We interrupt our current PWeR News blog series, Seven Solutions to Healthcare Reform to discuss President-elect Trump’s announcement on November 28, 2016, of his nomination of Thomas E Price, M.D. as Secretary of the U.S. Department of Health and Human Services (HHS). To put this in perspective, HHS manages both the Medicare and Medicaid programs in the United States and correspondingly has the single largest budget of any department in the U.S. government of just over $1 trillion (USD) with an active workforce of over 80,000 employees.
Since 2004, Dr. Price represented the Sixth Congressional District of Georgia, and he previously served two (2) terms in the Georgia Senate. Dr. Price has focused on healthcare while serving in the U.S. House of Representatives and is Chairman of the very powerful House Ways and Means Committee, as well as the House Committee on the U.S. Budget.
Dr. Price was a practicing orthopedic surgeon for nearly 20 years in the state of Georgia. He graduated from a very prestigious medical school at the University of Michigan and completed his residency at Emory University in Georgia.
We believe that Dr. Price will serve as a “Surgeon in Chief” of what will be the next transformation of healthcare in the United States. Not only has he been an opponent of ObamaCare, he also has effectively prepared its major overhaul or full out replacement.
It has been reported by the media the Democratic political leaders “reacted with alarm” at his appointment, in part knowing that they have a competent politician and an accomplished medical doctor in a position to bring wide-sweeping changes to the “Obamacare Legacy.”
Dr. Price has put forward his own replacement to the Affordable Care Act of 2010: “ObamaCare,’ in the form of the “Empowering Patients First Act of 2015” (EPFA). Link to the 242-page bill as filed is provided below. More on this proposed EPFA in a future blog.
In brief, the EPFA involves age-adjusted tax credits, health savings accounts, and catastrophic risk pools. It also has a controversial plan to allow individuals to opt out of Medicare, Medicaid, Veterans Administration, and receive tax credits to buy their own individual health coverage.
We believe that the greatest impact will be at the state level, where Dr. Price may work more aggressively with states to innovate new models of care – possibly giving major block grants directly and seeing how each state experiments with it. It is likely that major states, certainly our home state of Florida, will use these block grants to materially expand healthcare in the state. As a state where healthcare plays such a major role, I would expect Florida will create material innovations unshackled from the extensive regulatory oversight and cost-best-based apportionment and Medicaid today. We also anticipate that Dr. Price will work well with House Speaker Paul Ryan, as they share many of the same views on healthcare and empowering states to drive innovation.
Because Dr. Price supports the Medicare Access and CHIP Re-authority Act of 2015 (MACRA), we are also confident he is committed to continue on the path to value-based compensation of providers. Of relevance and materiality are his comments on MACRA and the overwhelming and burdensome reporting requirements demanded from providers – we couldn’t agree more!
We believe that Dr. Price will continue the move to advance the use of health information systems and the next generation of Electronic Health Records (EHR), though we strongly believe that he will likely cancel or materially delay Meaningful Use 3, and other massive reporting requirement that are not actually making care any better. The path, as we have noted before, is to reduce the year-over-year impact, as the healthcare industry is too large to move any faster. Now that EHRs have made a meaningful penetration into the healthcare community, we need to make them more responsive to patients and provide material benefits to providers in providing quality care, not just care to meet a “reporting requirement.” We expect that the current penalties for not meeting MU-2 will continue to increase to 5% for those that do not have certified EHRs, and that the far-reaching MACRA program will take over in 2019, and stay on target, with cost-for-poor outcomes and benefits for good outcomes.
After announcement of his nomination, Dr. Price was quoted saying, “There is much work to be done to ensure we have a healthcare system that works for patients, families, and doctors; that leads the world in the cure and prevention of illness; and that is based on sensible rules to protect the well-being of the country while embracing its innovative spirit.”
My personal opinion is that there was no better candidate for President-elect Trump to nominate for this highly material part of the U.S. government; it is the largest industry on earth and the single largest budget department in the U.S. government. HHS is a department that not only impacts every segment of the 17.8% of U.S. GDP, it also sets the standards for the other $2.3 trillion it does not pay for, and finally, it impacts states’ budgets for another nearly $300 billion; in short, it impacts all Americans.
We believe that Dr. Price will lead a “new Renaissance in healthcare” that will decentralize healthcare back to the states, drive towards greater transparency and more outcomes-based payments. We believe the big winners will be patients first, also providers, managed care, those that adapt to a less Byzantine procurement, prizing and payment model, and lastly it will be “huge” for technologies that enables providers and patients to communicate and drive towards better quality and lower cost – the last being the key measure. We fully believe that by 2020, the U.S. healthcare will be better than it is today.
We commend President-elect Trump for a very wise selection.
– Noel J. Guillama, President