Episode 97 Recap – Looking at Healthcare amidst the presidential election

The print version of the FLATLINING Podcast

Quick Recap

In this episode, Matthew and Ron discussed the role of healthcare in the upcoming presidential election, focusing on the potential implications of Medicare drug pricing negotiation and changes to the Affordable Care Act. They also explored the challenges of cutting costs within the healthcare sector.

Presidential Election

Given other issues like the economy and inflation, Matthew suggested that healthcare might not be a top priority for voters. Ron agreed, stating that while specific healthcare issues like drug prices or abortion could come up, healthcare overall was unlikely to be a major campaign issue. Ron said, “I wouldn’t be surprised if there is a presidential debate and there aren’t any questions about healthcare.” Ron doesn’t think there is a high level of interest in healthcare right now and finds this a little surprising with some of the upcoming “cliffs.” He pointed to the Medicare trust fund which, according to Ron will become insolvent in 2036 or more locally, the North Carolina state employees' health plan where the treasurer said it may not be able to pay its bills at the rate it is losing money. Matthew suggested this challenge may have been partly due to a pricing project he launched before the COVID-19 pandemic. Ron said that issues like immigration, crime, and inflation were more likely to feature prominently in Republican campaigns and predicted that regardless of which administration occupies the White House, they would likely ignore healthcare issues until faced with Medicare insolvency, saying these issues are hard to tackle and are often only addressed when they become serious.

Concerns Over Medicare Drug Pricing Negotiation

The team then discussed the potential issues with the Medicare drug price negotiation. As an economist, Ron expressed concerns about price controls, arguing that they could lead to unintended consequences such as limiting drug development or forcing the drug companies to do something else. “There is nothing that says these companies have to sell their product to Medicare,” he said. Ron asked rhetorically about what happens when a drug company creates a new amazing drug and decides not to sell it to Medicare, you end up with seniors not getting a drug they need. He acknowledged the need for a solution but noted the complexity of the issue, and in an election year, the solution doesn’t make for a good soundbite. Matthew agreed, highlighting the lack of discussion about healthcare policy. He cited the recent insulin price cap legislation and pointed out that drug companies had already announced similar measures before the legislation was enacted.

Discussing ACA Changes and Medicare for All

The conversation shifted to potential changes to the Affordable Care Act (ACA) and the political implications of advocating for Medicare for all. Ron suggested that substantial changes to the ACA would be difficult, especially with a divided Congress. Matthew noted that Vice President Harris's views on Medicare for All seemed to have shifted since her Democratic primary run in the 2020 cycle. At that time she backed a Medicare for All approach and then made some adjustments he said.  Ron thought that this was likely a strategic move to try and steal a little “wind” out of Bernie Sanders’s momentum in the early days of that race. Then Senator Harris dropped out of the primary on December 3, 2019, before any votes were cast. Both agreed that voters are more focused on the economy than healthcare issues this go around.  

The Challenge of Cutting Costs in Healthcare

Matthew brought up the recent appearance of former Cigna executive Wendell Potter who explained that when dollars get moved around in the healthcare system, somebody screams because you are taking it from one to give to someone else. Ron added that each year there is about $4 trillion being spent inside the healthcare system.  He said if you could cut 10% of that, that is $400 billion, money that is now no longer somebody’s revenue.  He explained that one man’s revenue is another man’s expense. “There are whole industries that are not that size,” he said. Regardless of who that is, whether it be a pharmacy, hospital, or insurance company, they’re going to want to hold on to that revenue and that’s what makes this extremely difficult, he said.

Future Secretary of Health and Human Services (HHS)

The team wrapped up with some closing thoughts on the current HHS boss and future picks for the position. Matthew said regardless of who is elected he hopes they pick a competent secretary. He said not that he doesn’t think the former Attorney General of California Xavier Becerra isn’t intelligent, but healthcare is not his specialty. Matthew doesn’t think he knows how to run the other entities under HHS.  Ron agreed and compared his selection, to putting himself in charge of the Nuclear Regulatory Commission, something he joked that he is definitely not qualified for.  

The FLATLINING Podcast team will continue to watch the news and events in the healthcare space. If you liked this episode, be sure to subscribe and catch the next conversation at the intersection of healthcare business, politics, and policy. You can find the FLATLINING Podcast wherever you listen to other great podcasts.