In a brief but pointed address on Monday afternoon to attendees at the World Health Care Congress, being held at the Marriott Wardman Park in Washington, D.C., Seema Verma, administrator of the federal Centers for Medicare and Medicaid Services (CMS), reiterated key policy positions of the Trump administration around healthcare, and asked healthcare industry leaders to support the administration’s goals around regulatory reform and healthcare consumer empowerment.
Speaking for about 18 minutes, Administrator Verma noted that “One of the things I enjoy about being the CMS administrator is that I have a unique vantage point on U.S. healthcare. We are the nation’s largest insurer. Our footprint on the US healthcare system is so significant that everything we do has an impact on every American, whether they are a CMS beneficiary or not. That solemn responsibility is constantly on my mind,” she said. “We have the responsibility not only to deliver high-quality services to our recipients,” but also, knowing that anything that CMS focuses on will influence the healthcare industry at large, to do whatever is possible to compel improvements in the broader healthcare system as well, through the agency’s overall influence.
Verma made it clear that she believes that the U.S. healthcare spending trajectory is unsustainable, with spending growth that outstrips general price inflation something she considers unacceptable. “A looming healthcare crisis on the horizon” around cost, Verma said. “When I say crisis, I’m not engaging in hyperbole. Spending growth higher than overall economy” continues apace, she noted. “By 2026, we will be spending of every five dollars on healthcare. That means healthcare spending will crowd out other priorities,” she noted, such as infrastructure, defense and education. “And for every American citizen, it means that more and more dollars will go to higher premiums, deductibles, and copays. The bottom line is that our system is unsustainable; and there’s no easy solution.”
What’s more, Verma said, healthcare spending inflation is growing at the same time that outcomes are not improving relative to those of other countries. “A recent Harvard study compared healthcare spending in the U.S. with that of 10 other nations,” she said. “The U.S. ranked poorly in infant mortality and treating chronic conditions, and on average, we have shorter lifespans. We spend more money, and get less from it.”
Given the lack of demonstrated value for spending, Verma says that action is necessary, adding that “President Trump agrees. To that end, he has encouraged us to take bold action to increase quality, improve outcomes, and lower cost. Those are not new concepts,” of course, she said, but the key will be to increase value in healthcare, and use the power of CMS payment to force a march towards that value.
And, in that fight, “Some progress has been made,” Verma said. “But if we’re going to take the final steps, we must activate the most powerful force in our healthcare system for creating value: the patient. We must do better for them, and for that, patients need to be empowered, particularly through full access to and ownership of their electronic patient records. With regard to that, “Last month, we launched the MyHealthEData Initiative, to empower patients by giving them control of their health records,” and with that initiative, “we made it crystal clear that the days of keeping patient records [from patients] must end.” Further, she said, “We have proposed payment consequences for hospitals that don’t give patients access, and have asked that providing patients with access to their records be a requirement for participating in Medicare.” And, she added, “We will take very action necessary” to make sure that that goal is fulfilled. Among the steps she touted was the recent release of “Blue Button 2.0, a developer-friendly, standards-based API [application programming interface], which will allow a majority of beneficiaries connect their claims data to payers. We are also working to advance price transparency,” she added. “In virtually every sector of the economy, you are aware of the cost of services before you accept them. Patients need to know” the costs and value of healthcare services received, she said. What’s more, she said, “We are proposing a requirement that hospitals post their charges online. We’re just getting started, and are asking for input” from provider leaders nationwide.
“Another barrier to care is overly burdensome federal regulations. CMS produces over 11,000 regulations a year,” Verma stated. “Many more are redundant, unnecessary, and actually have a negative impact” on quality or value, “costing our healthcare system $39 billion a year.”
And she emphasized a consumer-driven, market-driven frame for how she views the regulatory sphere. “We believe that Americans can define quality better for themselves. We don’t want to decrease competition, or choice, for beneficiaries,” she said.
Meanwhile, she said, “We are also looking to meet the needs of the 11 million Americans who have purchased their insurance on the health insurance exchanges, and to help the 28 million Americans still without insurance.”
Addressing charges around the ACA
Verma then took the opportunity to deliver remarks that veered strongly into the political realm. “I take exception to the claims that we are trying to sabotage Obamacare; Obamacare was failing long before Donald Trump became president and I became CMS administrator,” Verma said, referring to the Affordable Care Act (ACA) passed by Congress and signed into law by President Obama in March 2010. “Today, half the counties in America, and 10 states, have no health insurance choices. The reality is that premiums have more than doubled since Obamacare’s inception. In Arizona, premiums rose 190 percent, in West Virginia, 160 percent, and in Oklahoma, 201 percent. These are plain, clear facts. The stark reality is that when we came into office, we were faced with healthcare options that were pricing Americans out of the system, giving them fewer and fewer options, and then punishing them with tax penalties.”
Verma went on share several stories of individuals who had accessed health insurance on the state health insurance exchanges created by the ACA, stating that the ACA’s failings were responsible for their problems. “I’ve heard many stories of patients unable to afford their deductibles, or forced into narrower and narrower [provider] networks,” she said. “John, in West Virginia, had the choice of only one carrier, so his premiums went from $3,240 a month to $930 a month, just last year, and with a $6,800 deductible. Sandra in Kentucky, fell and broke three ribs and her sternum, but she has a $13,000 deductible, so she couldn’t’ afford to go to the hospital. These are heartbreaking stories. In addition,” she said, the federal government had been making payments to insurers that weren’t authorized” by the provisions of the ACA. “Americans know a bad deal when they see one,” she said emphatically. No amount of PR can hide Obamacare’s failures.”
Verma stated, “We have refused to stand idly by while Americans are suffering. And to this end, we’ve worked to help Americans who can’t afford premiums for insurance on the exchanges. We’ve been working to stabilize the exchanges and drive down costs. We’ve also proposed to expand the use of short-term insurance, to now be used as an affordable option for people caught between insurance they can’t afford, and no coverage at all.”
What’s more, Verma said, “Obamacare has also put a strain on the Medicaid program. Medicaid makes an incredible difference” in the lives of its beneficiaries, she said. “I have a colleague whose daughter has both autism and epilepsy, and who needs 24-hour care. For people like her, Medicaid is more than a safety net; it’s a lifeline—one that needs to be preserved and protected for those who truly need it. An overwhelming majority of the people put into Medicaid by Obamacare were put in” inappropriately, she said. “And that is stretching waiting lists for care, even as states enroll millions of able-bodied adults. Obamacare also gave providers higher rates, while putting millions of Americans into a program not designed for their needs. And the previous administration wasn’t willing to be flexible.”
Verma said that, ‘Last year, I announced that it was a new day” with regard to Medicaid under this administration, “and that we’re there to partner with states to help. CMS is now offering a more flexible, streamlined approach” to Medicaid administration, “through 1115 Medicaid demonstrations,” described on the Medicaid program’s federal website in the following way: “Section 1115 of the Social Security Act gives the Secretary of Health and Human Services authority to approve experimental, pilot, or demonstration projects that are found by the Secretary to be likely to assist in promoting the objectives of the Medicaid program. The purpose of these demonstrations, which give states additional flexibility to design and improve their programs, is to demonstrate and evaluate state-specific policy approaches to better serving Medicaid populations. On March 14, 2017, the Department of Health and Human Services and CMS issued a letter to the nation’s governors affirming the federal government’s partnership with states to improve the integrity and effectiveness of the Medicaid program for low-income beneficiaries. The letter encourages states to bring forward proposals designed to accomplish this, grounded in ideas that reflect the dynamics and culture of a state.”
Verma noted that “We’ve already approved five demonstrations, and more are in the queue. We’ve also already approved three waivers around community engagement, and are working on 11 more of those, with both Democratic and Republican governors.”
Coming back to an earlier theme of the speech, Verma said that, “Through all of our actions, we start with the goal of putting patients first. For hospitals and providers, that means focusing on transparency,” including among other things, giving patients control of their health records,” through initiatives like MyHealthEData and BlueButton. She also predicted that providers would be offered more alternative payment models to participate in over time. “For states, it means giving them more flexibility, while at the same time, holding them accountable for producing positive results.” And, for all stakeholder groups in healthcare, she said, “it means creating a healthcare system that puts value over volume. We need your help,” she concluded, asking the audience to help her achieve the administration’s policy goals in healthcare, especially the broad goal of empowered consumers making informed choice about their care options, in a free-market-driven healthcare system with maximal choice and minimal regulation. Verma concluded her remarks by thanking the audience, and then exited without taking any questions.