← American Thought Leaders
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- [00:00]
A
Is just the tip of the iceberg. I think what we're seeing in Minnesota, which is billions of dollars of fraud that hurts our most vulnerable people, is dwarfed by what I saw in California, which is wholesale cultural malfeasance around health care. They realized that they could pay doctors to move people into hospice. And so now they don't have access to regular Medicare anymore. So people are dying because they can't get care.
- [00:25]
B
And in this episode, I'm sitting down with Dr. Mehmet Oz, the administrator of the Centers for Medicaid and Medicare cms. He oversees programs that constitute a quarter of the entire US Federal budget.
- [00:39]
A
They're also buying the beneficiary numbers from Medicare patients. There's a market for that. The magnitude of fraud that we believe is approximating $4 billion just in hospice and home health care.
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B
As we near the one year mark of the Trump administration, we discuss their efforts to cut waste, lower drug prices, and transform health in America.
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A
For decades, Americans have been paying three times more than Europeans and other developed nations. If it's the same product made in the same factory, often in America, it should cost the same in America as it does everywhere else.
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B
This is American Thought Leaders, and I'm Jania Kellogg. Dr. Mehmet Oz Senior. Such a pleasure to have you on American Thought Leaders.
- [01:22]
A
Well, thank you for having me on. We have names that are equally difficult, I think, at times.
- [01:27]
B
Well, let's start with a very difficult topic. Frankly, I saw that you and the deputy secretary of hhs, Jim o', Neill, went to Minnesota to personally look at fraud. And I'm kind of wondering what you actually did there, what you found there. A lot of people are interested.
- [01:44]
A
Well, Mike Stewart joined us as well. He's chief counsel for the Health and Human Services. And the reason we sent three major administration officials out to Minnesota is we care about the programs all over the country. But when we see problems at the scale that's happening in Minnesota, you want to understand how it happened, how do we get here? And it's probably worth going back a little bit and understanding what the whole purpose of Medicaid was. It was created with Medicare in 1965. It is the ultimate payer of last resort. It's the entity that catches you and addresses a moral obligation of government to take care of its most needy citizens. Now, Hubert Humphrey, who was from Minnesota, a senator whose name adorns the building I work in, the Humphreys building, is famed for having said that it's the moral obligation of government to take care of those at the dawn of life, our children, and we cover 53% of children, take care of those at the twilight of life. Seniors especially what we call dual eligible seniors, which means they're on Medicare, but they don't have any money, so they can't pay the CO pay, so they have Medicaid that helps them as well. And then Humphrey said, there's an obligation to take care of those in the shadows. That haunting use of the light metaphor has always caught my attention. Those in the shadows are folks with substance use disorder, emotional problems. People just have trouble dealing with the complexities of life. So when you're dealing with that group of individuals, and we probably all know people in our lives that have some of those characteristics, it's imperative that we're there to take care of them. Some of the ways we do that involve providing home and community based services, which means instead of paying for a hernia operation in a hospital where you know exactly what you're getting and a bunch of licensed professionals involved in providing it who probably aren't going to cheat the system as much, and more importantly, you can track what they're up to, that's pretty safe money to be spent. You might be spending too much of it. They might be abusing the system. I'm not making implications about the quality of their morals. I'm just pointing out that you can actually count the numbers and be pretty confident you're getting what you paid for. But when I'm providing services, and I say I because my job at CMS is to pay for these programs, we're the ultimate federal provider of healthcare in the country. So when we're paying for these services that are based in your home, the person providing those services is often not a professional. It's much more difficult to assert that you actually got a service. For example, if we're teaching you how to buy or to rent an apartment or how to live an apartment, how to be a good neighbor, if we're providing transportation to the hospital, if we're engaged in making sure you have food after you've had a procedure so that you can get better, these are softer issues. In fact, I often liken it to the things your family would normally do for you. But if the government's doing it for you because your family can't or won't or something else is going on, that limits that. It gets hard to figure out if you actually got the service from someone who's reputable. And that's where the opportunities for fraud expand. And that's what we were investigating in Minnesota.
- [04:54]
B
And so I saw that the number expanded. I think it was up to from 1.3 billion to 1.8 billion recently. Right. And then I saw that you're actually looking into other states as well. But what did you specifically find on this fact finding trip?
- [05:10]
A
So we spoke to a bunch of whistleblowers and we discovered that there has been for years a cover up. Whether it was done at the highest levels of government, I can't assert that. I don't know that. But I know culturally you were dissuaded, intimidated from speaking up about the fact that you thought there was fraud happening. And anytime people raised the possibility that, for example, the Somalian sub population who have different cultural mores than the folks who have historically been in Minnesota might be taking advantage of systems that were built for Minnesota, nice people. And this is what was told to me by people working in Department of Health and Human Services there from folks who are police, law enforcement, they were witnessing it. But if they said something, they. One woman was walked out of the building and censored for a while, then allowed to come back because they couldn't discover or at least assert anything that she had done wrong. But when she came back, she was basically shuttled around, so could not play a real role in the government anymore. After she had raised concerns about what was going on with these home and community based service monies. We also learned that these 14 programs that they themselves have acknowledged were problems were so poorly audited. And the reasons for that, we spoke to the auditor in the state is that the people who were supposed to be running these programs didn't know how to do this audit. They didn't really know how to keep score. They weren't comfortable with some of the financial tools you might use to keep track of how money's being spent. Culturally, they weren't really the kinds of person you want in there. You know, you need to sort of be like an investigative individual. I want to, you know, I trust you sort of, but I want to verify that you're telling me the truth. You need to have a desire to want to do that work. So you have well meaning people trying to be nice. Try not to ruffle any feathers. If you do ruffle feathers, you get outed. You know, although you may still have a job there, you don't get to do anything in that job. And that ostracizing of individuals is quite problematic. So the systemic nature of it is what stunned me. I didn't expect for it to have been done in such an Organized way. But when you see that and then you deal with the reality of what's happening in Minnesota right now, which is a complete lack of confidence that the services that were supposed to be provided for the individuals that Hubert Humphrey said were the daughter of life, the twilight of life, living in the shadows. They're getting services sometimes, not getting them other times. So the trip to Minnesota recently culminated with a trip with a visit to a building called the Griggs Building. This is a building decades old. It was a textile mill. They made linen there. Converted into an office building. But, Jan, you wouldn't walk in this building. It's a bad part of town. It's all boarded up windows. It looks like a communist office building. And yet, apparently there were 400 businesses running out of there in the last couple years that had generated about $380 million of bills for the federal taxpayer or the state of Minnesota. And these are all social service businesses. So as you start to probe into how this beehive of corruption arose, the question does come up. You know, who owns the building? Like, how did this even come about? The building owner would not let us go into the building, Although I know because there have been search warrants in the past, that basically you have a bunch of empty offices with maybe one computer terminal inside of it. You don't have this bustling community of people trying to do good for other Minnesotans. You know, these are a bunch of folks that were scam artists, we think, taking advantage of a naive system. And here's the hard part to fathom. I don't want everyone to take a deep breath. Now, Minnesota, which is cold this time of year, is just the tip of the iceberg. I think what we're seeing in Minnesota, which is billions of dollars of fraud that hurts our most vulnerable people and puts them at risk because you steal not only their money, but you can steal their lives by putting them at risk for bad services provided at the wrong time that actually take away opportunities for others to get treatment.
- [09:13]
B
And.
- [09:13]
A
But what we're seeing in Minnesota is the tip of the iceberg, because it is dwarfed by what I saw in California, which is wholesale cultural malfeasance around health care. There is a acceptance that you need to be in the fraud business, especially in Los Angeles. And the magnitude of fraud that we believe is approximating $4 billion just in hospice and home health care. And I want to spend a few minutes walking you through what's really happening there, because if it's reflective of what might happen in other parts of the country or might already be happening elsewhere. It's very concerning for the core infrastructure of federally funded health care.
- [09:53]
B
There's this perception that some Americans just don't get any health care right, because it's a private system.
- [09:58]
A
So Medicare and Medicaid were created in 1965 to make sure we did have a social safety net for health care. Medicare deals with older Americans over the age of 65. You pretty much get Medicare. We have a bunch of people younger than 65 who qualify for not common reasons. And then you have a Medicaid program designed for people who are generally beneath 138% of the poverty level. It's a bizarre number, but it happened to turn out that way from Obamacare. So most states will provide Medicaid to the working poor or the folks who are unable to make ends meet financially. We have other programs as well that we offer for children. For example, the veterans Administration offers programs for our vets. But most people can get access to healthcare if they're willing to either fill out the paperwork or for whatever reason, qualify. There's less than 10% of Americans who don't have healthcare, one type of another, and we're continuing to try to make that number even better. But the system works if people are paid appropriately for doing their jobs. The opportunities to defraud Medicare and Medicaid are huge because the organization I run doles out about $1.75 trillion a year. It's a lot of money. And the problem is that to defraud it, you basically can arm yourself by getting the beneficiary number of just one of those people over 65 or on Medicaid. You know, if you have an ID number, if we can get that number as a fraudulent group, you could start to build the system inappropriately. Now, it doesn't matter if one or three people do it, but if tens or hundreds of thousands of numbers are stolen and made available online, now all of a sudden you can weaponize this and what we witnessed in Minnesota, which it does involve a lot of Somalians. Disproportionate number of Somalians have been indicted in that corruption. But there are folks who are Minnesotans for generations who are probably involved in the culpable as well. They just don't seem to be in the front of the line as they get accused. But it's not just Minnesota, though. In California, you have Russian, Armenian gangs, mafia who are running a weaponized effort to defraud the US Government. In South Florida, we have durable medical equipment fraud DMEs give out wheelchairs and canes and knee braces. We have more of these durable medical equipment suppliers in south Florida than McDonald's. Why? Because it's easier to open up one of these businesses than to open a bank account. And the Cuban government, we believe, and this has been an accusation made by the mayor in Miami, might be involved in some of these efforts. Certainly Cuban nationals or Cuban immigrants are disproportionately involved in some of this fraud. So you see, and we see Russian, Chinese mobsters involved in elder daycare in Philadelphia. We have personal care services in New York that has been run oftentimes by either the Hasidic community or we also believe Russian mafia. Many groups that are penetrating our health care system to steal money from us who are not native born Americans and many of them aren't US Citizens. In fact, when the Department of Justice goes after some of these groups, as I was involved in an announcement earlier this year in 2025, about a $15 billion Russian mafia sting, most of the perpetrators had escaped back to Russia. They go back to their home countries. So it's a effort by other countries to take advantage of our health care.
- [13:34]
B
System for that 10% that don't have kind of this official coverage. What happens to them when they have a serious problem?
- [13:42]
A
Well, if you have a serious problem, you go to a hospital in America. The hospital by law has to take care of you. And then we try to settle up afterwards. Ideally you don't want to have people without health insurance, but often it's the people who can't fill out the paperwork aren't registering correctly. Then we have the Affordable Care act that also is there to bridge people from the poverty level income up to 700%, historically in that range, they'd stopped getting it over the last couple years. But Obamacare was designed to take care of people who are making between one and four times the poverty level. So after that there was a hope that they'd be able to transition into commercial health insurance. And it is true that often people from other countries don't understand why we don't just socialize at all. I think we have a system that works better because it supports market forces to drive quality care. And I say that because in other countries they'll do things that will cap prices. When you cap prices in, whether it's rental income in apartments or you do it for medications or, you know, doctors care, you actually pervert the market forces that would normally provide highest quality care. And so we see right now in Europe, for example, because of price caps on pharmaceuticals. Pharmaceutical companies don't provide their best new drugs to the Europeans as quickly. It often delays several years, and you actually start to see a difference in survival rates of chronic diseases in Europe compared to the US because of some of those limitations. Now, this is all addressable, and this is part of a larger strategy that the President has for health care.
- [15:22]
B
Well, so this is kind of the obvious question here. Two. Two obvious questions. One is, you know, just hot off the press is great American health care plan, right? And the other one is, you know, marquee sort of policy of this administration, I think, is the drug pricing, which kind of sounds to me a bit like a cap, given everything you're saying. So why don't you kind of disambiguate that for me? And let's talk about the great American health care plan.
- [15:46]
A
So the great American health care plan has several important pillars. One of them is to make sure that we slash drug prices. And we do that by asking Congress to codify what we have successfully been doing at the President's request this year, which is to allow most favored nation drug pricing. It's not a price cap. Quite the opposite. So here's what the deal is. We're making the point that for decades, Americans have been paying three times more than Europeans and other developed nations have been paying for the exact same drugs made in the same facilities. And that's a problem because America's already underwriting a lot of development expense. We pay for the research. We help these drugs get crafted. We provide incentives through NIH and other sources to make sure that novel research is able to prosper. So we develop these drugs once they're developed, and maybe we foot the bill for that disproportionately, at least when you buy the drugs for your people, if it's the same product made in the same factory, often in America, it should cost the same in America as it does everywhere else. That's what the President has been saying. He says, give us most favored nation drug pricing. Whatever the best price is out there for the developed country countries, we should pay that. We shouldn't pay three times that. So he said, go to industry and ask them what it takes for this to occur. He said, don't go in there and say you gotta take them out of business. Don't put price caps on there. And also recognize we don't want to stunt their innovation. We want them to be able to create as many new novel solutions to cure cancer and heart disease and lots of other conditions as possible. Now, that's Not a price cap, because inherently it's a negotiation. If industry doesn't like it, they can leave. They don't have to participate. However, that's not what's happened. The reality is when you look people in the eyes like I'm looking at you, Jan, and you say you have been using a system that's not fair to the American people, they will say, yeah, we knew one day you'd come knocking. You figured it out, we get it. It's not sustainable. Let's figure out a solution so we don't go into a troubled area financially. We can still innovate and we'll gently, over time, move towards the most favored nation drug pricing. These were hard negotiations. It took a while, but the President was adamant that it needed to happen. Industry recognized that they weren't getting out of it this time. So they voluntarily, voluntarily agreed to some of the rules that will now govern this process, which means give our most vulnerable people most favoritization drug pricing immediately. So all the Medicaid patients usually are qualifying. Make sure that you give some of the best, most important products to Medicare for the seniors at Most favored nation drug pricing. Those lower the taxes that we pay, but it also lowers the overall cost of services for these products to that senior population. And then every new product that you release has to be at this new fair value equally into other countries. In return, we're going to do two things. We're going to give you access to more people so you have a bigger market. And we also want to help you when you negotiate with countries overseas, to not let them take advantage of you, because just like NATO insists that everyone pay a little extra, so America pays less, not, not, you know, less than everybody else, just pays less. So it's fair. So now we have a NATO system that's a bit more equally spread those expenses across all the NATO countries because after all, it's benefiting them primarily. That makes sense. Same thing's happening in most favored nation. We're asking all the countries to even up. So we went to the UK as an example, and Jameson Greer, who's the United States Trade Representative, and Secretary Lutnick from Commerce, went over there and they pushed hard. They said, guys, you're not paying a reasonable amount of money for your medications. In America, we're paying 0.8% of our GDP for medications. In many parts of Europe, it's 0.2, 0.3. It's significantly less. Less than half of what we pay per percentage of our gdp. Pay more. Don't make up Cockamamie rules that pretend like you're actually trying to make the right price happen. You guys are just pushing down prices on purpose. So they've agreed in the UK to pay a bit more. That equalizes prices, brings revenues to the pharma industry. And the best evidence I have that what we've done is reasonable is that the market cap, the value of the stocks of the pharmaceutical companies have not plummeted. In fact, they seem to have gone up a little bit since these negotiations have been consummated. So it gives all of us confidence this is a sustainable process. And we've spoken to the leaders of the pharmaceutical industry and they're willing to work with Congress to try to figure out a solution. So this is something that is important for the country. It's fair. Folks are agreeing with it, even in industry. We're asking Congress to codify it, make it permanent so that it doesn't go away after this administration's done. And we don't have pharmaceutical companies, you know, running away afterwards saying, you know, the next administration is not strong or we can get away with not doing this anymore. We just want this to be the law of the land so that we're just fairly treated.
- [20:54]
B
You know, you're responsible for something like a quarter of American government spending. It's trillion and a half plus dollars. So there's a lot of places where that money kind of is being scooped away. You have to deal with all of this. Right?
- [21:08]
A
Let me share with you what I saw in Nevada and California, because it's chilling because it's not just about low life stealing money. What's happened in California is a tolerance and acceptance of fraud. Everyone's involved. It just seemed when I was talking to different folks again, whistleblowers, community organizations, the U.S. attorney, it's so rampant that you don't even know how to get your arms around it. And it happened for a bunch of reasons. There was a general desire not to offend people. This happened in Somalia with the Somalians in Minnesota. It's also happening with some of these mafia folks in Southern California. But they began, they realized that they could pay doctors to move people into hospice. The hospice is designed for the last six months of your life. It means you're going to die. These hospice programs are created when the most common reason that you'd enter it is cancer. But these days, not everyone with cancer dies. But also you're putting a lot of people with Alzheimer's, other conditions in there. So it became a little harder to police whether people are going into hospice. But what happens if 100% of the people in hospice survive six months? Like, nobody dies and that happens?
- [22:19]
B
Doesn't sound like hospice.
- [22:20]
A
Doesn't sound like hospice. Doctors are being paid to send people inappropriately to hospice. Now that's a problem, Jan, because if you're put into hospice, you actually give up the rest of your health care protection. You no longer get traditional Medicare benefits because you're in hospice, you're dying. So we're not going to pay all these extra expenses for things that aren't going to benefit you because you've decided to pull back voluntarily. You decided that you're not going to go out there and try to get everything done for you, possible to help you live longer. You've made peace with the end. But people are put on hospice who don't know it, they don't realize it, and so now they don't have access to regular Medicare anymore. So people are dying because they can't get care because they were falsely tricked into being on hospice. Now that's a major concern for me. But then I began to look into how this could possibly happen. How is it that we've gotten seven times more hospice in California over the last several years? Do we have seven times more people dying? What's going on here? And you begin to realize it's systemic fraud. Everyone decided not to do anything about this. We're not going to look at it. It's too painful, too difficult. Maybe some groups may benefit financially from not checking into this. The doctors are getting engaged so much in the hospice that it's beginning to undermine basic ethos of the healthcare profession. And I'll tell you one whistleblower story that will chill you. And then we should move on to the good news in healthcare, because there's plenty of it. I was talking to a gentleman who owns five hospice centers. Now, if you own five hospices, you have to ask yourself why you own five hospices. Because you're hiding the ball. You want to have a lot of patients split over a lot of different centers so that we can't track you as well. Anyways, he's building this beautiful mansion, massive house, because he's got a lot of money, right? Because he's stealing money from these hospice programs. The plumber comes in and says, you know, I see you're in the hospice business. I've got a little side hustle. I own a hospice business. And the guy who's the doctor says, really? He goes, yeah, I'm a plumber, but I got a Hospice business. You don't have to really be a doctor to own hospice. And then the carpenter who's next to him was building the cabinet says, hey, what do you know, I got a hospice business too. So both of the folks who are doing plumbing and carpentering have side hustle businesses. The contractors in hospice, the guy building the house makes a lot of money. And so that guy, I started asking, well, how'd you make all this money? Because, well, you know, I go to doctors. I mean, low life doctors. No, no, no, no. I go like to the doctors at Cedars Sinai. Now, this is an allegation. I can't prove this, but I don't know why he'd lie to me. You know, I'm trying to learn. And he's willing to offer some insights. He says, the doctors at this hospital are willing to send me some patients. And I said, that's weird. Really? They just pay them and they give you? Yeah. He goes, the doctor said he, if I gave him thousand bucks a month or something, that he'd send me patients. And then I started to do that in other hospitals. And then I'd ask the doctors to send me the patients from the hospital directly. And they say, oh, no, no, no, we can't send you the patients from our hospitals directly because our board members own hospice and the board members of the hospital want that hospital to send patients to their hospice. You understand the level of perversion here. We've got low lives who shouldn't be in the business. Right. And not every doctor finished top of our class. Right. A lot of doctors have lost their way. They're getting paid. They're paying other doctors to the. You know, the accusations are that people with money who are involved in hospitals are also being paid in these unscrupulous endeavors. So there's a general perversion of the entire healthcare ecosystem.
- [26:02]
B
What kind of numbers of people are we talking about in hospice, out of curiosity?
- [26:06]
A
Oh, thousands and thousands of people are being rolled into these systems. And, you know, we're estimating between hospice and home health care because they get related because you, the scoundrels are involved. They overlap. They send patients back and forth. You'll buy the. By the way, they're also buying the beneficiary numbers from Medicare patients. There's a market for that. I'll pay you a couple hundred bucks. Give me your number. I'll pretend you're in hospice, I'll pretend that you're in home health care, and I'll bill the government for that. And the accusations are that tens of thousands of people have sold their numbers as well. But again, we have to validate this with US Attorneys working on these issues. But once I dove into it, I began to realize how deep the rot was. But the aggregate just in LA county, just in LA county, we think, is between a half to $4 billion. John. About 10% of all of the new billing in home and health care in the country, in the entire country, seems to be taking place in la. So obviously it's way out of whack. And when they started to try to rein in some of this corruption in Los Angeles, guess what happened in Nevada next door, sevenfold increase in hospice shifted. Yeah. And now we're seeing fraud around hospice and home health care in Arizona, we're seeing it in Texas. So it's starting to spread. Just like if you try to crack down a durable medical equipment in South Florida, it spreads north to other states. And I suspect what's happening in Minnesota with the Somalians is the tip of the iceberg. We have evidence now that we might be seeing that in other Somalian populations they talk to each other. Once you figure out that no one's watching the till, you begin to steal money in other areas. In any case, we are aggressive on this. We are rebuilding the infrastructure that would audit these, because it was pretty much gutted in the last administration. And if you're asking why would this happen? Because I think that's what the viewer right now should be asking themselves. Why is it that we are having so much fraud in our social services? Let me just give you a little insight. By federal law, if I give you Medicaid, if I qualify you for Medicaid, I must also offer you the right to vote by law. So is it possible this is just political patronage run amok with federal tax dollars, that what we're really seeing is an effort to enlist people in these social programs, Medicaid, SNAP and elsewhere, in order to get you onto the voter rolls. At the same time, I'm giving you something to get you to want to vote for me. That's the accusation in Minnesota. It's the possibility in California, where we actually have the unions being involved in some of these endeavors and lobbying as well. So this might be part of a much larger scheme to change how we elect our officials. And that is very chilling for us to think that you might be using social programs designed to help all Americans who are struggling or who have vulnerabilities, using that as a tool to change who gets elected.
- [29:05]
B
Absolutely astonishing. There's been a Lot of activity, of really profound activity. I would say some very significant policies. Especially most recently, we've got the new dietary guidelines, the flipping of the food pyramid. We've got aligning the vaccine schedule with something closer to what we see in some European countries. A lot less shots, you know, basically. But when you look back at this year, I mean, basically, we're one year in. Where do you see the most consequential changes? Aside from starting to look at fraud and abuse?
- [29:40]
A
The most consequential things we're doing involve the power to convene, pulling together people who normally wouldn't talk with each other to figure out action steps. And here's why that's important. We have three basic ways that we can regulate and regulate. You know, how you regulate an industry has a. Is that there's a philosophical element to that. Am I trying to catch you, like, trick you and audit you and find you doing something wrong? Or am I trying to say, hey, listen, your industry's run amok. You're not helping the American people anymore. We got to fix it. So what do you want to do? There's two different ways of regulating. I tend to be in the latter category because the President believes the latter category is a wise way to go. And here's why we have that opportunity. When you have a strong negotiator in chief, which the President is, you can say things like, I have the right to pass laws. Laws tend to be hard to predict what they'll look like. They're difficult negotiations. They're usually not exactly what you want, but it's what we got done because often it has to be bipartisan. So we have the ability to pass laws that could be difficult for you to deal with. We have rulemaking, which means I can write as a head of cms, that from now on, here's how we're going to pay and here's what we're going to consider acceptable. And I can make those rules. If you don't like them, you can sue me. They take a while to write. It can last for years if you litigate. Lawfare is widely used to block rulemaking in government. But generally, if we've written the right rules the right way, we'll win. It just will take a while. And again, by the time the rules take action, sometimes they're not quite as nimble as you'd like, so they can't adjust to market forces like the role of AI in healthcare and how technology might change how we offer services. The shortage of healthcare workers might make it so that the rule you wrote five years ago isn't really applicable now. Right. So that's just the reality of governing. But both of those writing laws and regulating could also lead you to give. You know, it could be used as tools, weapons to force people to the table to negotiate. And by doing that last step, using the power to convene to pull people together, you can actually get a lot of stuff done. So I'll give you a concrete example. Prior authorization, which is that widely disliked process where you're sitting in your doctor's office, the precious covenant of the office is a place where sacredly, I can talk to you. I'm the doctor, you're the patient. We talk about the game plan. I confide in you some issues about yourself that we need to deal with, and then we move forward with a plan to get you better again. Instead, the insurance company reaches their long arm in and says, jan, not so fast. That test that you were going to get, that X ray to see if you have cancer, you can't get that. We're not going to certify that. We're not going to pay for it. Now I've got to spend time as a doctor, 12 hours a week on average, negotiating, fighting with the insurance company to allow me to do what I need to do for you. The insurance company is saying, you're not doing the right thing for Jan. You're just trying to make money off the guy with this test you want to do is not necessary. We're not going to let you do it. They spend 12 hours a week fighting with me. So we both waste time. I'm unhappy, the insurance company's unhappy and you're unhappy. So people get skittish about prior authorization. So I can pass laws, I can do rules. But we did something different. We called the insurance companies, said, come on out, come into Washington. We'll get a little conversation to have here. And this was done by Chris Clump, who runs Medicare. Very talented executive outside of government. We recruited him in like so many people who did super well as private sector leaders on the outside of government. This president made it so clear this was a generational opportunity to change health care, that we've gotten all these wonderful leaders coming into government. So very capable folks like Chris pulled the insurance companies together and said, what are you going to do? Is there a better way than what you're doing right now? And you know what they said? Yeah, there is. If you'll give us safe harbor to be able to navigate a better solution. We think we can reduce the number of procedures that are prior off because not all procedures are at risk. Just a couple of the big ones, you know, back surgery, Unnecessary procedures done on people who don't know it, that they don't need these operations. Let's protect the people from unnecessary surgery. Let's go curtail doctors from just making money or just making mistakes and doing the wrong things to patients. And that way the system will work better. And we'll save money for the system because it saves about 20% of healthcare dollars if you appropriately do prior authorization. And here's a better part. We could do it immediately, like instantaneously while you're sitting in the office. We could actually build a system that tell you that something that you want to do to the patient is not right. So we can start to connect. But then we learned something even to me more profound. There was the possibility of creating what's called a gold card. Certify me as being so good at what I do that I can go ahead and do what I need to do for you, Jan, without the insurance company getting involved. A gold card is a license to practice without prior authorization. Interfering, you only give it to the best doctors. Well, guess what happens. All the other doctors say, well, why does oz get a gold card? I mean, all of us finish top half of our class, right? All doctors think they're top half of their class, so we should all get the gold card. I'm going to change what I do so I qualify for a gold card. And then market forces again. This is how this president thinks. The patients start to say, hey, doc, why don't you have a gold card? Are you not as good as the other doctors? You do things you're not supposed to do. Why don't you do things the right way? So you get a gold card too, and I'll come see you if you do that. So you see, we got the market to shift, to drive quality, to reduce unnecessary procedures and waste and fraud and abuse without having to have the government involved in regulating. And the industry did this voluntarily. Now we're checking, obviously trust but verify, to make sure they're doing the right things. But we find that to be more effective. We have done that across the board. We've gotten involved in sector after sector. We call the hospital systems in. I mentioned the pharmaceutical industry with most favoritation, drug pricing. By moving with industry, we get nimble solutions that can be adjusted season to season. And we do it quickly and we do it without litigation. And so the president gets to negotiate hard and he Gets the answers and the deals that he wants. He's doing the same thing in other sectors of the US Government, right? Foreign policy, et cetera. He'll just go and negotiate and navigate and jump beyond all the usual bureaucratic hassles. We have those capabilities. We prefer not to use them unless we have to.
- [36:12]
B
So as we finish up, what would you say were the sort of banner concrete accomplishments or the banner most consequential shifts?
- [36:24]
A
The tech transformation of CMS will allow us to meet patients where they are. When we wrote our objectives in key results, there were two really important pillars. Empower patients, because if they're truly aware of what's happening in their lives, they'll take better care of themselves. They're the ultimate stakeholder, but they'll also drive efficiency in the market. A smart patient, not all patients have to be smart, but enough of them have to be smart enough to know that this is a good thing to do. And I'm going to take this service and I'm not going to do that because it's unnecessary. That's what we want. The second big thing. So empower patients and then incentivize providers, provide financial incentives for doctors and hospitals and pharma companies to do the right thing. To make that happen. You have to have data flow. You have to have information that is transparent to all. And so the data that we have at CMS is harnessed in these old systems. If anyone who knows computers, these are COBOL based systems built in the 70s. We don't even have engineers who know how to program that way anymore. So we are rebuilding the basic infrastructure of how the system works. And we have signed up in this tech ecosystem. Every major company, incumbent, insurgent that you can think of that's involved in health technology is a signatory. They're all pledging to work with us to accomplish the goal I just outlined to allow patients and the system to talk more effectively. There will be within this year apps that if you have metabolic syndrome, diabetes, the companies will be able to build these tools, these apps. You'll be able to use them as a Medicare beneficiary. We'll pay for it as long as it delivers better outcomes. I don't care about engagement, I care about outcomes. And the fact that we have created an entire ecosystem to bring technology, including artificial intelligence into Medicare and Medicaid are huge, salutary advances for the system because it allows us to catch up with the rest of the information technology in America. We don't stream content the way we used to. We don't order food the same way we don't travel in rideshare car, you know, Ubers and Lyfts like we used to. We don't bank like we used to. Yet we do healthcare the way we did in the 60s. And by bringing healthcare kicking and screaming into 2026, we're going to allow it to be developed same efficiencies and the same systemic improvements that we know the American people deserve. My hope is while we're in these seats, we'll be able to deliver on this promise because it will be the single most important thing we do to dramatically drive down the increase in costs, yet improve the quality of care. Because the most expensive thing we do, Yan, without question, is deliver bad quality care. Why? If a bad thing happens to you, I paid someone to do it to you. I'm paying someone who's capable to fix it, and then I've got to pay for downstream complications. Let's leap past all that and use the efficiencies that information and data can bring to the system, including the promise of AI to deliver higher quality care to you. And by doing that, we'll be able to afford health care. And if we don't fix the current health care financial system in this country, we will end up becoming a big health care system with a small country attached.
- [39:46]
B
Well, Dr. Mehmedaz, such a pleasure to have had you on.
- [39:50]
A
God bless you. Thanks for having me.
- [39:51]
B
Thank you all for joining Dr. Ahmekmedaz and me on this episode of American Thought Leaders. I'm your host, Jan Yek Yellik.