What Tom Price's confirmation to head HHS means for healthcare

Policy analysts expect the new secretary to use a market-oriented approach to healthcare reform rather than a regulatory-based one.

Rep. Tom Price (R-GA) was confirmed as the Department of Health and Human Services (HHS) Secretary at 2:11 a.m. on Friday after several contentious debates, including the debate before his confirmation, which lasted about 16 hours. Concerns about whether Price would be a good fit for the position revolved around his vision for the U.S. healthcare industry as well as his investments in healthcare and pharmaceutical stocks.

Following a boycott by Democrats in the Senate Finance Committee confirmation hearing for Price, Republican members held another hearing shortly thereafter, unanimously voted in favor of Price, and recommended him to the full Senate for the final markup.

Price, an orthopedic surgeon, will now oversee the agency with $1.1 trillion in annual spending and that has several other healthcare agencies within it, including the Centers for Medicare and Medicaid Services (CMS), the Food and Drug Administration (FDA), the National Institutes of Health (NIH), and the Center for Disease Control and Prevention (CDC). The Senate Committee on Finance nomination hearing for President Donald Trump's pick to head the CMS, Seema Verma, is set for Feb. 16. 

Ana Mulero

The new HHS Secretary prompted a lot of controversy among lawmakers as well as in the healthcare industry. During his previous nomination hearings, Price dodged several questions about what his plans would be for repealing or modifying the Affordable Care Act (ACA) and gave few details on the questions he did answer.

“Many saw the ACA as simply the first step to a single-payer system and thought this was heading U.S. healthcare in the right direction,” Dr. Roger Stark, a healthcare policy analyst at the Washington Policy Center, told Healthcare Dive.

“Others, however, believe in more free-market and patient-oriented approaches to healthcare and see Price's nomination as a step in the correct direction.”

Dr. Roger Stark

Healthcare policy analyst, Washington Policy Center

Healthcare policy analysts have certain expectations for how the HHS would work under Price. The approach analysts expect him to use to address healthcare reform is market-oriented rather than regulatory. They expect his vision for healthcare to be more consistent with a smaller federal role than what is reflected in current legislation.

Price has repeatedly stressed what he calls the “six principles of healthcare:” affordability, access, quality, responsiveness, innovation, and preserving patients' choices. However, analysts believe that while most people would support these generalizations, it would be very difficult for him to craft legislation that would move the healthcare system in those directions at the same time.

“There are tradeoffs in there,” Alice Rivlin, director of the Center for Health Policy at the Brookings Institution, told Healthcare Dive. “And it’s those tradeoffs that he will be working with the White House and both Houses of Congress to figure out what do we actually do.”

Price is inheriting a rule that its opponents deemed safely unpopular, but is now becoming liked by more and more Americans just as Republicans are trying to dismantle it.

What may likely be the most challenging goals to accomplish are bringing down costs and making healthcare more affordable. 

“Some Republicans are full of criticisms of the ACA because the premiums are too high and the deductibles are too high and it cost too much.”

Alice Rivlin

Director, Center for Health Policy at the Brookings Institution

"The only way to get the premiums down and reduce the deductibles is by spending more money,” Rivlin said. 

The myriad of reports that have been released over the last few months on the dire consequences repealing the ACA the way it has been proposed would cause resulted in GOP infighting over how quickly healthcare reform would occur. A new analysis by the Congressional Budget Office found that an estimated 18 million Americans would lose their insurance coverage with an ACA repeal. Also, the American Hospital Association (AHA) reported if a repeal is passed without simultaneously replacing coverage, it would cost hospitals $165.8 billion in federal payments, while the Commonwealth Fund found it would lead to 2.6 million job losses in 2019. 

At least five GOP governors of states that expanded Medicaid have advocated for the ACA to stay. Yet President Trump hopes to repeal the law “by the end of the year,” he said during an interview earlier this week. "[W]e should have something within the year and the following year."

The president also vowed to “repeal and replace Obamacare essentially simultaneously” after Price is confirmed. 

Price has led the efforts to privatize the Medicare program and cut Medicaid spending. Senator Chuck Schumer (D-NY) argues Medicare is "enormously popular because it works, it delivers affordable and vital healthcare to our seniors and it needs to be strengthened not put on the chopping block."

The Trump team and Price have indicated they would turn Medicaid into a “block grant,” which would give states more control over the program and funding. But the block grant in the House 2017 budget, which Price oversaw, would reduce Medicaid spending by $7 billion this year, according to the Center for Budget Policies and Priorities. 

Former CMS acting Administrator Andy Slavitt argues more money is needed to be able to increase access to Medicaid coverage, rather than block grants. 

“About 85% of exchange plan enrollees get a subsidy; many also get cost-sharing reductions,” National Center for Policy Analysis Senior Fellow Devon Herrick told Healthcare Dive. “Half of the newly covered are insured by Medicaid programs,” he adds. These are all issues that Price will have to address. 

Price will "likely champion a program that will provide a tax credit in place of sliding scale subsidies," Herrick said.

One of the primary obstacles for Price to solve with healthcare reform is how to deal with the number of uninsurable Americans who are also high cost individuals. He has previously advocated for state high-risk pools. 

The Empowering Patients First Act he sponsored could potentially be the legislation to replace the ACA. 

“If he sticks to the Empowering Americans First Act of 2015, he will also want to limit the percentage people could be charged above standard premiums for pre-existing conditions.”

Devon Herrick

Senior Fellow, National Center for Policy Analysis

Price "would also favor granting states the right to experiment with health insurance regulations," Herrick said. 

Only time will tell whether the changes to the country’s healthcare policies will actually be disastrous or just what the doctor ordered. In the meantime, the hope is that Price’s experience as a care provider, as well as in the Georgia legislature, will help him steer the HHS in the right direction. "His experience as a thoughtful detailed-oriented legislator, combined with his decades working in the medical field make him uniquely qualified to confront the challenges facing patients, families and caregivers," Federation of American Hospitals President and CEO Chip Kahn said in a statement.

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Filed Under: Payer Health Law Finance Policy & Regulation
Top image credit: Gage Skidmore