The big interview: We sit down with RFK Jr.'s No. 2 Chris Klomp

Happy Thursday, friends!

We have a special edition this week of our “four questions with” series featuring the Department of Health and Human Services’ advisor and Medicare chief Chris Klomp. As of several weeks ago, Klomp was named number two at the Department of Health and Human Services, reporting directly to Robert F. Kennedy Jr. He and his team oversee the healthcare of tens of millions of Americans.

Klomp is also a digital health entrepreneur by background, as the former CEO of Collective Medical and former board member at the women’s health unicorn Maven Clinic. He divides his time between Washington, D.C., and Park City, Utah, where he’s been involved with several of the state’s initiatives to bolster entrepreneurship via pilots, including the sandbox program. It’s that program that is ground zero for the state’s recent partnership with venture-backed Doctronic to test out AI for autonomous care delivery. 

I invited my friend Jon Gordon to join me in a conversation with Chris. Jon is a long-time healthcare leader who has been a founder, venture investor, and payor/provider innovation executive (full bio at the bottom). Today, he is currently building something new to radically humanize healthcare with a focus on patients. So I knew the three of us would have a lot to discuss. We would be remiss not to ask about the ACCESS program from CMS’s innovation center (CMMI), which is designed to provide new reimbursement pathways for companies improving outcomes for patients with chronic conditions. Several days after we spoke, CMMI dropped more information about the pricing for that program (Second Opinion covered the industry’s reaction to that here).

CMS also announced in the aftermath of our discussion that Klomp’s purview had increased across HHS. And for that reason, we primarily focused on our questions about Medicare, as that was his remit at the time.

Just a few of the topics we covered in the conversation:

• The decision not to raise Medicare Advantage rates.
• The ACCESS program from CMMI.
• CMS’s hiring plans (what they’re looking for and why);
• How to bring down healthcare costs and whether AI will make a difference.
• The lack of health data interoperability and what needs to be done about it.

Chris has been consistent that what he’s trying to do overall is create a healthcare system that makes it easier for entrepreneurs and innovators to build in a crowded market of incumbents and bring down cost while ensuring quality. Everyone in our industry knows that’s much harder said than done.  

Let’s get started.

Jon Gordon: Let’s start with your prior life as a digital health entrepreneur. What do you see as the role of technology in healthcare, especially now that you’re sitting in a very different seat?  

Chris Klomp: I firmly believe that technology should be a deflationary force in healthcare - in fact, it’s the only way we are going to be able to bend the cost curve. But our system has made it difficult for technology-driven insurgents to enter into the market and drive costs down. Today, innovators have to contort their products to align with reimbursement rules (or build direct-to-consumer products outside the system) rather than focusing on outcomes. The result is that innovation ends up being cost-additive. That’s backwards. We should level the playing field so insurgents can fairly compete and incumbents are pushed to either behave more like innovators or get left behind. I want to be clear, though: the enemy isn’t any one organization. It’s a broken system that leaves people behind, and rules and regulations that, while they were designed with the best of intentions, end up stifling competition. We need payment models that reward measurable improvements in outcomes rather than rewarding activity. If you can improve quality and do it efficiently, you should get paid, period. That creates real market competition and invites technology into care delivery in a deflationary, access-expanding way.

Accomplishing this requires three things. The first is real data access — clinical and financial — without incumbent gatekeepers blocking interoperability. We’ve spent tens of billions funding electronic health records, and this has ended up becoming a roadblock. That’s why we’ve funded the Office of the Inspector General to enforce million-dollar penalties per instance of data blocking.

Second, as I mentioned before, we need an outcomes-based deflationary payment model that rewards results instead of activities. This is especially true for emerging applications of AI:  fee schedules tend to be inflationary and not tied to outcomes, so we’re averse to the idea of creating an AI-specific fee schedule.

Third, we need a more deregulatory environment that doesn’t abandon safety, but instead uses evidence and data rather than fear to guide policy. We should have regulatory sandboxes where we can safely test new models and technologies, monitor them closely, and adjust as needed. Technology can drive real improvements in access, quality, and cost if we let it.

Christina Farr: Let’s look at a concrete example of this deflationary potential: Utah’s recent announcement of a partnership with the venture-backed company Doctronic to use AI to address a discrete use case around automating prescription refills. How do we balance that potential for progress while ensuring that we’re also protecting patients?

Chris Klomp: We’re really in the early innings here. We do need ways to test and evaluate new ideas, which includes suspending some of the regulations that might be stifling innovation to see if that improves outcomes. I don’t want us to operate on the basis of fear, but on the basis of evidence. We don’t want to get rid of doctors, yet there are patients out there waiting nine months to see a dermatologist, and yet people still die of skin cancer. Instead, let’s use technology is a force multiplier to allow the providers we do have to see more patients - so while physicians might be a scarce resource, physicians plus technology may not be. I’m in meetings all day with lobbyists that want more payment, or don’t want the government touching their profit pool. My goal here is to show that we're not attacking your profit - we're trying to focus on the highest and best use of a physician’s time. So, in the case of a dermatologist, maybe we use technology to take care of that basic skin check and free up the doctor to focus on the complicated cases. 

Jon Gordon: Let’s dig into that a bit further. When we look at AI, how should we evaluate its potential for benefit versus its potential for mistakes and harm? Does AI need to be perfect, even if today’s status quo is not?

Chris Klomp: It’s clear we hold technology to a different standard than humans, in part because there’s a diffuse set of stakeholders as compared to an individual clinician. But we have to ask whether zero harm is a reasonable goal for AI regulation. Right now, there’s a lot of uncertainty related to patient impact, outcomes, and cost. These are tough, existential questions. I sit on an AI steering committee for all of HHS, and we’re having these conversations right now. How do we keep patients safe while also keeping pace with innovation and change? In an ideal world, the government uses a principles-based framework for monitoring and evaluation of technology. I don’t believe any one agency can keep pace with the change that is happening - instead, we’ll need to rely on clinicians acting on behalf of their patients to police these systems on a one-to-many basis. We should hold technology accountable for transparent processes and outcomes – but we should do the same for humans as well. 

Christina Farr: What do you think this all means for the incumbents? 

Chris Klomp: I resent how much time we spend playing defense on things like coding and risk adjustment when that time, effort, and money could be spent on improving health. The truth is that not everyone is going to win as we modernize healthcare and Medicare. But we have to start wrestling with this - and we can do so in an orderly manner.  

That’s why we’re pushing accountable care and risk-based models and making fee-for-service less central over time by using regulatory levers wherever we can. We’re trying to make fee-for-service less attractive while making accountable relationships more attractive. This will enable us to move past codes and claims, which are time-based and inflationary. Just look at how payment itself has become an industrial complex. And yet everywhere else it’s not hard to pay for things. We can buy food and train tickets anywhere on the planet with a phone or a piece of plastic - so why can’t we do this in healthcare?

Jon Gordon: That’s a perfect illustration of how the healthcare system is system-focused rather than patient-focused.  

Chris Klomp: ACCESS is a great example of how we’re trying to get the system to act differently and put patients first. The model is focused on chronic care, and while it doesn’t mandate the use of technology, it certainly encourages it. Payment is tied in a measurable way to specific health outcomes. It rewards results, not activities - so the payment is set high enough that it is attractive – that there’s a reward if you hit the outcome targets – but low enough that it is deflationary and cannot be earned by doing the same things that are happening today. In designing ACCESS, CMMI wanted to ask how we can foster a scarcity mindset to allow entrepreneurs to do things that haven’t been done before. 

Christina Farr: Is there anything that you can share about the recent Medicare Advantage rate announcement? The industry was surprised that rates were essentially kept flat. 

Chris Klomp: We are big proponents of accountable care relationships, which include both ACOs and Medicare Advantage. But that requires that these programs attract market participants, which in turn requires a sense that everyone is competing on a level playing field.  But we’re seeing signs that there’s competition happening on the basis of risk adjustment. Risk adjustment exists to guard against adverse selection, so any beneficiary who wants to have an MA plan is able to do so. We believe that MA plans should compete on the basis of performance for beneficiaries and for taxpayers - not on their ability to code risk. 

Jon Gordon: You’re almost a year into your tenure. You arrived at CMS having been an entrepreneur, not a policy person. Since then, you’ve been talking about making government service more accessible to people from technology, clinical, and policy backgrounds. What kinds of roles are you recruiting for, and who should consider a “tour of duty” at HHS or CMS?

Chris Klomp: We have a truly fantastic team of people here at CMS - smart, capable people who are dedicated to making a difference for our country and its people. There’s so much to do - so we’re actively hiring across a wide range of roles — technologists, clinicians, operators, policy experts, and interns at the undergrad and graduate level. We’re encouraging people to think in terms of a tour of duty. Come for six months, a year, or two years. Make a mark at a scale that’s hard to replicate elsewhere, then go back to the private sector or your next chapter. It’s incredibly fulfilling work. You’re learning from top experts, working on real national programs, and contributing directly to helping your country. It’s fast-paced, not bureaucratically slow, and we’re seeing strong inbound interest from people who want to serve.

Parting thought from Chris: We talk about healthcare like it’s a market, but it’s not. The market has a willing buyer and seller, and the buyer knows what they’re buying. There’s price transparency, price discovery. We don’t have that for a variety of reasons. And we could and we should have that. 

Meet my co-author: Jon Gordon

^{Jon Gordon is an entrepreneur, investor, and executive with 20 years of experience in healthcare at the intersection of strategy, innovation, and policy. He is currently Co-Founder & CEO of Tecida, a context-based care orchestration startup, and Founder & CEO of F|42, a nonprofit building the field of person-centeredness in healthcare. Both organizations are organized around a mission of radically humanizing healthcare. Previously, Jon was Co-Founder & Managing General Partner at HC9 Ventures, an $83 million early-stage healthcare venture fund. Prior to HC9, Jon was SVP of Innovation at Commonwealth Care Alliance, a non-profit health plan focused on caring for vulnerable populations, Managing Director of their corporate venture arm, and CEO of their portfolio company LifePod. Before CCA, Jon served in a number of roles at NewYork-Presbyterian, including founding their $40 million strategic venture capital arm. Jon is adjunct faculty at the Columbia Mailman School of Public Health and was previously faculty at Weill Cornell Medicine. He holds a BA cum laude from Princeton University and an MBA with honors from Columbia Business School.}

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