Liz Fowler (00:00):
... what's that saying in Washington, that you want to be at the table but not on the menu?

Rae Woods (00:05):
From Advisory Board, we are bringing you a Radio Advisory, your weekly download on how to untangle healthcare's most pressing challenges. My name is Rachel Woods. You can call me Rae.

(00:16):
Over the last several weeks, we at Advisory Board and here at Radio Advisory have been fielding question after question about the future of healthcare business. You want to know about funding cuts, what the restructuring of HHS means, how the rise of Doge and MAHA are upending how our industry is run. And how an uncertain business environment for all will impact healthcare specifically.

(00:40):
Given all of those questions and all of the uncertainty facing business leaders, I'm going to be taking on a bit of a different role in this episode. I'm not just here to host, I'm here to represent you, our listeners, and share your questions, your anxieties and the opportunities you are chasing with the people who know exactly how the sausage gets made.

(01:00):
I've invited Liz Fowler, former director of CMMI under the Biden administration, and Eric Hargan, former Deputy Secretary of HHS under the first Trump administration. You probably immediately notice that I've invited a Democrat and a Republican to this conversation. But it is a conversation, not a debate. Each of my guests have long resumes in the public and the private sector. They've worked for multiple administrations and they have a history of working across the aisle to achieve shared goals.

(01:30):
As we have this conversation, I want you to remember that Advisory Board is a nonpartisan organization. But nonpartisan doesn't mean passive. My hope is to create a forum for the people who've been in the room, who've written the policies and who've read your comments to speak directly to your questions. So let's get into it.

(01:52):
Hey Eric, hey, Liz, welcome to Radio Advisory.

Eric Hargan (01:55):
Thank you.

Liz Fowler (01:56):
Thanks.

Rae Woods (01:58):
We have either timed this episode perfectly or terribly depending on how you want to think about it. After a hundred-ish days of the second Trump administration, we know that's that arbitrary line that we like to look at, and just hours before we started this recording, the House Energy and Commerce Committee released their proposed budget.

(02:22):
The markup, if I have this right, is going to begin 26 hours from now, which is a reminder that the proposals in this bill are far from certain. I was reviewing the proposed text this morning, which frankly puts into focus a lot of the things that we already expected, things that we've already talked about on Radio Advisor, cuts to government-funded insurance, namely Medicaid. In fact, I think if passed this would represent the biggest reduction in Medicaid funding, which feels very novel.

(02:52):
And that's actually where I want to start the conversation. Eric, you, and you, Liz, have both been at the start of new administrations, and I know that some amount of change is normal. If I reflect on these first 120-ish days, things feel a little bit more chaotic, at least to the health leaders that we speak to. What has happened that is truly novel or less expected? And what are things that should actually feel familiar to us from previous administrations?

Eric Hargan (03:23):
Well, first of all, you have something that is pretty novel, which is Doge. That's something that's very different. I don't think we've seen that before. As for the rest of the things, you can look at a lot of the other pieces that they've been done before, but not usually in such quick manner. Where it's all brought together and all at the beginning of the administration. So executive orders, certainly normal. It's the pace of them that are going on I think between the executive orders, Doge, a serious restructuring of HHS for the first time in about 30 years, taking place at the same time. As a consequence of Doge and other things, a lot of personnel being let go, in the thousands. And then on top of it, you have dozens of lawsuits launching at the same time in response to some of these activities. And then on top of the regular rules, the normal things that are going on, which is rate notices and proposed rules and possible things going on that just take place of normal course like Medicare rules and so on.

Rae Woods (04:21):
And just to put a number on those executive orders, I checked right before we started this recording, and we're on 147 executive orders thus far. By the time this recording comes out it'll certainly be more than that.

(04:35):
Liz, what felt familiar to you, if you reflect on your first 100 days of the Biden administration, that felt familiar in the first 100 days of the Trump administration?

Liz Fowler (04:46):
What feels familiar is a new administration comes in, they review all the pending policy decision, all the reports, all the policies, and in the case of the CMS Innovation Center, which I led in the Biden administration, similarly reviewing the models, what's saving money, what's not working, where do we want to make adjustments, that all feels very familiar.

(05:07):
I think what's unexpected is maybe the personnel actions, some positive and some negative. I mean, positive, they did an exceptional job of getting people in roles very quickly. I was really amazed and really impressed with their ability to move so quickly. But on the negative side, the Doge approach to reducing the federal workforce has been really devastating for morale. And I think we're really seeing that the department and the administration as a whole is really losing some good people. And putting those who are remaining really on edge.

Rae Woods (05:38):
Yes, yes. And the pace of change is exactly why frankly at Radio Advisory and at Advisory Board we are getting flooded with questions from health leaders. And there's a very practical question that we are getting which is just what are the set of tools to engage with the administration, to engage with HHS leaders?

Liz Fowler (05:59):
I think there's some general rules to follow, just the same ones that apply no matter who's in these seats, don't just bring your problems and complaints but also think about what solutions to bring to the table.

Rae Woods (06:13):
Love that.

Liz Fowler (06:13):
Use numbers and evidence, build your credibility, be respectful. Don't come in guns a-blazing full of judgment and ill will. Maybe don't wait until you need something before you engage.

Rae Woods (06:26):
And that is particularly difficult right now because you're getting into the best practices of how to have the conversation. But I'll say we're getting some folks saying, "I can't even have the conversation at all because my contact is gone. The part of the organization that I worked with now doesn't exist because of the restructure." So what does it mean to even engage meaningfully with HHS if some of those relationships that some organizations have built over years and decades don't exist anymore?

Eric Hargan (06:55):
It's always good to just continue to engage. As Liz said, don't just show up when you have a problem, especially one that's like you're on fire with. That's not the time to engage. That's generally true. It's really true when you have so many things going through the pipe at the same time which is what's happening right now. And while people often say about an administration when it starts out, people always say there's chaos, there's frenzy because there always is at the beginning of any new administration. But I think right now you're seeing so many things being attempted all at the same time. So trying to get in front of people early on. In other words, they're doing so much, that your opportunities to get to them are going to be relatively limited.

(07:39):
So I wouldn't wait on this. And just be available because things may just suddenly open up and you're able to get in. And this is just generally good advice for dealing with the government is the, help us help you. What is it that they're trying to do with this, and trying to understand it from the inside out, about what they're trying to achieve in context of everything else that they're trying to do.

Rae Woods (08:05):
So a lot of what you're talking about is the direct conversations that you're going to have with different levels within the government. Are there other tools that you want to make sure you remind our audience that they should be using as they engage?

Liz Fowler (08:18):
One thing I think people should think about is site visits and inviting folks to come visit their facility. If you know one of the officials is going to be out in name your location for a speech, invite them to come see your clinic, your hospital to see what you're doing upfront and personal. I think that's a really important way to explain exactly what it is you're trying to achieve. And how some of what they're trying to do may be interrupting the success of those goals.

(08:45):
Another is maybe thinking about is just building a coalition and thinking about who the fellow travelers are in your space. Who you might want to work with to approach the administration together.

Rae Woods (08:57):
That's actually really interesting. Are there areas where you would recommend our listeners build that coalition and be aligned on change together?

Eric Hargan (09:06):
There are areas where you can see continuities between the administrations already developing, the area of lowering drug prices. If you're going to walk in and say, "We are planning on raising drug prices but," you may already have lost the audience.

Rae Woods (09:21):
And something that was important when you were part of the Trump administration, something that we could learn from the first administration and apply to the second?

Eric Hargan (09:28):
Look at the continuities in policy because what we've had here is an extremely unusual circumstance, first in over a century, where you have an administration that's divided by four years. So this hasn't happened since the 1890s. Look at the areas where there's continuity across the first term and say where does it hook in? Sometimes it's good to treat it like a new administration. We've just been talking about that. The way in which there's been just a lot of things going on, new things that have been added in like Doge. But there are continuities as well. And you can see that thematically, which is that emphasis on drug prices and getting them lower. Even just as recently as the last few days we've seen that, new very striking proposals coming out from the White House on how to do that.

(10:12):
So when you look at that, you go like, "Am I going to be on the opposite side of something that is a persistent concern of this administration?" And how do I address those issues? They're not going to be very open to this. Is there something else that I can work with them on? Subparts of what you're trying to do that might be acceptable to them. Areas where you're not emphasizing things. Like say in the case of drug prices, you're not emphasizing the raising the prices, but innovation or access or one of the other areas can help the administration in a different way.

Rae Woods (10:42):
We're doing a good job of naming how to speak to officials and topics to align on. But I want to admit that in our conversations with health leaders, there's more of a posture that's emerging before they even get to the point of asking us a question. And the posture really falls into one of two extremes. Either doing what leaders have done for many previous administrations, which is engage and have dialogue and share their priorities and give data.

(11:14):
But there is an increasing number of health leaders that are actually telling us, "I'm concerned to engage at all." And I want you to let me quote one of the questions that we've gotten, which is that this health leader said, "We're expressly not engaging with the administration 'to avoid putting a target on our back'." The fear here is actually not about ideological divides. The fear is about how do I avoid practical consequences? What is your take on the reality that some leaders are hesitant to engage at all?

Liz Fowler (11:51):
I mean, I would just say that's not a very smart approach. It's counter to the advice that we were trying to convey earlier, which is to get in there before you have a crisis. What's that saying in Washington, that you want to be at the table but not on the menu?

(12:07):
I understand the concern, but if the worst case scenario transpires, it's really hard to go back to a board or to your leadership and explain that, well, we didn't want to engage and we were afraid what might happen if we did. Think wisely and carefully about how to engage but definitely engage. And if going straight to administration officials doesn't feel comfortable, there's also the hill. There's a whole nother part of the government that wants to hear from you. You are a constituent of somebody's and should certainly make your perspectives known.

Eric Hargan (12:36):
And the administration will listen as it always listens to Congress. I agree completely with Liz. That if you're at the point where you're thinking, I don't know if I should or I should not, you're probably going to go in with the right attitude. In other words, if what you want to come in is to say, "I'm going to give them a piece of my mind and I'm going to sue them and I'm going to tell them I'm going to sue them," then you might not want to go in because you're probably going to go in with the wrong attitude. You're not really going to help yourself. But if you go in with you're thinking, I don't know if I should or not, maybe you should.

Rae Woods (13:07):
And I want to reiterate that the concern that they have is very practical. And it's about exposing some other part of their business. So they're saying if I communicate something about tariffs, if that's where I'm pushing on, and will something happen to our Medicare funding, will something happen to our ability to run that health equity task force or to provide gender-affirming care. And I want to be clear the fear in the back of their heads, I'm mostly speaking for health systems at this point, is just where might I lose more funding, more money.

Liz Fowler (13:38):
One piece of advice I might provide is, no one likes to be surprised, it doesn't matter which administration. So no one wants to see that you're announcing the impact of tariffs in The New York Times or in the press. But talking to people privately and making sure you're conveying your perspective. You're not announcing it to the world, but you have a responsibility to explain the impact to those who will listen because they should care about these impacts.

Rae Woods (14:03):
And to your point, you're also coming with productive solutions and not just naming the problems.

Eric Hargan (14:07):
You're not just saying, "I've got a problem." So in other words, if you find somebody that has the exact same issue that you do, and you're exactly parallel to someone who's in the cross hairs, a university, a law firm, organization, what are you planning on talking to the administration about when you go in. If you think you can address it, and they might even provide them a solution or something they could offer to other organizations, they're going to be eager to hear that.

Rae Woods (15:53):
The word that's coming to shape for me as we're having this conversation is productive, what are the productive next steps that health leaders can take when they have questions, when they have concerns? And the questions that we are getting fall into two camps. Some of them are very, very specific. Everyone wants to know what are the cuts that are coming to Medicaid, to Medicare, to the individual marketplace?

(16:15):
But then there's this other camp. There are some leaders that are actually asking a larger question, and I might even call it a contradiction, and that's around the Make America Healthy Again movement, the MAHA movement. Now in theory, all health leaders that are listening to this episode, they tell us we share the same goal as MAHA, as HHS, we want to make communities healthier, we want to reduce the impact of diseases everywhere and for everyone. The challenge is when you look at some of the specific moves of the last 100 days, health leaders want to make America healthier, but they're not sure how to do that given cuts in research and layoffs, program changes, data being pulled down. How do you want us to square intention with action?

Eric Hargan (17:02):
Well, I would say with regard to MAHA, the overall structure of it has not yet taken place. In other words, commission has not finished what it's going to do. They're doing a lot of prep work for the outlines of what this is supposed to be. Because there are a lot of ways that can go.

(17:19):
Now we can see outlines of it in terms of a focus on chronic disease, children's chronic disease, things like obesity, metabolic syndrome, diabetes, heart disease, hypertension. And then the issues that Secretary Kennedy has with a number of the particular issues on the industry side and the research side.

(17:37):
So what does that mean? I think we have to wait on that. And that is in many ways I think counter to some of the other things that are going on at the department right now, as you well point out. What are they going to do with research in this space? I mean, we've seen announcements of there may be a common research agenda taking place between the research agencies on these fronts. They may be starting to cooperate more with the secretarial top-down drive towards MAHA and the principles there to achieve a greater punch on these things.

(18:10):
I think, again, not making abrupt decisions right now while we haven't seen the outline of what MAHA is intended to do, I would wait and see for what's going to be happening with MAHA.

Rae Woods (18:22):
So it sounds like your advice in general is do the proactive productive conversations around the things that are more certain. I'm again thinking about the budget that came out a few hours ago. And for this particular area where there's just a lot less certainty because it is truly novel, this might be an area to wait and see.

Liz Fowler (18:41):
I agree. And I think the more speeches that you see, the more public remarks, I think watching the innovation center that will start talking more about what they're going to start leaning into and their strategy, I think all of these are hints about what the future might look like.

(18:58):
But I want to go back to something that you said, Rae, because I'm really struggling with this contradiction. I mean, there is an inherent contradiction between Make America Healthy Again and then cutting Medicaid to such a substantial degree that potentially 13 million people are losing their health coverage. There's an inherent contradiction between embracing innovation but then cutting research and the NIH and the FDA staff and the institutions that are the backbone of our R&D infrastructure. I think it's hard to square some of that.

(19:32):
And yes, I agree, we need to all be watching carefully to see when these new approaches and directions are announced. But in the back of our mind, I can see why it's challenging for a lot of the folks on the ground trying to figure out how to make ends meet and live into this new approach and new language that we're using around priorities.

Eric Hargan (19:53):
Yeah, I think that's a fair point. I think that what people need to concentrate on is, for example, some incumbent organizations in the NIH, indirect cost cuts. Like when you look at those and you say, well, are they going to end up spending that $4 billion or not? They might, as I said, they might spend it on new research. In which case the incumbent organizations that depended on it, they're not going to welcome that. But people that might qualify for new research might welcome it a lot.

(20:20):
When you look at where people were let go, in some cases there were senior researchers and senior people at these organizations at NIH and CDC absolutely were let go or transferred to other agencies, I think, again, take a look at who left and which parts were cut. And that may result in something, I would not say otherwise because we don't know right now. And in fact, I think just this morning they're bringing some more staff back at one of the agencies, they've done that a couple of times. That was their promise was that as quickly as they cut they will bring people back. So that's I think got to be everybody's hope. That they're able to do what they said they were going to do, that people are available to go back into the department and that they do in fact go back into the department.

Rae Woods (21:05):
What's your message for the standard other ways that maybe folks are even taking for granted, that they maybe didn't even know HHS was part of doing, that has now been taken away, how do we fill those gaps while also pushing for these new shared priorities?

Liz Fowler (21:22):
I mean, it's a really hard question. In some cases we won't realize what's lost until we need it. And I know I've heard a lot of folks around town saying, "Well, this is how they do things in Silicon Valley with startups, and they wipe out a lot of staff and then they bring some of them back." But a lot of these folks are people with very deep levels of expertise in a very specific area. And some of this, it's going to be really hard to recover. And programs that we might not realize we're missing until we need them, like the 6 million people that rely on heating in the winter and cooling, the entire federal staff is laid off.

(21:57):
I mean, I think about ASPE, which is the Assistant Secretary for Planning and Evaluation, they let go of 75% of the staff.,that is the R&D or the health services research part of HHS. But some of the functions that have been eliminated are the team that puts together the federal poverty level and determines what the Medicaid match rate is for states.

Rae Woods (22:19):
These are all really, really good examples of things that I agree we take for granted or we don't know are part of HHS. And if I think about this administration's purpose and thinking about efficiency and thinking about reducing fraud, waste and abuse, it makes sense that they're following in the move fast and break things ideology. To your point, Liz, that's really hard to do when you're talking about healthcare. When breaking things might mean impacting real people. Which leads me to a different question. You both have been part of HHS. I'm curious, does what's happened in the last 120-ish days signal for you a new purpose for HHS, a new identity for HHS in society and in healthcare business?

Eric Hargan (23:04):
I don't know that I think of it as a new identity. If you look at the department from a really broad goal, helping people live longer, healthier lives It sounds platitudinous. But it's also, as broad as that can be, that's what the department's going to do. The administration is proposing these things, is Congress going to endorse them? Is Congress going to say, "No, we do not want that"? Or is Congress going to acquiesce and say, "We want to make those cuts, it's time for those programs to go"? That could happen. Or Congress could say, "No, not really, we do want you to do these things." And they could respond effectively in the middle of this.

(23:40):
They're not going to be, probably in the context of the reconciliation bill that we're dealing with right now, there's too much energy being spent on that, but again, we're going to have to wait for this particular bolus of activity to be swallowed down by the Congress and get through that.

(23:57):
So I think now when you see things like a lot of the non-infectious parts of CDC getting shuttered, is that going to be taken over by the new Administration for a Healthy America? Are we going to have the functions now be centralized more or less in a single agency whereas they were spread out over a number of them? And will that approach turn out to be effective? And will it help CDC, as they think, to concentrate more on its earliest and most traditional mission on infectious disease? And staying away from other things that had glomerated over time. Or alternately on the negative side, will stakeholders in the public go, "Well, we really needed the CDC to do this"?

(24:38):
When you have redundancy with multiple agencies doing more or less the same thing, and this is true of any organization not just HHS, things tend not to fall through the cracks because there's lots of people covering them. But it's not efficient, centralize, you have central direction, central control, able to do the data. But on the other hand, if they get it wrong or they don't do their job, it's done.

Liz Fowler (25:01):
I don't think anyone would argue that changes couldn't or shouldn't be made, that efficiencies couldn't be gained. And I think Eric has pointed out, there may be redundancies across the administration. I think it's just how it was done and how quickly it was done. It was almost, instead of a scalpel, thinking about these questions and carefully planning it out, it really was using more of a hatchet. And I think impacting real people, real lives and real programs in a way that we may not realize what we've lost until it may be too late.

Rae Woods (25:34):
And in your opinion, are those small ways that we're losing things, and may not realize it until we've lost them, does that represent a sea change for HHS, a change in its ideological role? Or is it merely in structure and function?

Liz Fowler (25:48):
I think it's more structure and function.

Rae Woods (25:50):
It seems that you agree there. And on the structure and function side, the question, again, back to a practical question that we're getting is, okay, if this ball has been dropped, I don't know if HHS is going to pick up that ball again, to your point, Eric, about some people have been let go and some people are going to be brought back, there are swirling questions on who and how should some of these balls that have been dropped have been picked back up? Especially for things that folks again might take for granted, like free school lunch. Whose responsibility is it to do free school lunch if that has gone away? I don't disagree that the public sector might say, "Yes, private sector come in, pick up the slack, pick up the slack." But there's a bit of a game of hot potato of, okay, who and how, what is your take on that?

Liz Fowler (26:36):
I really do believe that we are a resilient society. If I look at what happened during Covid, I mean, we shifted very quickly and did what we needed to do to keep things running. I think we are a very agile society compared to maybe some other countries and other cultures but I think it's part of the American culture and ethos. So I think there's opportunities here to rethink some of these functions and how they're carried out, who does them, what the responsibilities are. Build back what we want to make sure is retained. And so maybe trying to look forward and trying to at least provide some level of optimism for what comes next.

Eric Hargan (27:18):
Yeah, I agree. When it shakes out, we're not there yet, about who's doing what, is there something missing? Are there gaps there? Are ways that things can be done better? And again, promise was they're going to move quickly and they're going to move quickly in the other direction. So bringing it to their attention. For example, if there are crucial people that have been let go, they probably need to be alerted to that. Or have they just been shifted to a different agency? I think seeing what will be the difference in perspective of the new home agency about it. How are they going to deal with each other? When agencies are all brought together like this AHA combine is brought together, what happens at the end of that? And does it create new synergies, new conflicts when we come down to it?

(28:01):
HHS is by budget by far the largest department in the federal government. I don't think that's going to change anytime soon. Regardless of what happens in the upcoming budget, we're still going to be having a commitment as a people, as a country to these issues, to the 300 plus programs that are represented and administered by the department that span unbelievably broad areas. And those that impact very closely into people's lives and their families. We're not giving up on that.

Rae Woods (28:31):
I really appreciate you saying we're not giving up on that. And I also appreciate you saying that we have to do a little bit of a waiting to see how MAHA, Make America Healthy Again, and I believe it's AHA, the Administration for a Healthy America, not to be confused with the American Hospital Association, is going to ultimately shake out.

(28:52):
I will say from our perspective on the stepping in, we are hearing from lots of life sciences firms saying, "All right, we've got to pick up the baton when it comes to research." I will say, they have a clearer space to step in than the hospitals and health systems. So let me channel those leaders for a moment here. The balance between margin and mission is really hard right now. Health systems were already bracing for significant funding cuts, a worse payer mix, et cetera. And if I reflect on at least the proposed budget, we have a little bit more specific information on how this is going to affect the leaders or could affect the leaders listening to this episode. 8.6 million people potentially becoming uninsured, cutting 715 billion from Medicaid in the Affordable Care Act. Definitely going to impact payer mix, definitely going to impact uncompensated care, definitely going to impact health system margin.

(29:45):
The question that comes up for us is, how can they continue to be a safety net, especially in rural areas, and continue to provide care that frankly does not make money if these proposed cuts take their margin from, and I'm going to quote again here, from 'thin to catastrophic'?

Eric Hargan (30:04):
Yeah, well, I think this is an area where everybody's going to have to, first of all, remain engaged right now in telling people how many of these hospitals are in the red, how many of these areas in rural and these community health centers and so on, what is going to be the effect of these on them. Now, that's a question that certainly Congress had heard about before. They're going to have to continue to hear about it. Because for myself, coming from a rural health background, I grew up ... my mother worked 58 years at a hospital outside a town of 800 in southern Illinois, I'm live to this issue. And many of these institutions that are out there are the only point of access for many miles around.

Rae Woods (30:49):
And moving from the red to the black would require things like saying, "We're not providing emergency care anymore or obstetric care." Care that's really essential for the health of those communities.

Eric Hargan (30:58):
That's going to be the first thing they go to is getting rid of these units, OB or behavioral health, mental health. Those areas that probably go away, is Congress going to be careful enough in what they're doing to not end up wiping this area out? I know they had it in mind, but are they going to succeed in walking that line of both ensuring the long-term sustainability of the Medicaid program overall, which had been growing very quickly, and also making sure that we don't end up with this loss of access, particularly in rural and underserved areas?

Liz Fowler (31:32):
I mean, I think some of these trends were already happening. And like you said, margins were thin already. It's not like people were with a lot of flush cash and able to withstand a lot of these forces and these cuts. I think it's going to be a challenge. And I think it has to be an all-out effort to think about how to reach out to both the administration and to Congress. And these are two separate debates. You've got what's going on in the administration. But then the cuts that are on the table and the ones you're talking about in Medicaid, those just came out, and that's part of Congress.

(32:01):
Is that really what Congress wants to do? And they need to hear from more than just the hospitals and more than just hospital administrators and the executives. I mean, this really is an all-out effort. And the previous administration, I know what was really powerful was sometimes hearing from patients and consumers. And making sure those voices are at the table as well. When you start hearing from voters and patients and consumers and people who don't want to lose these functions in their communities, especially what the Medicaid cuts could mean, I think needs to be an all hands on deck.

Eric Hargan (32:33):
And really people should remember, and the administration is also cognizant of this, the party's coalitions have changed. In other words, there is a much more working class element inside the Republican party right now that's represented by the president's own movement inside the party. And so it remains to be seen what will be heard from the people. There have definitely been some concerns raised on that part of the coalition, the Republican coalition, about what's planned to be done.

Rae Woods (33:04):
I've given you the perspective from the listeners of Radio Advisory from health leaders. And even tossed some of their specific questions at you. Before we close, I want to give you a chance to speak directly to them. What is your central message that you want to tell the healthcare industry at this moment in May of 2025?

Liz Fowler (33:26):
It is a very challenging time. And like I said, I think the American ethos is one of resilience and agility. That said, these are pretty trying times. And any advice that I give would probably sound trite to somebody who's trying to really deliver these services and make sure that they can keep delivering on their mission and values.

(33:47):
I hope that they're all thinking about scenario planning, worst case scenario, best case scenario. I imagine they're all going through this. I think it's time to start thinking about diversifying relationships. Who in the community or across the health system have you not thought about working before but might have an in with this administration, with folks that are making decisions? Think about those partnerships and those relationships that maybe you hadn't thought about before. Be really strategic about your engagement, including coalition building, including that patient voice, the consumer voice, the community voice.

(34:21):
And then I think it's also, you're probably trying to lead in a time of significant change, is a time to make sure that you're thinking about the talent that you have on your team. And make sure that you're doing as much as you can to support them and working with them to ensure that morale doesn't go underwater and that people still realize that what they're doing is really important.

Eric Hargan (34:44):
My overall message is, don't panic. Which is take a look at what's being proposed, what's actually being proposed, not what you're reading in these endless streams of information that come off the internet. There's an awful lot of opinions going around. They far, far outweigh the number of facts. But when those facts are there, engage with them. As Liz said, engage with them thoughtfully. Think of whoever else might be on your side on these things. And how the goals of your organization can be in tandem in some ways and you can engage thoughtfully with the administration or Congress on what they're proposing.

(35:21):
We're probably in a little bit more than we are used to, these first a hundred days. But again, it is the first hundred days. And that's why, taking a deep breath, not giving in to panic or despair about these things. But let's see what's actually going on. Dig through that to the extent you can find it. And then act.

Rae Woods (35:40):
I love it. Liz, Eric, thank you so much for coming on Radio Advisory.

Eric Hargan (35:46):
Thank you.

Liz Fowler (35:47):
Thanks for the opportunity.

Rae Woods (35:51):
We focused a lot on this conversation on what's already happened and what we want you to do right now. But as you do that, as important as that is, we need to stay focused on what happens next and what you can do to be productive business leaders in this policy environment. And remember, as always, we're here to help.

Abby Burns (36:16):
Here's what our Advisory Board research team is watching this week. As Rae mentioned, we recorded this episode just hours after the House Energy and Commerce Committee released a proposed bill that would reduce Federal Medicaid spending by more than $600 billion in the next 10 years through a combination of reducing Medicaid eligibility and funding.

(36:35):
For weeks healthcare leaders and we at Radio Advisory have been anticipating exactly which cuts would make it into this bill after Congress in April ordered the Energy and Commerce Committee, which has sole jurisdiction over Medicaid and shared jurisdiction over Medicare, to find $880 billion worth of spending reduction over the next 10 years.

(36:55):
As Liz and Eric said, the exact terms and provisions of the bill aren't set in stone. And in fact the House Budget Committee on Friday rejected the initial proposal. But the directionality is clear, so regardless of how the technicalities will shake out across this reconciliation period, we need to center ourselves on what this means for the healthcare safety net.

(37:16):
Here's what you need to know. First, it signals stricter control around Medicaid eligibility. This includes mandating work requirements for certain adults starting in 2029. But it also introduces a lot more administrative hoops to monitor and maintain eligibility. Which means it could be easier to dis-enroll eligible beneficiaries on account of administrative errors. This bill would also reduce the federal match for Medicaid expansion to states that use public funds to provide coverage to undocumented adults or children.

(37:47):
All told, it's estimated that the current proposal would cause 8.6 million people to lose insurance coverage. After more than a decade of efforts to increase access to coverage this marks perhaps the first widespread decrease in the national insured rate. That means more uninsured patient volumes. It could also mean more care avoidance. In other words, patients waiting to seek care until their needs are more complex, more acute, and ultimately more expensive.

(38:15):
In addition to these indirect impacts, there are also some direct impacts to provider margins. On the plus side, this bill pushes reductions in payments down the road to take effect in 2029. But it also proposes reductions to two funding mechanisms that help providers make up for the Medicaid shortfall, state directed payments and provider taxes. And those changes would go into effect immediately.

(38:41):
This is just a sample of the provisions. The bill also includes measures regarding gender-affirming care, staffing ratios at post-acute facilities, PBM reform, provider enrollment, ACA enrollment and eligibility, and abortion and family planning.

(38:56):
One of the things Liz and Eric emphasized in their conversation with Rae is just how important it is to speak up about how proposed policy changes will impact you, including your ability to contribute to our collective safety net.

(39:10):
We're recording this policy update on Friday afternoon, May 16th, so it's very possible that we've seen more movement in the proposed bill since then. We'll be continuing to monitor changes and what they mean for you and for the industry more broadly.

Rae Woods (39:48):
If you like Radio Advisory, please share it with your networks, subscribe wherever you get your podcasts and leave a rating and a review. Radio Advisory is a production of Advisory Board. This episode was produced by me, Rae Woods, as well as Abby Burns, Chloe Bakst, and Atticus Raasch. The episode was edited by Katy Anderson with technical support provided by Dan Tayag, Chris Phelps and Joe Shrum. Additional support was provided by Leanne Elston and Erin Collins. We'll see you next week.