Seema Verma speaks out against single-payer, emphasizes commitment to competition

In remarks to the Better Medicare Alliance 2019 Medicare Advantage Summit, CMS Administrator Seema Verma shared the Trump Administration’s vision for the future of American healthcare.

Here are the highlights.

Medicare for all is a threat

Verma said she is deeply concerned about the proposals for Medicare for All and a public option, because they are a complete government takeover of healthcare, and that 180 million Americans will lose their private health insurance and be forced into a government- run system. Seniors have paid into the system their entire lives, and it wouldn’t be fair to them and would reduce the quality of the care they receive.

“Our seniors deserve a system that helps them get well, not get in line,” she said.

The cost of healthcare in the U.S. is troubling, with costs rising at the same pace as before the Affordable Care Act was passed. “Millions of Americans have seen their premiums and deductibles grow to levels out of their reach, with premium increases exceeding 200 percent in some states since Obamacare took effect,” Verma said. “And by 2027, nearly one in every five dollars is projected to be spent on healthcare.”

She added that the most recent 2019 Medicare Trustees report projects the Medicare trust fund will run out by 2026, and that while Medicare for All advocates say they want free healthcare, in the end the American taxpayer will pay for it. And in a single-payer system, government policies would stifle innovation and thwart competition.

Verma said a public option is also flawed.

“I view a public option and Medicare for All as equally dangerous, and history backs me up,” she said. “In a well-functioning market where insurers compete on price and quality, high performers are rewarded for efficiency and innovation. A public option has no such drive, as governments have endless resources-they can simply turn to taxpayers when they run a deficit.”

“We believe that our role in government should be to promote a healthy and competitive free market where providers and insurers compete on the basis of cost and quality, and patients are incentivized to seek high value providers,” she said.

A different vision

Verma said the Trump Administration has a vision that puts patients first, and back in control of their healthcare. It starts with protecting the Medicare and Medicaid programs and strengthening them for future generations.

By unleashing the power of the American consumer, market forces-the same forces that deliver better cars, better phones, and better restaurants year after year-will address the underlying cost drivers in our healthcare system.

How the government thwarts competition

Today, the government pays for about 45 percent of the nation’s health expenditures, according to Verma. “Our outdated government payment polices and central planning have stifled the competitive forces that could bring down cost and improve quality,” Verma said.

For example, she said, Medicare’s payment policies for specialty care and primary care were locked in place decades ago, and generally result in higher payments for specialty care. The role of the primary care doctor has become more complex and important over time, but Medicare’s payment policies have not kept up, so primary care doctors are paid less than the value they provide.

Additionally, for decades, Medicare has employed a hospital-centric payment model, even as an ever-increasing number of services can be performed just as well and at a lower cost in the outpatient setting. Medicare actually pays more for many services when they’re performed in a hospital, leading to a surplus of hospital beds, and hospital spending has become the largest driver of healthcare costs.

She said government policies are leading to the creation of monopolies, resulting in an upward trend in provider consolidation. Hospitals are buying up physician practices, and mergers among large health systems and health plans are a common occurrence. But without competition in a market, consumers have fewer choices, prices go up, and incentives to improve quality go down.

And these health systems have every reason to acquire physician practices, because the government has created payment incentives that financially reward hospital systems for doing so. A patient today pays more for the same healthcare service at a practice owned by a hospital system than in an independent physician office, Verma said. To address this, the Trump Administration changed Medicare’s payment policies to promote site-neutral payments.

Well-intended government rules and regulations-whether under MACRA or Meaningful Use-have exasperated many physicians, leading to more physician burn-out, or moral injury, Verma said.

Creating competition

Verma said intiatives like “Patients over Paperwork,” which involves updating regulations that are outdated, duplicative, or overly burdensome, have helped providers increase the amount of time they are able to spend with patients. And to further promote competition, the administration has worked to ensure that patients will be covered for procedures outside hospitals when it’s safe, appropriate, and less expensive-such as by expanding the number of surgical procedures that Medicare will pay for at ambulatory surgical centers.

To help the millions of people who have left the individual insurance market because premiums are high, the administration has taken a number of steps to provide more affordable choices. This year, new regulations have resulted in the first reduction in premiums on the individual market since Obamacare took effect, according to Verma. In addition, more insurers are entering the market, bringing more competitive pressure and driving premiums lower.

She also pointed to efforts to make sure patients have all the information they need to make informed choices and have the right to know the price and quality of services before they receive them, and that their medical records belong to them.

“This Administration has been absolutely committed to free markets and freedom by empowering American patients so they have access to the high quality, affordable care of their choosing,” Verma said. “You can expect the Trump Administration to continue to enact market-based reforms that put patients first; protect people with pre-existing conditions; address the real cost drivers to lower the price of care, and create more transparency to ensure that all Americans get access to the highest quality of care.”