HIMSS 2017: Ex-HHS Secretary Mike Leavitt predicts ‘less disruptive’ ACA repeal, survival of CMMI

The era of President Donald Trump in healthcare policy may not go as predicted, either for Republicans in Congress or Democrats critical of his pick for HHS Secretary, according to the last Republican who ran the agency, Mike Leavitt.

The former governor of Utah and member of President George W. Bush’s Cabinet now chairs a consulting firm focused on navigating the regulatory landscape of the Affordable Care Act (ACA) and the transition to value-based care. He sat down with HealthExec at HIMSS 2017 in Orlando to discuss where he sees government policy, alternative payment models and health IT going in the Trump-Tom Price era.

HealthExec: How worried should a hospital or health system CEO be about the conversations of repealing and replacing the ACA?

Leavitt: There are going to be changes, but they’re likely won’t be as fast as people worry and they’ll be time to respond to them. I think there will be fewer changes than people envision. I think that what does happen will generally be perceived as improvements.

Why do I say that? This is going to require a bipartisan approach because [Republicans] have 52 votes in the Senate. It requires 60 to do much of what they’ve said they want to do. The Republicans have committed that there not going to do this on a strictly partisan basis. They’ve also indicated they’re not going to leave 20 million people stranded, and frankly, many of things that are in the ACA, with minor adjustments, become ideologically acceptable to them.

So I think there’ll be changes. I just think it’ll take longer, and they’ll be less disruptive than people think.

As someone who both ran HHS and crafted state budgets for a decade as a governor, would a Medicaid block grant be seen as a burden or a blessing for state-level health spending?

I’ve been through this conversation three times as governor and as HHS Secretary. Block grant is a bit like the words “repeal and replace.” They’re big phrases that are big slogans that mean many things to different people.

Block grant to governors means “just give me a lot of flexibility.” What it doesn’t mean to most governors is “I don’t want to be the backstop for when society has bigger needs. I want to have a partner then, and you’re going to make me do this, federal government, you better be there to help me do it at the same time.” Republican and Democrat will not want a situation where they take a limited amount of money, but they still have the entitlement that they have to deal with. That conversation perpetually gets more complex as it goes along.

I think there will be more state flexibility. I think there will be some way for the states who haven’t expanded to be able to share in government money that they haven’t taken through the ACA. I think they’ll ultimately they’ll have to find a way to let the existing Republican and Democrat governors who have expanded Medicaid to continue to meet that obligation. They require them to make some hard decisions with this new flexibility, but the math becomes very complicated when you get into the specifics of this and get beyond just the term “block grant.”

Does that flexibility inevitably lead to reducing enrollment in Medicaid?

Flexibility means you get to make decisions about whether or not you spend more money, change eligibility standards, change benefits or align them differently. It could be any combination. There will be states who use their flexibility to do none of them. There’ll be others who use their flexibility to do some of them.

The new head of HHS, Tom Price, has been critical of things like mandatory bundles and Centers for Medicare and Medicaid Innovation (CMMI) initiatives. Do you believe he’ll be a friend to value-based care?

When you become HHS Secretary, you realize you have your hands on the wheel of the largest payer in the world, but soon you realize yours aren’t the only hands on that wheel. He’ll be a very important voice, but he’s not the only voice, and his perspective will change when he’s sitting a different place.

For example, CMMI. Republicans generally were critics of CMMI. They said it was too much money and too much power. Well, the money is likely gone now, but the power remains, and now it’s in Republican hands. Power looks different than when it’s in Democratic hands, and I think he’ll find that the CMMI authority gives him a lot of flexibility to give states what they want, and they will not be doing away with CMMI.

I think [Price] has been supportive of MACRA (the Medicare Access and CHIP Reauthorization Act). He’ll find out that a lot of the analytics that have to be in place for MACRA to work come from CMMI. So again, I think we may see changes in how CMMI works, but I don’t think we’ll see it go away.

I think you can also look at what the Republicans were able to agree upon before the election. They didn’t agree to do away with CMMI, so this is one of those [things] that fits in with the category of “repeal and replace means a lot of things to a lot of different people." In the final analysis, I don’t think CMMI will go without change, but I don’t think it’ll be eliminated.

Speaking of phrases which mean a lot of different things to a lot of different people—if a president asked you to craft policy around the principle of "insurance for everybody," what would it look like? Is it even possible?

It’s possible, and I believe there’s a widely-held aspiration that Donald Trump was expressing. I think Americans would like to have where everyone had access to an affordable insurance policy.

There’s a long-held debate about what access means and what universal coverage means. I think we’ll see a series of policies roll out that will continue to make access available and more individual responsibility and less government responsibility for health insurance.

I’m not sure if that’s what you’re asking. It’s a complicated question, but I think it’s a widely-held aspiration. Republicans and Democrats want that to occur, the difference is their view on what role the government ought to play in it.

On the subject of health IT, since we are at HIMSS, what’s caught your attention recently within the IT space?

I’m impressed about the amount of emphasis that’s being given to consumer access to data and putting consumers in the middle of the care continuum. In the past, consumers have gone to healthcare providers who have made a lot of the decisions and had all the information. We’re seeing a direct movement now toward consumers having information and being encouraged to be a part of the conversation.

Do you think the industry and its products have progressed enough to make good use of all that data?

I don’t think you can look at the transformation of healthcare as being a job for one president or one Congress. This is a 40-year process. I do think we’re in a period of change that will be about 40 years, and we’re about 25 years into it. There’s still lots of competencies that we don’t have. It’s hard to transform an industry because you have to get down to very basic things and how they function and people have to learn new ways of doing things, and that takes time, but I do think we’re making progress.

I think in the next four years, we’ll see more iterative change. We’ll see more competencies develop. We’ll see a continuation of trends away from fee-for-service payment and more toward value. I think that means costs improve over time and I think it means quality improves, and that, in my view, is the definition of progress. If you can have more people insured, have higher quality and lower costs, you’ve been extraordinarily successful. No one’s been able to accomplish that perfectly, but that continues to be the objective.