HHS Secretary Tom Price joined me this morning:
HH: Joined by one of the stars of the Trump cabinet, Dr. Tom Price, Secretary of Health and Human Services. Dr. Price, welcome back, always good to talk to you.
TP: Good morning, Hugh, wonderful to be with you on this glorious morning.
HH: Representative Greg Walden was with me last hour, and he said Thursday’s vote in the House on the AHCA, he said, “This is the make or break vote. I’m not aware of any Plan B.” Do you agree with him, Secretary Price?
TP: Oh, yeah. I think we’re going to make this happen, and this is the next step in the process, and then it’ll move on over to the Senate, and we’ll continue to perfect it. And we’ve got so many opportunities from a legislative standpoint as well as what we’re able to do here at the department, it’s just an exciting time to be able to move our health care system in the direction that actually thinks about patients and those providing the care, as opposed to just government.
HH: Now I would vote for this bill if I were a member of the House, but I am following the Freedom Caucus. And Axios’ John Swann caught up with Mark Meadows last night, who said, “I’ve now reached a conclusion that our leadership will dare us to vote against this.” Is that in fact what’s going on? Have we reached the end of negotiations? Or is there still opportunities for amendments to the manager’s amendment?
TP: Well, I don’t know that there are opportunities at this point for amendments to the manager’s amendment. There are opportunities certainly in the Senate. At some point, you’ve got to put down the pens, and the hour is late. There were a number of amendments that were rolled out yesterday that address a lot of the concerns that people had, so the bill has moved, I think, in a better direction from a work requirement standpoint for states to give states that option to make certain that we’re addressing greater flexibility for certain states from a Medicaid standpoint to give the governors greater flexibility. We’ve done some things here at the department that I think are really important, and we’ll be addressing more of them this week and as the weeks roll by. So I think the plan, the overall plan, is moving in a good direction.
HH: Let me play for you the brief subject critique from the Senate side. This is Tom Cotton and Ted Cruz both saying the same thing, Tom Cotton on my show and Ted Cruz on Face the Nation.
TC: Hugh, there is no three phase process. There is no three step plan. That is just political talk. It’s just politicians engaging in spin.
TC: I’ve called bucket three the sucker’s bucket.
HH: So Secretary Price, is there a phase three, or is this all AHCA plus what you can do administratively at HHS?
TP: Well, you never know what the future will bring. And obviously, the plan is to have the phase three, the third leg of this stool. And it’s incredibly important, because there’s so many things that you can do legislatively with 60 votes that aren’t, don’t have budgetary effects, so it can’t be done through reconciliation. And then obviously, many of the things that we would do through regulatory modifications and changes and improvements, some of those, many folks feel would be better from a statutory standpoint putting that into law, and that’s, I wouldn’t necessarily disagree with that. But that’s not to say that there isn’t a phase three, or it’s, or it’s not possible, because it is. And with this president, I will tell you, he is as engaged and positive about moving forward as anything I’ve ever seen. So I wouldn’t ever, I wouldn’t ever bet against him.
HH: So if he goes up to the Hill today, and Mark Meadows says I’m willing to do a deal, but I need some tort reform, do you think the President gives him his tort reform?
TP: Well, the President obviously talked about that in his joint session to Congress. And I was very pleased to hear that, and he believes in it strongly. He knows the importance of it. He knows the practice of defensive medicine costs hundreds of billions of dollars every year, and drives up the cost of every single American’s health coverage and health care. So yeah, I think we can get that done as well.
HH: Can you answer my question on substance? I’ve got three hobby horses, Secretary Price. One is we can use the tax code in reconciliation and pass things with 51 votes. And if we simply tax every health policy in every state that did not have a meaningful cap on pain and suffering damages, we would drive out defensive medicine in most of the 50 states. If a federal subsidy, a federal excise tax was laid on a state that did not cap pain and suffering, that state would cap pain and suffering within a month or two after that happened. Why aren’t we doing innovative stuff like that?
TP: Well, two points. One is that I think that’s possible, however as you know in the reconciliation, the test is not just whether it has budgetary effect, but whether the budgetary effect is significant and consequential, or whether it is simply incidental to the policy and you’re just trying to use it to carry along the policy. Now that’s a test that you have to, you do have to test it. You have to try it, and that’s what would be work for the senators to do. Second point I would take a little issue with, and that is any of the states that have put in place pain and suffering caps, and they’re important and have been put in place, but there’s no study that I’m aware of that demonstrates that a cap on pain and suffering or non-economic damages actually blunts the practice of defensive medicine. It holds down malpractice rates, but it doesn’t do a thing for the practice of defensive medicine, because docs and other providers, they don’t change what they do based upon that. That’s why we need the innovative kind of lawsuit abuse reform, which is to provide best practices to be able to be utilized as a positive affirmative defense in a court of law.
HH: Again, you can mandate that with the tax code as well.
TP: You could.
HH: What I just keep thinking about is because of the reconciliation rules, if it has a demonstrable effect on the budget and is significant, I don’t mind mandating everything. But it just seems to me that it was less creative as it might have been on tort reform, which I think you and I agree is the real culprit here.
HH: It is really driving medical cost.
TP: Hundreds of billions of dollars a year, and the estimates depending on who you talk to, somewhere between $400 and $800 billion dollars a year, which is huge amounts of money, as you and your listeners know. That’s three to four, at least four trillion dollars over ten years. And you know, when we talk about trying to save $10 billion dollars over ten years, so this is major money, and it needs to be addressed. And Andy Barr in the House has got a great piece of legislation that he’s been pushing for a number of years, and I would encourage folks to take a look at it.
HH: Yeah, I would encourage you when you talk to the senators to put it in the form of tax surcharges on states not adopting best practices or pain and suffering, because boy, we can get it through. Talk to me about essential benefits, Secretary Price, because a lot of people worry, I think that’s second bucket, and I think you can do it. Am I correct about that? Or do we have to use tax code revisions there as well?
TP: No, I think, and I would encourage folks to go back and look at the original law and where it defines the essential health benefits. It stipulates that the Secretary has the opportunity to define what constitutes fulfillment of the requirements for the essential health benefits. And these are, this is really important, because what that means is that when we go through the appropriate process, we believe it’s possible to allow the states to be the ones that are defining what the parameters are, what would be a compliant health benefit, what, how you measure that and what the consequences of that measurement are. So it’s, it would then essentially return to the states their rightful authority to regulate and determine what health coverage and health insurance is in their state.
HH: Now do you, your colleague, Scott Pruitt in the cabinet, has already begun the APA, the Administrative Procedures Act, to redefine waters of the United States. He and the President got that thing going. Have you begun the APA process to redefine essential benefits? And how do we make sure that your definition of essential benefits, which I assume will be skinnied down and genuinely essential, as opposed to this parade of benefits Team Obama put out., how do we make sure it doesn’t get changed by the next administration?
TP: Well, that’s why some folks believe it ought to be statutory, but that doesn’t mean that we don’t, that we let the regulations stand as is. And we’re in the process of doing both guidance letters and looking at the APA as to whether or not that’s necessary for the essential health benefits. You know, the previous administration, not only did they put in place hundreds of regulations pursuant to Obamacare, but they also issued over 5,000 guidance letters, many of which have the same kind of authority as a rule or regulation. They’re just interpretations of how the department, how the federal government will view compliance or not of stipulations in the law itself. So those are as important, and we’re working on those literally as we speak on not just in essential health benefits, but an array of items, and we’re trying to prioritize those to make certain we get to the most important ones first.
HH: I know your team is very experienced and very vast, but the unwinding process is so enormous, do you have enough people from the White House over there helping you do this?
TP: We’ve got a lot of folks, but we could use a lot of help. And that’s just where I would solicit input from you and your listeners on the kinds of things that they have seen that have been just lunacy in terms of being able to provide care and receive care. If there are conversations you have with others, whether they say there’s this ridiculous rule or this regulation that is making it so that I can’t do X, let us know. We’re in a receiving mode on the kinds of things that the American people feel are thwarting their ability to receive the kind of care that they need and want.
HH: All right, now the next thing I want to ask about, competition across state lines. Again, I think you could say to the tax code people write a provision to the tax code that taxes any insurance policy from a company that does not offer at least a basic policy in X number of states. How do we increase competition of portable plans across state lines, because only when people compare apples to apples can you get competition going, Mr. Secretary?
TP: Yeah, you could do it by that method, by requiring or making certain that insurers are able to cover a network across state lines. My preferred method is to go the opposite way, and that is to say to individuals you can pool together with every other person in the individual and small group market should you so desire, even though you’re not economically aligned. We call them individual health pools, so you get, as a one or two or three folks out there, you get the purchasing power of millions across the land, and that’s the way I think to address the ability to purchase…
HH: But that’s a 60 vote, that’s a 60 vote rule, isn’t it?
TP: That’s a 60 vote rule.
TP: And the good news on that one is that it has support on both sides of the aisle. Robust polling mechanisms, whether it’s association health plans or individual health pools, those are the kinds of things that once we get through this current phase, I sincerely believe we’re going to be able to get folks to come to the table and to work on this.
HH: I hope you’re right. I hope you’re right. Let me close by asking you about something completely different. I want to bring it up early, and that is you’ve got a global part of HHS, and it deals with pandemics. We’re coming up on the 100th anniversary of the Spanish Flu, which affected 500 million people, killed between 50 and 100 million people. We’ve dealt with Ebola, we’ve dealt with Bird Flu. This is early on in your tenure as Secretary of HHS, but are you already looking at that, because to me, it’s a ticking time bomb. It’s been a century since we had a pandemic that did this. It’s going to happen someday. I was never confident that Team Obama knew what was going on. What do you think, Secretary Price?
TP: Yeah, this is really important, and I am privileged to lead a bunch of folks here at the department who are watching out for this literally daily. I get an update daily on the emergency operations that are either planned or occurring not just around the nation, but around the world, and looking, for example, at H7N9, which is the Avian Influenza potential for this year and making certain that we’ve got surveillance out there around the world for pandemic, and you’re right. We need to be ever vigilant. We need to make certain that we’re initially preventing, but that we’re able to detect and then respond in the most aggressive way, and the folks here and at CDC and elsewhere are just doing remarkable work to make certain that we’re prepared and protecting the American people.
HH: How do you rank the threat of H7N9?
TP: Oh, right now, it appears to be a of low pathogenicity, low virulence, not capable of transmission between bird and human. But we’re watching, and you know, these bugs are smart. And we need to be smarter, and need to be able to respond in a way that again protects the American people. And it’s not if it’s going to happen at some point. It’s when, and that’s what we, that’s what we’re on guard for every single day. And I can’t tell you, just having been here a little over six weeks, the incredible dedication of the folks in the department for this area.
HH: Last question. Did the OMB draft budget give you what you need for global pandemic preparation?
TP: It’s a challenge. There’s no doubt about it. The President has outlined his desire to beef up Defense spending, which I think is appropriate. We’ll work through this process with Congress, and I know that there will be people that will be watching that and making certain that they’re looking out for the same kinds of questions that you just asked.
HH: Secretary Tom Price, are you going to have success on Thursday? Is this getting out of the House?
TP: I think so. I think so. It feels good.
HH: Okay. Thank you, Secretary Price.
TP: Take care.
End of interview.