Rae Woods (00:02):
From Advisory Board, we are bringing you a Radio Advisory, your weekly download on how to untangle healthcare's most pressing challenges. My name is Rachel Woods. You can call me Rae.

(00:14):
This week, we are bringing you a special episode live from the main stage at ViVE, a conference focused on the intersection of healthcare business and the future of technology. I was invited to moderate a panel on the state of the payer industry. No small task, and that's because payers are operating in one of the most turbulent moments the industry has seen. Costs are rising faster than premiums. Utilization continues to climb. And at the same time, CMS is rewriting the rules; rules around transparency, interoperability, prior authorization, and oversight, raising the bar for accountability while compressing margins. And what that creates is a real balancing act. Plans are being asked to improve quality and outcomes, manage utilization responsibly, and deliver a better experience for members and providers all at once.

(01:07):
And the pressure isn't coming from one direction or even one source. Regulators, providers, employers, members, they're all pulling on the system in different ways. So in this conversation, we use Medicare Advantage as our proving ground, and not just because more than half of seniors now choose Medicare Advantage. It's actually where many of these tensions show up first, or at least most visibly. It's also where there's outsized opportunity for smarter controls, better collaboration, and for technology to actually reduce friction rather than add to it. So to have this conversation, I sat down with three leaders who sit at the center of this tension, from the payer side and the technology side. We've got Dr. Kay Judge, Chief Medical Officer of Medicare for Blue Shield of California, Dr. Ali Khan, Chief Medical Officer of Medicare for CVS Aetna, and Dr. Syed Mohiuddin, head of healthcare for Anthropic.

(02:04):
Here we go, live from the ViVE stage.

(02:14):
If you could describe in one sentence or less the state of health plans today, what would you say? Syed, let's start with you.

Syed Mohiuddin, M.D. (02:22):
Under pressure and very focused.

Rae Woods (02:26):
Okay.

Kay Judge, M.D. (02:27):
Do more with less.

Rae Woods (02:28):
Ali?

Ali Khan, M.D. (02:30):
Actually having to push on clinical stabilization.

Rae Woods (02:33):
But these are the challenges we're facing. Let's move to opportunity. Now let's focus on 2026. What's the biggest opportunity that CVS Aetna, Blue Shield of California are chasing this year, actual bets, not experiments?

Ali Khan, M.D. (02:49):
I mean, for us, this is pretty straightforward, right? CVS has put in a $20 billion investment from an AI perspective. We are trying to make that actually granular. It's very easy to get up here and say a lot of different talking points, right? From a member perspective, this really focuses on, can we actually make the member experience more than just a buzzword? And so we are actually trying to pull together some of the work we do in network sculpting, some of the work that we do in a digital journey and the work that we do in access to actually make these literal care paths and care models, the tools that we have to reduce friction when we are thinking about an oncology journey, when we are thinking about a diabetic journey, and to show that viscerally is where we're spending a ton of time. And then on the provider side, it's really much more around, can we actually show that our words are more than just rhetoric?

Kay Judge, M.D. (03:37):
For Blue Shield, I think we're very similar. I think the payer journey right now is, what's the very rapidly shifting national landscape? And what is CMS thinking about it in terms of, how are we going to deliver care and is access going to be part of the model of care delivery? And we have the highest cost cohort, the highest chronicity of care burden. And CMS is saying, "We are no longer going to reimburse for process metrics. We are going to reimburse for outcomes. So take this polychronic cohort and say, how are you going to fix this? And by the way, you are going to do it with a limited amount of money because we expect AI to be part of the solution."

Rae Woods (04:21):
Yes.

Kay Judge, M.D. (04:21):
So how do we integrate AI into our existing UMCM care models in a way that's seamless? And then I think there's a base of how do we do it in a way that's transparent and engenders trust in our providers and our members?

Ali Khan, M.D. (04:36):
I would just say to make it really granular. We have to free up time for our own teams to do the stuff that actually helps people, as opposed to what we're required to do from a check-a-box activity from the NCQA. Us enabling AI scribing for our case management, utilization management nurses has freed up about 127 minutes a day that they can actually use to, oh, I don't know, discharge plan or secure transportation or do the stuff that they came to do, right? But also the stuff that all too often falls through the cracks. Those sound like table stakes, but this is the basic work right now of actually returning agency back at the frontline.

Rae Woods (05:13):
So I heard better experience, better partnerships, better outcomes. Syed, you're representing Anthropic on this stage. When you hear payers have these goals, what timeline can they expect? Is it a year, less than that, more than that? How fast can the technology get us to where we want to go?

Syed Mohiuddin, M.D. (05:34):
Very fair question, because obviously if you're in a really margin constrained environment and somebody's telling you, "Hey, go put your incremental capital against this new technology that we don't actually know if it works in the industry or not," you need to know, especially with shareholder pressure on you, you need to know that you're going to get a return. A lot of companies can be very forward leaning. A lot of companies can pour a lot of capital against priority, have a lot of horizon three bets and wait three and four and five and six years. Most of them don't work, but a few of them take off.

(06:19):
Our industry, managed care, does not allow for that. So I think in short, you can expect to see progress and wins and momentum in your first year, but to really transform, you're not just freeing time for your workers to call someone who really needs that phone call and execute a discharge plan and do the follow-ups, but you're also freeing them to start re-imagining because a lot of what we're doing in the industry can be done differently, not just more efficiently. Everyone thinks about OpEx, but I'm talking about just better, way less friction.

Rae Woods (06:55):
Yes. That's a thread I want to keep pulling on because I hear across the hall at ViVE, a lot of a focus on efficiency and not what the efficiency gets us. So let's talk about what it gets us in terms of improving the experience for providers and improving the experience for members. Two things that I know that you're focused on this year and beyond. Let's start with providers, and I'm going to run at the elephant in the room, which is prior authorization. This is often the biggest or the most visible flashpoint between providers and between payers. From your perspective as health plan leaders, where have you seen prior auth move from this instrument that is frankly blunt, but also successful at curbing spend into something that is more purposeful, more prescriptive and more intelligent?

Ali Khan, M.D. (07:47):
So whether embarrassingly or not to admit this, it has taken the application of AI for us to be able to solve what is seemingly a very simple problem that when somebody is getting cancer treatment, I should not deny their Zofran for nausea after getting chemotherapy. We have spent a bunch of time this year, obviously working with AHIP and with others, but to say, "Hey, how are we pulling pharmacy data from CVS retail pharmacy, data from Caremark, our own clinical knowledge to create real prior authorization bundles that are not saying, 'Hey, not only is it we are going to authorize seven imaging studies at once over the course of your treatment, but we're wrapping chemotherapy together, we're wrapping that Zofran together, we're wrapping that shower chair together you might need.'" All the pieces that we know on a journey happen for an oncology member, these are small details that aggravate the heck out of people and we are trying very hard to just cross the T's and dot the I's using AI to enable us not losing sight of that.

Kay Judge, M.D. (08:47):
You talked about the fiduciary responsibility. There's a commitment that we have as managed care plans to make sure that we're shepherding resources in a very expensive cohort population. So when I think of prior auths, I think of two parts. One is point of care. Can we apply the right prior auth at the right time and remove all the ones that are not needed to reduce friction in the moment? And the other is just prospective support. I think the shift right now that we're seeing with AI is that we can, instead of after the fact, say, "You know what? That wasn't clinically indicated." Can we tee up our providers and our members saying, "This is a path you're going to work with and we are going to guide you so that you are going to have a painless, frictionless path that's easily accessible, visible, real time. You ask for it, you got it. And if you don't, you know why at real time"?

Rae Woods (09:41):
At real time. And that I think is the trick.

Kay Judge, M.D. (09:42):
And I really think that this was time really excited about Blue Shield saying we are also partnering with AHIP on we have to reduce this burden. We have to be part of the solution. We can't just sit down and say, "Yes, there's a friction here. We all know about it." We need to say, "There's this shifting aggressive tide of all of these resources that we have." And if we have visionary deployment and you ask the question how fast, we have to be ready to build this airplane as we're flying and we have to rely on the knowledge that we have and the partnerships that we've created to say, "We can do this and we can do this in six months and in one year with partners who can take us with them."

Rae Woods (10:25):
So, Syed, what did you not hear from them that you think is an opportunity to turn this blunt instrument into something that is more intelligent and precise because we know that prior auth is this huge pain point?

Syed Mohiuddin, M.D. (10:35):
I mean, I think conceptually they're right. I mean, I know I'm supposed to be the AI guy on stage. At the end of the day, you need to get to trust, right? And I think what the technology ultimately is doing, yes, it's taking unstructured data. Yes, it's allowing for, you have a reasoning layer. So a lot of what when nurses are going to or clinical reviewers are going to ultimately get you to yes, you can just get there instantaneously. There's all these technical capabilities of these models, which are fantastic and happy to talk about them, but creating transparency, that is a prerequisite for trust. Look, the reality is there's low resources on both sides. It's going to become a little bit of Hunger Games, right? So you're going to create some information, asymmetries, you're going to try to arbitrage your opportunities. One player's going to do one thing, another player's going to do another set of things to get their little piece, all because they don't trust the other side.

(11:32):
So we have to use the technology to create the transparency that ultimately brings us back to trust, then all this stuff will go away.

Rae Woods (11:40):
I actually want to run at trust here. I'll admit in my conversations with providers, they are quick to say, "Yeah, Rae, I'll share that data when it doesn't come back to bite me." So from the health plan perspective, what do you need to do to improve that relationship with the provider so that you can give them a signal that, "No, no, you can trust us this time or it will be different this time"?

Ali Khan, M.D. (12:05):
I mean, super tactically, this is around keeping promises. We spend a lot of time with hospital systems around the country being like, "Hey, you're using Epic. We have Epic Payer Platform. We should exchange data." And lots of times hospital systems will be like, "Why?"

(12:20):
So I think this is where we've spent a bunch of time this last year. There's a couple of large regional systems in the Midwest where we've done this. When we actually are sharing data in a meaningful, bidirectional, interoperable way, they are actually seeing their manual chart requests from us being cut in half. That saves them processing time, that saves them staffing, right? Their DRG turnaround from a claims perspective is down by 65%. We saved them 265 hours of provider staff time that was spent not in peer-to-peers, not in crazy long conversations, not frustrated with us and waiting for us to do something that would be the other shoe dropping, right? At the core, it's just a matter of being like did we actually follow through when we said, "We think we can make this easier"?

Rae Woods (13:06):
This is an interesting example because it's not about taking a current point of friction and saying, "We're going to get us back to neutral." And instead it's, "No, no, we are partners. I want to make this better for you." They need that what's in it for me if they're going to be sharing the table.

Ali Khan, M.D. (13:21):
But there's scar tissue there, right?

Rae Woods (13:22):
Absolutely.

Ali Khan, M.D. (13:23):
We have work to do in terms of lysis of adhesions or breaking through that to actually get to the place where they believe it.

Kay Judge, M.D. (13:30):
Absolutely agree with everything you said. And I think it's a scenario of, why would you trust us with this information and what are we going to do with it? And it really is engaging with them of here's this information, whether it's an Epic Payer Platform where here's some data that you can have at your fingertips care gap closure. When you need it, we are going to help you achieve stars. And I think the conversation as a nonprofit health plan becomes easy when we sit there and say, "We are all on the same side here. We need our members to have excellent quality, excellent clinical outcomes. How can we partner with you to get you there?" The collaboration between payer and providers should not be a punitive big brother overreach, oversight. It should be, "How can we help you?"

Rae Woods (14:13):
It's also important to remember that trust is something that is built over time. So for every example, every win that you share, you need to keep adding and layering the wins on top of them to actually build that trust-based relationship.

(16:19):
I often hear about these points of friction and this lack of trust when it comes to providers not trusting plans. But let's be honest, it also goes the other way. And I'll say as technology and as artificial intelligence becomes more common at every organization, and as organizations are using it to protect their margin and sustain their business, I'm actually feeling a little bit more of that Hunger Games mentality. And now I'm hearing health plans say, "Wait, wait, wait, do I trust the provider partner?" So how do we get to a point where we're actually at shared trust as opposed to competition?

Syed Mohiuddin, M.D. (16:57):
I actually love this moment because payers had their claims data and they had more central analytics capabilities and they were able to do things, create sophistication, execute with sophistication in a way that a lot of times providers just didn't know what to do. And now providers have found a bit of a between ambient and clinical documentation integrity and all the things that allow them to essentially submit cleaner claims, optimize codes. Payers might say do a little more to get their margins. Now there is equal footing in a way. Both sides have an existential need to, "Okay, are we going to keep doing this? Are we going to have appeal bots to death or are we actually going to sit at the table like adults and figure this out?" And I don't think there was an impetus to do that before in a way that candidly, I do feel there is now.

Rae Woods (17:45):
What changed? Is it the margin pressure that is forced that moment? Is it the technology? What has changed now?

Syed Mohiuddin, M.D. (17:52):
The power imbalance is less because providers have more power in the equation because of essentially what they're doing with coding.

Rae Woods (17:59):
And they're wielding that power. Absolutely.

Kay Judge, M.D. (18:01):
I agree. We talked about Medicare Advantage being at an inflection point, and I think there's a benefit to that because it's no longer us versus them. It's how are we together going to manage care of this population? How do we align incentives? How do we align communications? How do we align our data systems in a way that we all benefit? How do we collaborate? And then what does our contracting look like? So I think the Meta View of we've tried this, we've tried upside risk, downside risk, and I think we're evolving and CMS is evolving in, "Okay, now you guys think you can do it. Show us. Show us with access. Is success in your chronic bundles."

Ali Khan, M.D. (18:41):
The point of Medicare Advantage was meant to be to show that we could do more in clinical care coordination, that we would do better in keeping people out of trouble, that we would actually drive value. And the last 15 years has kind of blurred that narrative for a lot of different reasons, right?

Rae Woods (18:57):
Which is why CMS is exerting their power.

Ali Khan, M.D. (18:59):
Exactly. But so at this regulatory and political moment, we have an impetus as Medicare Advantage plans and as plans overall to be like, "What is the point of us being here and what additional value add are we actually driving at the last mile?" At the end of the day, trust breaks down to time, resources and follow through. And if we can show that we are actually bringing resources and follow through to bear in a way that values people's time, then that's the end goal, but we have to prove that over and over again. And let's be honest, there are a bunch of health systems that aren't wanting to deal with us right now. But then the ones who are saying, and Cleveland Clinic's a great example is for us and with Humana of saying, "We're going to go deep on full risk Medicare Advantage and let's co-build stuff together." That's not a JV. That's shared actual moral and operational alignment and we can go do a lot with that.

Rae Woods (19:47):
So we've talked a little bit about transparency. We talked a little bit about all the ways that CMS is starting to exert their pressure. They're exerting this financial pressure. They're changing the rules. I want to talk about what has to change within an organization to enable the interoperability, to enable the transparency, to enable better prior auth. I hear a lot of talking points. I see the rules. Rules aren't the same thing as change within an organization. Syed, what has to change internally to make this successful?

Syed Mohiuddin, M.D. (20:17):
Number one, lead from the top. And number two, create incentives that align with, including financial incentives, by the way, that align with achieving those targets is the same as everywhere else. Number three, communicate, communicate, and then over communicate. And number four, if you're talking a big game, but you're not actually bringing in the tools and changing your operating model and empowering your workforce and giving them access and giving ... Then what the hell are you doing? So it's all of the above, just like it's always been.

Rae Woods (20:47):
Yeah. And that same energy has to apply to not just, how do we improve internally? How do we improve the provider experience? That same energy extends to the member experience.

Syed Mohiuddin, M.D. (20:56):
The members and the system.

Rae Woods (20:58):
Yes.

Syed Mohiuddin, M.D. (20:58):
We have an obligation to improve the system. So everything you're doing, if you are in member engagement, how do you do that better? If you are in provider relations, how do you do that better? If you're on the prior offside, how do you create more transparency? Friction is bad. It's bad for our brand. It's bad for our customers. It's bad for our bottom line. It's just bad. So what are we doing? Focus on fixing the system.

Rae Woods (21:19):
So if you could fix the system in one way for members, what would be the first thing on your list?

Ali Khan, M.D. (21:25):
Fifteen second SLA for when they call us. When we think about how do we root out sources of common misery in the system, that's where we've started. Just make it easier for them to contact us. Yes, you can go to our app, but there's a ton of people who are still calling the number on the back of everyone's insurance card for member services. And if nothing else, whether that's agentic or whether that's human in the loop or whether that's a third party entirely, that we are connecting people at a moment that they don't show up already annoyed with us.

Kay Judge, M.D. (21:53):
Yeah. We owe it to our patients to have all their information at our fingertips when they call us to help direct them through their path of care. They want it seamless. They want to know we know them and we know how to partner with them in their health. And I think AI is going to be a big part of that solution and we have to leverage that to push forward clinical outcomes, which Medicare Advantage has yet to show to the extent that CMS wants us to show it.

Syed Mohiuddin, M.D. (22:23):
I fundamentally believe in empowering everyone in the system because we all went into healthcare to make the system better. And I would literally give every single one of them access to, it could be Claude Code, it could be any one of these tools that are transformational and kind of revolutioning their capabilities, but are on your phone and on your personal laptop, but never on your work computer where you could totally regenerate the systems yourself. And now it's like, you don't need to be a coder to use Cowork. The point is, bring technology into your four walls, but everybody has their hands on it, so they're working on these things together.

Rae Woods (23:03):
I want to run at the naysayers going, "All right, all this AI, it's just going to make things more efficient for you." So how do we make sure that we're using these tools to improve the provider experience, improve the member experience, improve the system, and not just focus on getting more efficient?

Kay Judge, M.D. (23:19):
It's where we put it. Do we embed it in our processes that are causing friction, are causing the lack of trust? And do the patients and our providers see this shift? I mean, are we doing the checkbox? Or are we doing efficient care at bedside with knowledge of the entire healthcare ecosystem that's helping us in the background? So I really think that we're going to have to show that we have leveraged data to the benefit of our provider and members in effective ways that they see we really have to shift that paradigm into proactive partnership and helping navigate through the healthcare ecosystem.

Ali Khan, M.D. (23:58):
I think to get really specific, Syed talked about re-imagining earlier, care management's a great example of this. It's very easy in care management do a lot of check-the-box activities that don't actually impact somebody's life. All of us on this stage are inundated by many people in this room and other rooms about like, "Let me take a health risk assessment and I'll automate this for you." And that's a great idea from the context of making that maybe a less painful process for people. But if clinical teams and cross-functional teams aren't pushing the partners that we're working with to say it's not enough to just go through a list of questions, but you actually have to generate an action plan and then ideally in a multi-agentic model, do the things in the action plan, right? Go solve the issue around like a home's not safe from lots of tripping hazards, so send a home safety evaluation in the house and get a carpenter to put up some grab bars and nail down some rugs.

Rae Woods (24:46):
Yes.

Ali Khan, M.D. (24:46):
It's those pieces actually drive into last mile follow through that requires the re-imagining and where we can take people to Syed's point and to Kay's point that are motivated to be here, that came to do this work for a purpose and actually demonstrating impact on the ground, that is the point.

Syed Mohiuddin, M.D. (25:02):
I think about power a lot and what you cannot have happen with technology is that power is only in the hands of a small group of people who will figure out how to use it for their benefit. Power should be in everybody's hands in the healthcare system, right? As a patient or as a family member, I should know for myself, right, all of my health information, all of my gym information, all of that stuff should all be connected and I should be able to converse with it. I should be able to schedule. I should be able to do all these things that are so freaking hard with unbelievable ease. As a doctor, that information should be at my fingertips at every step of the way. All the information to deal with all the administrative burdens that we talked about earlier should be where it needs to be so the payer doesn't have to spend as much on chasing me and the provider doesn't have to submit as much crap because the information's already there.

(25:56):
So power should be in everybody's hands and we should democratize that and make sure that people are using it for their best interest because their ultimate interest should be the health of every American.

Rae Woods (26:07):
Thank you so much for joining me at ViVE.

Kay Judge, M.D. (26:09):
Thank you for having us.

Ali Khan, M.D. (26:10):
Thanks for having us.

Rae Woods (26:36):
New episodes drop every Tuesday.

(26:53):
If you like Radio Advisory, please share it with your networks. Subscribe wherever you get your podcasts and leave a rating and a review. Radio Advisory is a production of Advisory Board. This episode was produced by me, Rae Woods, as well as Abby Burns, Chloe Bakst, and Atticus Raasch. The episode was edited by Katy Anderson with technical support provided by Dan Tayag, Chris Phelps, and Joe Shrum. Additional support was provided by Leanne Elston and Erin Collins. We'll see you next week.