“If They Want To Blow It Up, They Can” – How Republicans Can Hobble Healthcare Without Repeal


Tyler Durden's picture

Following President Trump’s clarifying tweet yesterday that “Obamacare will explode” on its own…

It is becoming increasingly clear that, even without the ‘repeal’, the Trump administration has already begun using its regulatory authority to water down less prominent aspects of Obamacare.

The Republicans’ failure to repeal Obamacare, at least for now, means it remains federal law. But as Reuters reports, newly confirmed Health and Human Services Secretary Tom Price’s power resides in how to interpret that law, and which programs to emphasize and fund. Earlier this week, Price stalled the rollout of mandatory Medicare payment reform programs for heart attack treatment, bypass surgery and joint replacements finalized by the Obama administration in December.

Hospitals and physician groups have been counting on support from Medicare – the federal insurance program for the elderly and disabled – to continue driving payment reform policies built into Obamacare that reward doctors and hospitals for providing high quality care at a lower cost. The Obama Administration had committed to shifting half of all Medicare payments to these alternative payment models by 2018. Although he has voiced general support for innovative payment programs, Price has been a loud critic of mandatory federal programs that dictate how doctors should deliver healthcare.

Without the backing of Medicare, the biggest payer in the U.S. healthcare system which Price now oversees, the nascent payment reform movement could lose momentum, sidelining a transformation many experts believe is vital to reining in runaway U.S. healthcare spending. Price “can’t change the legislation, but of course he’s supposed to implement it. He could impact it,” said John Rother, chief executive of the National Coalition on Health Care, a broad alliance of healthcare stakeholders that has been lobbying the new administration for support of value-based care.

The move Friday to pull the Republican bill only reinforces the risk to the existing law.

“It seems that the Trump Administration now faces a choice whether to actively undermine the ACA or reshape it administratively,” Larry Levitt, senior vice president at Kaiser Family Foundation, wrote on Twitter.

As a painful reminder, the United States spends $3 trillion a year on healthcare – more by far than 10 other wealthy countries – yet has the lowest life expectancy and the highest infant mortality rate, according to a 2013 Commonwealth Fund report.

Health costs have soared thanks in part to the traditional way doctors and hospitals get paid, namely by receiving a fee for each service they provide. So the more advanced imaging tests a doctor orders or pricey procedures they perform, the more money he or she makes, regardless of whether the patient’s health improves.

“We have a completely broken economy in healthcare,” said Blair Childs, senior vice president at hospital purchasing group Premier Inc. “Literally, all of the incentives in fee-for-service are for higher cost.”

As Reuters concludes, President Trump has already signed an executive order directing the HHS to begin unraveling Obamacare. In the early hours of his presidency, Trump directed government agencies to freeze regulations and take steps to weaken the healthcare law. The order directed departments to “waive, defer, grant exemptions from, or delay the implementation” of provisions that imposed fiscal burdens on states, companies or individuals. These moves were meant to minimize the costs and regulatory burdens imposed on states, private entities and individuals.

David Cutler, the Harvard health economist who helped the Obama Administration shape the ACA, said Price could do all sorts of things to undermine the law.

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