Ep. 25: Administrator of Change

with Seema Verma

September 2, 2021

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Seema Verma
Former Administrator, Center for Medicare and Medicaid Services (CMS)

At CMS, Seema Verma was the architect of CMS’s strategic vision, implementing over sixteen tactical initiatives aimed at transforming the American healthcare system to lower costs, improve quality, and increase access. During her tenure, Verma led federal government efforts to infuse market competition, empower patients, and unleash innovation producing historic reforms. She also drove efforts to require price and quality transparency while ensuring patients have ownership over their portable medical records.

Verma’s historic “Patients Over Paperwork” initiative reduced regulatory burden and saved the healthcare system billions of dollars. Verma also worked to accelerate value-based care transformation and address the social determinants of health by advancing new payment models throughout CMS programs, including models for drug pricing that resulted in lower insulin prices. Under her leadership, premiums dropped in Medicare Advantage, Part D, and the insurance exchanges. In response to COVID-19, she led industry-changing efforts to drive telehealth and remote care across the healthcare system while creating flexibility for health providers to augment the health care workforce, expand services and testing, and ensure access to vaccines and therapeutics.

Prior to CMS, Verma was the founder and CEO of a health policy consulting firm helping states and private industry on a range of healthcare issues. Verma received her BS in life sciences from the University of Maryland and her Master’s Degree in Public Health (MPH) with a concentration in health policy and management from Johns Hopkins University.

 

In order to make a difference, you have to lead. You can't just wish for it, you have to make it happen.

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Gary Bisbee 0:43

Born to immigrant parents, Seema Verma was taught from a young age to pursue excellence, and that’s exactly what she has done across public and private sectors. from Indiana to Ohio to Kentucky to Washington, DC. We developed a better understanding of the Healthy Indiana Plan, a unique Medicaid expansion that utilizes health savings accounts. This work developed her relationship with Indiana governors Mitchell Daniels and Mike Pence and led to her appointment as Administrator of the Center for Medicare and Medicaid Services. The priorities Seema took on at CMS included deregulation, decreasing administrative costs, and moving toward value-based care. She’s a firm believer in the free market and worked to align financial incentives of the patient, payer, and provider. These ideals continued to inform decision making once COVID-19 hit. She discussed the lessons she learned leading CMS during a global pandemic and the contribution CMS made toward the public/private partnership, Operation Warp Speed. She shared that the most important thing she learned as a leader in a crisis is the importance of listening and communication.

Good afternoon, Seema, and welcome.

Seema Verma  2:10  

Thanks for having me, Gary. It’s a pleasure.

Gary Bisbee  2:12  

We’re pleased to have you at this microphone. This show is all about leadership. And you’ve had a wonderful career leading in both the private sector and the public sector. We’d like to explore both of those. We tried to get to know our guests a bit, learn a little bit of their background, and that helps us close them as a leader. What was life like growing up for you?

Seema Verma  2:38  

I am the daughter of immigrants, my dad came over here in the 60s, married my mom and she came over as well, both of them are from India. So like a lot of immigrants, they have that vision of the American dream, trying to make their own lives better in the lives of their children. And I think because of that they gave up a lot, it was difficult for them to leave their family and friends. And back in those days, it wasn’t as easy to communicate. So it was still just writing letters. And they look forward to getting a letter every three or four weeks from their family members. And I think because of that they’d invested a lot and they set a very high bar, they expected a lot from us. And I still have the memory of coming home excitedly with a 95 on my math tests. And I thought it was pretty good. And my dad said, “Well, that’s good, but what happened to the other five points?” That was how our household worked, always the pursuit of excellence, trying to do better. No excuses. It didn’t go very well. It was like they expected you to deliver a certain level or a certain high expectation no matter what, so I think some of those core principles about hard work and perseverance and never giving up and always delivering no matter what. That’s really served me well in my career.

Gary Bisbee  3:58  

What did the young Seema think about leadership?

Seema Verma  4:01  

Back in those days, there were a little more Barbie dolls and boys rather than leadership. But I think from an early age, even in high school, and in college, I was always involved in leadership positions, whether it was student government or different clubs and activities. I always found myself sort of saying this is the way I think things should work and volunteering and stepping up to the plate.

Gary Bisbee  4:26  

You mentioned your parents, did you get any of your leadership style from your parents?

Seema Verma  4:33  

I think so. If you ask any of my team members, they would say she has a very high bar and there are very high standards. And I think that’s sort of what I expect of myself. And I also expect it from my team. And because of that, I think we had a lot of obstacles against us at CMS over these last four years. The team did extraordinarily well and produced a lot of great outcomes, some of those themes about “we’re going to deliver for the American people and the American Health System no matter what.”

Gary Bisbee  5:06  

Thinking back on your life, at what point did you recognize you were a leader or at least had the interest in being a leader and probably found yourself being very successful at it?

Seema Verma  5:21  

I think it’s also recognizing, as you go along with your career, and you realize, if you want to do X, or Y, or Z, in my case, I wanted to impact policy, I wanted to see these changes, I felt like things weren’t going in the right direction. And when you have that feeling, it’s I want to do something about it. And I’m going to use whatever skills I have to impact that. So whether that’s being in the student government, in high school, or in college as well, it kind of comes from a desire or I would say, a concept or an idea that “this needs to change, something needs to get better.” I want to be able to fix that or to impact that. And you recognize in order to do that you have to be in a leadership position to be able to impact that change or to work with other leaders to make that happen. And so I think for me, it’s about wanting to see change or making a difference. And realizing, in order to make that happen, you have to lead. You can’t just wish for it. You have to make that happen.

Gary Bisbee  6:21  

When did you first become interested in health policy?

Seema Verma  6:25  

I started out my career thinking that I wanted to go into medicine, I wanted to be a doctor and I took those biology classes and chemistry and all that good stuff. But slowly realize that what goes on in healthcare is a lot more than that interaction between the doctor and the patient. And it has a lot to do with the way our government runs healthcare, how things are financed, and that there are many people in our country that don’t have access to high-quality health care services. And what I love about healthcare is it’s the gift that keeps on giving. It is multidisciplinary, you need lawyers at the table. You have scientists there, you have engineers there, you have policy people, legislative people, it really takes a lot of different disciplines to make healthcare work. There are so many problems, even if you fix one, there are 10 more behind you. So it’s always interesting. I’m always learning, there’s probably not a single day that goes by where there’s always something to be learned about healthcare. So it’s always exciting. And I love that idea of constantly having a challenge.

Gary Bisbee  7:33  

You got your hands full in the healthcare challenge, that’s for sure. You’re back home in Indiana. How does that feel?

Seema Verma  7:41  

It’s great. For four years, I was commuting. I’d get up at 3:30 in the morning on Mondays and be in DC all week, and then come back on the weekends, so it’s nice to have dinner with my family and just appreciate being back in the Midwest and having that day-to-day with my family.

Gary Bisbee  7:58  

Well before the CMS appointment. And after you graduated from Johns Hopkins with your MPH looks like you had several jobs, maybe in DC, maybe in Indiana, and then you’ve formed your own company. What led you to form SVC?

Seema Verma  8:15  

Gary, I wish I could tell you it was some deep entrepreneurial spirit. But really what it was is I had just started to have children. And I thought that it was just easier. I needed the flexibility. And so I built my practice around also being a mom. And what was sort of interesting, because back then I sort of recognized I knew I needed flexibility, but also the people that came to work for me needed flexibility as well. And so we did a lot of “you could work at home,” “you could come into the office.” And so as people are talking about COVID these days and working at home, I was like wow, I did that 20 years ago. And that was sort of the concept that we had many years ago and it worked well. There are many parents across the country where you have two working parents and families need flexibility. And so that was really the premise. It turned out to be a great decision because it really exposed me to a lot of different things I was working on before I went into starting my consulting business. I was able to work on the front lines in a public health department and public hospitals. That’s really where the rubber hits the road. You’re seeing the trials and tribulations that patients are going through the doctors, the hospitals. And when I went into the consulting round, we got to work with a lot of different types of clients, whether it was state governments or hospital systems, or even an IT company that was struggling to understand regulations and healthcare. So it gave me the opportunity to have more of a bird’s eye view of the entire healthcare system and work from a lot of different perspectives.

Gary Bisbee  9:49  

When I first became aware of you was your work in Indiana Medicaid. How has the HIP program eroded over time since you set that up?

Seema Verma  10:04  

The Healthy Indiana Program was sort of revolutionary and probably is still very novel in the way that it dealt with the Medicaid program. I give a lot of credit to our good friend, Mitch Daniels because he really was that kind of conceived the idea of trying to do something around consumerism in the Medicaid program. And he really felt like with growing healthcare costs, that it couldn’t just be the insurance companies and the doctors that were responsible for trying to lower healthcare costs that we needed to engage the patient and the consumer. And so the idea in Medicaid was to have a health savings account, which had always been poo-pooed by people because they said, well, low-income individuals can’t manage an account. And we put all of those types of claims to bed. We funded the health savings account to make sure that there was enough money when the individuals would also put money into that account. And if there’s money left over at the end of the year, they can use that money to offset their own premiums. But it really kind of instilled the concept of if I go to the doctor, this is how much it costs. And I think they tend to value the health insurance that they have. But I think those principles, the idea of consumer engagement of consumerism, really stayed with me. I think we tried it in Indiana, it worked very well, that program is still around. We have seen those concepts duplicated across the country and other Medicaid programs as well.

 

Gary Bisbee  11:29  

I think your work also with Ohio and Kentucky during that time, was that around this idea of the consumer, or was it another assignment?

 

Seema Verma  11:42  

Other states saw we want to do something like that in our program, especially as many states were looking at expansion, they didn’t want to extend a program that was primarily designed for an aged, blind, disabled, or more vulnerable population and give that to an able-bodied population. And they thought we need to design this in a way that’s more appropriate for the disabled body population. And so you saw states across the country doing things like just co-pays, or premiums or having some type of incentive if you do X, Y, or Z will give you more benefits, really the idea and the concept of we don’t want to just hand out Medicaid cards, we want to try to improve the lives, improve health outcomes and help these individuals become more independent over time. Teach them how to use health insurance, because the idea is that Medicaid wasn’t supposed to be a life plan. It’s supposed to be a temporary program. And so the idea you’re gonna go to regular health insurance, let’s teach you how this works and what to expect. Hopefully, when you get to a job that does offer health insurance.

 

Gary Bisbee  12:48  

That stood you in good stead for your appointment at CMS. Why don’t we move to that? What was the background for your receiving the appointment at CMS?

 

Seema Verma  13:00  

I’d worked on the Trump campaign, so I was introduced to President Trump and obviously, I’d worked a lot with the vice president in between Mitch Daniels. Thereafter, Mitch Daniels stuff with the Healthy Indiana Program, Vice President Pence in his time as governor of Indiana expanded that program. And it actually worked with the Obama administration to negotiate that waiver. At the time, President Trump appreciated the HIP program and thought it was really innovative and novel. And I think they have this concept of more federalism and empowering states. And I think that philosophy was very consistent. I’d spent a lot of time on the implementation of the Affordable Care Act or Obamacare, and had reviewed all the regulations and knew what the pitfalls were in some of the problems. They were very concerned about the impact and wanted to try to address that.

 

Gary Bisbee  13:56  

How did you go about setting your priorities when you go into a job that is a $1.6 billion organization? How do you think about setting your priorities?

 

Seema Verma  14:08  

That was always the hard part. When we first came into the office? I think the President was pretty clear. They had a mission and agenda around the Affordable Care Act, but that quickly fell apart. And it was like, Okay, well, what are we going to do? There was also a focus on opioids, there was a focus on lowering drug costs. But for me, there was so much work to be done across the whole healthcare system. And if I looked at all of my predecessors that had been at CMS, they usually had had a major piece of legislation that they were implementing, whether it was the part D program, the Affordable Care Act, MACRA, all of those things. They were really, the leadership was coming from Congress, and they were responsible for implementing the programs. In our case, it was clear that after the efforts on repeal and replace fell apart that Congress wasn’t going to be taking up any major pieces of Health legislation. And so for me, it really came, I think kind of a period where it was like this is on me, I need to figure this out, we need to put an agenda forward. And we’re, we’re not going to get a lot from Congress here, they’ve taken some time on health care, they’re going to move on to other things. I did a national speaking tour that went across the country and talked to providers in different settings, whether it was nursing homes or hospitals, rural areas, patients, and we listened to the challenges and there were a lot of them. The Affordable Care Act is a small piece of the entire healthcare system. And yet everybody was focused on 10 million 11 million people where there were all kinds of problems. And so we did a lot of listening problems with CMS problems with regulations. And we kicked off a number of initiatives, probably one of the biggest ones was patients over paperwork, which was about the deregulation of healthcare and trying to reduce all the money that we spent on administrative costs. But that listening was really important because it generated a lot of ideas. And we looked at everything that we had heard and tried to pick out those projects or those initiatives that were going to have the biggest impact because there were obviously lots of things and lots of suggestions, whether it was can you change the coding, can you increase this reimbursement, what I wanted to do was to pick the things that were going to be very impactful. And I’ll give you a few examples of those. So moving towards value-based care, that actually addresses so many problems across the system. But in order to make value-based care work, we had to address things like the stark law and deregulation. Another example is telehealth, by trying to relax some of the rules and expand telehealth, we actually were able to address a lot of issues with rural health, mental health, with access issues. You kind of pick that one issue that solves many, many problems across the system. And so that was sort of the goal. We were told, why don’t you pick three or four things to do. And we picked 16 initiatives, and we were actually able to deliver on all 16 of them and bring those across the finish line.

 

Gary Bisbee  17:14  

You met your goal of 16 but, standing back and looking at it, are there another 16 there if you had another four years that you’d be going after? Is there still a lot in that space?

 

Seema Verma  17:26  

I don’t think the work is ever done. You make a regulatory change. A great example was the work that we did on price transparency, we made that change. But those things take several years to be implemented, then there’s the enforcement piece of it. And then with any major change, there’s going to be little tweaks that you need to make. I think from my standpoint, what I really wanted to accomplish was to turn the healthcare system into the sense that we can’t continue on the trajectory that we’re on. The system is unsustainable, it’s contributing significantly to the debt of the country, and over the long term that has some very significant problems. And so what we wanted to do is figure out how we lower healthcare costs without actually changing the experience for consumers, especially in the Medicare program, or Medicaid, people are very reliant and dependent on these programs, you want to make sure that they’re getting what they need. And so we looked across the healthcare system to try to change a lot of those issues, whether it was increasing competition, or we’re not going to pay the hospitals more for the same service that we can get in a doctor’s office. So it was looking for those types of things. And so yes, the job is certainly not done. But I’d like to think that we helped to get it on the right trajectory. And even in some areas where the current administration may not agree with us, I think by raising the issues, and even if they reverse course on them, we brought those issues to the forefront in a way that was never done before. People had talked about it, but no one had actually delivered on it. And so even if they’re undone, I’ll give you an example. There are some requirements, the federal government says for the Medicare program, these services must be performed in the hospital. To me, that was anti-competitive with surgery centers and hospital outpatients and really felt like it was the doctor and the patient that should be making that decision. And so we said, we’re going to get rid of the inpatient-only list. Now the binding administration is proposing to reverse course on that, but I think it still brings up the issue, and there’s about what is the right course. Maybe they’ll put the list back in, but there may not be as many services on it. So I feel like we may not have gotten exactly where we wanted to go. But we certainly raised awareness of a lot of issues and made progress.

 

Gary Bisbee  19:54  

You got high marks with your regulatory activities from the field for sure. It looks like the Biden administration is supporting the Transparency Initiative. So that’s one that they have supported. Although when you’re on, you’re speaking or listening to her, you probably weren’t getting great feedback on that one from the providers, were you?

 

Seema Verma  20:15  

No, that was it that came from the patient. I think it’s unfair, how much money people actually spend on health care, and they don’t know what they’re paying for. It doesn’t give them the ability to shop around. And I really believe in the free market. And I think it can work in health care. And that was also part of our agenda with promoting competition. But a market can’t work when prices are hidden. And so by having price transparency, and along with that quality transparency, you’re actually increasing quality in the healthcare system. For the first time providers are having to compete on the basis of cost and quality. And in every other market, we know that that has lower costs and improves quality. So I think that hopefully, it’ll have the same impact. I think consumers are delighted by it. And they deserve to know they shouldn’t be in the dark when it comes to what they have to pay.

 

Gary Bisbee  21:05  

Medicare Advantage did well during your time at CMS. How do you think about Medicare Advantage? Is that a kind of role model for Medicare going forward?

 

Seema Verma  21:18  

Absolutely. I think that Medicare Advantage represents where we were trying to go, it’s the greatest example of competition based on price and quality. And that’s exactly how the program is structured. Every year, seniors get to peruse the different plans and check out the quality scores and check out the cost. And so over our 10 years, we were trying to get rid of the regulations that we thought were standing in the way of promoting more competition and really had some great results with the changes that we made over the four-year period, premiums went down around 32%. Overall, in some areas of the country, we actually saw premiums drop 50 and 60%. So it was very significant. And it really kind of speaks to the role of government and the importance of having the regulations correct. Because we do loosen the rules. The other thing that we did is give more flexibility to the plans to offer more benefits to our seniors, there’s been a lot of discussion about the social determinants of health. And we know that there are a lot of things that impact a person’s health, whether it’s the diet that they’re eating, maybe not being able to have a ride to the doctor’s office. And so by having Medicare Advantage, where there’s a fixed cost, we can say this is how much we’re paying, then it’s up to the health plan to make those dollars work in a way that works for the patient, but also kind of keeps them with a budget. And what we found is that it could be something simple like meal service to a patient after surgery or putting a ramp in their home to help keep them safe if those things really make a difference, whether it’s pest eradication services. And so we gave the plans a lot of flexibility to offer these services that we thought could improve health. And so because of that we are seeing this migration towards MMA, our goal was to get to 50%. We’re not quite there. But we’re definitely moving into the high 40s. And I think in the next few years, you’ll see it over 50% as seniors sort of recognizing I’m going to be able to have more predictable cloth and there are more benefits that are being offered there.

 

Gary Bisbee  23:25  

We still have what is it about 20 million baby boomers that aren’t yet on Medicare. So there’s a lot to come there. Why is it so hard for us to move away from fee-for-service in this country?

 

Seema Verma  23:39  

I think it’s because of the way the system has been structured in terms of payment that we pay you when something goes wrong. It’s like your car goes wrong. You go in and they fix x y&z and they get paid for each and every service that they do. So there’s no incentive for providers to keep patients healthy. There’s no reward for doing a good job. So if you actually improve patient outcomes, or you do a better job with surgery, you’re going to get paid just as much as the next guy. And so I think that those financial incentives have been misaligned. And that’s why perhaps we’re not getting the results that we’d like to see, despite all of the spendings our country spends on health care, and the debt that we’re accumulating because of that we have a relatively unhealthy population. And we also see a lot of differences in disparities in terms of health outcomes. I think that’s become more of a bigger topic in the lab because of COVID. And so the idea I think value-based care is trying to align financial incentives to hold providers accountable for lowering costs and improving quality. So if you are able to show better outcomes, you get paid more and if there are savings to the system, you get to share in that. I think that’s where that Probably where we need to go is the healthcare system, it’s not going to work to ration care, it’s not going to work to just throw more money at health care and put more people on government programs. The government has not solved these issues. In fact, the government arguably has made it worse than the programs that the government’s been in charge of Medicaid and Medicare have huge financial problems. Medicare’s about to go insolvent in a few years, and states are struggling to pay for their Medicaid programs. And so I think the strategy really has to be something around going to market-based principles. And value-based care delivers that by having competition based on quality and outcomes. I think that’s what’s going to move the needle forward in terms of lowering healthcare costs or at least trying to limit the growth rate.

 

Gary Bisbee  25:49  

Is it going to take a federal initiative to move their CMF or kind of private sector through its own initiative move more to value-based care?

 

Seema Verma  26:00  

I think it has to be both the federal government moving, and that’s something that’s been a bipartisan effort, the Obama administration and through the Affordable Care Act set up CMMI. So there’s a lot of models out there, I think it’s moving too slow. And we’ve sort of tried to cajole providers, but it’s a hard move. Imagine if you’re a hospital CEO, you’re going to feel good when the hospitals fall, and now we’re saying, well, we want to keep people out of the hospital, and all of a sudden, your beds are not full, your revenue changes. And so I think it’s a, it’s a very different mindset, people are not used to it. And so they’re not going to do it unless they are pushed to do it. We were moving towards more mandatory models. With our accountable care organizations, we were saying, look, we’re not going to give you all these waivers and things like that, unless you are taking on risk and doing real value-based care. So I think we were trying to be more aggressive and at the same time trying to address some of the barriers to doing value-based care whether it was data and interoperability making sure providers had access to their patients’ complete medical records trying to address the stark regulations. I think this needs to move quicker and faster. And the government can’t do it alone. That’s Medicaid and Medicare or just some payers, but to the commercial payers as well. But it’s been a little disheartening since I left CMS as I go across the country, and I talked to providers, and they say, we’d love to do value-based care. But the insurance company isn’t offering us these models. And you talk to the insurance companies and they say we don’t think the providers are ready for it. I think there has to be a commitment because if not, there’s going to be significant consequences to our country for not doing this.

 

Gary Bisbee  27:47  

Couldn’t agree more. And I think as you say, it’s really a joint effort between the government and the private sector, but the private sector has to step up here. I worry that they’re not moving fast enough.

 

Seema Verma  28:04  

Value-based care solves a lot of problems. It improves the quality of care, which is the big one. There are also some opportunities where one of the things that goes on in value-based miles is CMS is that they provide a lot of waivers from regulations. And during COVID, we learned a lot about which regulations were particularly unhelpful, especially in a crisis. And we got rid of those. In fact, there are over 100 waivers currently, in effect, I think providers need to push CMS and push other payers that, hey, if we’re going to do value-based care, we want more flexibility. We want to be able to reduce our administrative costs. We don’t want to micromanage every move that we make if we are taking on risk. I think it’s also an opportunity for providers to reduce a lot of those administrative barriers and things that really make their jobs more difficult, and could again, lower costs.

 

Gary Bisbee  28:59  

Let’s turn to Medicaid for a second. And a lot of states have what is called managed Medicaid programs. Do you see any evidence that that is moving toward value care? Or is that just more of a cost exercise?

 

Seema Verma  29:15  

There’s accountability in Medicaid when you do have private companies running the program. And it actually gives the Medicaid recipients more choices. If the state’s running the program. There’s absolutely no accountability on anything, whether it’s quality or because there are no requirements for CMS. But this way, the states can say hey, we want you to work on these issues. We want to see progress on infant mortality or we want to see progress on heart disease. And so it requires these private insurance companies to be innovative. And again, it gives the end-user choices now. I do think it’s incumbent on those state Medicaid programs to have the appropriate oversight of these firms. grams otherwise you’re paying, you’re just paying them the job that the government could do if you’re not exacting. If your contracts are not set up in a way to improve quality and outcomes, then you’re not getting the full potential value of a managed care contract.

 

Gary Bisbee  30:17  

You mentioned COVID. And you uniformly received high marks from least people I talked to on health care, which is a lot of them. So congratulations. And you mentioned 100 different waivers. Most people are probably aware of telehealth and what you did there. And in that growth, what lessons did you learn looking back on it? What lessons did you learn about a crisis like that and being in a position of leading CMS?

 

Seema Verma  30:49  

I appreciate that. We led a great effort, but it was a wonderful team that I had behind me that worked very diligently day and night on the COVID response. I think one of the biggest things that I’ve learned as a leader in what I’d say crisis management or crisis situation is the importance of listening and communication. You’re operating in what I call the fog of war. And you don’t know there was no playbook for CMS, there was no pandemic plan. One of the first things I did in January when we were hearing the reports of what was going on in Wuhan is they said, well, let’s look at the plan. And it was essentially just a manual of how you should have these meetings and this is how you should be structured. But there was certainly no advice. Despite the fact that there was h1 and one and SARS, there was nothing about telehealth there was nothing about the types of waivers that would be important. So we were starting from scratch. And because of that we had to bring everybody together in the agency. And so we would have meetings, sometimes once-twice a day where you had 100 people on these calls representing Medicaid and Medicare and rural health and minority health and the exchanges. And I don’t know that there has ever been an effort like that where the entire agency was focused on one particular area. So if we said we’re going to do telehealth, it was like, okay, Medicaid, go back and figure out what states need to be able to do Medicaid, what regulations need to be changed? Medicare, you do your piece and Medicare Advantage you do your piece and hey, what can we learn from rural health And oh, by the way, the program integrity, people are going to sit there as well, because we want to make sure that they understand the flexibilities, and if we need to make sure that we are we have appropriate oversight. And so I think listening to the team, the other part that was so important was the healthcare industry themselves. We tried to meet with really every sector, at least, sometimes it was two or three times a week, sometimes it was just once a week. And that changed over time. But I was constantly on the call on calls with the Hospital Association. And they would say, here’s what we need, or Okay, you gave us that waiver not quite working, we need you to change this, that and the other thing with telehealth, we started with telehealth and they said, Actually, we need to be able to make phone calls like we need to be able to reimburse to be able to communicate with somebody over a call. And so we did that in the second round. So there was a lot of back and forth. And the healthcare system, whether it was a nursing home or a dialysis facility, or home health hospital, doctors offices, they were on the front lines, and so we sought them out, tell us what you’re going through, tell us the challenges that you’re facing. And that’s sort of how we put together the waivers. So we did a lot of our own thinking. But it was informed by that discussion that real true public-private partnership, and making quick decisions not under Well, we will make sure we do this. We shouldn’t cause X, Y, and Z programs. It was like, “No, we’re in a crisis. This is what they need. We’re going to give it to them. We can figure this out on the back end if there are issues.”

 

Gary Bisbee  34:00  

I know the health system and health plan leaders saw that their cycles of decision-making had accelerated during this crisis. And they’re all worried about how I can keep that going? I don’t want to go back to the way it was. I’m assuming that you had a somewhat similar view at CMS. How do you think about that? How can you keep some of that cycle of speed of decision-making going?

 

Seema Verma  34:30  

I give a lot of credit to Vice President Pence because I think he was responsible for cutting through a lot of that bureaucracy. I do think that that is actually why the government is so slow, and some of those, it takes a lot of layers of approval to move anything through and has to go to OMB and they have 90 days and this agency has 60 days and so anything going through, which is why you see things take so long, and there are some good things about that process right when you need. Do you have a lot of options on things, a lot of different perspectives, legal perspectives, financial perspectives, so that’s a good thing. But I think the process is incredibly long and frustrating, I think I feel like there’s, towards the end, we had a ton of regulations that were done. And we just ran out of time with COVID. And not because CMS wasn’t ready. But the rest of our partners could not deal with how much we were giving them. And I think that’s, I think that’s sad. But if they’re not able to keep up, and it’s like, lead, follow or get out of the way, it was sort of my motto, when COVID came, they got out of the way, but on a typical basis, they want to be involved in anything. And I think that just slows down the system. So there’s got to be some larger reform of the process. And that’s not administration specific. I think this goes on in every administration. But I think some reform is appropriate.

 

Gary Bisbee  35:54  

I certainly agree with that. Back in March 2020. Early in the COVID crisis, I interviewed Dr. Mark McClellan, who talked at that point about there being a new normal. And of course, a lot of people since then have talked about that. Do you have any thoughts about what might be a lasting change coming out of COVID?

 

Seema Verma  36:20  

There are a few things I would say. Obviously telehealth, there were also some changes that we made things like an at-home hospital without walls, as I just kind of think about where we are today with a Delta variant now sort of reversing a lot of the progress that we made in terms of whether it’s maths or schools and things like that. But we need to get to the perspective that this is going to be endemic, and there’s going to be communities that are going to experience outbreaks. And a lot of the restrictions that we put in place initially, were factored on a couple of different things. Most of them were the supply issue, making sure that we had supplies to deal with a potential stress on the healthcare system. And I think we resolved the supply issue where he figured it out. Okay, I think most of the healthcare systems now feel pretty comfortable with the supplies that they have. The biggest issue now is staffing. It’s not even necessarily capacity inside the hospital. But I think we have to know that this isn’t going to end COVID. And so we’re decreasing, but you’re going to have these surges, or you may have another type of virus that comes. And so I think we need to think about whether this is going to be the status quo. We need to figure out how we make our healthcare system more resilient. How do they quickly expand services? Across that, we’ve been talking about value-based care and how we’re trying to keep people out of the hospital. And so hospitals may not be as large or they may be refashioning how they do business to do more outpatient care, but then you have a pandemic that comes along and you need your health care system to be big. And this is where I think we’ve got to be creative. We have surgery centers across the country, it’s not clear to me that they were ever really utilized in the way that they could have been, they could have done a lot of the surgeries that maybe hospitals couldn’t do because they were doing COVID care. So I think it’s almost rethinking every community’s COVID plan and that they need to be able to figure out how to increase capacity very quickly. One of the biggest barriers right now is staffing. And so we need to think about maybe a nationalized system to move people around quickly. I think the hospitals did a lot of that. It happened organically, that maybe a more organized, systematic place of Okay, we’re dealing with an outbreak here or there. Now, it gets tricky when the entire country is going through a big outbreak. But I think we have enough experience that we really need to be able to turnkey, and make the rapid expansion of services available across the country in lieu of shutting things down or restricting kids going back to school. I think the American public is kind of fed up with that. And we’re losing that battle or that issue. I think the best way to figure out how we can make sure our healthcare system can deal with these inevitable up-and-down and ups-and-downs and requirements for increasing their capacity.

 

Gary Bisbee  39:24  

While you were there during Operation warp speed, which was an amazing, just an amazing feat. I interviewed Alex Gorsky from J&J. Not too long ago about that. The current situation, which is we’re just having difficulty getting people vaccinated at least getting enough of the vaccinated. If you were back at CMS, would you be thinking about that and is there anything that CMS could do to help get more people vaccinated?

 

Seema Verma  39:56  

One of the biggest contributions of CMS towards vaccines and operation work speed was making sure that they were free of charge. So we put out all of the regulations and kind of, we worked with providers across the country to figure out how to make that happen. So that was the first thing. The power of CMS is that they are serving over 140 million Americans. So almost half of the country is served by Medicaid. So we know who these people are. And we also have the data systems between Medicaid and Medicare to say, who’s covered and who’s not. And so I think the power of that data is really important, because it now lets us know, hey, who do we need to focus on? I think, also, another thing that CMS can do, and they’ve increased reimbursement for vaccines. So they’ve done a little bit about that as well. But I think incentives to patients-incentives to providers as well, at the end of the day, the one thing that I learned at CMS is it’s all about financial alignment and financial incentives. That is the power of CMS and what they can bring to bear. So it’s figuring out, do I say to a patient, let me figure out how to lower your costs. If you get your vaccine or your providers, how do we encourage them to help their patients and educate them about the benefits of vaccines?

 

Gary Bisbee  41:17  

You’ve talked about some accomplishments, that deregulation, transparency, and a clearly terrific job during COVID. What were some of your disappointments?

 

Seema Verma  41:30  

Disappointments were the stack of regulations that were completed that unfortunately didn’t get through the system, there’s still a lot, there’s a ton of work that needs to get done. I think one of the areas around quality and safety and our oversight of that I think some of the challenges that we faced with the nursing homes and the unfortunate number of people that that passed away, I think that a lot of that would have been worse, if it not if it wasn’t for some of the efforts and the things that we did around testing and supplies. That being said, it really spoke to me that there’s a lot of work to do around oversight and quality of our healthcare system. And that’s really only something that CMS can do. No one has the authority to do that. There’s a lot of work that we need to do as a country ensuring a certain level of quality and safety in every healthcare institution in the country.

 

Gary Bisbee  42:26  

How does it feel to be back in the private sector?

 

Seema Verma  42:29  

It is great to be back in the private sector. A lot less quieter, a lot less drama and trauma. But I’ve been really encouraged to see and talk to a lot of innovators on the front lines, and they’re implementing a lot of the policies that we developed at CMS. And it’s just great to see everything that’s going on.

 

Gary Bisbee  42:50  

You’re on the numerous boards and the monogram board. I’m sure they’re delighted to have you. How are you enjoying that?

 

Seema Verma  42:57  

Yeah, it’s been great. What I appreciate about both of those companies that are very mission-driven with Lou Maris, it’s John Doerr who has a vision around value-based care. It’s a partnership between the hospitals and the insurance companies that may plan to try to bring value-based care, it’s teaching providers helping providers shift to a value-based system. It’s not just here’s your contract and do it, but they’re actually working in partnership and addressing the social determinants of health. And with monogram, this is a Bill Frist company, this is around kidney care and trying to improve kidney care in our country. This is something where it’s in dire need of disruption to have people being able to do more home dialysis and hopefully try to delay the progression of kidney disease. And so that’s something that we worked on at CMS, it was a high cost or for the healthcare system. But I think even for those patients, they really have a lot of issues. And they have to go in for dialysis three days a week and or more. So it’s hopefully ripe for disruption. And it’s great to be involved with companies that are very much mission-driven and want to do the right thing for patients.

 

Gary Bisbee  44:11  

Your circumstances are certainly much different now. Is there any thought about starting another consulting company?

 

Seema Verma  44:20  

I loved consulting, but what I realized I loved about consulting was working with clients on a long-term basis. So I’m always happy to provide advice and I’m doing a lot of that now. I still have companies come to me and I give due. So I am doing a little bit of consulting work. But I think over the long term, I’d like to go back to working with a team in an organization and a mission. So let’s just say that I don’t think this is the last chapter in my book. Stay tuned.

 

Gary Bisbee  44:48  

It better not be, Seema. It better not be. Thank you so much for your time today. This has been a terrific interview. Final question is for all of our young up and coming among leaders, what advice would you give them,

 

Seema Verma  45:03  

I would say for any leader is that one of the things that the leader brings to the table is the vision and the mission, to be able to define that to remind people of that and that the role of the leader is to guide to help develop to teach, and you have to have those skills that are really only something that the leader can do. I think one of the things that I learned a lot from being at CMS, before I came to CMS, it was running a smaller company, and then you go to CMS 6000 employees was that I’m not going to be able to do a lot of the work that I do. It’s my job to teach, to inspire to set the goal and the vision and set that bar really high. And whatever you expect of your staff, your employees of anybody that you lead that you have to lead by example when they see you doing it. That’s why and how they’re going to do it.

 

Gary Bisbee  45:57  

Great way to wrap up today. Thank you again, Seema. This has just been terrific.

 

Seema Verma  46:01  

My pleasure. Thank you so much, Gary, for having me. I appreciate it.

 

Gary Bisbee  46:06  

New episodes will debut every Thursday. Join me in conversations to gain advice and wisdom from CEOs, presidents, and healthcare experts. Health care leadership is hard work, but it becomes more manageable as we learn from the remarkable lives and careers of our guests. I’ll see you there.

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