaningful.
I think you'll hear a lot of people talking about health equity, but if you ask them, "What's your strategy for addressing generational poverty?" they'll say, "Well, that's not what I mean by health equity. I'm talking about transportation and food vouchers. I'm not talking about the root cause issues." The whole conversation around social determinants of health and other equity is a step in the right direction. But it's only a step. It's not a complete understanding of what needs to happen. Unless we're willing to do the really hard important things, you're not going to see movement in those life expectancy discrepancies.
Yeah, I think this is a debate I get into with a lot of people and we've talked about it in other episodes too, where it's like social determinants of health sound great, but when the healthcare system is one of the most inefficient places to actually deploy capital relative to what you're trying to do, wouldn't it make more sense just to go through these other government programs like SNAP, Earned Income Tax Credit, Child Tax Credit, etc. where you're just giving cash directly to people instead of saying, "Hey, now Medicaid can cover groceries." I don't know if you have thoughts on where it makes sense for the healthcare system to get involved in what is effectively social safety net programs versus maybe those other programs actually just do their thing and we don't necessarily have to mix the two up?
Well, the difference of course, is you have mandatory funding for healthcare programs and you don't have it for those other programs. We fund housing and food and childcare and those things about half of what the developed world does on a per capita basis. So there's not enough money. Then people turn to, "Where is the money actually? Where did the money sit?" Money sits in Medicare and Medicaid. I'll tell you a story. When I was running CMS, we had a crisis in Flint, Michigan. You may recall that lead pipes were poisoning children. These were children of color in a very poor neighborhood in a state where the governor wasn't doing anything about it. We had a severe health hazard for kids.
So we made the decision at CMS that we were going to take say, any child in Flint, Michigan was going to be covered by healthcare until they were age 18. No questions asked. It can never be kicked off. That was one step and that was something well within our authority. But the fact remained that we had another problem. We had a bunch of pipes feeding into people's homes that still had rust in them and they needed to be remediated. The question you are asking, Nikhil, is who's going to remediate them? Well, I did call HUD and they don't have the money. They said, "We can't do it." The governor wasn't willing to lift a finger.
And I didn't have the mandate. I was not legally allowed, according to my lawyers, to pay for pipe remediation. Which we would now call social determinant. No greater social determinant than the pipe leading into your house. So what did I do? What did we do? We did it anyway. Because sitting there at that point in time, knowing that I was risking being called in front of Congress to say, "How are you spending money this way?" I couldn't justify watching the problem and knowing that someone had to step in and solve it. And I had the ability, if very questionable authority. So we did it. We paid to remediate the pipes.
But we need a more permanent solution. I think what a lot of governors would tell you, particularly Republican governors, is they want to blend the budget together. They want to go the opposite direction from what you're saying. They want to blend the budget together and say, "Hey, let me invest more in preschool and let me invest more in safe homes and let me invest more in all these other things and I'll have to spend less on health down the road." There's a compelling intellectual argument there.
The reason the Democrats don't like it, by the way, is because the history is that those programs are cut and the money is never reinvested in people again. They don't trust that the money gets there and so they require that allocation and it's a minimum standard. Long answer, but we are clearly living at a place that's sub-optimized. The reality is someone needs to take leadership and someone needs to act. If you're a hospital, you can say, "Hey, it's not my job to make sure the people are housed.” But guess what? They'll end up on your doorstep.
Sometimes I think of it as a good way to run the experiments. It's like these small private companies basically realizing it's actually worth it to invest upfront in X, Y, Z social determinant. And if they can prove enough outcomes, then maybe it is worthwhile for the government then to invest in those same programs at scale. But it's hard to predict something like Flint. That's just an unfortunate event for everyone.
It's unfortunate. But when you look at the effects of climate, it's going to happen all the time. What happens when people are getting flooded out of their houses? Who's going to pay for fixing all that? Who's going to pay for moving people to places that work and so forth? Communities are under siege in many parts of the country and they're going to continue to be and we have to decide as a country that we're going to prioritize... I was very pleased to see in the Inflation Reduction Act all of the money that's going to environmental justice to try to head off some of these issues. But these are not going to go away.
Switching gears to your entry into the public sector in the first place. You've done so much since. You famously came in to save healthcare.gov and you've obviously come in since on the COVID response. I would love to hear how both of those things came about in the first place.
In the first case, as I was alluding to earlier, I stupidly volunteered. And lest you think that if you make a call like that to the White House, that it won't get returned... It turns out if you're the only one that calls, they may just take you up on it. We had a lot of resources at Optum and we were willing to do whatever it took. I think they needed somebody who would treat the problem like it was their own and that's exactly what we did. But it was scary. I will tell you that after they announced that we were going to do this, after they announced that I was going to lead this, they said, "And it will be fixed within five weeks." We hadn't seen one bit of code or we didn't have one feel for this.
They said, "Look, every technology project in the world, it gets behind budget, gets behind schedule." It's not unusual. And it's often a function of management and leadership. In a crisis, one of the things I've learned is you get a lot of more degrees of freedom to make tough decisions, to make fast decisions, to move things along. And we did it. As a result, millions of people got covered. That was important to me because I wanted... As you know, I talked it about earlier, going back several decades, I'd been focused on the problem of getting people coverage and access to care. It was important to me because if it failed, I believed that people would no longer trust that they should do anything ambitious or bold with regard to the government in healthcare.
It succeeded and President Obama at the time asked if I would consider staying on and I ended up running CMS. It was a wonderful time to be there because we were just inventing value-based care, we were just pushing on access. It was a time where I was a very untraditional leader for CMS coming from the private sector. But I'd gotten to know people during the turnaround, and I learned that you really have to respect the craft of government very much like we expect people to respect the craft of investing or anything else that we do. And there's amazing, brilliant people there. It was just wild and quite an honor. Probably will be one of the highlights of my career, without question.
The second time around, I was that unusual person who knew both the private and public sector, knew how government worked. And I had worked directly with, to some degree, President Biden when he was vice president, Ron Klain, who was chief of staff. In a crisis when you don't have a lot of time, a known quantity is worth a lot. We've been in the trenches together before. And we had a major crisis. We had thousands of people that were dying every day and we couldn't seem to get a vaccine to save our lives into people's arms. We were able to produce some of them, but we weren't getting them to people. People were crawling all over websites, scared to death. And we had variants chasing us down the road and we needed to get people vaccinated fast.
I had just raised a funded Town Hall and it was... My only diligence question, really, during the fundraising process was, "Will you go back to government and become secretary?" I said, "I assure you, I will not go back to government. There's no chance I will go back to government.” Signed a blood oath. The first time they called, I said, "No, I can't do it." The second time they called, I said, "No, I can't do it." The third time they called, I said, "You're scaring the crap out of me. This must be really bad." And they said, “It is.”
We negotiated something where I could come in for a 140-day maximum period, leave by June 6th. Come in the first day of the administration, leave by June 6th. I figured we were either going to get the vaccination program and many of the things we needed to do to get COVID under control done by then and on good footing or we wouldn't. I called every one of our investors and said, "Each of you has a right to veto this if you like but this is what I think I need to go do." And I got a tremendous amount of support and I'm grateful for it.
You were a key part of the most important rollouts of things that impacted people's health over the last decade. Healthcare.gov and giving folks easier access to vaccines, hugely impactful, ended up working out, but were pretty bumpy at the beginning, both of them. I'm curious what you've taken away from it. In an ideal world, we wouldn't have to bring you in each time to save them. We’d just roll them out in an effective way. What have you learned about some of the reasons this stuff happens in the first place? As you think about whatever this third or next thing is that is going to be incredibly impactful, getting that right the first time on the government side and not needing the SWAT team like you.
Well, look, I mean the principles of accountability, building culture and team and execution exist equally within the private and the public sector. It's probably easier to sub-optimize that kind of thing in the public sector because, the really diffuse nature of accountability, because people playing political football and because the fact that they just don't value operations and execution as much as they value policy and politics. What was unusual is that I think as I got into working with folks, and I think I'll be critical more of the Democratic side here for a moment. I think the Democratic side is a little more suspicious of the private sector. The Trump administration was overly reliant on the private sector and believe the private sector could do everything.
I think that hopefully I gave an appreciation to people that as long as you could read the room and listen and know your environment and you connect, you actually can go in and execute. In my mind, everything is an analogy, the president was my boss, Congress is my board of directors, the American public were my shareholders and the ultimate bosses. So if I got called in front of Congress and yelled at, I would say, "Okay, this is no different than my board telling me that they're hearing things from shareholders, that they're concerned about needing me to address." Framing it in that way and then focusing on accountability and execution and helping people win.
I'll tell you what. One of the gifts is when you know you're only going to be there for a temporary time, you want to leave a better legacy and you can make everybody else the winner, and you don't have to worry about yourself because you're not trying to build a career. I wasn't trying to build a political career. I was trying to get stuff done and give a little something back for all of the things I've gotten to enjoy in my life and in this country. When you do that, when you have that attitude, I just wanted to leave the agency a better place, and I wanted to leave the processes in the government a better place, it's amazing how much you can get done. And that's true in your life and our life as well. You build team, don't focus on credit, be the go-to person, all that kind of stuff and you're going to increase your odds of success.
You were one of the faces of, I would say, communicating a lot of the things happening in COVID to the public. I'm curious about two things. One, how do you think we can do a better job of actually delivering science communication to the masses? Because clearly, that was one of the big hang-ups during this whole thing. Then two, somewhat relatedly is do you think we're better or worse prepared for a future pandemic should one come?
Let me talk about the communication thing because I think we really, really screwed that up and it's so easy to screw up at it. My big lesson in some respects is don't overthink it. Don't try to play guessing games as to how people are going to interpret what you're saying. Don't try to manage them to a message. One of my first days, I was at the White House and I was going out to speak, and one of the staff people told me that this was going to be broadcast live on CNN, Fox, MSNBC, NBC, ABC, CBS. I called my wife and I said, "Hey, I'm about to go out and talk to the public about..." To put it in context, the Trump administration hadn't held a press conference in months and months and months, which was one of the reasons why all the networks were all over it.
And I said, "Hey, I'm about to about to walk out on stage." She said, "Just remember, confidence is sexy." Which is basically saying, “Slavitt, no jokes. None of your dad jokes. Just go out there and be confident." I had this image in my mind when I walked out there of every question I was going to be asked, to answer them as if I were talking to my own sister. Why my sister? My sister's a couple years younger than me. She's brilliant. She's a PhD. She's very smart. She knows nothing about healthcare, she knows nothing about this stuff, but she has a right to be curious and she has a right to get her questions answered. The advice that I give to her is advice I'd give to someone I deeply care about. And she's smart enough to understand nuance.
When I got asked a question, I would try to answer it in a way that I think people would want that information and that could be most helpful to them. It made it easier by the fact that when I was in the Oval Office talking to the President, at one point I was talking about how a piece of news would go down. And he said, "Look, Andy, one thing when you're out there, I don't want you worried about how what you say reflects on me. I want you to give people the information they need that'll be helpful to them." Made my mission incredibly easy. It made my mission much, much easier.
I was asked pointblank, "When are we going to be able to get vaccines? Because we’re getting on websites and we can't find them." I said, "Look, let me just be clear on the situation as I see it. We have a shortage." No one had used that word before. I said, "We have a shortage. That shortage is likely going to be here for a period of weeks, if not months. And it's very uncomfortable for us to not get what we want when we want in this country. And I get that. I recognize that. You should expect that we're not going to sleep very much until we close this shortage. But I promise you, the shortage will end. In the meantime, you should just know the reason you're experiencing what you're experiencing is not because of inefficient websites or anything else, it's because there's not enough vaccines out there."
Then I said, "I'm going to report to you three times a week on exactly how many vaccines we're sending out, exactly how many are getting used, exactly how many we're going to send out the following week, exactly how many people are getting and not getting their vaccine." What I thought I said there was just an ordinary answer to an ordinary question. But that particular response, I think in part because I just sort of said, "Look, we have a shortage," it was the quickest way to explain in the simplest words what people were actually feeling.
And I think for a long time, they were feeling like, "You're describing something that's not what I'm experiencing. You're saying 'I promise you by this date, this will happen.' Or 'This isn't so bad.' Or 'This or that.'" And I got a tremendous amount of response because people felt like they were being told the truth. And I just tried to follow that path.
It's great insight. That was a really tough period of telling people what was going on while it was happening without true certainties. I do not envy being in that position. But it's very helpful to hear how you thought through that stuff because I'm sure there were a lot of tradeoffs made in the messaging. We'd love to talk a little bit about how you think about how the government is prepared for future pandemics. Are we in a better place or not? I feel like when monkeypox came around, it was the second test of a little bit of pandemic infrastructure. I'm curious if you thought we did well, especially relative to what you were expecting.
I think the smart investment we could make is one that Congress has chosen not to make, which is essentially to buy the spare capacity to be able to turn on and within six months, be able to have a platform that can produce vaccines and therapies for most of the viruses that are likely to cause the next pandemic. Including bird flu, H5N1, which is I think the thing giving people cause to say that may be the next big risk. It's impossible to hold stores of millions of vaccines because the variant that will come may not be bird flu, may not be this H5N1. It may be a different one. You can't actually be prepared with vaccines on the shelf and ready to go. But the next best thing is to be able to say within six months, we're going to be able to do that.
Right now, the mRNA platform, the good news is it allows us to do a lot more quickly. The bad news is we would have to scramble because Congress hasn't allocated those resources. I, for one, think that they should. The question then becomes, "What happens in those six months?" If you would say that there's two variants you got to look out for, two variables. One is how contagious something is. Is it as contagious as the flu? And the other is how lethal is it? Is it as lethal as Ebola? If it's one or the other, if it's highly contagious but not very lethal, then you're going to have to control that in...
You have to really be resigned to the fact that you're going to see a lot of spread in the short term. And if you have something that's highly lethal but not very contagious, then you say, "Okay, great. We're going to have a really strong containment strategy and make sure that this doesn't spread." Now if you have both, something that's contagious and lethal, that's when you really have to worry. I think we do have to be running scenario planning, red teaming, focusing on what happens in those kinds of situations. That's the answer on a government perspective.
From a human perspective, I worry a little more. I don't think we demonstrated that we are our brother's keeper as a whole in our society. I don't think that people rose to the occasion and said, "We will sacrifice to defeat this thing." I think people ran into their own camps and it became a little more politically heated than it needed to be. And I think the communication fouls that you mentioned did us no favors. But that stuff we have to do better and get right. We're going to present to Congress in March on recommendations to respond to the next pandemic for pandemic preparedness. I hope Congress takes it seriously.
We always like to end our interviews with a quickfire round where we'll get your quick thoughts on a few questions that we ask all our guests. To kick things off, we hear the same themes all the time in digital health that are all the rage these days. Curious, one you feel is overhyped and one you feel like is underhyped.
AI and AI. AI, for the last 15 years, when it's been called everything from big data to cloud or whatever it has been called, analytics, overhyped. Overhyped because a solution in search of a problem is not what healthcare needs. But generative AI may be able to solve problems of consistency. Not the kind of things that people necessarily think about but the problems that plague us because they're so variable. They're low-level things that we don't do the same way every time, everywhere. I think there is genuine promise there but that promise could only be achieved if we define the right problems. Look, we have a labor crisis that's not going to get any easier. We have a huge shortage of nurses and we have more nurses now than we will ever have ever again. We have to solve that. That is one of the things we can tackle.
We generally ask people, if you had a policy wand and you could wave it and make one change, what would it be? But I want to get a little more specific with you on what do you think should change about Medicaid that would meaningfully improve the program today?
I'm going to partially obey your rule and partially not. I think a childhood tax credit is the number one thing we can do to improve healthcare in this country. I think that's not actually Medicaid but it will enable people to get healthy through the program or get a job that they can keep and maintain and pass it through the program. People are always surprised when I give them this answer because it's a non-healthcare policy. But I think to some extent, we in the healthcare system deal with the dysfunction that exists because our society has a really weak safety net. That's where I would be. I think that's going to be far more powerful than even the very exciting efforts. Again, social determinants, spend and all that other stuff that's happening in the Medicaid program, I think that's fine, but I'd rather go deep than scratch the surface.
We've talked a lot about communication throughout this episode and effective ways to do that. I know when you left the administration the first time, you'd spent a lot of time defending the Affordable Care Act and promoting a bill that has individual features everyone loves, but maybe in aggregate has been more challenging to get popularity for. As you reflect back on the rollout or promotion of the ACA in the early days, what’s one thing you would've done differently to get better initial public response?
I think you asked the question exactly the right way, Jacob. It was a bill that people were tempted to say, "It does this and it does this and it does this and it does this. And it's kids that are under 26 and this and this and this." Something for everybody. Republican messaging begins and ends with, "No, you don't want this. No, you don't want this. Here's why it's bad." It's a lot easier to say something is bad than to say all the reasons why it's good. So if you don't have to come up with a solution on your own, it's very easy. It was only when Paul Ryan, who I like personally, had actual responsibility along with President Trump and Mitch McConnell for coming up with something that they flailed.
But what we learned after the fact was there's one thing that people found really important and almost everybody did, and probably to a fault we should have only been talking about that one thing. And if I said to you, Jacob, "Hey, do you believe that everyone in the country should have health insurance?" You'd say, "Yeah, I guess so." If I said, "Do you think that should happen at a cost to you?" I.e., your insurance may be less. You'd say maybe half the people would say yes and half the people would say no. But when we start talking about something that you value, in this case, preexisting condition protection, it turned out that 90% of the people said, "Well, no, don't touch that. Don't touch that."
I think if they had to do it over again, they would've talked about this in those terms because it's something everybody could relate to. I think for a lot of Democrats, they think, "Hey, if we just say this is really good, it's going to help low-income people, people will get it and say, ‘Why not do that?’” But in government, people have to see themselves in the problem. Say, "Look, you're going to want preexisting condition protection because someday, you might leave your job and someday you might do this and someday you might do that." And all of a sudden, you're casting it in people's terms and it was a much more powerful argument. Indeed, over time, the law's gotten more popular in part because people understand those things about it. They don't have to understand everything about it. They just have to understand the part that's relevant to them.
My final question, since most of us are never going to be in the Oval Office, what's surprising about the room?
I guess the most surprising thing about the room is it's just a room. Its carpeting is a little bit threadbare, the wallpaper is nice. It's cool when you can see Marine 1 land right outside the window. You sink way down in the couches when you're sitting there, you feel very small. But I also think it's a room that people can... Various presidents have different philosophies but can really use to their advantage. I actually think Donald Trump, the master at marketing and positioning, was very effective at freely bringing people into the Oval to use his power to make all kinds of points. I found President Obama was more… treated it like a special sanctuary.
The West Wing itself is probably interesting. If you've never been in there, it's like a nice trailer. It's a rectangle attached to the nice part of the White House and to the East Wing. But it's a trailer. If it wasn't located at 1600 Pennsylvania Avenue and wasn't painted white, you could feel like you're in an office park, crammed in with narrow hallways. It doesn't look like it does in West Wing. Shoved in upstairs, you're walking in the hall. If you're walking up the narrow stairway, you're bumping into the person who's walking down carrying coffee.
But I have to say, I'm not so cynical that I can't say it isn't an incredibly cool place to be, an incredibly cool place to work. It's very exciting. There's a lot of decisions getting made rapid fire. The people that you're around, if you're lucky, are super smart and collaborative. Notwithstanding that it's kind of a trailer park, it's a place where it's a real privilege to spend time.
You did some pretty impactful things from that trailer park. Huge thanks. This has been a fascinating conversation. It's one of our favorite parts of doing this, that we get to talk to folks like you. I'll leave you with the last word. For folks that are interested in learning more about you, obviously you have your podcast, somewhat active, depending on the day, on Twitter. What's the best way for them to do that?
I think In the Bubble is one of the best things you can listen to if you want to be plugged into the world. If you want to know more about our firm, Town Hall Ventures, obviously, look us up, call us, email, write us, get on our website. We love what we're doing there. I have a policy organization which is all about providing access and equity called United States of Care. I don't run it. The woman who runs it is a wonderful woman named Natalie Davis. That's cool stuff.
You'd see me in the Atlantic, you'd see me doing all kinds of things. If I could be helpful to people, I will. That's kind of my job, as I've become more of an old man and less of an aspiring person. Hopefully, people who are listening to this who are earlier in their careers, I think part of what my job is now is to help that next generation of people reach their potential because we need it.