March 7, 2025 • 20 mins
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Health Affairs' Jeff Byers welcomes Rebecca Pifer of Healthcare Dive back to the program to discuss the 2025 budget resolution that passed the House on its way to the Senate, the current administration's health care agenda, and what ripple effects the current actions of DOGE are having on the health care workforce.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Jeff Byers (00:39):
Hello, and welcome to Health Affairs This Week. I'm
your host, Jeff Byers. We'rerecording on 02/26/2025. As a
heads up, we will have releaseda new issue for our March 2025
issue, that comes out by thetime this episode publishes. The
issue's main topics arepharmaceuticals, private equity,
child health, and more.
(01:00):
Check out the link in the shownotes. One of the papers in that
issue will be doing a livetaping for a health policy on
March 12. Rob Lott will chatwith Yasha Sweeney Singh on her
upcoming paper in the Marchissue on private equity's effect
on health care staffing. So,please join us to ask some good
questions for Yasha Sweeney andto Heckel Rob. But today, I'm
(01:23):
joined by Rebecca Pfeiffer fromHealthCareDive to talk about
what's been happening inWashington DC of late.
Rebecca, welcome back to thepub.
Rebecca Pifer (01:32):
Thanks for having me.
Jeff Byers (01:34):
Yeah. So as a quick reminder, we're recording this
at the February, and thisepisode will go live on March 7.
So let's, acknowledge upfrontthat maybe some of this
information will be a little bitout of date by the time you, the
listener, hears this. But,Becca, you have boots on the
ground in Washington, DC. Youknow, what to sound like a
(01:55):
middle aged man asking, ayounger person, what's up?
What are their vibes like in DC?
Rebecca Pifer (02:02):
Great question. Vibes. Well, to your point about
I'm glad you mentioned thatwe're recording this a week
ahead of when it's going to bepublished because things in DC
have been moving incrediblyquickly, obviously, under the
new administration. So I thinkthere's a definite sense of
uncertainty. There's been anumber of layoffs that have
(02:24):
affected a lot of people in thecity and outside of it.
So I think vibes are somewhat,uncertain would probably be the
best word.
Jeff Byers (02:33):
One thing that isn't uncertain is, yesterday, the
house passed the budgetresolution, and that has some
potential Medicaid implications.Can you give us a sense of what
happened or what's going downwith the budget resolution
currently?
Rebecca Pifer (02:50):
Yeah. So last night, as you mentioned, the
house passed the budgetresolution. So basically, if
people aren't as familiar withthat, it's essentially a wish
list for spending from the theHouse Republicans. Right? So it
passed a very, very narrow vote.
I think it was two seventeen insupport and two fifteen against.
(03:13):
Now it will move on to thesenate. The senate could
potentially negotiate somechanges to it, but the house and
the senate need to get thelanguage exactly the same
between their two bodies before,they can move on to what's
called the reconciliationprocess, which then allows them
to actually figure out how we'llput this policy blueprint in
place. So, basically, the budgetcalls for it wants to reduce
(03:37):
spending by $1,500,000,000,000,and most of this is to pay for
the president's tax plan. A lotof that could come from health
care.
So the budget asked the energyand commerce committee, which
has oversight over major federalhealth care programs, to cut
$880,000,000,000 in spending.And since, the president and top
(03:58):
Republicans have promised not totouch Medicare, which is the
major federal insurance programfor, for seniors and some other
individuals, Most of that isgonna come from Medicaid.
Jeff Byers (04:09):
Just, so, again, this will be published in on
March 7. Do you think there'llbe any any movement from the
senate to get to thatresolution, or where might we be
when this actually drops?
Rebecca Pifer (04:19):
That is a really good question. I think it really
just depends on whether or notthe senate wants to try to push
through the budget resolution asit stands without changing
anything or whether they wannachange anything. As I mentioned,
the house and the senate need tohave precisely the same language
before the process can moveforward, and speaker Mike
(04:40):
Johnson had a difficult timegetting it through the house.
There are conflicting wings ofthe Republican party. Some
people think that, they shouldcut more spending.
The tax cuts are going to costmore than the savings that are
outlined in the budget. So someRepublicans think that the
government should try to cutmore, and then some moderates
want less steep cuts. So that'smaking it sort of difficult to
(05:02):
coalesce around a plan. And thatdebate will also be happening in
the senate. You know, somepeople in the senate wanna pull
back on some of the spendingcuts.
Some people might potentiallywanna remove the provision to
raise the debt ceiling. Therecould be movement on it by next
week. There could be not. It'sreally tough to say.
Jeff Byers (05:21):
Yeah. So it sounds like we're setting ourselves up
for a potential, another anotherappearance, to discuss what
actually happens.
Rebecca Pifer (05:28):
Definitely happy to. And it's also I feel like
it's worth noting that when thehouse and the senate when they
arrive at the same point on thebudget resolution, it's going to
be many more months before weget to the actual package that
will put these policies inplace. So we're really just at
the the very start of a verylong process.
Jeff Byers (05:48):
You know, and then stepping back, generally, from
as far as we can tell, what dowe know about, the Trump's
administration health careagenda?
Rebecca Pifer (05:56):
Yeah. It's a very, very good question. I
think a lot is up in the air.There are certain things that we
know based off of Trump's firstterm that he's likely to
probably continue, but,obviously, a lot in the
environment has changed, sincethen. There's also uncertainty
from the people that, thepresident has selected for top
(06:19):
health care roles, what theiragendas are.
And then as we've talked about,Republicans have very tight
margins in Congress, so there'sa lot of complications with what
they could actually get done.But for maybe just starting with
health care services, thepresident and Republicans,
generally, they want to curtailabortions, and they want to
promote IVF and other fertilitytreatments. The president
(06:41):
recently signed an executiveorder around that, and there's
sort of a a real conservativefocus on incentivizing more
Americans to start families. Healso just yesterday signed an
executive order directingagencies to crack down on
hospitals and insurers thataren't transparently publishing
their prices, which was, youknow, a policy he had in his
(07:01):
first term. And the goal is tomake it more easy for consumers
to shop between health careservices in the instances when
that's possible.
So that sort of might suggestthat, his administration is
going to sort of renew its focuson price transparency that we
saw in his first term. When itcomes to major federal health
(07:22):
care programs, I think theadministration is viewed as a
net negative for the AffordableCare Act and for Medicaid, as
we've already discussed with,you know, potential big cuts to
Medicaid and the budget there.And then, it's viewed a little
bit more positively for Medicareand for for privatized Medicare
(07:42):
Advantage plans. So happy to getinto some more specifics there,
but that's probably the a highlevel view.
Jeff Byers (07:48):
Yeah. No. That's great. I guess another thing
that I I didn't hear youmention, but also maybe worth
noting, have you heard anythingfrom your reporting about the
agenda on, like, the IRA or orMedicare drug prices or drug
pricing in general, not justMedicare?
Rebecca Pifer (08:06):
For sure. So I don't cover pharmaceuticals as
much. I've done a lot of workwith pharmacy benefit managers,
but I'm not as familiar with theadministration's stance towards
the IRA. We do know that hehasn't moved to roll back the
negotiation process at all inhis early days, which was
something that people thought hemight do. So far, it seems like
(08:27):
he's continuing Medicare'sability to negotiate drug
pricing.
So that's potentially a a goodsign for the IRA there. But,
unfortunately, yeah, I'm not asfamiliar with the specifics of
that. That's not really in mycoverage zone.
Jeff Byers (08:39):
Fair enough. And, thanks for that. And then just,
again, acknowledging that,things are moving along at a at
a somewhat quick pace, for newsbefore we publish this. I read a
report from I don't know if thiswas on HealthcareDive or any of
the IndustryDive properties,but, I'm reading from Axios that
(08:59):
and I quote for the headlinefrom today, February 26, White
House orders agencies to preparefor large scale firings. So
there's, preparations andalready have been some layoffs
in the federal space.
Could you talk about thoselayoffs in the health care
space?
Rebecca Pifer (09:15):
Definitely. Yeah. So, the Trump administration
mostly through the Department ofGovernmental Efficiency or DOGE,
which is essentially a executivecommittee that's that's helping
with these cuts led by ElonMusk. They have moved really,
really quickly to reduce thesize of the federal workforce.
So there's no formal tally fromthe government about how many
(09:38):
workers have resigned, or beenlet go, since the Trump
administration assumed office.
It's certainly in the tens ofthousands, and it could be
significantly higher. So todate, as I mentioned, this
mostly has taken place throughtwo avenues. So, a large number
of federal employees wereoffered financial incentives,
(09:59):
like, months of paid leave ifthey left their jobs early. And
then there's also been layoffsof probationary employees, which
are essentially employees thatare new to their positions.
They're not on probation for,poor job performance or anything
like that.
They're just newer to theirpositions, including people
(10:20):
who've recently been promoted.So they just don't have the same
protections as career staff, sothey can be let go more easily.
And, yeah, as you mentioned,Doge is turning more now to
formal layoffs in sort of thenext phase of its plan to shrink
the federal workforce. Sobecause, it's a formal process,
(10:40):
it can take longer. They have tojustify why the employee is
being fired, and then theemployee can appeal the
decision.
But that's sort of the nextphase. So these cuts have been
really, really broad. They'vebeen across a range of agencies.
But in health care, they've beenyeah. People have been let go
from a slew of HHS agencies likethe CDC and the CMS and the FDA
(11:01):
and the NIH.
So they're they're really acrossthe board.
Jeff Byers (11:06):
Yeah. And then, again, my apologies for quoting
Axios to an industry dive,employee. But That's
Rebecca Pifer (11:13):
okay. Axios does great work.
Jeff Byers (11:15):
That's right. The same Axios article from Emily
Peck says there are about2,300,000 federal employees, not
including the postal service,just to have some context for
those numbers there. And thenkind of going back to the policy
aspect of it, Medicaid andMedicare are both politically
sensitive programs. What are youhearing from sources about the
(11:35):
future of these programs? Youmentioned in the sentiment
Medicaid is a net negative orMedicare and Medicare Advantage
specifically is a net positive.
What are you hearing? What mightwe see?
Rebecca Pifer (11:46):
Maybe starting with Medicaid just because it
seems like there's going to bepotentially more near term
action. So Medicaid is the it'sthe insurance program for low
income people in The UnitedStates, and Medicaid really
expanded over the pandemic. Andsince then, it's contracted a
little bit because ofeligibility checks that states
(12:07):
have had to do. But right now,Medicaid and the children's
health insurance program, theycover about 80,000,000
Americans. So it's major, major,major program.
And Republicans right now arelikely going to have to turn to
Medicaid and cut Medicaid toreach the the targeted cuts that
they wanna reach. Right? Cuts toMedicaid could take a lot of
(12:29):
different forms, which I'm alsohappy to go into. It gets a
little wonky. So I can I canavoid it if that's that's less
of an interest?
But pretty much everyone thinksthat Republicans are going to
try to cut Medicaid this yearbecause the budget essentially
forces them to, the budgetproposal. And cuts to Medicaid
impact a lot of differentactors. Reducing federal
(12:54):
Medicaid spending essentiallyputs the burden on states to
either increase their spendingto keep services and eligibility
the same, or states, which arealready really stressed to cover
their share of Medicaidspending, will have to cut
eligibility or services. Andthat's assuming that the federal
government doesn't decide to dosomething like work
(13:14):
requirements, which would cuteligibility, on its own. So
depending on what the federalgovernment and what the Trump
administration decides to do, acertain number of people are are
going to lose Medicaid coveragein The United States, which, you
know, has obviously a majorimpact on the beneficiaries
themselves, but also has a verymajor downstream impact on
(13:36):
health care providers.
Providers already say they'renot paid enough by Medicaid to
cover the cost of patient'scare. And then if a greater
share of those patients areuninsured, that raises the
burden of uncompensated orunpaid care on providers,
especially in low income areaswhere there's a greater share of
Medicaid individuals and thatcould, you know, pressure
providers financially,potentially put more providers
(13:57):
out of business, and then itwill also lower funding for
insurers that contract withstates and managed care
programs. So very far reachingimpact of of these potential
cuts on Medicaid depending onwhat the federal government
decides to do here. Mhmm. OnMedicare Yeah.
Jeff Byers (14:12):
Real quick on that. Not to bait and switch on
listeners, but, failed affairsis hosting a insider only event
on March 19, specifically onMedicaid's uncertain future. So
we have some great speakerslined up for that, including
Jennifer Talbert from KFF andAditi Fasan from Children's
(14:33):
Hospital of Pennsylvania andmore. We'll put the links in the
show notes so that if you're notan insider, sign up to be an
insider, and you can also watchall of our past events. But
yeah.
Rebecca Pifer (14:43):
Good pitch. You know?
Jeff Byers (14:44):
Doing a quick plug.
Rebecca Pifer (14:45):
No. No. No. It's important. It's important.
I totally get it. No worries. Soyeah. Then quickly on on
Medicare. Medicare is it'spolitically relatively
impervious.
It's very difficult to touch.Seniors are such a powerful
voting block. So the Trumpadministration has promised it's
not going to touch Medicare. Sono cuts coming from Medicare.
(15:08):
And the big question withMedicare is what's going to
happen to Medicare AdvantagePlans.
So Medicare Advantage Plans,they're basically privatized
Medicare plans where privateinsurers contract with the
federal government to provideMedicare coverage to seniors.
And met MA plans have grownreally significantly, over the
(15:29):
past decade, and that thatgrowth is slowing a little bit
according to the most recentenrollment data we have. But
there's a lot of controversyover Medicare Advantage plans.
They can restrict benefits in away that traditional Medicare
plans can't. So Congress hasbeen more skeptical of the plans
recently.
The Biden administrationpromulgated some regulations to
(15:51):
try to cut back on overpaymentsto the plans, and that's sort of
the environment that plans arein, at the outside of the Trump
administration. And then theTrump administration could be
better for plans because theTrump administration could raise
reimbursement to them.Reimbursement rates were a
little more positive under theTrump administration than they
were under the Bidenadministration. But at the same
(16:12):
time, plans are more there'sperhaps more scrutiny on the
plans now than there was fouryears ago. So another area where
potentially it's a little trickyto say precisely what's going to
happen, but net net, the Trumpadministration is viewed as as
friendlier to the MedicareAdvantage industry than the
Biden administration was.
Jeff Byers (16:31):
So kinda transitioning then, you know,
Rebecca, thanks again forjoining us on Health Affairs
this week. Always a pleasure tohave you here. Hopefully, we can
have you back shortly. But kindof transitioning to, like, what
are you watching in the, healthcare business and politics space
this year?
Rebecca Pifer (16:45):
Yeah, a lot. A lot. So definitely Medicaid
cuts, what shape they take, ifany, during the reconciliation
process. Same as well. We didn'twe haven't really talked about
the Affordable Care Act as much,but there's, very generous
subsidies for ACA plans thathave caused record enrollment in
(17:08):
ACA plans at the moment.
And, those subsidies arescheduled to expire at the end
of the year if congress doesn'tact to preserve them. So
definitely keeping an eye onthat because that has huge
implications on both the, youknow, 24,000,000 people who have
ACA plans and then also theinsurers that offer that
coverage, keeping an eye on boththose things. And then I'm
(17:28):
really interested in the FTC andthe DOJ and how they're gonna
operate under Trump. That'sthat's another area sort of
where potentially peep peoplehave made a really different
prediction based off Trump'sfirst term versus now about what
they'll do. Like, there's a areally interesting ideological
split among Republicans rightnow about antitrust efforts and
(17:51):
and how exactly they shouldcombat, or should they combat,
really, consolidation and and mand a.
And recently, Trump's FTC chair,Andrew Ferguson, elected to keep
stricter merger guidelines thatwere put in place in 2023. So
that was sort of a surprise forsome people in the industry. So,
(18:13):
definitely interested in in, howthe FTC and how the DOJ under
the Trump administration willoperate and what that means for,
for the companies I cover. Andthen the other thing that we
haven't really talked about isPBMs, pharmacy benefit managers,
what stance regulators in theTrump administration will take
towards them. You know, theywere major PBMs, Caremark and
(18:34):
OptimRx and Express Scripts.
They were sort of targeted, intheir view, unfairly, but they
were sort of targeted by theBiden administration for and by
some, you know, some lawmakersfor allegedly contributing to
higher drug costs and for whattheir position in the
pharmaceutical supply chain,what effect that had on drug
costs. And then Trump last yearsaid he plans to, like, take
(18:57):
down the middlemen, but,obviously, we haven't seen
anything concrete from hisadministration yet on that. So
that is also a big area ofinterest for me.
Jeff Byers (19:05):
And for those of you that are interested in, peer
reviewed research and evidencebased on, PBMs and, Affordable
Care Act and antitrust, pleasesubscribe to, the Health Affairs
Journal. If you're wanting latesome late breaking news in those
areas as well, you can check outhealth care diet for more
coverage on that. Rebecca Piper,thank you from joining us today.
(19:29):
Is there anything you wannapromote before we we send, the
listeners on their way?
Rebecca Pifer (19:33):
No. Thank you so much for having me. I guess,
just to add on quickly to whatyou said, subscribe to
HealthCareDive, if y'all haven'tyet. We have a daily newsletter
that goes out. We cover avariety of of hard news.
We do a lot of analysis into thetrends that are shaping the
sector and, totally free to signup. So, yeah, that's it for me,
and thanks for having me, Jeff.
Jeff Byers (19:54):
Rebecca Piper, thanks again. To you, the
listener, if you enjoyed thisepisode, please share it with a
friend, leave a review, all ofthat good stuff, and we will see
you next week.
Hello, and welcome to Health Affairs This Week. I'm
your host, Jeff Byers. We'rerecording on 02/26/2025. As a
heads up, we will have releaseda new issue for our March 2025
issue, that comes out by thetime this episode publishes. The
issue's main topics arepharmaceuticals, private equity,
child health, and more.
(01:00):
Check out the link in the shownotes. One of the papers in that
issue will be doing a livetaping for a health policy on
March 12. Rob Lott will chatwith Yasha Sweeney Singh on her
upcoming paper in the Marchissue on private equity's effect
on health care staffing. So,please join us to ask some good
questions for Yasha Sweeney andto Heckel Rob. But today, I'm
(01:23):
joined by Rebecca Pfeiffer fromHealthCareDive to talk about
what's been happening inWashington DC of late.
Rebecca, welcome back to thepub.
Rebecca Pifer (01:32):
Thanks for having me.
Jeff Byers (01:34):
Yeah. So as a quick reminder, we're recording this
at the February, and thisepisode will go live on March 7.
So let's, acknowledge upfrontthat maybe some of this
information will be a little bitout of date by the time you, the
listener, hears this. But,Becca, you have boots on the
ground in Washington, DC. Youknow, what to sound like a
(01:55):
middle aged man asking, ayounger person, what's up?
What are their vibes like in DC?
Rebecca Pifer (02:02):
Great question. Vibes. Well, to your point about
I'm glad you mentioned thatwe're recording this a week
ahead of when it's going to bepublished because things in DC
have been moving incrediblyquickly, obviously, under the
new administration. So I thinkthere's a definite sense of
uncertainty. There's been anumber of layoffs that have
(02:24):
affected a lot of people in thecity and outside of it.
So I think vibes are somewhat,uncertain would probably be the
best word.
Jeff Byers (02:33):
One thing that isn't uncertain is, yesterday, the
house passed the budgetresolution, and that has some
potential Medicaid implications.Can you give us a sense of what
happened or what's going downwith the budget resolution
currently?
Rebecca Pifer (02:50):
Yeah. So last night, as you mentioned, the
house passed the budgetresolution. So basically, if
people aren't as familiar withthat, it's essentially a wish
list for spending from the theHouse Republicans. Right? So it
passed a very, very narrow vote.
I think it was two seventeen insupport and two fifteen against.
(03:13):
Now it will move on to thesenate. The senate could
potentially negotiate somechanges to it, but the house and
the senate need to get thelanguage exactly the same
between their two bodies before,they can move on to what's
called the reconciliationprocess, which then allows them
to actually figure out how we'llput this policy blueprint in
place. So, basically, the budgetcalls for it wants to reduce
(03:37):
spending by $1,500,000,000,000,and most of this is to pay for
the president's tax plan. A lotof that could come from health
care.
So the budget asked the energyand commerce committee, which
has oversight over major federalhealth care programs, to cut
$880,000,000,000 in spending.And since, the president and top
(03:58):
Republicans have promised not totouch Medicare, which is the
major federal insurance programfor, for seniors and some other
individuals, Most of that isgonna come from Medicaid.
Jeff Byers (04:09):
Just, so, again, this will be published in on
March 7. Do you think there'llbe any any movement from the
senate to get to thatresolution, or where might we be
when this actually drops?
Rebecca Pifer (04:19):
That is a really good question. I think it really
just depends on whether or notthe senate wants to try to push
through the budget resolution asit stands without changing
anything or whether they wannachange anything. As I mentioned,
the house and the senate need tohave precisely the same language
before the process can moveforward, and speaker Mike
(04:40):
Johnson had a difficult timegetting it through the house.
There are conflicting wings ofthe Republican party. Some
people think that, they shouldcut more spending.
The tax cuts are going to costmore than the savings that are
outlined in the budget. So someRepublicans think that the
government should try to cutmore, and then some moderates
want less steep cuts. So that'smaking it sort of difficult to
(05:02):
coalesce around a plan. And thatdebate will also be happening in
the senate. You know, somepeople in the senate wanna pull
back on some of the spendingcuts.
Some people might potentiallywanna remove the provision to
raise the debt ceiling. Therecould be movement on it by next
week. There could be not. It'sreally tough to say.
Jeff Byers (05:21):
Yeah. So it sounds like we're setting ourselves up
for a potential, another anotherappearance, to discuss what
actually happens.
Rebecca Pifer (05:28):
Definitely happy to. And it's also I feel like
it's worth noting that when thehouse and the senate when they
arrive at the same point on thebudget resolution, it's going to
be many more months before weget to the actual package that
will put these policies inplace. So we're really just at
the the very start of a verylong process.
Jeff Byers (05:48):
You know, and then stepping back, generally, from
as far as we can tell, what dowe know about, the Trump's
administration health careagenda?
Rebecca Pifer (05:56):
Yeah. It's a very, very good question. I
think a lot is up in the air.There are certain things that we
know based off of Trump's firstterm that he's likely to
probably continue, but,obviously, a lot in the
environment has changed, sincethen. There's also uncertainty
from the people that, thepresident has selected for top
(06:19):
health care roles, what theiragendas are.
And then as we've talked about,Republicans have very tight
margins in Congress, so there'sa lot of complications with what
they could actually get done.But for maybe just starting with
health care services, thepresident and Republicans,
generally, they want to curtailabortions, and they want to
promote IVF and other fertilitytreatments. The president
(06:41):
recently signed an executiveorder around that, and there's
sort of a a real conservativefocus on incentivizing more
Americans to start families. Healso just yesterday signed an
executive order directingagencies to crack down on
hospitals and insurers thataren't transparently publishing
their prices, which was, youknow, a policy he had in his
(07:01):
first term. And the goal is tomake it more easy for consumers
to shop between health careservices in the instances when
that's possible.
So that sort of might suggestthat, his administration is
going to sort of renew its focuson price transparency that we
saw in his first term. When itcomes to major federal health
(07:22):
care programs, I think theadministration is viewed as a
net negative for the AffordableCare Act and for Medicaid, as
we've already discussed with,you know, potential big cuts to
Medicaid and the budget there.And then, it's viewed a little
bit more positively for Medicareand for for privatized Medicare
(07:42):
Advantage plans. So happy to getinto some more specifics there,
but that's probably the a highlevel view.
Jeff Byers (07:48):
Yeah. No. That's great. I guess another thing
that I I didn't hear youmention, but also maybe worth
noting, have you heard anythingfrom your reporting about the
agenda on, like, the IRA or orMedicare drug prices or drug
pricing in general, not justMedicare?
Rebecca Pifer (08:06):
For sure. So I don't cover pharmaceuticals as
much. I've done a lot of workwith pharmacy benefit managers,
but I'm not as familiar with theadministration's stance towards
the IRA. We do know that hehasn't moved to roll back the
negotiation process at all inhis early days, which was
something that people thought hemight do. So far, it seems like
(08:27):
he's continuing Medicare'sability to negotiate drug
pricing.
So that's potentially a a goodsign for the IRA there. But,
unfortunately, yeah, I'm not asfamiliar with the specifics of
that. That's not really in mycoverage zone.
Jeff Byers (08:39):
Fair enough. And, thanks for that. And then just,
again, acknowledging that,things are moving along at a at
a somewhat quick pace, for newsbefore we publish this. I read a
report from I don't know if thiswas on HealthcareDive or any of
the IndustryDive properties,but, I'm reading from Axios that
(08:59):
and I quote for the headlinefrom today, February 26, White
House orders agencies to preparefor large scale firings. So
there's, preparations andalready have been some layoffs
in the federal space.
Could you talk about thoselayoffs in the health care
space?
Rebecca Pifer (09:15):
Definitely. Yeah. So, the Trump administration
mostly through the Department ofGovernmental Efficiency or DOGE,
which is essentially a executivecommittee that's that's helping
with these cuts led by ElonMusk. They have moved really,
really quickly to reduce thesize of the federal workforce.
So there's no formal tally fromthe government about how many
(09:38):
workers have resigned, or beenlet go, since the Trump
administration assumed office.
It's certainly in the tens ofthousands, and it could be
significantly higher. So todate, as I mentioned, this
mostly has taken place throughtwo avenues. So, a large number
of federal employees wereoffered financial incentives,
(09:59):
like, months of paid leave ifthey left their jobs early. And
then there's also been layoffsof probationary employees, which
are essentially employees thatare new to their positions.
They're not on probation for,poor job performance or anything
like that.
They're just newer to theirpositions, including people
(10:20):
who've recently been promoted.So they just don't have the same
protections as career staff, sothey can be let go more easily.
And, yeah, as you mentioned,Doge is turning more now to
formal layoffs in sort of thenext phase of its plan to shrink
the federal workforce. Sobecause, it's a formal process,
(10:40):
it can take longer. They have tojustify why the employee is
being fired, and then theemployee can appeal the
decision.
But that's sort of the nextphase. So these cuts have been
really, really broad. They'vebeen across a range of agencies.
But in health care, they've beenyeah. People have been let go
from a slew of HHS agencies likethe CDC and the CMS and the FDA
(11:01):
and the NIH.
So they're they're really acrossthe board.
Jeff Byers (11:06):
Yeah. And then, again, my apologies for quoting
Axios to an industry dive,employee. But That's
Rebecca Pifer (11:13):
okay. Axios does great work.
Jeff Byers (11:15):
That's right. The same Axios article from Emily
Peck says there are about2,300,000 federal employees, not
including the postal service,just to have some context for
those numbers there. And thenkind of going back to the policy
aspect of it, Medicaid andMedicare are both politically
sensitive programs. What are youhearing from sources about the
(11:35):
future of these programs? Youmentioned in the sentiment
Medicaid is a net negative orMedicare and Medicare Advantage
specifically is a net positive.
What are you hearing? What mightwe see?
Rebecca Pifer (11:46):
Maybe starting with Medicaid just because it
seems like there's going to bepotentially more near term
action. So Medicaid is the it'sthe insurance program for low
income people in The UnitedStates, and Medicaid really
expanded over the pandemic. Andsince then, it's contracted a
little bit because ofeligibility checks that states
(12:07):
have had to do. But right now,Medicaid and the children's
health insurance program, theycover about 80,000,000
Americans. So it's major, major,major program.
And Republicans right now arelikely going to have to turn to
Medicaid and cut Medicaid toreach the the targeted cuts that
they wanna reach. Right? Cuts toMedicaid could take a lot of
(12:29):
different forms, which I'm alsohappy to go into. It gets a
little wonky. So I can I canavoid it if that's that's less
of an interest?
But pretty much everyone thinksthat Republicans are going to
try to cut Medicaid this yearbecause the budget essentially
forces them to, the budgetproposal. And cuts to Medicaid
impact a lot of differentactors. Reducing federal
(12:54):
Medicaid spending essentiallyputs the burden on states to
either increase their spendingto keep services and eligibility
the same, or states, which arealready really stressed to cover
their share of Medicaidspending, will have to cut
eligibility or services. Andthat's assuming that the federal
government doesn't decide to dosomething like work
(13:14):
requirements, which would cuteligibility, on its own. So
depending on what the federalgovernment and what the Trump
administration decides to do, acertain number of people are are
going to lose Medicaid coveragein The United States, which, you
know, has obviously a majorimpact on the beneficiaries
themselves, but also has a verymajor downstream impact on
(13:36):
health care providers.
Providers already say they'renot paid enough by Medicaid to
cover the cost of patient'scare. And then if a greater
share of those patients areuninsured, that raises the
burden of uncompensated orunpaid care on providers,
especially in low income areaswhere there's a greater share of
Medicaid individuals and thatcould, you know, pressure
providers financially,potentially put more providers
(13:57):
out of business, and then itwill also lower funding for
insurers that contract withstates and managed care
programs. So very far reachingimpact of of these potential
cuts on Medicaid depending onwhat the federal government
decides to do here. Mhmm. OnMedicare Yeah.
Jeff Byers (14:12):
Real quick on that. Not to bait and switch on
listeners, but, failed affairsis hosting a insider only event
on March 19, specifically onMedicaid's uncertain future. So
we have some great speakerslined up for that, including
Jennifer Talbert from KFF andAditi Fasan from Children's
(14:33):
Hospital of Pennsylvania andmore. We'll put the links in the
show notes so that if you're notan insider, sign up to be an
insider, and you can also watchall of our past events. But
yeah.
Rebecca Pifer (14:43):
Good pitch. You know?
Jeff Byers (14:44):
Doing a quick plug.
Rebecca Pifer (14:45):
No. No. No. It's important. It's important.
I totally get it. No worries. Soyeah. Then quickly on on
Medicare. Medicare is it'spolitically relatively
impervious.
It's very difficult to touch.Seniors are such a powerful
voting block. So the Trumpadministration has promised it's
not going to touch Medicare. Sono cuts coming from Medicare.
(15:08):
And the big question withMedicare is what's going to
happen to Medicare AdvantagePlans.
So Medicare Advantage Plans,they're basically privatized
Medicare plans where privateinsurers contract with the
federal government to provideMedicare coverage to seniors.
And met MA plans have grownreally significantly, over the
(15:29):
past decade, and that thatgrowth is slowing a little bit
according to the most recentenrollment data we have. But
there's a lot of controversyover Medicare Advantage plans.
They can restrict benefits in away that traditional Medicare
plans can't. So Congress hasbeen more skeptical of the plans
recently.
The Biden administrationpromulgated some regulations to
(15:51):
try to cut back on overpaymentsto the plans, and that's sort of
the environment that plans arein, at the outside of the Trump
administration. And then theTrump administration could be
better for plans because theTrump administration could raise
reimbursement to them.Reimbursement rates were a
little more positive under theTrump administration than they
were under the Bidenadministration. But at the same
(16:12):
time, plans are more there'sperhaps more scrutiny on the
plans now than there was fouryears ago. So another area where
potentially it's a little trickyto say precisely what's going to
happen, but net net, the Trumpadministration is viewed as as
friendlier to the MedicareAdvantage industry than the
Biden administration was.
Jeff Byers (16:31):
So kinda transitioning then, you know,
Rebecca, thanks again forjoining us on Health Affairs
this week. Always a pleasure tohave you here. Hopefully, we can
have you back shortly. But kindof transitioning to, like, what
are you watching in the, healthcare business and politics space
this year?
Rebecca Pifer (16:45):
Yeah, a lot. A lot. So definitely Medicaid
cuts, what shape they take, ifany, during the reconciliation
process. Same as well. We didn'twe haven't really talked about
the Affordable Care Act as much,but there's, very generous
subsidies for ACA plans thathave caused record enrollment in
(17:08):
ACA plans at the moment.
And, those subsidies arescheduled to expire at the end
of the year if congress doesn'tact to preserve them. So
definitely keeping an eye onthat because that has huge
implications on both the, youknow, 24,000,000 people who have
ACA plans and then also theinsurers that offer that
coverage, keeping an eye on boththose things. And then I'm
(17:28):
really interested in the FTC andthe DOJ and how they're gonna
operate under Trump. That'sthat's another area sort of
where potentially peep peoplehave made a really different
prediction based off Trump'sfirst term versus now about what
they'll do. Like, there's a areally interesting ideological
split among Republicans rightnow about antitrust efforts and
(17:51):
and how exactly they shouldcombat, or should they combat,
really, consolidation and and mand a.
And recently, Trump's FTC chair,Andrew Ferguson, elected to keep
stricter merger guidelines thatwere put in place in 2023. So
that was sort of a surprise forsome people in the industry. So,
(18:13):
definitely interested in in, howthe FTC and how the DOJ under
the Trump administration willoperate and what that means for,
for the companies I cover. Andthen the other thing that we
haven't really talked about isPBMs, pharmacy benefit managers,
what stance regulators in theTrump administration will take
towards them. You know, theywere major PBMs, Caremark and
(18:34):
OptimRx and Express Scripts.
They were sort of targeted, intheir view, unfairly, but they
were sort of targeted by theBiden administration for and by
some, you know, some lawmakersfor allegedly contributing to
higher drug costs and for whattheir position in the
pharmaceutical supply chain,what effect that had on drug
costs. And then Trump last yearsaid he plans to, like, take
(18:57):
down the middlemen, but,obviously, we haven't seen
anything concrete from hisadministration yet on that. So
that is also a big area ofinterest for me.
Jeff Byers (19:05):
And for those of you that are interested in, peer
reviewed research and evidencebased on, PBMs and, Affordable
Care Act and antitrust, pleasesubscribe to, the Health Affairs
Journal. If you're wanting latesome late breaking news in those
areas as well, you can check outhealth care diet for more
coverage on that. Rebecca Piper,thank you from joining us today.
(19:29):
Is there anything you wannapromote before we we send, the
listeners on their way?
Rebecca Pifer (19:33):
No. Thank you so much for having me. I guess,
just to add on quickly to whatyou said, subscribe to
HealthCareDive, if y'all haven'tyet. We have a daily newsletter
that goes out. We cover avariety of of hard news.
We do a lot of analysis into thetrends that are shaping the
sector and, totally free to signup. So, yeah, that's it for me,
and thanks for having me, Jeff.
Jeff Byers (19:54):
Rebecca Piper, thanks again. To you, the
listener, if you enjoyed thisepisode, please share it with a
friend, leave a review, all ofthat good stuff, and we will see
you next week.
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