Confronting the State of Healthcare Legislation & 340B Misinformation, Part 1 with Elizabeth Kutter

Jeremiah Hodshire (Host): I’d like to welcome today’s special guest, someone who I absolutely think is the funniest professional that I have ever met, at least at the MHA. But it is a pleasure to have Elizabeth Cutter for the very first time, in our studio here. Elizabeth is the Vice president and deputy general counsel at the Michigan Health and Hospital Association. That would somehow reference that you’re an attorney, which we’ll talk about in just one moment. So first of all, MHA, Michigan Health and Hospital Association, obviously, talk to us about how long you’ve been there. What’s the work that you do? What specifically does the MHA do?

Elizabeth Kutter (Guest): Absolutely. So first, thank you for having me. Long time listener. First time caller. It’s very, very much an honor to be here. It’s an honor to join you and talk about all of the things that are happening. So, I’ve been with the MHA for just a little over four years. So, not a super long time at the association, but a long time in this space.

JH: You act like you’ve been there for at least two decades. I just want you to know, I mean, you know, you’re well-rounded and you’re grounded. Just think what 20 years are going to bring for you.

EK: Will it shock you to know that I have worked in politics for almost 20 years?

JH: Have you really? I’m interested to hear your background, because I seriously thought you worked for the MHA a lot longer than four years.

EK: So, I started with the association in 2022. Before that I came from Wayne State University. So, the state’s only urban public university, one of the R1 research institutes in the state. Fantastic place, but obviously known very well for its medical school. At the time, the president I worked under was an epidemiologist, so I did a lot of stuff in that space.

JH: So, what did you do at the university?

EK: So, I did all of our lobbying at the state, which is very budget focused for the universities. That’s what they do the most of. Prior to being at the university, I was with Henry Ford. So, with one of our larger members on the east side. Spent a bunch of time there. Prior to that, I was on staff in the state and did healthcare, obviously did the Health and Human Services budget. I did a whole bunch of stuff in health policy. But that was honestly a bit accidental in nature.

So, when I started on central staff, I did things that were really fun, like tourism and natural resources, and then they were like, “Oh, you’re kind of technical, why don’t you do financial services?” So, I did financial services. And then I did oversight and they’re like, “Oh, you’re good at highly regulated. Would you like to do healthcare?” And I was like, “No.”

So if you love that I’m in healthcare, you can thank my former boss who was at the state legislature. If you hate that I’m in healthcare, you can blame him. I’ve done that for a long time. Prior to that, I did a brief stint out in DC, and I spent some time, working for a member of Congress who has now since passed. But I worked for a Dan Benishek. He was congressman for the first district for a couple of terms.

JH: Were you council or what did you do?

EK: I was an intern, just starting out my career in the space. It was post-law school, but I had not worked on the federal side ever. So, I worked there. And then I was working for a single-issue organization for a while out in DC doing lobbying work and supporting lobbying, and then before that was a member of staff in the State House.

JH: So, I mean, what a depth of experience. And so, I’ve got a couple questions to follow up to that. So, do you find that a lot of the lobbyists are attorneys? Or what would you say is the advantage for you of having that background in the role that you play today? And I guess really talk a little bit about your role today. What do you do on a day-to-day basis?

EK: So, I think that’s not an uncommon path. It’s probably 50/50 in the lobby for folks that have a background in law, but it’s a lot of people who pick that space because they are technical in nature, love words. People that go to law school love words. I love words, I love legal language, I love designing language. I love negotiating on things. And a lot of those elements that you’re really focused on in law school and that they teach you in law school, are the same things that apply when you really want to get good policy done. It’s figuring out when and how to negotiate something. So like, what’s the timing when you give on something, knowing what you can give or can’t give. What are your hard lines? And what are the spaces where you’re like, “You know what, this one I’m going to let go. This one is a give. I’m going to give this one up, but this one I can’t give up. But I can move around some of the words here and get the same end result that I need.”

JH: So generally speaking, if I could ask, in the background, what the community, does not see is all of that work, right? They hear the rhetoric of the politician or they see the final product. But in the background, people are actually putting this to paper, and its words, and each of those words carry weight. And that weight at times, obviously, becomes the weight of law, but it has to be rooted in some type of legal parameters and those type of things. So, there’s a lot in the background that’s going on. That you’re working on.

EK: I think that’s why you see a lot of lawyers use this pathway because there’s a couple of really fun pieces of it. When you’re drafting anything in that space or even recommending amendments or drafting law from baseline, like if we have a member come to us. So, you asked about what it is that I do. I do a lot of direct lobbying. The vast majority of my job is direct lobbying. I get the extraordinary privilege of doing support work in the legal space and helping out in those realms.

JH: So, define direct lobbying. You know, you have been very, very involved and we’ll talk about it in a minute, in some very key issues, that MHA has advanced and advocated for on behalf of their members. Among those 340B and some of those, you know, and that’s a lot. But that looks like what? You’re actually knocking on the door and you’re actually educating, training, advocating?

EK: Yeah, I mean, it’s exactly what it sounds like. So direct lobbying would be me going into a legislative office, knocking on their door, going in and talking to them and saying, I need you to take this position on this piece of legislation and asking them to vote in a specific manner. So, there’s a huge difference, right? There are two things that are occurring in this space that people, I think oftentimes conflate.

So, there’s advocacy. Advocacy is like a big umbrella. So, if you’re out in the community—you’re out at a community event, and you’re talking to folks about an issue that matters to you, that matters to the hospital, and it matters to the industry. And you’re saying like, hey, 340B matters to me. I care really deeply about this issue, and I want you to know what it means for Hillsdale Hospital in particular. You know, it means these types of services, it means these types of things. It is why we are here. We’re community asset. And this helps keep us in that space. You’re being an advocate. You’re doing a great job making sure that people understand the issue, that they’re talking about the impact it has locally and that they understand what their local hospital is experiencing.

You’re not direct lobbying, even if you’re meeting with your local state representative or your state senator, right. If you’re meeting with them, it’s not part of your everyday job and you’re not spending all of your time doing that. You’re advocating globally for the issues that matter to you. And everybody should be an advocate. And this is me saying everybody should do that. Everybody should go to coffee hours. They should go meet with their legislators, meet with the candidates and find out what’s going on. Everyone is an advocate. Not everyone is a lobbyist.

The vast majority of my job is spent directly communicating with legislators and asking them to take a specific position, or a specific vote, on a specific issue. There’s a huge difference in that, that I’m not doing just global education, which we do a lot of, but it’s very much like I’m going in, I’m talking to a legislator and I’m saying, hey, I want you to vote yes on Senate Bill 94. Senate Bill 94 matters to our members that helps us protect contract pharmacies in the 340B space. It protects us from encroachment in this program from pharmaceutical manufacturers. I need you to vote yes. Voting yes matters to our industry and to our membership.

And then, you know, the legislature can say any number of things. We’ll have it back and forth conversation, but because over 50% of my time is spent doing exactly that, asking somebody to vote a specific way on a piece of legislation, and that would be I’m a lobbyist, I’m registered. I am, under the law, a regulated entity. I have to file reports semiannually that say, you know, this is what I’ve done, this is who I’ve been around. Accountability matters a ton. And I think again, the sort of common misconception nationally. What’s a lobbyist. What’s an advocate.

JH: You’ve defined it today. It’s an art. And you are representing the interest of your members at MHA, but it’s got to be tough at times, though, when you’re dealing with members who might have differed interest. That’s hard, isn’t it?

EK: It’s very different having come from the individual hospital side.

JH: Right. Because you knew exactly 100% this is what we’re going to do.

EK: Or this is what we’re doing in this community. Or this is the individual issue, here’s a good example. Certificate of need is something that everyone in the industry understands, but largely the association doesn’t get involved in because it really is individualistic in nature. Folks are fighting for an opportunity to really make sure that either A, services can be offered in a specific space, they can add services or move beds around, add beds, any number of different things that sort of deal globally in us operating as entities in the community and being able to offer services, offer services.

But we don’t as an association get involved because our members are often not aligned. And I’ll give the association an incredible amount of credit because this is a leadership structure. And a leadership down sort of endeavor from the board level all the way through the entire association. We operate on consensus. So, when everybody is aligned that’s what the association. If our folks, you know, at the board level, if our folks at the legislative arena level in the policy space say like, hey, you know, one entity wants this and another entity does not, we’re not picking winners and losers. That’s not appropriate. And it really would, I think, lower the effectiveness. It puts us in a bad spot.

JH: It’s an incredible amount of walking the line. Certainly, you know, hospitals have varying opinions about, whether it’s mergers and acquisitions. But I have to tell you, MHA is remarkable in the work that you guys do, to ensure that, even if there’s differing opinions, you’re still representing me in so many areas. We’re going to talk about that in a minute about some of the work that you’ve done this year that has been monumental to the to the success of hospitals, large and small.

So, healthcare experts, and as we look and, try to brief healthcare experts or tell us about what the future’s going to look like, it’s going to be ugly. It’s going to be nasty. 734 hospitals at risk of closing, half of them at immediate risk. 20 in Michigan. It’s happening all around us. And the root of this is that we’re not getting paid like we should get paid, or the reduction of certain programs such as Medicaid. So, healthcare expenses continue to outpace cost of living, creating more of a significant financial burden and strain for hard working families across the United States. I’m excited that you’re here with us today, Elizabeth, to provide your insight, on advocacy and funding for healthcare, because I think that’s important specifically to Michigan and working with the Michigan State budget, in the Michigan state government.

So today we’re going to talk about Medicare cuts, state budget priorities, and, of course, what all this has to do with rural health.

JH: So why don’t you tell us a little bit more about the incredible work? And I say that with sincerity, the incredible work in state advocacy, that you do with the MHA and what your current key goals are in that context, with policy meetings and discussions with legislatures. What’s it look like today?

EK: I want to go back to some of your early, earlier comments because I think it is really challenging for the average person to feel like my vote matters. My discussion matters. The email I sent or letter I sent or the call I made to my legislator. But I do want to reiterate, just like despite the fact that globally the tenor is super political and it feels really far away, and it feels really like things are happening and they’re not connected to local communities. Your legislators do deeply care about those things, like please continue doing those. Please continue to write emails and write letters and talk to us. Tell us what’s going on, because I don’t know what the priorities are unless our own members are talking to me about what’s impacting them.

JH: Do you often have legislators tell you like we’ve heard from constituents? Is that a common? Is that uses a litmus for them, or how are they using that information just to give our listeners an understanding.

EK: So, when I was on member staff, when I worked for a legislator, when I worked for an elected official, I was the person when you send an email, I was the person that went through all the emails in the email box, and I was like, okay, this one’s a healthcare one. It goes to our healthcare person. This one is a natural resource one. It goes to our natural resources’ person. Or if it was a constituent inquiry in a topic area that was one that I covered, then I would do the research and respond to that individual.

But we answer and keep track of every single thing that comes in through the office. And it really isn’t as many as people think before it’s like, oh, this is an issue we’re going to have to really talk about. It’s really only, you know, 5 or 6 emails or calls from your local community, that’ll start to catch attention. It’s really only about five and you get about five and you’re kind of like, all right, we’re going to dive into this a little bit for really like what’s going on here. What’s the issue, what’s happening.

And at that point that’s when you as staff are going to reach out to the stakeholders that you know. So, you’re going to reach out to the association or to your local hospital. Yeah. I mean, you experience this. On a really regular basis. And that’s exactly what you want. And that’s the whole reason that it’s really important to do those letters, to do the call, to show up to the coffee hour, to be present for those things. Yeah. Because you’re not able to develop that relationship unless you’re willing to reach out. The engagement part is the biggest piece of everything that’s happening in politics. Nothing in politics is going to continue to get better if people don’t deeply care about it. It’s such an opportunity for you as an individual citizen and as a resident of Michigan in particular; to say I do or don’t like the path we’re on and then to vote with your feet. I mean, people vote with their feet in any number of different spaces. Our elections are the best way that you as an individual have the opportunity to say, I do or don’t like what’s happening.

But you asked about priorities, things that we’re working on. So, the biggest priority right now in this timeline is going to be state budget. So, the state is really actively moving in that space right now, which is very fantastic because we’re a little early on the timeline. You may recall your listeners may recall if they’re political nerds like me. Last budget cycle, we were way down to the wire. I mean, we really did not even get serious about a budget until August. We’ve got two budgets, both out of the House and the Senate, that fund the Department of Health and Human Services in ways that are much closer to what we would anticipate from a tradition setting.

A state House budget in the DHHS space that largely funds all the hospital lines and Medicaid pretty close to full. And then we’ve got a budget on the Senate side that does fully fund it. So, when you’re thinking about a negotiation, when you’re thinking about like, I’m an attorney, obviously we talked about that. When I’m thinking about a negotiation, if I’m in a space where the differences are significantly narrowed, I’m looking at outcomes from a much more positive stance. The outcome is much more likely to be closer to what we want to see. Then when we started last cycle.

JH: So, you feel you feel encouraged.

EK: Yeah, I do.

JH: Well, we often talk about all the negatives, but it’s great to know that there’s a shred of hope.

EK: Well, yeah, I mean, and you should offer gratitude when people are doing things are going well. I’m going to offer gratitude to that, because I think the legislature has done a really good job this year of being really serious about the budgeting process. And you’re right, there are a lot of threats out there, and I think the legislature is taking that seriously. And they’re asking us and asking other stakeholders, how do we make up these revenue losses? I mean, you know, whether you like HR1 or you don’t like HR1, obviously, our industry is pretty concerned about HR1 is a really serious thing. It’s like we’re going to lose an incredible amount of money.

We’re going to lose access to care, whether that’s because they lost coverage or because their local hospital could not sustain it. I mean, that is a very real threat. And it’s a serious threat to the state budget. But I’ll give credit on the state budget side, I think the legislature is doing a good job of thinking through what are revenue generators. What are savings that we can recognize that are not necessarily tax increases. What are our structures? What are we doing within the confines of what we have. What are savings that we can find. Like one of the cool and creative ones that I saw on the Senate side was reference to most favored nation pricing. Lots of people are familiar with Most Favored Nation now.

Certainly, the federal administration has made that a more kitchen table set of terms versus I think if you would ask anybody, you know, a year and a half ago what’s Most Favored Nation, they’d be like. What? So, but if you’re thinking about it like those risks are very serious and those risks are very, like, challenging to wrap your head around when you’re a state legislator and you’re like, okay, cool, but why are our revenues so low? Or why are we making these massive caseload adjustments and estimates? What is it that we actually need at the state level to fund the right amount of folks to hire? As well, on top of the folks to hire, like the money to support them, to implement work requirements. I mean, the work requirements are coming, whether you like them or not. What we need to do is make sure we do it really well so people don’t lose their coverage. Because when people lose their coverage, they’re not going to stop getting sick. And they’re going to come to the emergency room. They’re not going to call up their primary care doctor and cash pay option. They’re not going to start running and eating exclusively vegetables. Like they’re just that’s not going to be the case.

People are going to continue to live the life that they live, whether that’s healthy or unhealthy. It’s not a value statement or anything like that, but like people are going to live the way that they live and they’re going to get injured or they’re going to get sick regardless of whether they have coverage or not, and they’re coming to the hospital.

JH: I want to get in the weeds in a minute on some of those issues. And, you know, I’ll be cognizant of our time. But right now, when you’re working with the state legislature today, like in this hour. What are the budget priorities for the state? And I want to move beyond right now, healthcare. I want to get in the weeds of healthcare. But like, what are the top priorities that they’re what would take precedence over a healthcare fund? You know, total package is what are you hearing in Lansing today?

EK: So, I think on the House side, the big priority that the majority caucus has talked a lot about is property tax relief. They’re really looking for ways to make sure that as a state, we can look at eliminating our state-based property taxes. And that’s gaining a lot of traction. They’re looking at Indiana as really the reference state for some of that. But that’s a priority. But you have to generate revenue somehow. So, then the opposite side of that argument is where does that come from?

But if you’re I think if you’re a member of the majority caucus in the House, what you’re thinking about is not necessarily replacing that revenue with new revenue, but instead really looking at what are the places in state government that could be leaned down, which is a risk that we’re always very cognizant of because people look to healthcare first to take those dollars out and say like, oh, I mean, we heard this rhetoric a lot at the federal level around waste, fraud and abuse. And I think you hear that at the state level.

JH: Very easy talking points, right? Who doesn’t want to read waste, fraud and abuse.

EK: Well, it’s same as I mean it’s very similar I think as the talking points around affordability. You know everybody is recognizing that things are expensive right now. Gas is expensive, eggs are expensive. Groceries globally are expensive. Infrastructure is expensive. Like it is. The housing market is changing. You know, everything that people are experiencing is very expensive. So, there is this sort of very large-scale conversation happening at the state federal level around affordability.

Everybody’s looking at affordability and approaching it two different ways. House side they’re looking at property tax relief, this is a space where we can really try to help people out. And I think there was, you know, a pretty strong endeavor and has been a strong endeavor in and around income tax relief and reductions. We have some work maybe in the last couple of years, where the state passed some legislation that if the state had appropriate revenues, the income tax would automatically trigger to go lower. And we achieved that for a year. It’s gone back up now. But I think there’s this sort of consistent interest and endeavor to go at income tax relief, at property tax relief, at those very, like day-to-day things people would see.

It’s an attraction opportunity from a state perspective. We’re trying not to be a net exporter. I mean, we talked again about healthcare and what happens when people lose coverage and what happens when HR1 really becomes implemented. Michigan is an aging state. We’re not a state that’s attracting young people. Our median age has escalated from, I think, like ten years ago it was like mid-30s. Now we’re looking really more at mid-40s. We’re not getting younger. We are a net exporter of talent. We educate an incredibly fantastic amount of people and then they leave. They go away. But their parents stay. You know folks are here are older.

So, people are in Michigan, are aging and that’s causing a lot of stress on the healthcare system too, because those are patients who are going to present, and there are people who are going to have more complex health issues. I mean there are people that are going to have heart disease. They’re going to have diabetes. They might have cancer or they might get a cancer diagnosis. And already be navigating these systems. And that’s not going to change. The challenge again is that while folks are really focused on delivering these kitchen table affordability items, the first place that we have a tendency to pilfer is in that healthcare settings.

JH: I want you to be honest, you always are brutally honest. I want you to be truthful on this podcast about what is the attitude towards healthcare in Lansing right now at the state Capitol. And we have to we have to warn my colleagues across Michigan. But this is a national podcast. So, it’s not just happening in Michigan. I would venture to say no. Talk to us about what is the attitude towards us.

EK: So, I think it’s interesting. Michigan is always a really great bellwether and sort of a microcosm. Like if you’re thinking about what’s happening nationally, what is the national scene look like? Michigan has always had a tendency to be a good example of what’s to come or what could be happening. Right now, we’re obviously a very purple state, so we have a house that’s controlled by Republicans. We have a Senate that’s controlled by Democrats. We have a governor that’s a Democrat, which means we get this very interesting dichotomy of approaches.

And, interesting two-fold set of like what people think. Right now, what we see on the House side is probably closer to what we see at the federal level too. But it’s not unique, just to that chamber. I mean people are. And again, you asked for my brutally honest opinion. People are not friendly to hospitals. There is a common perception that hospitals are greedy, that hospitals are bloated. We’re a part of the waste that we’re, billing and overcharging. And then just taking all the money. And we’ve got some secret hoard of gold like a dragon. But yeah, I mean, there’s this common perception that hospitals are super, super wealthy.

JH: Do you think that’s on both parties?

EK: I don’t think it’s unique to one party. I think there’s so there’s some sentiment on both sides. I mean think about it. Everyone knows what a hospital is. Everyone has been to a hospital. Gotten a hospital bill. Received care in a hospital setting. Had a family member that had care at a hospital. So, it’s a really easy space for people to target for adversaries in particular. Like for someone who’s trying to point the finger away, they’re trying to distract. And that’s common. I think we see that in folks who are adversarial.

In Michigan, dominantly hospitals are nonprofit by nature. Nonprofit status is always under attack. And that’s an unbelievable thing, in my opinion, because of the amount of good that’s happening. And what we’re doing is just really wild. But I think you see this sort of rhetoric from folks, it’s like, oh yeah, they serve lobster and they’ve got all this money. Hospital executives make too much. And you got this big bill. And how cruel of them. But in reality, there the real difficulty is explaining the complexities of healthcare. In politics, you know that if you’re explaining, you’re losing.

JH: No, it’s rhetoric, is so easy just to say look at your hospital bill. You payed $27 for an aspirin.

EK: Yes, exactly. And look at this ridiculous facility fee they tacked on. And it’s really challenging to try to explain to somebody the intricacies of healthcare financing. It’s not cut and dry. It’s not an ala carte service.

It’s not like going to McDonald’s where you’re like, oh, well, I’ve got five bucks in my pocket so I can’t get an apple pie today. I can just get my double cheeseburger or side of fries, right? Like you don’t pick and choose. This is again, maybe more my own personal opinion on this one. Like, you don’t shop for healthcare services in the hospital setting, in particular, in the way that you shop for other things. If I have, constrained income by any stretch in any space, I can say, all right, we can go to the nice dinner because I’ve got $50 or I’m going to go get fast casual because I’ve only got 20. And I can shop around for what’s going to make sense for my budget. What makes sense for what I want.

But if you’re in a car accident you don’t shop for those services, you’re taken to the trauma location that can handle what you have going on. And you’re taking you’re taken to the closest one, hopefully. I mean, like depending on volumes and depending on what could be happening. I mean, we saw this in the pandemic. I mean, people were going everywhere because it was wherever we could treat people and had the capacity. But you don’t shop for services in the healthcare setting.

So, it’s always really challenging when that rhetoric comes around. We’re really focused on reminding folks that hospitals serve a very deep community purpose, where the only leg of the healthcare stool that subject to EMTALA. So, if you present in the emergency room and you come in, we have a legal obligation, A, but also mission based obligation to serve you regardless of payer status or anything else. Like no matter what happens, you’re going to get service at your local hospital. you don’t go to your local pharmaceutical manufacturer. They’re not going to fix your broken leg. They’re not going to help you or your mom when there’s a health issue. Like that’s just not going to happen.

I think the real good benefit though, is despite this, you know, sort of national rhetoric that’s very challenging and forces, I think, all of us to be better about talking about what are we doing in the community, what is it that we do to serve, and who is it that you call? Who do you call when something goes wrong? I call my local hospital. My local provider. I call the people that I know that are going to take care of me. And I think one of the positive things that we continue to see though, is there is still this really deep connection to your local hospital, your local provider.

And I’m a lobbyist. So, I’m going to lobby all of you to be very involved in politics because super fun, get to know those people. Because they’re going to call you. And I want them to call you. And I want them to call your community members and your friends. Who are going to speak positively about what’s happening in the community, right. Because people who care about their local assets are going to protect those assets at all costs.

JH: I think an important sub portion of what you just spoke about. You know, you’re talking about you’re brought here after that car accident. You know, you’re not shopping. But it is important for our listeners to understand that we as hospitals are price takers. Whatever the government sets, I have to accept that. And so, understanding in rural America today that for me, 70% of my payer mix is Medicaid, Medicare. I don’t get to negotiate with Medicaid and Medicare.

The other issue is that when you look at commercial insurance in rural America, it’s really very small as a comparison to government payers because business and industry, doesn’t exist. Many times, hospitals like Hillsdale are the largest or second largest employer in your community. That’s not always healthy. But the point is, is that we’re price takers. This idea or concept that that’s out there, that we’re these greedy, you know, that we’re getting every dollar on that, you know, sheet. That’s not the case at all.

And unfortunately, though, Elizabeth, we have not told our story, I think one of the things that MHA has done while teaching us in the last year, is the critical nature and importance of telling our story, and we’ve done that at Hillsdale. We have a lot of videos out there. Our marketing team has done a phenomenal job at getting the voice of the patient who is our pastors, church members, the lady at the grocery store, out and telling their story. I think that is very important because we can get so quickly lost to your point of waste, fraud and abuse, but when you look at the face of the person at the dollar General and you look the face of your pastor because I know several that are on Medicaid, that’s not waste, fraud of abuse at all.