Commonwealth Club, July 25, 2018
Seema Verma: Americans enjoy the benefits of the best health care providers and innovators in the world. Yet while the volume of care consumed by American patients has not increased dramatically compared to similar economies, the cost of care in the United States has accelerated at an alarming pace. Health care costs are growing faster than the United States GDP, making it more difficult with each passing year for CMS to ensure health care for generations to come.
The status quo is simply unsustainable, and there is no easy solution. Anyone who tells you that more government spending alone can fix this problem doesn’t understand the issue, because despite the huge increase in funding we saw from Obamacare, many of our health care challenges not only remain but continue to worsen. As a country, we have not figured out how to slow the rate of growth in health care spending.
Before I conclude…I want to address one additional issue.
We have all heard the drumbeat for what advocates of a government-run – socialized – health care system call “Medicare for All.” Let me briefly explain why this notion reveals a fundamental lack of understanding about the uniqueness of Medicare to the very specific population that it serves.
First, Medicare is a program to provide care to our most vulnerable, disabled and aging population that needs it. Second, by proposing to expand services offered by Medicare to every American, you further strain Medicare’s funding streams and run the risk of depriving seniors of the coverage they have worked their entire lives to receive.
We have just discussed the challenges that Medicare faces in serving the nation’s seniors, the misaligned financial systems that are driving up costs, and the bureaucratic hurdles faced by doctors and hospitals. We have a lot of work to do to strengthen the existing Medicare program. Putting millions more Americans on Medicare will undermine the health care for the very demographic the program is designed to assist. Ideas like “Medicare for All” would only serve to hurt and divert focus from seniors, all the while expanding the regulatory burden and the misaligned and perverse incentives of a government-run system.
In essence, Medicare for All would become Medicare for None.
By choosing a socialized system, you’re giving the government complete control over the decisions pertaining to your care or whether you receive care at all. It would be the furthest thing from patient-centric care.
Let’s learn from the mistakes made in Medicaid when the Affordable Care Act pushed millions of able-bodied Americans into a program designed for pregnant women, children, aged, and those with disabilities, only to then incentivize states to serve the able-bodied before protecting Americans most in need. We have seen this movie, and the last thing we need to see is the sequel.
I seriously hope those who advocate it take time to understand the complexity of the program and the adverse consequences of their proposal.
Rather than straining Medicare, we are working to strengthen Medicare. We are activating patients to be consumers of health care, to drive providers to compete for patients by innovating and providing value. We are getting rid of burdensome regulations that are barriers to value-based care while realigning incentives so that providers can focus on delivering care that improves quality and lowers cost.
We are running out of time to solve the challenges of our health care system. Not addressing health care costs not only threatens the future of the Medicare program but our country’s future. This administration will never stop driving our system towards delivering value for the patient. This will take every single part of the health care system working together to ensure that we continue to drive towards value. Everybody will need to do their part to create a value-based system, but we need you to do your part as well. Please engage with us. We need and want your ideas and your unique perspective. At some point, we’re all going to be Medicare beneficiaries, so let’s work together to strengthen the program and leverage that strength for the future of our entire health care delivery system. This is not a luxury, but a necessity. The prosperity and the well-being of future generations is dependent on the decisions that we make today. So join us as we ensure those decisions will benefit all Americans. Thank you.
Mark Zitter, Moderator: I’d like to turn to the bigger issue that people have brought up and that you raised about single payer health care. I’m not going to ask the question that you already answered. I know the administration is not in favor of it. I do find that many people confuse single payer health care with universal coverage – not the same thing. Many countries have both – not the same thing. So clearly the administration is not in favor of a single payer approach; what’s the Trump administration’s feeling about everybody having health care coverage.
Seema Verma: I think we’ve always said that we want to make sure that people have access to coverage. That’s always been a goal of the administration. I just don’t think the government is the one to make decisions for each and every American. People need to make decisions about health care on their own. They need to have choices and options and they need to make the decisions that are going to work best for them. We don’t think the the government should be making decisions about individual families and for people about their health care. That should come from the individual.
Mark Zitter: And when you say “access to coverage,” is that the same as coverage?
Seema Verma: We want people to have access to coverage, and I don’t…I think we’ve been very clear about making sure that, you know, that there’s access in a lot of different ways. What we’ve had through Obamacare is a type of plan – a very expensive plan that lots of people can’t afford. Different people want different types of plans, and I think they should be able to make the choices – decide what’s going to work best for them.
Mark Zitter: So we have through the Affordable Care Act about half the number of uninsured in America. We still have eight or nine percent, whatever that might be, and granted the coverage for everyone is not optimal, so just being covered is not all that we need. However we still have eight or nine percent, more in some states, less in others; what’s the Trump administration’s plans to get that number up pretty close to one hundred.
Seema Verma: So a couple things that we’ve done…What we’re seeing in the exchanges is that the coverage has become very expensive, and for people that are subsidized, they’re not necessarily experiencing issues in terms of getting access to the coverage; they still may having a lot of problems in affording the out-of-pocket expenses and the very high deductibles. But a lot of people cannot afford the coverage; they are not able to get subsidies. And so one of the things that we’re trying to do is to make certain that there is different types of options available, providing more flexibility – short term limited duration plans; we put out a rule for association health plans. The idea is to create more flexibility and more options for consumers to be able to have different choices, because I don’t think that everybody can afford the one-size-fits-all Obamacare approach – a very expensive plan that’s leaving out millions of Americans.
Mark Zitter: We just heard over the past week in terms of the association health plans – there have been some new rules there. One of the groups that was most in favor of it didn’t feel like the new rules were sufficient for it to pursue. So are there other plans to do something else in that regard?
Seema Verma: We’re always going to be continuing to drive towards getting Americans options. I think the way Obamacare is structured, it’s a one-size-fits-all approach, and so you’re going to see action by the agency, and I think that’s what the president, in terms of his executive order, wants to make sure there is different types of plans available, that people have choices about their care.
Mark Zitter: One of the statements that the president has made that has gotten a lot of excitement on the right, and increasing interest on the left, is the notion of giving states much more flexibility in how they administer health care to their residents. There’s concern on the left that maybe states won’t do what they want overall, but of course you’ve talked about experimentation… Here in California, as you probably heard, we have a gubernatorial race. Most candidates are running on some kind of platform about single payer health care on a statewide basis. Plenty of challenge to that, but I guess my question to you is that should that platform go forward it would require, I suppose, waivers from the federal government so the money that currently flows through your department would be put into the California single payer pool. Should that happen… should that be requested, what would be your feeling about granting California that flexibility?
Seema Verma: I don’t think a single payer system is going to work, number one. I think that a lot of the analyses show us that it’s unaffordable, and that it would actually put many people in the situation where the government is making decisions about their health care. We’ve been consistent that we support flexibility, but when we look at proposals, we evaluate them to see are they fiscally sustainable, are they fiscally sustainable for the federal government as well as the states, and when we’re evaluating proposals that’s what we’re looking at, we’re looking to see whether the proposal falls within the confines of the law. But it doesn’t make sense for us to waste time on something that is not going to work.
Mark Zitter: So that’ll be a no.
Seema Verma: Like I said, our parameters are that it has to be fiscally sustainable for the federal government.
Transcript of prepared speech:
By Don McCanne, M.D.
This speech was primarily the rhetorical spin that this administration has been spewing out – much conservative and libertarian ideology with a paucity of health policy recommendations that are largely ineffective and often detrimental. Medicare for All advocates should be particularly concerned about what she has to say.
To no surprise, she dismisses Medicare for All with what she believes to be an inflammatory label: “socialized.” She then accuses advocates of not understanding Medicare. She says that that Medicare for all would risk removing resources from current Medicare beneficiaries, which of course is the opposite of the truth since it would expand benefits. She insists that it is unaffordable, ignoring the fact that increased government spending would be offset by the reduction in private health care spending.
Confirming that her speech is rhetorical, lacking in any beneficial policy substance, she concludes by saying, “Medicare for All would become Medicare for None.”
The conservatives have long supported giving the states a much greater role in regulation and financing of health care, contending that the states are in a better position to make decisions about health care for their people. Yet showing that she is much more driven by ideology than by policy, she insists that a single payer system is not going to work regardless, that it would be unaffordable, which all studies show is absolutely untrue when looking at total health care spending. She says that though she supports flexibility, she is not going to “waste time on something that is not going to work.”
As the moderator Mark Zitter says, “So that’ll be a no.”
I found it very painful to listen to this speech. I left out of the transcript that I typed her little joke about world peace, which to me only compounded the pain – joking about peace, of all things. (The audience didn’t laugh either.)
These people will never understand the ethics and morality of an egalitarian health care system that brings health care justice to all. We need to replace them with people who do understand and who care.
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