Seema Verma Speech
Prior to her 2016 nomination as the U.S. Government Administrator to the Centers for Medicare and Medicaid, Seema Verma delivered a high-level speech on the status of the healthcare industry in the United States. According to her speech, healthcare costs are growing faster than America’s GDP, and 10,000 people are enrolled in Medicare every day. Prescription drug spending in Medicare is higher than in any other area, and in 2016, President Trump announced plans to drive down drug spending and overall healthcare costs through open insurance and provider competition.
Verma was nominated by President Trump as Administrator to the Centers for Medicare and Medicaid. She is the 15th person to receive this position, currently overseeing a trillion dollar budget. Below are a few highlights and statistics from this high level speech delivered at the Commonwealth Club that provides insight into the administration’s unique outlook, and here is a link to the video.
- Healthcare costs are growing faster than the U.S. GDP, and by 2026, if continued on this path, the US will be spending $1 out of every $5.
- There are currently 60 million people on Medicare. One in three are on Medicare Advantage plans.
- Every day by the time you go to bed, 1.3 million people in Medicare would have seen a doctor and five million medical claims, worth $2 billion dollars, would be processed.
- CSM receives 10,000 new enrollments into Medicare every day.
- By 2030 (projected), the program will increase by 1/3 which would take it from 60 to 80 million beneficiaries.
- Spending will increase from $13,500 per beneficiary to almost $25,000 in 2030.
- Medicare only reviews less than 3/10 of 1% of all claims, this is leading the effort for programs such as Appropriate Use Criteria (AUC) and hints at an increased focus on fraud and abuse.
- Last fall President Trump issued an executive order called Health choice and competition across the United States. The President believes that competition is the key ingredient to driving down health care spending. This relates to both insurance and provider competition.
- Specifically noted that they are aware of the physician consolidation market. Specifically calling out hospitals buying physician groups. This is driving up the costs and she even used the word “monopoly.”
- Administration will continue to look into site of service. She indicated that some procedures need to be performed in a hospital setting, but that it didn’t make sense to compensate others at different rates. This trend is continuing and will likely have pressure on hospital profits.
- Stark Law – they are not opposed to alternations to the current Stark Law. They have heard that it is too restrictive and is adding costs to entities attempting to create Alternative Payment Models. This issue is currently in a public comment period.
- They are big on Medicaid waivers and providing states flexibility. Increased work requirements, etc. Stated that currently there are 11-12 waivers under review.
- Adamantly opposed to Medicare for All/One payer system. In her opinion it would divert attention from seniors and provide complete governmental control for healthcare delivery.
- Hinted that she would likely oppose California’s planned waiver request to ask for single payer system statewide in California.
- Alluded again to the need for price transparency across the board. Suggested that it be a requirement for participation in Medicare on a go forward basis.
- Big on telehealth initiatives. Wants to start reimbursing Phone/Video Chat, consultations among providers, review of text images to review.
- Suggested that the change in E & M documentation requirements and billing requirement overhaul would save physicians 500 years of physician time within 1 year of being implemented. Laying the groundwork for reduce reimbursement. Stated that 40% of all PFS volume were E & M codes.
- Prescription drug spending in Medicare is more than any other area, and President Trump wants to help drive the prices down for these medications (some pharmaceutical companies have either already lowered their prices or froze the price to meet this demanding goal for the healthcare industry).