Nancy-Ann DeParle, Managing Partner & Co-Founder, Consonance Capital Partners
How does our own well-being affect the community? Nancy-Ann DeParle, Managing Partner and Co-founder of Consonance Capital Partners, draws on her experience in health policy at the state and federal level to share an optimistic view on patient-centered well care for the future of health care.
Nancy-Ann DeParle is a managing partner and co-founder of Consonance Capital Partners, a private equity firm focused on investing in innovative health care companies in the lower middle-market. She is a director of CVS Health and HCA Healthcare, as well as Consonance portfolio companies Psychiatric Medical Care and Sellers Dorsey.
From 2011- January 2013, she was Assistant to the President and Deputy Chief of Staff for Policy to President Barack Obama. A health policy expert, from 2009-2011 DeParle served as Counselor to the President and Director of the White House Office of Health Reform, where she spearheaded the Obama Administration’s successful effort to enact the Affordable Care Act (ACA) and managed the initial implementation of the law.
From 2006-2009, DeParle was a Managing Director of CCMP Capital Advisors, and a senior advisor to its predecessor, JPMorgan Partners, LLC. She was also a Senior Fellow at the Wharton School of the University of Pennsylvania and a trustee or director of several corporate and non-profit boards, including the Robert Wood Johnson Foundation. From 1997-2000, DeParle was Administrator of the Centers for Medicare and Medicaid Services (CMS). She directed Medicare, Medicaid, and State Children’s Health Insurance Program (CHIP), which provide health insurance for more than 147 million Americans at an annual cost of $1.4 trillion.
Earlier in her career, she served as Associate Director for Health and Personnel at the White House Office of Management and Budget (OMB), as a litigation lawyer in private practice, and as Commissioner of the Tennessee Department of Human Services.
A native of Rockwood, Tennessee, DeParle received a B.A. with highest honors from the University of Tennessee, where she was Student Body President, and a J.D. from Harvard Law School. She also received a B.A. and M.A. in Politics and Economics from Balliol College of Oxford University, where she was a Rhodes Scholar.
Show Notes
Nancy-Ann DeParle shares her background in health policy in Tennessee state government and then in the Clinton and Obama administrations. [02:54]
A vision of what to expect from the health care experience in 2049. [09:52]
How will health care be paid for in the future? [15:16]
Why should we be optimistic about patient-centered care in the future? [21:14]
A person’s well-being is not only good for them, but also for the community. [26:17]
Transcript
Jason Helgerson: I'm Jason Helgerson and you're listening to health 2049.
Nancy-Ann DeParle: If I'm the patient, I'm on the team, too. I'm the quarterback, perhaps of my team or the point guard. And I am defining health care for myself in 2049 as an overall state of wellbeing. And if we look at it that way for everyone, it will compel us to be less selfish, to be more engaged in our communities, to think more about other people, to understand that my wellbeing is not only a good thing for me, but it's also a good thing for you and everyone else who lives in the community.
Jason Helgerson: [01:49] Today's guest has been one of America's most impactful healthcare policy makers over the last 30 years. In his recently released book, President Barack Obama states he relied more on our guest than anyone else when it came to getting the Affordable Care Act passed into law. In addition to her time as President Obama's top healthcare advisor, she was also the director of the centers for Medicare and Medicaid services during the Clinton administration.
She is now a partner and co-founder of Consonance Capital Partners, a private equity firm that focuses on investing in the US healthcare industry. Her vision for the future is one in which we will see the emergence of a true well care system, which will replace the sick care focus of today. In addition, she is confident that all Americans will be insured by 2049 and that value-based healthcare strategies will lead to a healthier tomorrow. I am Jason Helgerson and it is my pleasure to welcome Nancy-Ann DeParle to our program, Nancy-Ann, welcome.
Nancy-Ann DeParle: Thank you. Good to be here.
Jason Helgerson: [02:48] So maybe Nancy-Ann we could start by just having you tell our audience a bit more about your interesting background.
Nancy-Ann DeParle: [02:54] Well, it goes back several decades at this point, I guess I would say I started my career in healthcare, in a sense, at my grandmother's kitchen table. I grew up in a small town called Rockwood, Tennessee, a town of about 4,000 people in the eastern part of the state, Appalachia. I have a vivid recollection of sitting at my grandmother's kitchen table in 1966 or 67, she had a little shoe box on her table where she kept bills. And I can remember her sitting there with me and looking at the bills and she had bills from the doctor's office and saying, I wonder if this Medicare program is going to help me. It's funny, the things you remember, but of course, when I came to be the administrator of the agency that runs Medicare and Medicaid, the Centers for Medicare and Medicaid Services during the Clinton Administration, I often thought back to my grandmother and her wondering if Medicare would help her, which I think it definitely did. She lived a nice long life, passed away at the age of 98 and like many people who, if they get to be the age where they're eligible for Medicare in this country of 65, there's evidence that Medicare keeps them living healthier, longer. It's one of the few areas, in fact, Jason, where we compare favorably to other developed countries because Medicare has been so important to the senior population.
So like you, I worked in state government in Tennessee, you were in Wisconsin and New York and I was in Tennessee. And then had even more of an education about healthcare from the governor that I worked for Ned McWherter, who came into office with a pledge of doing something to address what he, and we call them indigent healthcare, the lack of healthcare for poor working people across Tennessee. We had a Medicaid program that was, I wouldn't say generous, but middle of the road, we covered everything we were supposed to cover kind of at a minimum, but there were a lot of working Tennesseeins’ who lacked coverage.
So I worked for a couple of years on a task force that the governor set up, I was the Commissioner of Human Services, which we did the eligibility determination for Medicaid. And so I got close to that aspect of it as well as, how do we solve this problem of covering the uninsured, the working uninsured in Tennessee. Out of that came something called TennCare, which was a Medicaid waiver that the state obtained from the Clinton administration. By then I was working in the Clinton administration, so I wasn't involved in implementing the waiver, but sort of in its most basic form, what it did was take the funding that went to this sort of arcane part of Medicaid called Disproportionate Share, the payments to hospitals that serve disproportionate share of low-income people and uninsured people and take that funding and match it up with individuals who lacked coverage.
So we expanded the Medicaid program to a higher level, percentage of the federal poverty level, and it applied also to working people. In the past, Medicaid had been limited to what was then called the AFDC, Aid to Families with Dependent Children, the welfare population, so mostly single moms and children.
So we expanded the population coverage and changed the funding to hospitals by giving the money directly to the patients, as opposed to the hospitals. It was a terribly difficult negotiation with all the different stakeholders in Tennessee, but the situation had gotten bad enough that everyone came to the table.
So I learned a lot from that experience of working to help people get coverage in Tennessee that informed the work that I later did, both in the Clinton administration and certainly working as President Obama's point person on the Affordable Care Act. I learned a lot of political lessons. I learned a lot of policy lessons about how to get things done and how to make progress and keep moving, trying to get, not make the perfect, the enemy of the good. So those are several experiences that I've had. And then as you mentioned, I spent 2009 through 2013 in the Obama administration, starting off as the point person and running the White House Office of Health Reform. And so led the administration's ultimately successful effort to enact the Affordable Care Act.
I certainly had no idea that it would become as controversial as it became because for 10 years after the failure of the Clinton health effort, which I'd also been involved in, there were all sorts of strange bedfellows, groups from providers to policy people to advocacy groups, everyone at the table talking about ways to solve the problems that we had in the healthcare system, from how to bring down the rate of cost growth, to how to reform the insurance markets, how to get everyone covered. All of these problems of course were inextricably linked and there were some, it seemed, bipartisan solutions that people were supportive of, at least so I thought when I took the job. But as everyone knows, it became very controversial by the time it eventually passed. And a friend has a book coming out called the The Ten Year War and it's an even longer war. If you look back to when the effort to get everyone covered for started, go back to President Teddy Roosevelt, but it certainly has been a 10 year war since the Affordable Care Act was enacted.
Jason Helgerson: [09:09] Absolutely and unfortunately the war, I guess, continues at least with some continue to advocate for the repeal, but then also, obviously with the new administration in Washington opportunities potentially to expand upon it. But let's think a little bit farther into the future Nancy-Ann and I think to the year 2049, so roughly 30 years into the future, what is your view of healthcare? What does it look like there in that year 2049, given all your experiences to date as a policymaker and in other roles, we think you're ideally placed to paint a vision for us of what the health and healthcare system could and should look like in the year 2049.
Nancy-Ann DeParle: [09:52] Well, I'll try, it won’t surprise you that I'm an optimist having worked in these policy wars for healthcare for the better part of three decades now. So I'm an optimist and I've approached it Jason, from the perspective of a patient. So what should a patient's experience be? What should a citizen's experience be with respect to their health and healthcare 30 years from now? And so idealistic really I've sort of sketched out what I think their experience should be like. I will say that I'm not negative on where we are now. I've been doing this long enough to see that we've made progress in some areas, but of course we have a long way to go.
So I would see as a patient that when I needed care that it would be simple and convenient to access. And by the way, care and health as a term would be defined holistically as an overall state of my wellbeing that would encompass both physical health, but also mental, spiritual, and social health. It wouldn't be just the way sometimes it's thought of today as a care for an illness, care for sickness, it would be thought of as an overall state of wellbeing.
If I need care in 2049, I hope it will be simple and convenient to access. I hope pricing of it will be transparent to me as opposed to the way it often is now where it is not transparent, as well as data about people like me who used a particular service or provider and their view of it and how they did, because I think that information helps people make decisions about what to purchase in other aspects of their life. And I believe that price and cost increases in healthcare should be, and will be 30 years from now, more tied to the value of the treatment or the service as measured by the quality of one's life, the improvement that it generates in your activities of daily living. I can think of a lot of different metrics, but there should be some way of valuing it and deciding whether or not a cost increase that is made is worth it or not, whether I’m getting a return on that investment that I'm making as a patient.
I believe that physical and behavioral care will be much more tightly coordinated, that it won't be unusual if one is receiving treatment for physical care to get asked about potential mental health care needs, or maybe be offered mental health care supports and vice versa, that if one is seeking therapy or treatment for mental health needs, that one's physical health will also be a subject of discussion.
And as part of that to make that happen 30 years from now, we need to have a much stronger reliance on team-based care, where one's team of providers, because there still won't be specialization, I don't see there being one person who can do everything for an individual with respect to their health care and wellbeing, but there should be much greater collaboration and much greater information sharing among the people who are on my team.
Maybe artificial intelligence helps make that more possible. We certainly have a ways to go with interoperability of the information now, but even if it were interoperable, it's not clear that each member of the team would know what to do with it. So maybe AI helps us there. And speaking of our data and our electronic medical records, consumers and patients should own their health data and it should be easy for them to know what the members of their clinical team, their wellbeing team have to say about their health status and how they can promote their health.
And finally, genetic testing we'll have figured out a way to use that appropriately, patients who want to use it, we'll be able to use it to identify potential risks that they have and also it could be used to help aid in diagnoses and prevention and treatment amongst the team that's providing care.
Jason Helgerson: [14:52] And then Nancy-Ann, and maybe we could talk a little bit about how you see healthcare being paid for in the future. Do you see it as a multi-payer world? Do you see the role of, in the United States, the large government payers, which you were administrator of Medicare and Medicaid, do you see those programs getting bigger, remaining about the size that they are today? How will people have their healthcare paid for in the year 2049?
Nancy-Ann DeParle: [15:16] I don't see it becoming a single payer world and that’s perhaps just my blind spot having worked so hard on the Affordable Care Act when this gets to the real politic of where we were in 2009 and where we are today in 2021, I have no idea where we'll be politically 30 years from now, but at least where we've been for the past 50 years, even in 1965 when President Johnson had a veto proof, he had a two thirds of Democrats in the House and in the Senate for a pretty long period of time. And still, it wasn't easy to pass Medicare and Medicaid, which were passed together.
Fast forward to 2009, we had a majority in the House and Senate as well, it was much thinner, famously we had fifty-eight Democrats in the Senate, and by the time the bill finally came up for passage in December of 2009 in the Senate, we had sixty. If you counted the two Independents in the house, we had a much bigger majority and still ideas like a public option, having the government offer a plan or even expansion of Medicare, a Medicare buy-in were floated, not even single payer, but those kinds of ideas were floated so that the government would have a bigger role and there were not the votes for that. So it's true that the membership has changed somewhat. The point is that even with much stronger majority’s, Democrats haven't had the votes in their own caucus to pass something like that. So can't predict, my crystal ball doesn't really look out 30 years from a political perspective, but I doubt that that will have happened.
I do think the government may pay for a larger population. It is possible that there will be a Medicare buy-in of some kind for people 55 to 65 or 60 to 65. Those ideas have been talked about, as I said there weren't the votes for that the last time, but maybe there could be as part of strengthening the Affordable Care Act. Some senators have offered that as an idea and President Biden has also talked about it.
So I do think it's possible that a larger percentage of people will be covered through help from government plans, whether Medicaid or from Medicare. I hope Medicaid is a larger share because there are twelve states that as we talk today, still haven't expanded to cover their population that was covered by the Affordable Care Act under Medicaid.
The Medicaid today is not your grandfather's Medicaid. It's a very different program. As you know, even from when you were running it, at least in Wisconsin, Jason, it's been a little less time since New York. And so you resided over some of those changes, but it's more of a middle-class program than it originally started off as, and as it gets expanded I think it will cover more.
So I see multiple payers, I don't see employers being willing to give up the game when it comes to providing healthcare for two reasons and I hope they don't for two reasons. One, because of the war for talent in this country, which I think is a good thing. I mean, you could argue that well they could just pay people more and in some cases they should do that as well and they are doing that as well. But healthcare is a benefit that people want and employers use their provision of healthcare as part of the way they attract and retain good employees and their families. So that's, I think a good thing that they want to continue doing that.
And secondly, they have been innovative. So we in the Affordable Care Act included pretty much every idea that had been tried and successfully implemented in the private sector to help constrain healthcare cost growth and improve quality. Some of those ideas were demonstrations in Medicare, others were more widespread. We need to go back and do the 2.0 version like the employer wellness programs that was somewhat muted version of what some private sector employees were doing. But nonetheless, we tried almost everything. We wouldn't have had those ideas had private sector employers not been innovating and working with health plans and providers to require them to meet new standards and to show more value for the services they were offering and do it at a better price. So that innovation, which the private sector has been a laboratory for as well as states, I think is important. So I hope the employers do decide to stay in the game and the evidence that I see is that they want to. So I think the basic contours of a multi-payer system will remain the same.
Jason Helgerson: [20:57] So your optimistic vision of a more patients that are more person-centered system in 30 years in the future, can certainly see some barriers that would need to be overcome and to get from here to there. But how confident are you that your vision will be achieved?
Nancy-Ann DeParle: [21:14] Well, I am pretty confident and the reason is because I see the progress that we've made even in the 10 years since the Affordable Care Act was passed. We talked and I raised the fact that the Affordable Care Act had been controversial in some quarters. And there's still efforts to repeal and replace. I guess we haven't seen one since 2017, really, but it's been a voting issue every single election since it was passed.
So starting with the 2010 midterms, that has been a key voting issue. But that said, in the background with all the controversy and the ads being run by various people against it, the insurance plans went to work and changed their business model from one that relied on being able to underwrite and pick the risk they would cover in many states, very lightly regulated. They could charge women in some states as much as 25 times more than men in the individual market just based on, I assume it was based on something actuarial, but that's what they did. There was no real community rating in that market in many states. They were allowed to not cover people with pre-existing conditions in many places. No one had true protection against that. It wasn't guaranteed issue all over.
So there were a lot of changes made to change the rules of the road for insurance companies. And they turned on a dime and implemented them, which wasn't easy. But when you see those kinds of changes, when you see some of the models that have gone into place to move us towards paying for value, again, experts disagree about exactly how much of our payment of our healthcare dollar is devoted towards services that are reimbursed based on the value they provide, but it's not zero anymore. It might not be 50%, it probably isn’t. It's probably closer to 20 or 30%, I guess, most of my data's for Medicare, but that's something, we're making progress. We've got the foundation in place and really that's what President Obama, I think that's what his thinking was, is he looked at the bill towards the end and made the decision about whether to make the final push that was so fraught, was that yes, it achieves enough of his ambitions for a healthcare system that lowered the rate of cost growth that improved and reformed the insurance markets that got everyone into the system, or almost everyone, that created some rights and responsibilities, rights to healthcare and responsibilities to get coverage and some help and getting it.
So that was the foundation. And I think it's made a lot of changes for the better. That gives me the confidence that we can make other changes to move forward on some of these other issues. The convenience to access, I suppose that was the silver lining, if you will and the pandemic that we're still in the midst of as we speak, hospitals and healthcare systems, again, turned on a dime there.
Some of them had maybe 2% of their visits in a given year would have been tele-health and now it's 60% or somewhere like that. It probably won't settle out at 60%, but a lot of physicians who had no plan to have a tele-health offering were forced to move to that and it found, Hey, this works pretty well. It serves my patients' needs and it doesn't require them to have a carbon footprint and go into my office and search around in a parking lot or a parking garage for a parking space. So all of those things about simplicity and convenience to access, I think are being, if not jumpstarted, at least advanced exponentially by what we're going through right now. So yes, I guess I would conclude by saying I'm very optimistic.
Jason Helgerson: [25:39] So in terms of this vision of yours, as a final question, I’m going to ask you to take a step back and think about it from the broader perspective of the nation, of the world, of humanity. If your vision is achieved by the year 2049 of this very patient-centered WellCare system that is integrated in, you use the word team, I use the word team all the time, I like to say that we need to make health and healthcare a team sport, so I agree a hundred percent with you, if we do achieve that state that you articulated, how will it actually make the world a better place?
Nancy-Ann DeParle: [26:17] I like that, a team sport and by the way, if I didn't say this, if I'm the patient, I'm on the team too. So I'm the quarterback perhaps of my team or the point guard and I am defining healthcare for myself in 2049 as an overall state of wellbeing that I'm in charge of, not totally responsible for, but I'm in charge of helping make sure that I get what I need from my team, that it encompasses not just my physical health, but also my mental and my spiritual and social health as well. And if we look at it that way for everyone and we as a community, look at it that way, then I think it will compel us to be less selfish, to be more engaged in our communities, to think more about other people, to practice the golden rule to understand that my wellbeing is not only a good thing for me, but it's also a good thing for you and everyone else who lives in the community. And I think that’s a good thing. I think that makes the world a better place. If we think about our lives as being part of community and being engaged in a community, I think it's a virtuous cycle because I think that kind of engagement also leads to better mental and spiritual health and social health. It makes me care that we have clean water in my community, not just for me, but for everybody, it's public health. If this pandemic has taught us nothing else, it's that public health isn't something that you put on a shelf that you just take for granted. It's taught us that it belongs to all of us and we're all accountable for making sure that we have an infrastructure and a foundation for the health of the community, the health of a population that includes not just, it certainly includes whether people get vaccinated and whether they're safe drinking water and safe places to play and good nutritious food to access, but it includes housing and lots of other things as well. I just think it's a more community. If we put our wellbeing in the center of things and look at it, not just as our own wellbeing, but everyone's wellbeing. I think it is a positive thing for our community and for our country and hopefully the globe.
Jason Helgerson: [29:01] Absolutely. I couldn't agree with you more. And that was Nancy-Ann DeParle's vision for health and healthcare in the year 2049 as always. Thank you for listening to health 2049. If you enjoyed what you heard, please subscribe to us and share this podcast with a friend. Thank you and see you next time.
