Price confirmation hearings and health policy — US Health Care Series Part 1

U.S. Healthcare Series: Part 1
By Pacyinz Lyfoung
AAP contributing writer

WASHINGTON, D.C. (Jan. 31, 2017) — This U.S. Healthcare Series series intends to provide information and track updates on the upcoming legislative decision-making process regarding U.S. healthcare.

Part I:  U.S. healthcare background and what the Tom Price Confirmation Hearings are setting the U.S. healthcare debates to be in the new administration.

In order to better understanding the complexity of the current U.S. healthcare system and the challenges of U.S. healthcare legislative decisions, a look back at historical origins and developments provides good insights.

The rise of the Industrial Age created a mass of workers fully -dependent on wages as opposed to self-employed craft people and farmers with broader means of maintaining self-sufficiency. Health insurance started as wage loss insurance for workers unable by illness or injury to earn their regular wages. Workers in Europe started mandatory professional insurance programs, which were integrated and expanded by their governments. Those government programs’ main goals intended to stabilize worker’s incomes and defend against labor turning to socialism.

At the turn of the 20th Century, American political figures and legislators initiated the process of considering some type of government healthcare program. Although he did not play any catalytic role, President Roosevelt was of the opinion that no country could be strong when its people were sick and poor.

It took 60 years of legislative debates and negotiations to finally pass the current Medicaid and Medicare system as part of the broader Social Security Act of 1965 signed by President Johnson. Those 60 years of legislative discussions and struggles reveal some of the fundamental ideological and political arguments that will continue to surround U.S. healthcare legislation:

• The tension between the fear of socialized medicine/government-supported healthcare (red-baiting, doctors feeling as slaves of the government) versus the right to health (a government’s responsibility to provide healthcare to its citizens; the fact that the U.S. lags behind other industrialized nations in terms of its healthcare coverage of all citizens)

• The tension between government-supported healthcare versus free market medicine (doctors’ control over their rates, patients’ choice, private insurance industry)

• The tension between providing healthcare for all who need it via a broad population and broad service government-supported healthcare system vs. controlling the growth of the federal budget and the federal deficit even if it means cutting coverage to some in need

• The tension between the right level of federal contribution and control via federal funding to the states and the right level of state contribution and state control over state-based healthcare services

All those tensions have so far been debated under two broad federal healthcare financing models: current entitlements and ongoing Republican proposals for block grants. An entitlement centers around an eligible population and basically guarantees that anyone meeting set eligibility criteria will be provided with the services, with the drawback of difficult-to-control and project spending. A block grant centers around a set amount of spending that can be distributed among those in need, with the drawback of realistically having to prioritize and exclude needs with limited resources.

At the present, according to the Heritage Foundation and most estimates, federal spending on healthcare in 2014 distributed 14.41 percent of the federal budget to Medicare and 10.37 percent to Health (Medicaid, SCHIP, federal and retirees’ benefits, Medicare for eligible military retirees, NIH, CDC, FDA). As a reference, 23.55 percent of the federal budget went to social security, 18.33 percent to National Defense, and 15.53 percent to income security (housing assistance, food assistance, disability assistance, foster care, Supplemental Social Security, etc.). For a more complete picture of U.S. healthcare expenses, the Center for Medicare & Medicaid Services (CMMS) tracks National Health Expenditures (NEH) by source of spending. In 2015, NEH were paid 20 percent from Medicare, 17 percent from Medicaid, 33 percent from private health insurance, and 11 percent from out-of-pockets. Furthermore, in that same year, 28.7 percent of NEH were shared by the federal government, 19.9 percent by private businesses, 17.1 percent by state and local governments, and 6.7 percent by other sources.

The confirmation hearings for Tom Price, presidential nominee to the position of Secretary of U.S. Health and Human services, provide a refresher on the immense and complex U.S. healthcare system issues at stake. The nominee’s past healthcare statements and proposals leaning towards some radical changes to the traditional U.S. healthcare system and the more recent Obamacare expansions also promise many intense and complex legislative negotiations if he is confirmed. The following non-exhaustive list will only provide a glimpse into those issues, which will be further reviewed individually in future articles of this series:

Medicare and senior healthcare:

• Alzheihmer’s patients, 5.2 million people
• Co-pays and deductibles
• Annual out-of-pocket spending caps
• Medicare Advantage plans, eg, vision and dental
• Seniors’ drugs’ donut hole
• Providers in insurance network vs. anywhere Medicare is accepted

Medicaid:

• Obamacare expanded coverage to many vulnerable populations, self-employed, young adults under their parents’ coverage, patients with pre-existing conditions, low income adults, now totaling 22 million enrollees; a repeal rolling back that expansion asks the question of what will be available to them
• Essential health services, eg preventive screening, dental, mental, pediatric
• Lifetime and annual no-limits, eg, patients with high-cost cancer treatments
• Current Obamacare taxes on Cadillac insurance plans meant to deter expensive plans and keep average plans’ costs lower
• Proposed tax credits and health saving accounts
• Remaining uninsured, eg, 95 percent children are now covered, how about the remaining 5 percent or 4.2 million children?
• Community nurses for mothers and babies that increase graduation and employment rates for mothers

Employment-based healthcare

• Decouple healthcare from employment or go back to relying more on employers for healthcare coverage of employees?
• Obamacare expanded coverage to those working at least  30 hours/week if the company has more than 50 employees
• Most of the Medicaid issues above

Special populations

• Women’s health, birth control, abortions, VAWA, cancer screening, maternal health including dental that impact the health of the fetus
• Underprivileged children and school healthcare programs
• Rural populations, non-physician medical services and telemedicine
• Indian Health Services, point person at HHS
• Minority health services, qualified health centers, minority health centers, cuts to Medicaid when
• Veterans’ healthcare
• End-of-life care, Care Act of 2015
• Diabetes chronic illness treatment
• Veterans’ Health (only 2/3 of Veterans are eligible for veterans’ healthcare, others must find other options, such as under Obamacare; furthermore, older Veterans use Medicare for additional coverage)

Private health insurance markets

• Proposed small group markets to cover the Medicaid populations that will be cut by repeal
• Proposed high risk pools’ markets to cover people with pre-existing conditions, which were 150-200 percent more expensive in the past
• Catastrophic healthcare insurance
• Private vouchers to access private markets
• Health insurance industry regulations cross-borders

Drugs

• High drug prices, pharmaceutical industry, FDA regulations of drugs and new drugs

Special issues

• Tobacco control
• Zika, eg, on islands
• Opioid crisis, funded at $1 billion for the next two years
• Vaccine safety

The second confirmation hearing of Nominee Tom Price provided the opportunity to hear his arguments:

• that he has no conflict of interest with regards to his pharmacy stocks
• that his role, words and actions as a legislator are different from his potential role as HHS Secretary
• that he is committed to the highest level of coverage and highest level of quality of care for everyone currently benefiting from Obamacare
• that he will rely on experienced HHS staff to learn more about the issues
• that he believes premium vouchers will be a solution for Medicare
• that he believes small group markets and high risk pools will address gaps left by the Obamacare repeal
• that he believes innovations will fill the gaps left by the repeal of Obamacare
• that he believes that removing DC obstacles and giving more control will fill the gaps left by the repeal of Obamacare
• that he believes cutting healthcare spending without reducing access or quality can be feasible if things are not kept in silos
• that he has not in the past demeaned healthcare for all as socialized medicine, which was rebutted by evidence from one of the Hearing committee members
• that he is just an administrative implementer of the laws passed by legislators, although he did agree that as the primary healthcare advisor to the President he will have a significant policy role

The final words of the representatives from both political parties appeared to better capture what U.S. healthcare debates and challenges will come in the future of this new Administration.

Will only the wealthy and the healthy get healthcare, if the federal healthcare budget is cut by 40 percent as per Republican block grant proposals?

Will nobody get healthcare because the uncontrolled federal healthcare spending will bankrupt the whole system, however, the best will be done to ensure that every deserving American is covered?

And maybe the key word in those closing statements might be “deserving,” which has been the subject of much interpretation and debate in many U.S. government social and healthcare discussions and negotiations.

The U.S. healthcare system promises to be and needs to be the subject of a rigorous and informed decision-making process, with the American public remaining aware and engaged as the impacts on their families will be tremendous.

Pacyinz Lyfoung, LLM/JD in Global Health Law and International Institution, is an attorney in Washington, D.C.