Managed Care Reflections: A Q&A With David J. Shulkin, MD

Am J Manag Care. 2025;31(7):In Press

AJMC: How have the concept of managed care and the conversations around it changed over the past 30 years?

SHULKIN: I think 30 years ago, the managed care industry was really developed and grew because of the issue of cost containment and the fact that the fee-for-service system had really no ability to control the rise in costs. Over the past 30 years, we’ve watched the evolution of the industry and the payer community begin to really address the cost issues. In the past 15 years, there’s been an additional concept of value, and that is to improve outcomes and quality. And that’s really still the journey that I think the payer community, the health plan community, is on: trying to fulfill the ability to improve value in health care purchasing.

AJMC: What changes do you see taking place in managed care over the coming years?

SHULKIN: I think the problems in health care are not going to get any easier. We’re going to be struggling with the issue of access, with affordability, and with quality as well as cost. So I think that the payer community, the health plans, are going to continue to try to deal with that now. Many are going to be responding to policy issues that are coming out of government and trying to adapt to a changing environment. And so what I think we’re going to see is the majority of health plans continuing to evolve their current offerings to fit both the market conditions and the policy changes, but we are going to see some new disruptors entering the industry to try to offer more solutions that we haven’t really thought about yet, putting more control into the hands of consumers, allowing technology to be able to help make some of these choices in purchasing and to be able to help people use information and data analytics to make better choices for their own health care.

AJMC: In 1996, you coauthored an article in AJMC that aimed to provide physicians with the knowledge, tools, and skills to participate in clinical resource management.1 How has the role of the physician in delivering cost-effective care changed since then?

SHULKIN: I think not as much has changed as people [think]. The physician is still primarily the driver of many of these decisions. I do think that over the past close to 30 years, we’ve continued to see clinical decision-making as the primary driver of these decisions, and it’s been the health plans that have relied upon finding providers to be able to deliver the care in a cost-effective way—and I think that that’s been a very challenging environment. Now we are entering a new environment where we’re going to be looking at a whole different set of tools that will, in some ways, begin to start replacing some of that decision-making that we’ve relied on solely by physicians, and when I say replacing, [I mean] either augmenting, facilitating, or in some cases fully replacing the types of decisions that have been made by using artificial intelligence and augmented databases to help make some of those decisions. So I think we really are on the cusp of the next 30 years looking very different from the last 30.

AJMC: What lessons from your time as secretary of the VA could be applied more broadly to managed care in the private sector, Medicare, or Medicaid?

SHULKIN: The [VA], as many people probably know, is the largest integrated health care delivery system in the country. And for me, entering that system, it was really eye-opening in that as secretary, I would go to Congress and ask for a budget for 9 million to 10 million veterans, and then I would get to decide where that money could be best spent in order to fulfill our commitment to those veterans. And I was free of the reimbursement rules and decisions that I’d always had to worry about when I was running private hospitals in the community or in the academic settings. And so what I began to see was that to be able to look at where you can invest money and not be driven by reimbursement rules was a very powerful experience because that’s how the VA gets to do population health. It gets to invest in things that don’t have fee schedules, like peer supports; providing service dogs for veterans; addressing homelessness when [veterans] don’t have a home; being able to implement fully integrated multidisciplinary care models using other factors besides traditional medicine, like adaptive sports, to be able to help improve the quality of life and mental health; and integrating behavioral and physical health. So the ability to be able to actually fully implement more robust solutions, to be able to reach out into the community, to do true population health with proactive outreach and integrating data with the clinical models, even though that’s not typically reimbursed in a private-sector setting, were lessons that I think are very important for us to learn from as we begin to start looking at new ideas and how we can improve quality and affordability and access to care for the rest of the populations that require that in the country.

AJMC: Finally, how has your experience leading health systems, hospitals, accountable care organizations, and the VA informed your outlook on the capacity of the learning health system to drive change?

SHULKIN: If anything, I’ve been humbled by the fact that knowing what to do and learning what to do are very different from implementing a solution, so knowing that the evidence has been there for a long time about best practices and ways that we can improve health and do things more appropriately for patients hasn’t always resulted in us implementing those types of evidence-based practices. What we have to really understand is that we practice in a system that is filled with many different incentives that aren’t aligned. I think it’s this fragmentation of our health care system and that lack of aligned incentives that sometimes prevent us from doing what we should be doing. The more that people have had a chance to work within these complex health systems, the more they understand that knowing how to change the systems of care and looking at the alignment between the clinical approaches and the financial systems or the reimbursement systems is really the key to determining how fast we can make change in these systems.

My hope for the future is that the provider community, the health plan community, the pharmaceutical community, and government can all begin to understand that if we don’t break some of those silos down and look at this as one true integrated system of health care, we’re never going to really reach the optimal levels of health, wellness, and affordability that we all hope for and strive for. Looking at our experience over the past 30 years, I don’t know too many people who have been in leadership the amount of years that I have been who would not say, “Boy, I wish we had been able to move the system quicker and faster and had a bigger impact.” In fact, it’s been much slower than I think many of us had thought it would be, and I hope the next 30 years are very, very different in that regard.

REFERENCE

1. Shulkin DJ, Rostenstein A. Enhancing skills in clinical resource management: a managed care approach. Am J Manag Care. 1996;2(1):95-100.