| The skinny
Healthcare spending is one of — if not the largest — financial burdens facing Americans, federal health regulator Casey Mulligan said during an address on Monday at the HFMA Annual Conference in National Harbor, Maryland. HHS Secretary Robert F. Kennedy Jr. appointed Mulligan as chief economist and chief regulatory officer of the agency in April. Mulligan said that his work at the agency focuses heavily on how to make healthcare more affordable — and that this requires a focus on healthcare delivery, not just insurance coverage. He uses a framework he refers to as "supply-side health economics” — which insists that healthcare, health outcomes and health insurance are distinct concepts. “Yes, insurance matters, but it's not the endpoint. The endpoint is better health and lower costs with more control in the hands of patients and families,” Mulligan declared. State-directed payments
He described one of his primary responsibilities as conducting regulatory impact analysis. To do this well, he thinks policymakers should carefully measure costs and benefits — as well as who bears those costs and how incentives are created by policy decisions. As part of his work at HHS, Mulligan has closely examined provider taxes and state-directed payments.He argued that many states use a financing mechanism in which they tax hospitals, nursing homes, or managed-care plans, and then this tax revenue is used to draw additional federal Medicaid matching funds. Mulligan said the combined funds are usually returned to providers through supplemental payments or state-directed payments. “Medicaid financing gimmicks spill over to commercial prices, employer premiums, marketplace premiums, wages and Medicare spending,” he remarked. Driving up costs
Mulligan argued that these financing arrangements end up driving up healthcare costs far beyond Medicaid. And he believes provider taxes typically increase the cost of delivering care, while supplemental Medicaid payments encourage providers to shift resources toward Medicaid patients. Together, these dynamics put increased pressure on commercial insurance premiums and Medicare spending, he said. — By Katie Adams |
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