Medicare and Medicaid Under Dr. Oz: What to Expect

Dan Gorenstein (DG): The Centers for Medicare and Medicaid Services, or CMS, is one of the most important agencies in the federal government. It’s responsible for the health care of 160 million Americans who get coverage through Medicare, Medicaid and the Obamacare exchanges. Its $1.5 trillion budget is nearly double that of the Department of Defense.

Usually, the person picked to lead this massive agency is a household name only to health policy wonks. But this time…

Sen. Mike Crapo: The committee will come to order. This is the hearing for Dr. Oz to be the CMS administrator. 

DG:  …it’s safe to say most Americans know this guy.

Oprah: Dr. Oz has a new weight loss plan for you. Yes!

DG: Yes, President Trump has nominated Mehmet Oz, the famous heart-surgeon-turned-TV-star, to lead Medicare and Medicaid. Today, we take a close look at Dr. Oz — who he is, the policies he’s likely to support and what we can expect from him as one of the country’s top health care officials.

From the studio at the Leonard Davis Institute at the University of Pennsylvania, I’m Dan Gorenstein. This is Tradeoffs.

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DG: To better understand Mehmet Oz and what his leadership at CMS could look like, we called up two people.

Tara Bannow (TB): My name is Tara Bannow. I am a reporter at STAT. I cover hospitals and health insurance, so that’s really everything within the umbrella of the business of health care.

Tom Scully (TS): Tom Scully, I’m a partner at Welsh Carson, a private equity firm in New York. But from 2001 to January of 2004, I was the CMS administrator.

DG: Tom ran CMS under George W. Bush and met with Dr. Oz as he prepared for his confirmation hearing. But I want to start with Tara, who recently wrote a 5,000-word profile of the nominee. Oz declined Tara’s repeated interview requests, but she did talk with dozens of Oz’s former colleagues – from his time as a surgeon at Columbia University and as host of his own TV show.

TB: I was actually really shocked at how many of his former colleagues were actually very enthusiastic about talking to me.

DG: Did the fact that you were getting so many yeses to your interview requests tell you something?

TB: I think it told me that Oz works hard, but also he has this sort of remarkable charm. And he’s a politician. He works it, you know, he knows how to win people.

DG: And on that, what stood out to you most about his confirmation hearings last week? Was it that charm?

TB: Well, I already knew that that existed, but I think what stood out was that, you know, at a confirmation hearing, the Democrats want to get their punches in, they want to have these spicy back and forths. But I think Oz really sort of disarmed them a little bit.

You saw it the most with Sen. Ron Wyden from Oregon. He had this long opening monologue about how Oz has touted Medicare Advantage.

Wyden: Dr. Oz has made a lucrative career out of advertising these for-profit insurance options, targeting seniors with shady marketing tactics on his television program. 

TB: He’s touted bunk supplements, 

Wyden: Dr. Oz has used this program to promote some of the most ludicrous wellness grifting that I’ve heard about to date. 

TB: He really went after him. And then he said, you’re going to cut Medicaid, too. I want you to come to Malheur County in Oregon and see what Medicaid means to these people. 

Wyden: I’ve had more than 1,100 of these town hall meetings, and we’d make you the guest at one. If you’re confirmed, will you come?

TB: And Oz responded…

Oz: If confirmed, I commit to visiting with you if you’ll teach me your jump shot. 

TB: Oh, I’d love to come, but you have to show me your jump shot. And Ron Wyden was just sort of taken aback, I think. 

Wyden: I like that part. But I’d like to know, will you come to Malheur County? I can make sure there’s a basketball court. 
Oz: I promise you, I will be with you.

TB:  I think that just exemplified Oz sort of. Yeah, just the charm was working. And he had that sort of little anecdote for every senator who asked him a question.

Oz: Senator Bennett, working in schools, which we discussed in your office.
Oz: Senator Crapo, when I walked into your office, You gave me an Idaho potato chip.
Oz: Senator Hassan, when I was in your office, you brought up the story of a young woman who had been suffering from inflammatory bowel disease.

TB: He made each of them feel special and unique. And that’s the kind of doctor that a lot of his colleagues described him as, like he really cared about patients and making them better, making them feel like they mattered. 

DG: So I want to take sort of an abrupt turn in this conversation with you, Tara, to go from the charm offensive to where you started your long profile on Oz, and you started with a scene from an episode of Dr. Oz’s TV show, where he’s showing pictures of rats with these massive tumors that his guest said were from being fed genetically modified food. You could have started anywhere, and you start with this, kind of like, ugliness.

TB: Well, I think that that episode encapsulated a lot of the criticism that you hear from the medical community of the Dr. Oz Show. So the guests that he had on stage with him were these well-known anti-GMO activists.

And as it was explained to me, the tumors – and they really are horrifying when you see the photos, they’re almost as big as the rats themselves – would actually be expected in this type of rat as they age. In reality, it wouldn’t matter what they were fed, they would still sprout these tumors.

So I think this story exemplifies the use of highly questionable science, inviting on guests with questionable credentials, and then really just kind of failing to question the validity of the science that they’re looking at.

DG: And I mean, Oz has taken a lot of heat over the years for promoting treatments with questionable scientific evidence. 

Oz: I’ve got the number one miracle in a bottle to burn your fat. It’s raspberry ketones.

DG: Raspberry ketones and green coffee extract beans. Miracle weight loss products. Hydroxychloroquine to treat COVID. 

Oz: You don’t want the virus to get into the cell. So how do you block it from getting it into the cell? That’s where hydroxychloroquine plays a role. We’ve been talking about it a lot.

DG: Senator Hassan of New Hampshire brought this up during the confirmation hearings last week.

Hassan: You have been nominated to run the largest health programs, the set of largest health programs in the United States of America. And it seems to me you are still unwilling to take accountability for your promotion of unproven snake oil remedies to millions of your viewers, and that’s really concerning.

DG: What do you think people need to know about this part of who he is? Sure. He’s charming. Sure. He’s been a doctor, a very successful surgeon. But at the same time, he’s peddled stuff that is not based in science. And now he’s going to be potentially running Medicare and Medicaid.

TB: Yeah, I think Oz’s big problem is that he has never been transparent or honest about how the money changes hands with these supplements and with the products that appear on his show. In fact, the show had many paid sponsors.

I found a flyer that Oz’s agent had created that described the Oz effect, which said that, you know, Weight Watchers revenue grew 69% after partnering with the show. Neti Pot sales grew 12,000% after Oz mentioned it during an episode. But Oz has never been transparent about this, and that’s a big problem.

On Friday, Sen. Maggie Hassan really tried to understand this. 

Hassan: How much were you paid to promote the supplements?
Oz: I was paid nothing to promote the supplements.
Hassan: But you promoted them on your show. And there was something called a Dr. Oz effect. You would mention them, and the sales would go way up.
Oz: That was written about by the press. That was not something that I would talk about on the show.

TB: So, yeah, I think that this is a huge issue and it just makes him a little bit less of a credible figure. That’s a big problem for someone who’s going to lead a huge agency like this. We have to have confidence that what he’s saying is true.

DG: I think one of the reasons, Tara, that I really enjoyed your coverage of Dr. Oz is because you really seem to take a very nuanced approach to who this person is, right? There’s an easy way to dismiss somebody who’s described as charming, like, oh, it’s not sincere. But when I listen to you, Tara, talk about this, I’m getting the impression that the clinicians, the medical people you talked to and also the TV show people, the professionals he worked with, trusted him because he did the work.

TB: Oh, yeah. He worked really hard. I think that’s the picture people paint of him, this guy who just works super hard to be the best at what he’s doing.

Andy Slavitt, a former CMS administrator, he said that Oz called him the day after Trump announced him. And he just asked him all these questions like, what do I need to know? How do I not screw this up?

And I think that really gets to who Oz is. He’s really going to work hard and prepare for this position, just like he clearly prepared for this hearing on Friday. He came with facts. It wasn’t like RFK Jr. where you weren’t sure if he knew the difference between Medicare and Medicaid. I mean, Oz had done some research.

DG: That’s a perfect segue to questions that I wanted to ask you about policy. He’s got a relatively short list of public policy positions. But one thing that seemed clear was that he was a big fan of Medicare Advantage, where older Americans can get their Medicare coverage through private insurers. Here’s him on his TV show a few years ago.

Oz: With Medicare Advantage you can get a plan with $0 monthly premium, which could mean a lot more money in your piggy bank, which is the goal here.

DG: But at his hearing, Tara, Oz was talking about, like, I’m the new sheriff in town. You know what I mean? Like this really different, tougher stance on these plans. 

Oz: We’re actually apparently paying more for Medicare Advantage than we’re paying for regular Medicare. So it’s upside down.

DG: What do you make of this about face on Medicare Advantage?

TB: I think he’s savvy. He’s a politician, like he wants this job. I don’t think he ever expected to be nominated for CMS administrator when he was doing all these commercials for Medicare Advantage. I think he clearly took to heart the criticism over the past few months of his promotion of Medicare Advantage, and he wanted to do a 180, which he did. 

DG: And here’s this moment right where the credibility question comes up. Like on the one hand, this person has the ability to go and do their homework. But is he actually really concerned about some of these questions and concerns that lots of people have on Medicare Advantage, or is he just sort of talking a good talk? As somebody who’s really reported and dug in on him, what was your take based on the hearing?

TB: You’re asking me to read his mind a little bit. 

DG: That’s true. 

TB: I think he will bend to the political whims of the moment. So I don’t know, it depends, I guess, on how much the Republicans pressure him. I think he will do whatever gets him the most political points. I mean, he has in the past changed his views on abortion and COVID lockdowns and vaccines to try to get into the Senate in Pennsylvania. So I don’t have doubts that he’ll do the same thing in this position.

DG Q: And Tara, what about Medicaid? What about vaccine policy? Those are two issues that a lot of people are concerned about, particularly Democrats, but other folks as well. Republicans in Congress are expected to propose big cuts to Medicaid, and there’s a measles outbreak going on.  Given Oz’s past as a doctor who’s cared for Medicaid patients, who told senators at the hearing that he believes in the measles vaccine, do you expect him to push back on these issues in the administration?

TB: No, he will not push back against anti-vaccine policies, I don’t think. And I think at the hearing it came into much clearer focus that Oz is willing to go along with Republicans in their efforts to cut Medicaid. 

Oz: When you expand the number of people on Medicaid without improving the resources required for those doctors to take care of those patients, you stretch resources very thinly for the people for whom Medicaid was originally designed.

TB: So to me, it sounds like someone who is very amenable to work requirements or putting more guardrails around who can be eligible for Medicaid. And he also helped make RFK Jr. a household name by having him on his show. So that gives me no confidence that he would push back on any kind of anti-vaccine effort.

DG: So after almost a month of reporting on this guy, I think what I’ve heard you say is he’s hard worker, very smart, wants to do a great job, and is a political creature, but also cares about making sure that people are healthy. If that person is the person who ends up being confirmed to run CMS, what does CMS look like under that person?

TB: That is a big question. I think everything you said is right. I think he’s also a yes man. He made it clear any policy handed down, he is not going to have any qualms about rolling that out at CMS.

One thing he said at the hearing on Friday was that he’s going to reach out to folks at CMS who are lower down on the totem pole. You know, the middle managers.

DG: The career people. 

TB: Exactly. He’s going to reach out to them and find out what’s working, what’s not working. And he’s going to try to create a culture that people enjoy working for. And that could lead to positive change. I think from everything I’ve learned through this, I think in five years from now, if we call up CMS folks, I think they’ll be like, oh, that Oz. I really liked him.

DG: If you could ask him any question, what would the question be?

TB: Oh my gosh. I don’t you know. It’s interesting, during my reporting for this story, every person I interviewed, I would ask them at the end, why do you think Oz does all of this? He clearly has a lot of money like he’s set for life. His family is set for life. So why do you think he wants to now go into politics?

The most common answer I got from all of his former coworkers was, I think he genuinely wants to empower people to live healthier lives. And I would say, really? You don’t think it’s like power or just to have be in the spotlight? And they’d say, well, probably a little bit of that too. 

DG: Tara, thanks so, so much for talking to us. It’s really been a great conversation. We really appreciate it.

TB: Thanks. This was fun.

DG: When we come back, we talk with a former Republican CMS administrator about what the job requires and what he makes of Dr. Oz.

MIDROLL

DG: Welcome back. We’re talking today about Dr. Mehmet Oz, President Trump’s nominee to lead the Centers for Medicare and Medicaid Services.

Now we’re going to turn to my conversation with Tom Scully. Tom ran CMS from 2001 through 2004 under President George W. Bush. And he’s been working on Medicare and Medicaid since the late ‘80s with the first President Bush.

I started by asking him what the most important skill is for a CMS administrator to have to be successful.

TS: I think the biggest skill is running this massive agency, finding good deputies to help you do that day to day, while still dealing with the politics of it. Because you have to deal with, you know, Republican or Democrat, there’s 535 people that are angry at you every day about your hospital not being paid right or your physician’s underpaid. Everybody’s unhappy all the time, Republican and Democrat.

So I think just the political skills of keeping those 535 people happy is difficult in itself. And I was there in a much less partisan era. I got confirmed 100 to nothing, And I helped lots of Democrats with their hospital problems and their physician payment problems. And that made it easier to deal with them when you had other things on the Hill. 

DG: And I’m really curious what you think about Oz. Because most CMS administrators, including yourself, had long backgrounds working on health policy in federal or state government. Oz doesn’t have that. He’s a doctor, and some folks like Idaho Sen. Mike Crapo said he thinks that’s going to be a good thing. 

Crapo: You understand how DC legalese looks on the ground and how policy plays out in practice. This is exactly the mindset we need for a CMS administrator.

DG: How big of a deal, given what you just said, do you think Oz’s medical experience and lack of government experience is going to be in his ability to run the agency?

TS: I think everybody’s different. My job at the time I was there from the very first day was to try to cook up and pass Medicare Part D and Medicare Advantage. I spent all my time on the Hill. That was my job. I was a legislative guy.

Mark McClellan is a doc. He’s a good friend. 

DG Q: McClellan ran CMS for Bush after you. 

TS: Yeah. He spent the next two years crafting the regs based on the legislation after I left. He was really good at that. I think Oz is a little bit in between.

It’s really helpful to be a doc. You know, 150 million people know who he is. That’s an advantage. When he says something, people pay attention. So he’s a credible, smart doc. He’s hired good people to run the agency day to day, which is hard to do.

There are 5 billion issues a day that you can focus on. You’re drinking from a firehose. So it’s hard.

DG: And so what’s your guess? You talk about McClellan was a guy who was putting in the regs. You were more of a legislative guy. Oz, you said, is somewhere between the two of you. Obviously, he’s got the skills to be a spokesperson. Do you have a sense or a hunch as to how you think the administration may try to use Oz? Use the fact that 150 people know this guy?

TS: 150 million.

DG: 150 Million. Excuse me, 150 million. That’s right.

TS: 150 people know me. 150 million know him. Slight advantage.

It seems to me that most of the people that Trump has picked for most cabinet spots are people he thinks are good on TV and good talking heads. So if you’re going to have a big fight over health care and you’re going to go defend your Medicaid changes or your Medicare or anything you’re doing, the Democrats are going to run around, obviously, and say, you’re cutting, you’re cutting, you’re cutting.

If I were them, I would use him to make all the public policy fights. And I would imagine he’ll do an awful lot of that.

DG: Medicaid came up a lot during the hearing, but Oz mostly sidestepped those questions. We’ve heard very little from him about Medicaid and Obamacare, which he’ll also oversee. Does that worry you at all?

TS: No, he’s not even there yet. He’s a very smart guy. So anything Oz needs to know, he can learn. And I think it’s just a matter of what fights he wants to pick. If you want to pick a loser fight, that’s going to make you really unpopular. Taking on Medicaid is probably going to do it. That doesn’t mean it’s not the right thing to do, but I’m guessing whatever the heated issue for the administration that’s causing controversy, he’ll be out there talking about it. And I think probably Medicaid, for better or worse, is probably the one that draws the most fire. 

DG: Tom, do you think the stars, I mean I know you’ve been fighting the fight on Medicaid reform for decades. Do you think the stars have aligned, with Republicans in control of both chambers and the Trump administration, to actually make Republican reform headway on Medicaid? Is this the moment? Is this the window?

TS: No, no. It should be, if they’re smart. I’m afraid they won’t be.

The way you’re going to fix Medicaid, in my view, is very gradually, like they did in Social Security. James Baker and Senator Moynihan cut a deal in 1983 to gradually increase the Social Security age from 65 to 67. They started a number of years out. I think they started 3 or 4 years after they passed the bill, and they did very gradually over many years that nobody noticed.

I think if we’re going to do something on Medicaid to fix Medicaid, you got to do something like that, start a few years out after the next electoral horizon and do it very gradually. Otherwise, I think you’re going to run into the same brutal politics that I have and many others who have tried to do things in Medicaid over the years. 

DG: One of the lines that stood out to me from Oz’s confirmation hearings was Washington Sen. Maria Cantwell. This is what she said:

Cantwell: You’re coming with the ability to be an advocate here. So we want to know what you’re going to be an advocate for. 

DG: The CMS administrator has two bosses, as you know, Tom: the HHS secretary and the president. How much room is there for a CMS administrator to be an advocate, to chart their own course on policy versus how much they’re just implementing what their bosses tell them to do?

TS: I think there’s tons. Look, in the Democratic administration there’s 10,000 people that care about health policy and want to do everything. There’s 100 cooks in the kitchen. The Republican administration is not that many. So if you have a good idea, or any idea, and you’re friendly with the president and the secretary, you pretty much got a lot of running room, and I think he’s gonna have a lot of running room. RFK and Oz have been friends for 40 years. They’re good friends. So I think that’s a huge advantage.

DG: Because there’s that trust. I mean, look, you talked to Oz. What’s this guy’s agenda going to be?

TS: Well, I thought I was going to stop by for half an hour for coffee, and it turned out to be much lengthier, much more detailed and really very interesting. He was very interested in everything. I think he was still trying to decide. As I told him, he was months ahead, preparation-wise, where I was in 2001 when I took the job. And, you know, I had a lot of experience.

I don’t think he’s decided what his top policy ideas are going to be. To some degree, as I said, they just come at you, you know, whatever’s on the front of the New York Times.

I think clearly from the hearing, what I saw, I think he’s going to spend a fair amount of time trying to fix Medicare Advantage and make it better. He is a big fan of Medicare Advantage, as am I. But if you’re a big fan of Medicare Advantage, it has to be regulated appropriately.

DG: And what does that look like, Tom? Folks on both sides of the aisle have criticized Medicare Advantage insurers for being pretty aggressive. They’ve tried to cherry pick sicker people and document sometimes irrelevant conditions to draw down more money from Medicare. A lot of folks in Congress want to see that stop, as you know. If Oz is actually concerned about that, what could he do?

TS: So it’s complicated, but there are a million little adjustments you can make. And basically the plans, in my opinion, aren’t doing anything illegal. They’re aggressively following the incentives that CMS has created over the years and then politically had a tough time pulling back.

The simplest way to fix it is, we’ve given them all kinds of ways to identify that they’re finding sick people and they should get paid more for it. And those things are kind of getting turbocharged and a little bit out of control. So fixing that and going back in how you measure how sick people are and how much you get paid for, that is really the core to what Oz could do to fix this.

DG: You said you thought it’d be a half hour coffee. How long did you end up spending with him?

TS: Oh, I don’t know, an hour and 45 minutes.

DG: And in that hour 45, what was the one piece of advice you were actually — you know, I’ve been interviewing you for years, Tom. You’re a guy who likes to give advice. I mean that in actually, in a generous way. I’m not taking a shot at you.

TS: My kids don’t think that.

DG: I’m sure that’s true. What’s the one piece of advice that you found you gave them in that hour 45 that actually you think mattered?

TS: Honestly, probably the one thing that mattered, which sounds like he’s doing. He said, look, RFK is getting confirmed. I’ve been told to keep my head down. Don’t go to the Hill, don’t talk to anybody. You know, don’t be calling Democrats. I said, look, I don’t know what the White House staff are telling you, but go have lunch with Ron Wyden. Don’t ask anybody. Go get to know some of these guys. They may not vote for you. You might have a fight with them all the time, but I said, you know, you’re always going to have some staff guy in the White House tell you what you can and can’t do. Just ignore them. They don’t know who you’re talking to. Go have lunch, play basketball with Ron Wyden. That helps. 

Wyden: I’ve had more than 1,100 of these town hall meetings, and we’d make you the guest at one. If you’re confirmed, will you come?
Oz: If confirmed, I commit to visiting with you. If you’ll teach me your jump shot.

TS: Ron may never like anything you ever do, but it’ll be a lot easier if you have the ability to pick up the phone and vice versa.

DG: Tom, thanks so much for taking the time to talk to us on Tradeoffs.

TS: Yeah. Good, good. Always good to hear from you. I’m going to see if my kids can get some of my advice and listen.

DG: Good luck with that.

TS: All right. Take care.

DG: I’m Dan Gorenstein, this is Tradeoffs.