[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]
DEPARTMENT OF HEALTH AND HUMAN SERVICES
FISCAL YEAR 2021 BUDGET
=======================================================================
HEARING
before the
COMMITTEE ON THE BUDGET
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTEENTH CONGRESS
SECOND SESSION
__________
HEARING HELD IN WASHINGTON, D.C., MARCH 4, 2020
__________
Serial No. 116-23
__________
Printed for the use of the Committee on the Budget
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Available on the Internet:
www.govinfo.gov
_____
U.S. GOVERNMENT PUBLISHING OFFICE
42-241 WASHINGTON : 2020
COMMITTEE ON THE BUDGET
JOHN A. YARMUTH, Kentucky, Chairman
SETH MOULTON, Massachusetts, STEVE WOMACK, Arkansas,
Vice Chairman Ranking Member
HAKEEM S. JEFFRIES, New York ROB WOODALL, Georgia
BRIAN HIGGINS, New York BILL JOHNSON, Ohio,
BRENDAN F. BOYLE, Pennsylvania Vice Ranking Member
ROSA L. DELAURO, Connecticut JASON SMITH, Missouri
LLOYD DOGGETT, Texas BILL FLORES, Texas
DAVID E. PRICE, North Carolina GEORGE HOLDING, North Carolina
JANICE D. SCHAKOWSKY, Illinois CHRIS STEWART, Utah
DANIEL T. KILDEE, Michigan RALPH NORMAN, South Carolina
JIMMY PANETTA, California KEVIN HERN, Oklahoma
JOSEPH D. MORELLE, New York CHIP ROY, Texas
STEVEN HORSFORD, Nevada DANIEL MEUSER, Pennsylvania
ROBERT C. ``BOBBY'' SCOTT, Virginia DAN CRENSHAW, Texas
SHEILA JACKSON LEE, Texas TIM BURCHETT, Tennessee
BARBARA LEE, California
PRAMILA JAYAPAL, Washington
ILHAN OMAR, Minnesota
ALBIO SIRES, New Jersey
SCOTT H. PETERS, California
JIM COOPER, Tennessee
RO KHANNA, California
Professional Staff
Ellen Balis, Staff Director
Becky Relic, Minority Staff Director
CONTENTS
Page
Hearing held in Washington, D.C., March 4, 2020.................. 1
Hon. John A. Yarmuth, Chairman, Committee on the Budget...... 1
Prepared statement of.................................... 4
Hon. Steve Womack, Ranking Member, Committee on the Budget... 6
Prepared statement of.................................... 8
Hon. Eric D. Hargan, Deputy Secretary, Department of Health
and Human Services......................................... 12
Prepared statement of.................................... 14
Hon. Sheila Jackson Lee, Member, Committee on the Budget,
statement submitted for the record......................... 69
Hon. John A. Yarmuth, Chairman, Committee on the Budget,
questions submitted for the record......................... 76
Hon. Chris Stewart, Member, Committee on the Budget,
questions submitted for the record......................... 78
Answers to questions submitted for the record................ 79
DEPARTMENT OF HEALTH AND
HUMAN SERVICES.
FISCAL YEAR 2021 BUDGET
----------
WEDNESDAY, MARCH 4, 2020
House of Representatives,
Committee on the Budget,
Washington, DC.
The Committee met, pursuant to notice, at 10:04 a.m., in
room 210, Cannon House Office Building, Hon. John A. Yarmuth
[Chairman of the Committee] presiding.
Present: Representatives Yarmuth, Moulton, Higgins,
Schakowsky, Morelle, Horsford, Jackson Lee, Jayapal, Khanna;
Womack, Woodall, Johnson, Smith, Flores, Holding, Stewart,
Norman, Hern, Roy, Meuser, and Burchett.
Chairman Yarmuth. Good morning. I want to welcome everyone
to this hearing on the Department of Health and Human Services'
Fiscal Year 2021 Budget. And I certainly welcome the Deputy
Secretary for the Department of HHS, Eric Hargan.
Thank you for being here today. I now will yield myself
five minutes for an opening statement.
Deputy Secretary Hargan, the importance of the Department
of Health and Human Services cannot be overstated. But now,
amid the deadly coronavirus outbreak, the work of HHS has
unmatched importance. Strategic investments in public health
systems, research into a vaccine and treatments, availability
of accurate testing, and access to high-quality care are
critically important.
But the contrast between those needs and the Trump
Administration's budget could not be more stark. Instead of
proposing a realistic budget for HHS and taking the health and
well-being of Americans seriously, the President has called for
draconian cuts, mounted consistent attacks on our health care,
undermined the agencies charged with keeping us safe, and
starved our communities of critical resources.
President Trump has proposed a nearly $10 billion cut to
HHS's discretionary budget, including debilitating cuts to the
CDC and NIH. He slashes mandatory health care spending by $1.6
trillion over 10 years, including a $900 billion cut to
Medicaid, a half-a-trillion-dollar cut to Medicare, and a $200
billion cut to other health programs.
The budget would require all states to enact work
requirements for Medicaid enrollees with no exceptions for
pregnant women, parents, the chronically ill, and other
vulnerable Americans. This comes despite the fact that no
evidence exists to support the Administration's claim that they
increase the financial well-being of Medicaid enrollees.
The Administration's real goal here, it appears, is to
create yet another barrier so that hundreds of thousands, if
not millions, of Americans lose their Medicaid coverage, and
now at the worst possible time.
That is not the only way this budget makes life harder for
millions of families. It includes the elimination of block
grants and programs like LIHEAP that help working families
fight their way out of poverty.
Despite the President's promise to prioritize child care,
any investments made in this budget would be nullified by the
complete elimination of the Social Services Block Grant and the
Community Services Block Grant, and the $21.3 billion cut to
the Temporary Assistance for Needy Families program.
There are other areas of the budget that don't add up,
either, where the message doesn't match the math. The budget
includes a $716 million investment in HIV/AIDS, but cuts
important NIH research programs dedicated to HIV prevention and
treatment by 8 percent. It also cuts programs to treat global
HIV/AIDS by $2 billion, or 35 percent.
The budget requests $169 million in new resources to combat
the opioid epidemic, but these nominal investments are negated
by the nearly $900 billion cut to Medicaid, the source of
coverage for four in 10 adults with opioid addiction.
When you compare these small funding increases to the huge
cuts that they are paired with, it is not hard to see them for
what they are: token investments designed to get a good
headline. If there is another explanation, Deputy Secretary
Hargan, we would welcome it.
We would also welcome some details on the President's so-
called vision for American health care, since there are none in
this budget, nothing specific about the President's so-called
commitment to lowering prescription drug prices, nothing about
expanding access to affordable, quality health care. It is
nothing but a vague promise.
There are many troubling parts of this budget, particularly
since the line between massive HHS funding cuts and severe
consequences for American families, between policy changes and
life-or-death outcomes, is so direct.
But, look, this is not a normal budget hearing. We are
potentially facing a public health crisis like we haven't seen
in years. And, from everything I have seen, this President
doesn't get that. He sought to under-fund or eliminate programs
to respond to public health emergencies from the get-go. Two
years ago he fired the government's entire pandemic response
chain of command and never replaced them. He told the American
people that the virus was largely contained. Then he said it
will go away in April, when temperatures warm up. Both aren't
true. He proposed a woefully inadequate coronavirus
supplemental that cannibalized other programs, playing a
dangerous game of public health whack-a-mole.
And the President's budget has no shortage of broken
promises, harsh cuts, and cruel policies that place little
importance on public health, and jeopardize the health care
security of millions of Americans. Our President is clearly not
up to the task.
But, Deputy Secretary, I hope you have more to offer the
American people today. I hope you are able to help reassure all
of us that our government is on top of this, that the doctors
and scientists who really know what they are doing are making
the decisions, and that everything is being done to protect the
American public. We look forward to your testimony, your
response to these concerns, and getting some sort of
justification for the decisions made in this budget.
[The prepared statement of Chairman Yarmuth follows:]
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Chairman Yarmuth. And with that I yield five minutes to the
Ranking Member.
Mr. Womack. I thank the Chairman for holding this hearing.
Thank you, Mr. Deputy Secretary, for your witness testimony
here today.
Today we examine the President's budget request for the
Department of Health and Human Services for Fiscal Year 2021,
an important conversation, in my judgment, and one that we are
having because the President, unlike my colleagues on the other
side of the aisle, actually produced a budget.
The primary responsibility of this Committee is to put
forth a budget resolution. In fact, it is required by law. Yet,
for the second year in a row, this Committee has abdicated on
its responsibility. I know there will be plenty of discussion
today, but I hope my colleagues will remember that political
commentary won't change the important issues we need to
address.
With that said, let's turn to the President's budget
request for HHS for this fiscal year.
HHS is responsible for administering programs from which
millions of Americans--on which millions of Americans rely,
including Medicare, Medicaid, TANF, and Head Start. You are
also charged with addressing some of the country's biggest
health crises, including coronavirus.
The agency also faces several budgetary challenges that
must be addressed: the ever-ballooning cost of prescription
drugs, the solvency of the Medicare Trust Fund, and the
untenable spending trajectory of Medicaid.
Health care spending is growing faster than any other
sector of our economy. In 2018 the U.S. spent $3.6 trillion on
health care. By 2027, health care spending is projected to
reach nearly $6 trillion, just under 20 percent of America's
GDP, according to a recent report from the Centers for Medicare
and Medicaid Services' actuary. Congress has to pay attention
to the factors that are fueling this growth.
First, the cost of care is increasing. According to the
Bureau of Labor Statistics, in 2019 the price of hospital
services increased by 3.8 percent, and the price of medical
care increased by 5.1 percent, both of which are higher than
the rate of inflation.
Second, Americans are living longer. Thanks to advancements
in modern medicine, the average life expectancy has increased
by roughly nine years since Medicare was created in 1965. Now,
that is good news, but it does have an impact on the growing
health care issues facing our country.
Finally, the ratio of retirees to workers is shrinking.
That is not good news. An average of 10,000 Baby Boomers are
leaving the work force every day.
Unfortunately, the laws that govern how our health care
programs work have not kept pace with these realities. As a
result, there is increasing pressure on programs like Medicare,
which provides care to about 18 percent of our population. As
an example, Medicare Part A, which covers in-patient hospital
care, skilled nursing facilities, hospice, and lab tests, is
expected to be insolvent by 2026, threatening the health
benefits many people expect to receive in the future. That is
only six years away.
Congress and the Administration have a shared
responsibility to address these challenges and put our health
care spending back on a sustainable path. I would argue that
Congress and the Administration not only have a shared
responsibility, that is our only hope. That requires taking a
hard look at what is working and what is not. It requires the
fortitude to make tough choices that strengthen programs for
today and tomorrow.
The President's budget takes important steps to do that. It
invests in the long-term health of the American people, while
also advancing proposals that will help rein in health care
spending. For example, it doubles down on the addressing--on
addressing the opioid epidemic by bolstering the SUPPORT Act,
which expands across to substance use disorder prevention and
treatment. Additionally, it includes new resources to expand
state opioid response grants that provide direct treatment,
recovery, and relapse prevention. It also supports our
commitment to decreasing the number of people affected by HIV,
by making vital investments in programs aimed at reducing new
infections by 90 percent within a decade.
At the same time, the budget includes several common-sense
reforms that have been proposed by both Republicans and
Democrats to make Medicare work better for patients, by cutting
waste, fraud, and abuse, increasing competition, and lowering
drug prices and out-of-pocket costs. These comprehensive
efforts are poised to achieve roughly $1.7 trillion in savings
in mandatory spending. That is important progress, but with $23
trillion in debt, and annual deficits over $1 trillion, there
is much more work that has to be done.
As I have said before, mandatory spending accounts for 70
percent of all federal spending today, and it is on a glide
path to go to 76 percent by 2030. Until we make structural
reforms to mandatory spending programs like Medicare,
discretionary spending, including funds for defense and other
key domestic priorities--and let me add, priorities that are
equally important to both sides of the aisle--are going to
continue to be squeezed.
Congress will continue to have the same battles year after
year over what programs to fund, and how to handle our deficit
and debt. Instead of it recognizing these fiscal realities, my
colleagues on the other side of the aisle continue to propose
bills like Medicare for All, which would radically disrupt our
health care system.
So I look forward to your testimony today, Mr. Deputy
Secretary. I again thank my friend from Kentucky for holding
this hearing, and I yield back the balance of my time.
[The prepared statement of Steve Womack follows:]
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Chairman Yarmuth. I thank the gentleman for his opening
statement and for--in the interest of time, if any other
Members have opening statements, you may submit those
statements in writing for the record.
And now, once again, I am happy to introduce Deputy
Secretary of the Department of HHS, Eric Hargan.
And I yield five minutes to you for your opening remarks.
STATEMENT OF HON. ERIC D. HARGAN, DEPUTY SECRETARY, DEPARTMENT
OF HEALTH AND HUMAN SERVICES
Mr. Hargan. Thank you, Chairman Yarmuth and Ranking Member
Womack. Thank you again for inviting me to discuss the
President's budget for HHS for Fiscal Year 2021. I am honored
to appear before this Committee for budget testimony as deputy
secretary for the second time, especially after the remarkable
year of results that the HHS team has produced.
With support from Congress this past year, we saw the
number of drug overdose deaths decline for the first time in
decades; another record year of generic drug approvals from
FDA; and historic drops in Medicare Advantage, Medicare Part D,
and exchange premiums.
The President's budget aims to move toward a future where
HHS programs work better for the people we serve, where our
human services programs put people at the center, and where
America's health care system is affordable, personalized, puts
patients in control, and treats you like a human being, not a
number.
HHS has the largest discretionary budget of any non-defense
department, which means that difficult decisions must be made
to discretionary spending on a sustainable path. The
President's budget proposes to protect what works in our health
care system and make it better. I will mention two ways we do
that: first, facilitating patient-centered markets; and second,
tackling key impactable health challenges.
The budget's health care reforms aim to put the patient at
the center. It would, for instance, eliminate cost sharing for
colonoscopies, a lifesaving preventive service. We would reduce
patients' costs and promote competition by paying the same for
certain services, regardless of setting.
The budget endorses bipartisan, bicameral drug pricing
legislation, and the overall reforms will improve Medicare and
extend the life of the hospital insurance fund for at least 25
years.
We propose investing $116 million in HHS's initiative to
reduce maternal mortality and morbidity.
To tackle America's rural health crisis, which is of
particular interest to me, as someone who grew up in rural
southern Illinois, we propose reforms, including telehealth
expansions and new flexibilities for rural hospitals.
The budget increases investments to combat the opioid
epidemic, including SAMHSA State Opioid Response Program, which
we focused on providing medication-assisted treatment, while
working with Congress to give states flexibility to address
stimulants like methamphetamines.
We request $716 million for the President's initiative to
end the HIV epidemic in America, which we have already begun
implementing with Congress's support.
The budget also reflects how seriously we take the threat
of other infectious diseases, such as COVID-19. It prioritizes
CDC's infectious disease programs, raising spending on them by
135 million from Fiscal Year 2020 levels to $4.3 billion, and
maintains $675 million in state and local preparedness funding.
As of this morning we have 78 cases of the novel coronavirus
here in the United States, excluding cases that have been
repatriated here.
As President Trump, Vice President Pence, Secretary Azar,
and all our public health leaders have emphasized, the general
risk to the American public remains low, in significant part
because of the President's decisive actions so far. But that,
as we have emphasized repeatedly, has the potential to change
quickly, and the risk can be higher for those who may have been
exposed to cases here or who have been to affected areas. We
are working closely with state, local, and private-sector
partners to prepare for the potential need to mitigate the
virus's spread in the United States.
As you all know, OMB has sent a request to make funding
available for preparedness and response, including for
therapeutics, for vaccines, personal protective equipment,
state and local support, and surveillance. The President has
made clear that we are open to your views on the levels of
spending that may be appropriate. With Secretary Azar serving
as Chairman of the president's coronavirus task force, we look
forward to working alongside the Administration's lead for the
virus, Vice President Pence, to secure the necessary funding
from Congress.
Last, when it comes to human services, the budget cuts back
on programs that lack proven results, while reforming programs
like TANF to drive state investments and supporting work, and
the benefits it brings for well-being. We continue the Fiscal
Year 2020 investments Congress made in Head Start and child
care programs, which promote children's well-being and adults'
independence.
This year's budget aims to protect and enhance Americans'
well-being, and deliver Americans a more affordable,
personalized health care system that works better, rather than
just spends more. Secretary Azar and I look forward to working
with this committee to make that common-sense goal a reality.
Thank you.
[The prepared statement of Eric D. Hargan follows:]
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Chairman Yarmuth. I thank you for your remarks. And, as a
reminder, again, Members can submit written questions to be
answered later in writing.
And, as Deputy Secretary Hargan and I discussed yesterday,
there may be areas which you don't specifically have the
expertise in, but you are happy to get answers from the
Department.
Mr. Hargan. Absolutely.
Chairman Yarmuth. So I want all the Members to know that.
And those questions and the answers from the Department
will be made part of the formal hearing record. Any Members who
wish to submit questions for the record may do so within seven
days.
As we usually do, the Ranking Member and I will defer our
questions until the end. And because the coronavirus spread
significantly in Washington state, and reports of nine deaths
due to the virus there, this has directly affected Ms.
Jayapal's district. For that reason, as a matter of courtesy, I
now recognize the gentlewoman from Washington state, Ms.
Jayapal, for five minutes.
Ms. Jayapal. Thank you, Mr. Chairman, and thank you, Deputy
Secretary, for being with us.
As you know, my home state of Washington was the first to
experience a coronavirus case back in January. We are now
looking at nine deaths in the state of Washington. I am
incredibly proud of our state's first responders, public health
officials, and infrastructure that has been built, and the
tremendous efforts and work that they have put forward.
I do have to tell you that the response efforts have
resulted in an estimated $200,000 a week of unexpected costs in
Seattle and King County alone. People on the front lines,
including health workers and emergency service personnel, were
not provided with adequate personal protective equipment in
advance. And the initial botched test kits and the slow
response from the Administration on testing protocols were
incredibly detrimental to our efforts.
In fact, Washington State is still waiting for half of the
requested medical supplies for response efforts. Calling this a
hoax, as President Trump did in the early days of this virus,
was extremely damaging. And taking just $2.5 billion dollars
from other needed sources, as the Administration's initial
response to this, was simply not sufficient.
Thanks to appropriators, we will, hopefully, have an $8
billion-plus package that we will pass through the House.
But it is time, Mr. Deputy Secretary, to stop playing
politics with this. We are losing people's lives as a result.
I want to start by asking you, is it a public health
priority to ensure that anybody who is experiencing these
symptoms and/or has been in contact with an infected person
comes to get a test?
Mr. Hargan. Well, thank you for that, Congresswoman. And I
just want to say my sincerest condolences go out to all the
families who have lost loved ones in Washington, and our
sympathies to them. Any loss of life is a tragedy. And of the
nine individuals that have passed, we know five were residents
of a nursing home there in Washington. And also our thoughts go
out to the health care workers in Washington, as you pointed
out, the first responders and everyone who has been dealing----
Ms. Jayapal. Thank you. They need the supplies, they need
the tests, they need the protective equipment. But thank you
for that.
Mr. Hargan. Yes, exactly.
Ms. Jayapal. And if you could just----
Mr. Hargan. And as for the tests, I think that, for
anything with regard to particularities, I want to make sure
everyone goes to CDC.gov for the recommendations that the
federal government----
Ms. Jayapal. Can I just ask you to answer the question,
Deputy Secretary?
Mr. Hargan. Sure.
Ms. Jayapal. Is it necessary, in order to prevent a public
health crisis here in this country, that we ensure that
everybody who has experienced the symptoms, or believes to be
in touch with an infected person, goes in to seek testing?
Mr. Hargan. I believe that----
Ms. Jayapal. Or public health support.
Mr. Hargan. Right----
Ms. Jayapal. Is that necessary?
Mr. Hargan. I believe that, you know, given the symptoms of
the disease--and I will defer to clinicians on exactly what is
done with testing. However, to repeat what our public health
professionals have said, everyone--the symptoms of this disease
resemble other respiratory illnesses. In many cases, people get
the disease and do not know----
Ms. Jayapal. Is it a priority for people to seek care?
Mr. Hargan. People should--if people seek care--many times
with mild and moderate illnesses, people are recommended to
stay home, to treat themselves. People who need medical care
should come to a health care facility. And----
Ms. Jayapal. So it is a priority for people----
Mr. Hargan. And----
Ms. Jayapal [continuing]. who experience the symptoms that
are described by CDC's protocol to come in and seek care. Is
that correct?
Mr. Hargan. For the level of severity that they announce.
So it is----
Ms. Jayapal. Thank you.
Mr. Hargan. So, in other words, CDC does not say everyone
who is experiencing any level of some kind of--that seems
like----
Ms. Jayapal. No, they have laid out a very clear protocol--
--
Mr. Hargan. Right.
Ms. Jayapal [continuing]. and set of guidelines.
Mr. Hargan. Yes.
Ms. Jayapal. For those people that experienced that----
Mr. Hargan. For those people----
Ms. Jayapal [continuing]. that have been in touch with
infected people, is it a priority to come in and seek care?
Mr. Hargan. They should follow CDC's protocols, and local
and state health authorities should consult those, and look at
their plans----
Ms. Jayapal. OK.
Mr. Hargan [continuing]. to make recommendations----
Ms. Jayapal. What about the Administration's public charge
rule that has created a chilling effect for people to come in
and seek care?
Are you telling the Department of Homeland Security and the
Administration that that is not helping to contain what may be
an impending pandemic that would affect every American, not
just those Americans who don't seek that care?
Mr. Hargan. I would have to defer questions on that rule to
the Department of Homeland Security.
Ms. Jayapal. But don't you think that is important, as a
public health official, the Deputy Secretary of the Department
of Public Health, to ensure that people do not face those
barriers if they are experiencing those protocols?
Mr. Hargan. Any local decision about how someone responds
and gets care is, you know--obviously, that is a matter of
public health import. However, any questions about the
particular rule should go to Homeland Security. They are----
Ms. Jayapal. I would hope that you----
Mr. Hargan. That is their rule.
Ms. Jayapal [continuing]. would let the Department of
Homeland Security know that this is a public health issue for
all Americans, that people do not seek care because they are
afraid that they are going to be deported the next day, or seen
as a public charge.
Mr. Deputy Secretary, some individuals have gotten tested,
found that they are tested negative, and now they owe over
thousands of dollars in medical bills. In a health care system
in which 70 million people are uninsured or under-insured, and
which over 500,000 people are declaring bankruptcy every day--
every year due to medical bills, what is your plan to work with
insurance companies, pharmaceutical companies, and hospitals to
make sure that people don't go home with bills that may
bankrupt them?
Mr. Hargan. You know, we do maintain support for the ACA
exchanges that provide insurance on the exchanges. We have many
options and choices that are available in this country for
people to finance their care.
We also provide increased support to community health
centers. We are very supportive of them. They provide care for
many millions of Americans at reduced cost, and they are
available in communities around this country.
Ms. Jayapal. You are aware that, as the Ranking Member has
undermined the Medicare for All bill, which would provide
universal health care for everybody, the Trump Administration
has worked very hard to cut the care that is provided under the
Affordable Care Act. I hope you are aware of that. It has
serious implications now, during this time of crisis for many
people across my state and, frankly, across the country.
Mr. Chairman, I know my time has yielded.
Chairman Yarmuth. That is all right.
Ms. Jayapal. I thank you for your generosity.
Chairman Yarmuth. The gentlewoman's time has expired. I now
recognize the gentleman from Ohio, Mr. Johnson, for five
minutes.
Mr. Johnson. Thank you, Mr. Chairman. I am really actually
glad to hear my colleague acknowledge the skyrocketing cost of
health care, the lack of access, the number of under-insured.
Thank you, Obamacare. I am glad you acknowledged that.
Mr. Chairman, thanks for today's hearing.
And Mr. Hargan, thank you for coming in to address our
Committee today. I am glad we are here to discuss the
President's Fiscal Year 2021 Department of Health and Human
Services budget request.
I am frustrated that this Committee has once again convened
a hearing to discuss the President's budget when my Democrat
colleagues refuse to produce a budget proposal of their own. It
is easy to sit up here and criticize the work that has already
been done, but it is the job of this Committee to produce a
budget, address our nation's fiscal challenges, and ensure that
our government's finite resources are helping to grow the
economy, create jobs, and raise wages for all.
Last month this Committee held a hearing on the President's
2021 budget request, and I heard a lot of criticism from my
Democrat colleagues about how the President's budget takes a
wrecking ball to America's economic future and security. In
fact, a senior Democrat on this Committee said that the
President's destructive and irrational budget intentionally
goes after working families and vulnerable Americans.
I can tell you, as the representative of rural eastern and
southeastern Ohio, I could not disagree more. I applaud the
Trump Administration's proposed investments in rural America,
including much-needed and overdue investments in rural
broadband and telehealth services. We have seen the
unemployment rate in my district decline by upwards of 60
percent across the spectrum of the 18 counties that I
represent. It is working, and it is working for rural America.
Telehealth is a powerful tool for improving access to
healthcare for all Americans, but especially rural Americans
like those that I represent. As the co-Chair of the
Congressional Telehealth Caucus, I have had the opportunity to
witness telehealth in action in my district. Whether it is
robots that help seniors receive care in the comfort of their
own home, or a video conferencing tool that enables stroke
specialists, neurosurgeons to consult with geographically
separated doctors to give the best care possible, the
opportunities are limitless and they are lifesaving. And I
believe we have only scratched the surface of what it can do.
So, Mr. Hargan, can you tell me what HHS is currently doing
to promote and expand access to telehealth services?
Mr. Hargan. You are absolutely right. Thank you,
Congressman, for that. Coming from a rural--from rural
Illinois, I understand very well what you are talking about
there.
Telehealth is an important aspect that we have to make sure
that we expand access to it, particularly for rural and remote
areas where there isn't otherwise able--where people aren't
otherwise able to get access.
Some of the things that we have done so far is that
Medicare now provides--pays providers for new communication
technology-based services, like brief check-ins between
patients and practitioners, and also evaluation of remote, pre-
recorded images and video. So, now that we pay for that, the
providers are going to be incentivized to actually participate
in that. So that provides an incentive for them.
We are also working with advanced payment models to be able
to remove barriers to telehealth services within Medicare to
make sure that rural and under-served areas are getting
expanded telehealth services where there is more than nominal
financial risk.
We also are allowing rural health clinics and federally
qualified health centers, which, in many cases, including in my
own community, are where providers--where we actually have
services provided to be distant site providers for Medicare
telehealth, and makes the services as eligible payments under
the Medicare physician fee schedule.
So we have done all of those things. We are taking
regulatory actions to be able to free up the use of telehealth
in rural and remote settings.
Mr. Johnson. OK. All right. Quickly, you know, I believe
telehealth could be a critical tool to help fight off the
coronavirus and respond to that virus. I am working with my
colleagues on both sides of the aisle to get a provision that
is in the Connect Back--Connect for Health Act in the emergency
coronavirus supplemental package to give the HHS Secretary the
authority to waive telehealth restrictions during national
emergencies, which could help prevent a run on the health care
system in--especially in rural America.
So, Mr. Hargan, do you believe that waiving telehealth
restrictions during national emergencies would benefit how HHS
and the Administration combat the outbreak of coronavirus?
Mr. Hargan. I believe that could be--like, providing
greater access to telehealth in situations can be a tremendous
help, especially because it helps relieve congestion on what
could be overburdened local health care systems, and allows
patients to be at home, isolated in certain circumstances, and
still have access to professional care. So it is--I think it is
very important.
We would love to work with you all to provide technical
assistance, whatever else you need, to be able to work through
issues like that in a----
Mr. Johnson. Well, we are working to get it in the
supplemental. I hope my colleagues on the other side of the
aisle will join us in trying to get that done.
Thank you, Mr. Chairman. I yield back.
Chairman Yarmuth. It sounds like a good idea I will say to
my colleague from Ohio.
Mr. Johnson. Thank you, Mr. Chairman.
Chairman Yarmuth. The gentleman's time has expired. I now
recognize the Vice Chairman of the Committee, the gentleman
from Massachusetts, Mr. Moulton, for five minutes.
Mr. Moulton. I thank you. You know, Mr. Chairman, it is
remarkable that my colleague across the other aisle, after five
concerted minutes of a real decent back-and-forth between the
deputy secretary and the representative of a district who has
lost men and women, good Americans to coronavirus, that he had
to start with a partisan attack on Medicare for All.
You know, I don't personally support Medicare for All, but
I certainly support the principle that we should be expanding
health care access to Americans.
And you know what? Health care budgets are going up because
our population is growing, and we want to have more Americans
get good health care.
Mr. Johnson. Would the gentleman yield?
Mr. Moulton. The deputy--no.
Deputy Secretary, I appreciate your seriousness with which
you are approaching both the coronavirus and your broader
duties, because, look, there has been a lot of partisan talking
points thrown about. I understand that the Trump Administration
is no more responsible for the coronavirus than Corona is. But
the Trump Administration, and your institution in particular,
is responsible for preparing for diseases and pandemics, for
responding to them, and for keeping Americans healthy. So I
have a number of questions.
Deputy Secretary Hargan, would you or your boss like to
revise your Fiscal Year 2021 budget request for the Infectious
Disease Rapid Response Reserve Fund, or the National Institute
of Allergy Infectious Disease--or Infectious Diseases?
Mr. Hargan. I think that, whatever we are--obviously, the
President has indicated willingness to work with revisions to
the supplemental request, and I think we are going to engage on
all fronts in deciding exactly how the money should be
apportioned. And----
Mr. Moulton. Well, I hope that is a yes, because your
budget cuts CDC's Infectious Disease Rapid Response Fund by $35
million, a pattern that dates back to a request of exactly zero
dollars for Fiscal Year 2019.
Would under-funding an account in Fiscal Year 2021 that has
already been tapped this year for coronavirus help our
response?
Mr. Hargan. I think we have asked for $135 million more for
CDC's----
Mr. Moulton. Well, I assume no, because----
Mr. Hargan [continuing]. Infectious Disease Response----
Mr. Moulton [continuing]. because you have--I am--you have
asked for more, which I appreciate.
Your budget request also reduces NIH's National Institute
of Allergy and Infectious Diseases funding to levels below that
which was appropriated in fiscal 2019 and Fiscal Year 2020.
Will this improve our ability to conduct and support research
on the coronavirus or other outbreaks?
Mr. Hargan. I think that we will engage on the supplemental
to decide exactly what portion----
Mr. Moulton. But would your--will your cut improve our
response?
Mr. Hargan [continuing]. CDC. Well, I think we have
advocated for at least $2.5 billion more dedicated to the
corona response in the supplemental request----
Mr. Moulton. Well, I am glad to hear that, frankly, you
have the courage to disagree with the President's budget
request. I appreciate that, because it shows that you and the
professionals at HHS are doing their job.
When President Trump announced that Vice President Pence
would be his coronavirus czar, he declared that the risk of
coronavirus to the American public, ``remains very low.'' Vice
President Pence echoed this concern.
Now, the World Health Organization, on the other hand, has
warned that coronavirus could be classified as a global
pandemic in the near future, if not today. Is WHO wrong when it
signals potentially elevating the classification of COVID-19?
Mr. Hargan. WHO has its own responsibilities in its
nomenclature, and it is responsible for declaring whether
something is, under their view, a pandemic or not.
Mr. Moulton. So do you think they are right or wrong?
Mr. Hargan. We will do exactly what the response is that we
need for the American people, regardless of what the WHO says--
--
Mr. Moulton. I understand that.
Mr. Hargan [continuing]. or how they declare it or----
Mr. Moulton. I understand that. Do you think that they are
right or wrong?
Mr. Hargan. I don't intend to oversee their operations of
the World Health Organization. Whatever they decide in terms of
their nomenclature, that is a----
Mr. Moulton. So do you think this is a pandemic or not,
Deputy Secretary?
Mr. Hargan. I believe that the WHO has its own
responsibility for that nomenclature----
Mr. Moulton. Do you think that this is a pandemic or not?
Mr. Hargan. WHO has its own----
Mr. Moulton. No, no, we will take WHO out of it. Do you
think that this is a pandemic or not?
Mr. Hargan. I believe that whatever we do within the U.S.
Government at HHS is the important thing that we focus on. It
is providing responses to the American people----
Mr. Moulton. Just answer the question, Deputy Secretary. Is
this a pandemic? The American people want to know, and they
deserve to know, and they deserve to hear it from you.
Mr. Hargan. With response to the declaration of these kinds
of terms by the WHO, I defer to them about----
Mr. Moulton. No, no. I am not talking about the WHO. I am
talking about you and HHS. Is this a pandemic?
Mr. Hargan. The declaration of a pandemic or not, from an
American point of view, from an HHS point of view, doesn't----
Mr. Moulton. One more quick question. The President said
that we are very close to having a vaccine. Is that true? Are
we very close?
Mr. Hargan. We are--we--I think Dr. Fauci has said that we
are within two to three months, hopefully, of entering a----
Mr. Moulton. Two to three months.
Mr. Hargan [continuing]. a vaccine----
Mr. Moulton. So we are going to hold you to that, Deputy
Secretary.
Mr. Hargan. That----
Mr. Moulton. Two to three months for a vaccine.
Mr. Hargan. Two to three months----
Mr. Moulton. Thank you, Mr. Chairman.
Mr. Hargan [continuing]. clinical trials.
Mr. Moulton. I yield back.
Mr. Hargan. So I just echo what Dr. Fauci said in his
testimony----
Chairman Yarmuth. You can go ahead and finish your answer.
Mr. Hargan [continuing]. to Congress. Yes, so he had said
within two to three months they hope to have a vaccine,
candidate vaccine, into clinical trials. And after then we
would enter into further phases of the vaccine. After that, in
terms of preparation for----
Mr. Moulton. So when can Americans get the vaccine? What is
your estimate?
Mr. Hargan. I think we are going to--we will see what the
scientists, the laboratories, and the researchers are able to
achieve. But we think that--I think, according to what we have
been told most recently, we are going to, hopefully, have a
vaccine earlier than we have had vaccines in the past because
of the investments that have been made by Congress, by the
Administration over the past years in order to prepare us for
situations like this.
Chairman Yarmuth. The gentleman's time has expired. I now
recognize the gentleman from Missouri, Mr. Smith, for five
minutes.
Mr. Smith. Thank you, Mr. Chairman.
Thank you, Secretary, for being here. There is so many
things that I would like to ask, or even to comment on.
We are here in regards to you presenting the President's
budget. And so let's just get some facts out there quickly, and
that is the President presented a budget this year, that is why
you are here. The House majority Democrats have not presented a
budget this year. Last year, President Trump presented a
budget. Guess what? The House Democrats didn't present a
budget. They like to criticize the President's budget. They
like to criticize the budget that you helped with. But they
can't even present a budget themselves.
And, just like Speaker Pelosi has said numerous times, a
budget is a statement of your values. The reason why the
Democrats can't present a budget on this Committee is because
they can't get along, because more than half of the Democrats
on this Committee are sponsors of Medicare for All. More than
half of them are. The cost of Medicare for All is over $30
trillion. That is their solution to health care, Mr. Secretary,
Medicare for All. That would cost every household $25,000.
Think about that. That is why they don't have a budget, because
they can't decide whether to put that in there or not.
I am thankful that you are here at least presenting a
budget. I am also thankful that the Republicans, over the last
several years, have increased NIH funding by 39 percent. I am
also thankful that Republicans have increased funding to CDC by
over 24 percent in the last several years. I am also thankful
that the President has signed legislation in the last year to
help make us better prepared for possible outbreaks like the
coronavirus.
However, unfortunately, what I am not thankful for is
hearing so many folks on the other side of the aisle try to
make coronavirus political because they hate the President. We
have had Democrats that has called coronavirus the Trump virus.
That is unacceptable. It is unacceptable.
Sunday, when I was home in my congressional district, a 14-
year-old girl died of the flu in my hometown of 5,000 people, a
14-year-old girl. Nine people have lost their lives by
coronavirus in the state of Washington. Fifteen people have
lost their lives from flu in my congressional district this
year. A loss of a life is horrible. We have a vaccine for flu.
We don't have a vaccine for coronavirus, and still people are
dying.
We have the best health care in this country than any other
country in the world (sic). And I know that Americans can pull
together and make a difference. And a lot of us don't know how
bad coronavirus is. People may act like they do, but they
don't. We do know flu is bad. A lot of people is losing their
lives. I just gave you the number of how many have lost their
lives in my congressional district alone, which is almost
double of how many has lost their lives of coronavirus so far.
What is unacceptable is the Democrats have been playing
partisan games with coronavirus. They complained when the
President asked for an increase of funding and a supplemental
of $2.5 billion because they said it wasn't enough, and that we
needed it fast. Guess what? Ten days ago, the President asked
for that funding and we are still waiting for a supplemental
bill to be filed by the House Democrats. They say they need
more money.
Last week, instead of doing a supplemental bill, we banned
flavored cigarettes. Let's get our act together. The Democrats
control this House. Let's put a supplemental on the floor and
at least file a supplemental. I would love to see what is in
it. Ten days. How many days is it going to be? Is it going to
be filed today, or is it going to be a couple of weeks?
I yield back, Mr. Chairman.
Chairman Yarmuth. The gentleman's time has expired. He will
have it before the end of the day, actually.
I now yield five minutes to the gentleman from New York,
Mr. Higgins.
Mr. Higgins. Thank you, Mr. Chairman. I would agree that we
are here to discuss budget facts. So let's talk budget facts.
The budget proposes to cut $1 trillion to Medicaid, which
will hurt access to about 13 million Americans. The budget
proposes to cut about $500 billion to Medicare. The
Administration has said, in relation to these cuts, that the
President's budget is not an action item, it is a statement of
priorities.
In your biography here, Mr. Secretary, it states that as
deputy secretary you are the chief operating officer and are
responsible for overseeing the day-to-day operations and
management of the Department, in addition to leading policy and
strategy development. Are these cuts representative of the
President and your priorities?
Chairman Yarmuth. Before you answer, Deputy Secretary,
could you pull the microphone closer to you?
Mr. Hargan. Sure.
Chairman Yarmuth. Or move closer to it. Apparently, C-SPAN
is having--people are having trouble listening on C-SPAN.
Mr. Hargan. Sure. So, with regard to Medicare and Medicaid,
which I think you had--you were mentioning, there is no cut,
year to year, in the money spent on either of these programs.
In fact, our budget anticipates a growth in the programs every
single year--Medicare and Medicaid, for the entire time, the
next 10 years. So there are no actual cuts here at all.
In fact, what we are trying to do is slow the growth of
these programs, we hope, in a thoughtful way. For example, in
Medicaid we took projected growth of spending from 5.4 percent
to 3.1 percent. Now, that means that it would be roughly in
line with the average salary increase that Americans are
projected to have. With regard to Medicare, it is from 7.3
percent growth to 6.3 percent growth.
So we are anticipating growth in these programs, but we are
trying to make sure that we are saving these programs in a
sustainable way into the future. We know that the Medicare
trustees have told us, as we heard earlier, 2026 is a time in
which these--the trust fund will start to run out. The reforms
that we proposed will extend the life of that trust fund to 25
years, at least. And I think we have to preserve it, not just
for today's seniors, but for tomorrow's. It is a promise to the
American people.
Mr. Higgins. Mr. Secretary, respectfully, the cut is
explained in the budget detail that it would be a cut to
providers. But those are the very providers that we depend on
to provide access to those under the Medicare program. So a cut
to those providers will likely result in limited access to
those providers.
Also in the budget, the National Institute of--Institutes
of Health, which is a very, very important research
institution, the largest research institution in the entire
world, and includes many component parts that are important to
us--the National Cancer Institute, the National Institute for
Allergy and Infectious Diseases--there are cuts to these two
agencies, as well. Does this represent a statement of
priorities for the President and you, as Secretary?
Mr. Hargan. Well, within the discretionary budget, NIH is
and remains the single largest item that we are proposing in
our budget. So, in terms of the priorities that this
Administration has for its budget at HHS, NIH is our top
priority. So it remains our number-one spending item in the
discretionary budget. So whether it is a statement of values or
just as a matter of fact, we are proposing a--that NIH remains
the number-one discretionary spending item.
Mr. Higgins. So if it is the number-one priority, why is it
proposed to be cut?
Mr. Higgins. Within the discretionary budget environment
that we are in here, that NIH funding has been increasing at a
rate that I think it is hard for our budgets to keep up with,
we are trying to reduce federal deficits and debt, and we--and
now I think Congress, of course, is going to decide the right
spending level----
Mr. Higgins. Final question----
Mr. Higgins [continuing]. for NIH.
Mr. Higgins [continuing]. Mr. Secretary. The President said
earlier this year that, ``I was the person who saved pre-
existing conditions in your health care.'' The fact of the
matter is people with pre-existing conditions have insurance
because of President Obama's health care law, which the
President, President Trump, is now trying to obliterate through
the federal court.
There is only--you know, before the Affordable Care Act, if
you had a kid that was stuck with childhood cancer, an
insurance company could deny you coverage because of a pre-
existing condition. You can't do that anymore. It is against
the law. But there is only one law in America that protects
people with pre-existing conditions, and it is the Affordable
Care Act.
So if you are trying to obliterate that law with a specific
alternative to replace it, you don't support protecting people
with pre-existing conditions. I am just curious. How do you
reconcile that, sir?
Mr. Hargan. So----
Chairman Yarmuth. You may answer.
Mr. Hargan. So with regard to that, as you know, the
President has said that that is the centerpiece of whatever
reform we would bring forward, and is to protect Americans with
pre-existing conditions. And so we reiterate that, as the
centerpiece of that. Regardless of what--if Congress has some
reforms in mind for existing laws, we would endeavor to make
sure that protection for pre-existing conditions is at the
center of it, regardless of what form that takes.
Chairman Yarmuth. The gentleman's time has expired. I now
recognize the gentleman from North Carolina, Mr. Holding, for
five minutes.
Mr. Holding. Thank you.
Mr. Secretary, various national regulatory authorities take
different approaches to overseeing the manufacture of drug
products. And this is true, even among countries that are part
of the International Conference of Harmonization, which
produces guidelines that tend to streamline global regulations.
Additionally, regions and countries with regulatory
authorities that diverge from the ICH completely may contribute
to global risk for drugs supply interruptions by diverting
manufacturer time and attention away from establishing quality
measures.
So my question to you is how has the FDA worked with the
International Conference for Harmonization and the Chinese
Government, which is part of the ICH, to align on current good
manufacturing practices, standards?
And what is the impact of streamlining these standards on
the cost of drug products?
Mr. Hargan. Yes, thank you. And, as you--as I am sure you
know, that--in 2008 FDA established its first foreign office in
Beijing to promote international policy harmonization in terms
of regulating drugs that are coming into the American market
from China.
So between harmonization and regulatory convergence, we
have a China office there. It is currently working with local
drug manufacturers on quality improvement. And that is going to
believe--we believe that is going to help facilitate first
cycle approval of generic drugs, which is consistent with the
FDA's goals overall, and the record numbers of generic drugs
that have been approved each of the last three years.
Now, since June 2018, China has been involved with the
International Council of Harmonization. They have been
nominated to join the management committee. Now, that gives us
great hope that, if China is part of the ICH in a thorough way,
that they are going to join in those harmonization efforts, and
we are going to be able to help facilitate their entrance into
joining international standards, which FDA and others of our
peer countries have been working for years on trying to
harmonize the regulatory structure and making sure that drugs
produced anywhere are going to have the highest level of
quality.
So what we have been able to see is that they are attending
meetings, we are having conversations, sending technical
experts to these international forums. Now, the ICH, we
believe, has kept pace. The membership criteria for them is
robust. So China, to get entrance into that, is going to have
to implement a basic set of regulatory requirements for the
manufacture of pharmaceuticals, for the conduct of clinical
trials in China, and for stability testing of pharmaceutical
products. So, with their entrance, they have to hit those
requirements.
And so, you know, we are looking forward to seeing how that
is accomplished, which will accomplish greater quality
improvements on things sourced in China.
Mr. Holding. Good, thank you. Now, I have been encouraged
by the Administration's effort to improve treatment for ESRD
patients through the 2019 executive order, Advancing American
Kidney Health Initiative, as well as the ESRD Treatment Choice
model proposed last year, aimed at providing patients more
choices through moving to dialysis at home or a transplant.
Kidney disease has a significant impact, as you know, on
Americans' everyday lives, and makes up more than $1 in $5
spent by the traditional Medicare program.
So my question, Mr. Secretary, is do you anticipate that
you finalize the ETC model in the next few months, and can you
speak to the savings that this model is expected to generate?
Mr. Hargan. Yes. We are working internally on that model,
as you know, right now. So we are--while I don't want to
perhaps give any particular timing on that, it is obviously--
kidney health is a serious priority for the President. As you
point out, it is about 20 percent of the spending in some of
our programs at HHS. And it is a serious--not just a financial,
but a physical drain on people who are in dialysis treatments.
So we are working to stand that out.
These are sort of--these issues, as you know, go back
decades with regards to how we treat and reimburse patients in
this area. In many cases it has been, I think, a galvanizing
moment for this part of the health care sector, that we have
new models being proposed. So we hope to have something out, as
I say, as soon as we can, making sure that we get a thoughtful
and successful launch of a model.
Mr. Holding. Thank you. I have another question, which I
will submit for the record, regarding the Pharmaceutical
Cooperation Inspection Scheme and the mutual recognition
agreement with the European Union and the Australia, Canada,
Singapore, Switzerland Consortium. But I will send that to you
in writing, as I am out of time.
Thank you, Mr. Chairman.
Chairman Yarmuth. I thank you.
Mr. Hargan. Thank you.
Chairman Yarmuth. The gentleman's time has expired. I now
recognize the gentleman from New York, Mr. Morelle, for five
minutes.
Mr. Morelle. Thank you, Mr. Chairman, very much for holding
this important hearing today. And thank you, Deputy Secretary,
for--I know, it is hard to find where we are, right?
Mr. Hargan. Yes.
Mr. Morelle. Thank you. I am over here. And thank you,
Deputy Secretary Hargan, for being here.
Mr. Secretary, as you may be aware, in November of last
year the Department of Health and Human Services denied the
state of New York's request to renew its delivery system reform
incentive payment called DSRIP, for short. It had a waiver. We
wanted to extend it past March, and that has been denied.
DSRIP is a Medicaid redesign program dedicated to
fundamentally restructuring the health care delivery system by
reinvesting in the Medicaid program with the primary goal of
reducing avoidable hospital use by 25 percent over five years.
So the idea is, rather than using sort of a slash and burn
technique to cut health care costs, DSRIP provides a
comprehensive and sustainable approach that takes preventive
measures to identify the needs of our most vulnerable
population before treatment becomes incredibly costly. And much
of that involves the social determinants of health.
For example, suffering from congestive heart failure is
expensive, obviously frightening, and requires regular medical
attention. If you add to that the question of stable housing
for the patient, and you add that into the equation, you really
are now dealing not only with extensive concerns that you might
have about your health, but you are also having to do it while
you are worrying about whether you have a roof over your head,
working to keep food on your table, paying for prescription
drugs, et cetera, et cetera. And simply getting to a doctor's
appointment becomes a--both a physical and emotional and
financial drain and challenge. So--and you are forced not to
choose simply between your immediate stability, but also your
long-term health and the cruel and unsustainable situation that
it puts people in.
So DSRIP funds programs that New Yorkers and patients
throughout the country who have complex medical issues--allows
them to address those needs. The dollars were allowed under the
federal waiver to assist people with complex affordable housing
issues, arrange medical transportation, and dealt with things
like opioid addiction, childhood asthma, a whole host of
programs and projects that were undertaken by the various DSRIP
provider networks throughout the state.
Since the implementation of it, hospital admissions have
been reduced by 21 percent among the Medicaid population that
was targeted, and preventable readmissions reduced by 17
percent, according to numbers that I have from June 2018, the
last data that is available.
This budget cuts Medicaid, it stops the waiver program. And
in effect, in my mind, while you can get short-term gains
perhaps in terms of financial gains, the outcomes are going to
be dramatically reduced and, in fact, cost us, long-term, far
more money, money that people in the health care field are
often trying to get to the quadruple aim, which is better
outcomes, bending the cost curve down, having improved patient
experience, and improved provider experience.
And I am very, very troubled that this budget doesn't take
into account many of the advances that are made toward
achieving the quadruple aim and using social determinants to
achieve better outcomes. And I want to know whether or not the
Department would reconsider New York's DSRIP waiver
application.
Mr. Hargan. With regard to the particular waiver
application, we can certainly talk to you after this. But I
wanted to talk a little bit about social determinants of
health.
I think we completely agree that these are issues that we
have tried to stand out on in terms of developing thoughtful
policies dealing with those. We know that, in many cases, they
can be very helpful to people, and can help avoid some of the
hospitalizations, some of the further medical problems that
take place down the line, that there are--and some of the
flexibilities that we have tried to allow people to have in
spaces for plans to be able to work them into their own plans,
we think, is very helpful.
Some of the things like the Stark and anti-kickback reforms
that have been proposed would allow social determinants of
health to be worked on, among----
Mr. Morelle. So----
Mr. Hargan. So some of the regulatory----
Mr. Morelle. Yes.
Mr. Hargan [continuing]. reforms are very much aimed in
that direction.
Mr. Morelle. Well, let me--and I appreciate that. I would
suggest this, and I apologize because I only have just a few
seconds left, and this is probably less in the form of question
than just a comment on it. I would suggest that, in the short
term, the next 36 months, that we would have to make
significant new investments in Medicare and Medicaid to have
real redesign of systems that allow for the longer-term
changing of the cost curve down and improving those outcomes
dramatically.
And I would like to work with the Department on thoughtful
ways to increase investments to have longer-term savings,
again, improve outcomes, avoid admissions, avoid re-admissions,
and improve patient experience and those of providers who are
struggling under shortages to deal with the stresses of their
job.
So I appreciate you being here, and I would like to
continue the conversation, if we can, offline.
Thank you, Mr. Chairman.
Chairman Yarmuth. The gentleman's time has expired. I now
recognize the gentleman from South Carolina, Mr. Norman, for
five minutes.
Mr. Norman. Thank you, Chairman Yarmuth.
Mr. Secretary, thank you for coming. Before I ask my
question, I would like to yield 60 seconds to Congressman
Stewart.
Mr. Stewart. Thank you, Mr. Norman. And I won't take 60
seconds, being respectful of your time.
Mr. Deputy Secretary, thank you for being here. I did have
a question, but many of us are trying to de-conflict schedules
here, and I can't stay.
There is a company in my district called Navigant. I am
aware of other companies, as well, that think they have
solutions, or partial solutions, or potential solutions
regarding the coronavirus. And I am sure you are aware of some
of these.
What I would like to do is just submit, in writing, for the
record, the agency's plan to develop and to leverage these
public-private partnerships. Very clearly, the answer is going
to come from some private company somewhere. Are we--do we have
a highway, a way of integrating with these companies, and to
get the information from them that otherwise--you know, in a
very time-sensitive manner?
And again, we will submit that for the record.
Mr. Hargan. Yes.
Mr. Stewart. Thank you, Mr. Norman.
Chairman Yarmuth. May I ask the gentleman, do you have
something you want submitted for the record?
Mr. Stewart. Yes.
Chairman Yarmuth. OK.
Mr. Stewart. If we could.
Chairman Yarmuth. I couldn't quite figure out whether you
wanted him to submit something in response----
Mr. Stewart. No, my--if I misspoke, I apologize.
Chairman Yarmuth. That is all right.
Mr. Stewart. Thank you.
Chairman Yarmuth. Without objection, so ordered.
Mr. Stewart. Thank you.
Mr. Norman. Thanks.
Deputy Secretary, one of the most frequent calls I get is
pricing for pharmaceuticals. ``Why is my insulin price so
high?'' Why is a particular type drug--what--PBMs are of great
interest to me. The spread pricing that--where they reimburse
pharmacies one price, charge the state an astronomically higher
price, what can--I guess--can you give me a road map for what
you consider a way to bring a light to that to help our
consumers?
Mr. Hargan. Well, as you know, the President has made
bringing down the cost of pharmaceuticals one of the keystones
of what we are trying to do at HHS, and put out--early on in
Secretary Azar's tenure we put out a blueprint addressing drug
pricing, which had dozens of different proposals that we are
standing out, in terms of addressing drug pricing.
The--some of the things that we have done--one of the
things that we have done just internally at the Department is
the fact that the generic drug approval rate has gone up to
record levels. We have also had high numbers of innovator drugs
that have been approved. All of those things, just kind of--of
their nature, by producing competition, produce lower costs for
Americans.
So we have seen drug prices--and Americans use generics in
large numbers. So we have seen prices lower as more generics
come online. That is a huge help, and that just happens in the
day-to-day business of the Department, but now at record
numbers, thanks to some of the reforms that were put in place.
On top of that, we have other proposals, things like the
direct-to-consumer rule that has been put out that says--that
shows people the prices that they are going to be charged. We
think that would have some effect on drug prices, as well.
We also are very happy to engage on drug pricing proposals
that Congress has put forward to move forward on a bipartisan,
bicameral basis, to have legislation that can enable Americans
to get lower prices for drugs. We have endorsed a number of
different areas in that space. However, we know that Congress
has a lot of different potential proposals in here, and we
would be happy to work with people here on that basis to bring
forward good legislation in this area.
Mr. Norman. Well, I appreciate it. You know, when I--when
you get calls from those widows whose child has been diagnosed
with diabetes, and the question is, ``How can afford the
insulin,'' because the alternative of her dying, it has an
impact on you.
Mr. Hargan. Yes.
Mr. Norman. So--and I appreciate the Administration's goal
to keep the focus on that. And it is real, I can tell you, in
the real world.
Mr. Hargan. Yes. Yes, absolutely. And, you know, we have
done some reforms. Part D premiums have come down over 13
percent in the past few years. So you are seeing the impact in
areas on there. That doesn't mean that we stop, just because we
have had some successes in bringing down premiums and bringing
down prices. We still have areas where we need to focus.
And, you know, insulin is one of the areas that--we hear a
lot of public testimony on that very issue. So we are committed
to working with Congress on these issues.
Mr. Norman. Well, I appreciate it. And insulin is one--is--
the question I had from my--from the person who called me was,
``This has been--people have had diabetes for a long time. Why
is the drug that should be a lot cheaper than it is, why am I
having to pay the price that I am?''
I have got 30 seconds. What about--I have got a lot of
rural communities with sovereign Indian tribes. Access to
health care, what is your take--opinion on getting them easily
accessible medical care?
Mr. Hargan. So with regard to rural areas, we have a lot of
different proposals. The Secretary, about a little over a year
ago, put together a rural health task force internally at the
Department. And so we have been working to get together a
package of proposals to work on with regard to rural health.
So expanding access in there is going to take both the
areas technologically, like telehealth, which we have talked
about already, but also being able to have a good work force in
the area, where people can practice to the top of their
license, and we have access to care, both on the service side
as well as the technological side. Both of those areas are
going to require reform.
We--some of it is going to require reimbursement reform,
and we have advocated for some of that, and have enacted some
of that, but it is going to require a--probably a longer
conversation. Fifty-seven million Americans live in rural
areas. They have--there is a disparity between rural America
and non-rural America, in terms of the health care that they
get on basic things like heart disease and cancer.
So--and we are going to have to move to a model that is
going to enable rural Americans like myself, as I grew up, to
have access to care, to have access to quality care that they
deserve. And some of that is going to be, as I say,
technological. Some of it is going to be work force development
that is going to enable us to move forward into a new model of
rural health care that is going to allow Americans to get
better care.
Mr. Norman. Thank you for your service.
Chairman Yarmuth. The gentleman's time has expired. I now
recognize the gentleman from Nevada, Mr. Horsford, for five
minutes.
Mr. Horsford. Thank you very much, Mr. Chairman. And thank
you, Deputy Secretary, for being here today.
I want to point out just before I begin, several of my
colleagues throughout this morning have talked about the budget
and the President's budget proposal, the congressional budget.
But I just want to reiterate that there are budget cap
agreements in place through 2021 that have been agreed to with
the Senate, with the House, and the Administration. In fact,
the Ranking Member of this Committee and member--many members
on the other side voted for those budget caps. So I know we get
a lot of misinformation from the White House, but I just wish
that we would not bring that misinformation into this Committee
setting.
Mr. Deputy Secretary, last week your boss, Secretary Azar,
came before the Ways and Means Committee, and I asked him about
the Administration's proposed $52 billion cut to the graduate
medical education program. Today these cuts would have
detrimental impacts on my home state of Nevada, where we need
more physicians, not drastic cuts to the very program that
trains and retains our doctors, particularly in this
environment with the coronavirus, where some of our doctors who
are being exposed are no longer available.
So my question to you specifically related to this is
Nevada ranks 48th in the nation for primary care doctors. We
have about 180 full-time doctors in southern Nevada per
100,000, compared to over 303, on average. And in certain parts
of my district I, literally, don't have an adequate number of
OB-GYN providers. We have 259 in the entire state of Nevada.
So what is your take on the proposed $52 billion of cuts to
the GME program?
Mr. Hargan. Well, I think that the point that you made
about the lack of OBs, for example, I was--my parents are--and
I am--from southern Illinois, but I was born in Missouri
because there wasn't even an OB available in rural southern
Illinois at that time. So----
Mr. Horsford. So why is the Administration cutting the very
program that trains more doctors, including OB-GYNs?
Mr. Hargan. One thing that we have done is, by turning this
into a more flexible block for GME, we have incorporated a lot
of the GME money into a single program. That is going to
allow----
Mr. Horsford. Reclaiming my time, because that is the exact
statement that the Secretary gave me in the other committee.
And somehow he argued that cuts to a critical training program
would be good for states like mine. And that simply is not
true.
Not only would my state lose funding for new doctors under
this budget, the plan outlined in your budget would hurt the
630,000 Nevadans who are covered by Medicaid. Both the American
Academy of Family Physicians and the American Medical
Association put out statements opposing the Administration's
proposal, and have warned that it would lead to significant
benefit cuts, would require states to limit the number of
beneficiaries receiving coverage, and it would put vulnerable
populations at greater risk.
We are a growing state. Putting us into a block grant
program and calling it flexibility doesn't work. So I am
unclear. How does a proposed flexible fund, which is just a
block grant program, and which adds no additional funds to the
training of doctors in my state or any others, how does that
help constituents have access to more doctors?
Mr. Hargan. So when you talk about exactly what GME has
done so far, we haven't had a real revision of this law in
terms of, like, what types of doctors that it funds since, I
believe, 1996 or 1997----
Mr. Horsford. So will you work with us on that?
Mr. Hargan. Yes.
Mr. Horsford. To address the need to diversify the revenue
that funds the GME program?
Mr. Hargan. I think that----
Mr. Horsford. So that we are not just relying on CMS
funding?
Mr. Hargan. Yes, and I would say that one thing that we are
trying to do here in the reform is to move it out of being
funded by the Medicare Trust Fund, which we think is a place
where seniors are actually using some of the Medicare money
that has been set aside for them to fund GME, which, in many
cases, funds doctors that aren't actually Medicare doctors----
Mr. Horsford. So you agree to work with us to come up with
a more robust GME program so that we can train more people, and
meet the needs of our constituents that need to see doctors?
Mr. Hargan. And update the GME program, so it represents--
--
Mr. Horsford. Is that a yes?
Mr. Hargan. Yes, we would like to work with you.
Mr. Horsford. Great. The Administration also proposes a
nearly $1 trillion cut to Medicaid over 10 years. How will
these compounded cuts impact my constituents' ability to lead
healthier lives and access physicians that they need?
Mr. Hargan. We think there won't be any cuts to Medicaid at
all. There will--every year there will be an increase in
payments in Medicaid. We anticipate all that we are doing here
is putting in place reforms that are going to slow down the
rate of growth to make sure----
Mr. Horsford. Slow down the rate of growth in the effect--
--
Mr. Hargan [continuing]. it is a sustainable program.
Mr. Horsford. In effect, cuts $1 trillion over 10 years.
Let's be honest with what it does. We get a lot of
disinformation and misinformation. Let's not continue to do
that in this Committee.
Thank you, Mr. Chairman, and I yield back.
Chairman Yarmuth. The gentleman's time has expired. I now
recognize the gentleman from Tennessee, Mr. Burchett, for five
minutes.
Mr. Burchett. Thank you, Mr. Chairman, Mr. Ranking Member.
Although our Ranking Member has decreased in age, he has not
increased in good looks, and I would like to state that for the
record.
Thank you, Mr. Hargan, for being here today. And I would
like to ask about--focus on Medicaid as it is today in
Tennessee.
Do you think Washington or state governments are better
equipped to design programs that are best suited to their
individual state?
Mr. Hargan. The states, obviously. That is the whole
premise of the Medicaid program, is that the states run the
programs for their own populations.
Mr. Burchett. Great. As you know, my home state of
Tennessee is the first state to convert our current Medicaid
program, TennCare, into a block grant. What would the impact of
this budget have on this new direction my state is going?
Mr. Hargan. Well, we are, I know, looking--working with
Tennessee on their proposal and what they have done. And,
again, Medicaid rises every year. The amount of money that is
set aside for Medicaid in this budget goes up every year. So we
would anticipate that the money would go up for Tennessee, and
that those flexibilities that would be available under any
proposal are there for Tennessee to--for its own population,
and for the needs that they see locally for their state.
Mr. Burchett. OK. I have no more questions, Mr. Chairman. I
will yield back the remainder of my three minutes and 32
seconds.
Chairman Yarmuth. Thank you, sir.
Mr. Burchett. You are welcome, sir.
Chairman Yarmuth. I won't even say your time has expired.
You yielded it back.
I now yield five minutes to the gentlewoman from Illinois,
Ms. Schakowsky.
Ms. Schakowsky. Thank you, Mr. Chairman.
Deputy Secretary Hargan, when President Trump ran for
office, he made a promise. He said, ``I am not going to cut
Social Security like every other Republican, and I am not going
to cut Medicare or Medicaid.'' However, in almost every one of
the budgets that he has released since taking office he has
proposed slashing hundreds of billions of dollars from Medicaid
and Medicare and Social Security. For Fiscal Year 2001 (sic)
you have proposed cuts of half-a-trillion dollars from
Medicare, almost $1 trillion from Medicaid, $25 billion from
Social Security.
These programs keep seniors, individuals with disabilities,
and their families alive. And they are critical as we battle
coronavirus right now. Medicaid covers the care of six in 10
nursing home residents, who are often older and living with
chronic medical conditions putting them at high risk, as we
have seen in Washington State.
While your Administration recently requested $1.2 billion
in new resources to fight coronavirus, the supplemental request
did not address $900 billion in cuts to Medicaid and--from--as
was in the original proposal.
So you may say that you were unaware of the coronavirus in
scope when you wrote that budget. But clearly, we have a
problem right now. So what steps or policies are you taking to
reduce the spread of coronavirus among nursing home patients,
which is a boiling question right now, or other vulnerable
populations who live in a congregate residence setting?
Mr. Hargan. Thank you, Congresswoman. We are, right now, as
Dr. Schuchat of CDC mentioned, Administrator Verma, who
oversees nursing homes, has appointed a liaison to work with
CDC to make sure that CDC's practices and nursing homes are
brought directly into CMS. So they are working closely on the
issue about nursing homes. As we had seen from Washington
State, that is an issue of the highest priority.
Because this--because the disease, from what we have seen
so far, really afflicts particularly those who are both elderly
and medically frail, that is why we need to make sure we focus
on that, as Dr. Fauci said.
Ms. Schakowsky. So are you regretting, I hope, that--this
almost $1 trillion cut in Medicaid at this very moment, when
six out of 10 people in nursing homes require help from
Medicaid?
Mr. Hargan. Well, there are no cuts to Medicaid in the
budget. Every year the money--the dollars to Medicaid go up
every year in this budget. Same for Medicare. We are simply
talking about decreasing the rate of growth to an amount that
the average American's wages go up every year, as we expect.
So if we reduce those, what we are doing is preserving it
for future Americans. The Medicare trustees tell us the
Medicare Trust Fund is going to start running out of money in
2026----
Ms. Schakowsky. You are talking about Medicaid.
Let me finally--over the past two weeks I urged Secretary
Azar, by a letter that was signed by 45 other Members, to
ensure that the coronavirus vaccine or treatments that may be
found will be affordable, accessible, and available.
And just yesterday President Trump met with the--with a
group of pharmaceutical executives. And so I am wondering, do
you have any update on the arrangements that have been made
with the pharmaceutical corporations and other private-sector
partners around licensing and pricing of the COVID-19 vaccine?
Mr. Hargan. Well, we--as you point out, we are working with
the private sector to develop and test a COVID-19 vaccine.
Government scientists invented some of the vaccine's critical
aspects, and we intend to work with the companies to ensure
that the price they charge the government for the vaccine is
affordable for taxpayers and patients, as well.
Ms. Schakowsky. Thank you, and I yield back.
Chairman Yarmuth. The gentlewoman's time has expired. I now
recognize the gentleman from Pennsylvania, Mr. Meuser, for five
minutes.
Mr. Meuser. Thank you, Mr. Chairman.
Thank you, Deputy Secretary Hargan, for being with us. I
represent a relatively rural congressional district, and I have
concerns related to CMS's so-called competitive bidding
program, particularly related to rural areas.
CMS issued an interim final rule in May 2018 that provided
payment relief for durable medical equipment in rural areas,
and has continued the relief until the end of 2020. Mr.
Secretary, can you tell me if CMS plans to continue this relief
in rural areas after 2020?
Mr. Hargan. Well, we do know that we are in the bidding
process right now for the competitive bidding program, and that
we--as you pointed out, with the IFR that was issued we
granted--there was some granting of relief by the agency on
that. We are hoping that this is going to alleviate a lot of
the problems that are faced by suppliers in that area.
We do know that there are issues in rural areas where the
number of suppliers continues to decline in that space, which
creates particular issues for competitive bidding in rural
areas. So I think we look forward--we are going to be
continuing to work in this area to figure out how to come up
with solutions for rural areas that have declining numbers of
providers in this area of DME.
Mr. Meuser. Well, that is excellent to hear. I spent quite
a number of years in the medical equipment industry, and I
feel, as many do--and I think stakeholder groups and consumer
groups--that very often competitive bidding is very much of a
misnomer. It is really more of the lowest price, regardless of
quality, patient choice, who the supplier might be, provider or
supplier standards, and distance to travel usually is not often
enough taken into consideration.
So when any--and it sounds like you know a thing or two
about it, which is encouraging. Before any such decisions are
made, you do plan on having a stakeholder input?
Mr. Hargan. So with regard to winding CMS and issues like
this, it is definitely being considered by the Rural Health
Task Force that we have drawn together. That looks at, sort of,
rural health and the problems that are faced by it from the
point of view of all of our agencies, including CMS, including
HRSA, the Indian Health Service, and others that deal with
these--that deal with the issues of getting rural access to
care. So DME is one of those issues. Obviously, CMS has taken
action on this to provide relief, but we are looking forward to
getting a comprehensive package of reforms together in this
area, and getting them out.
Mr. Meuser. Again, very encouraging. That is good to hear.
In the 2021 budget there is a provision that would expand
the competitive bidding program for DME into rural areas in
2024. Is this something that you believe CMS plans to move
forward with----
Mr. Hargan. Well----
Mr. Meuser [continuing]. without congressional approval?
Can you tell me anything more about that?
Mr. Hargan. So I think, as of now, we are planning on
basing competition on the rural areas, rather than on urban
areas, which we think is probably better representative of what
the conditions are in those areas. So we think that that has
attempted to de-link in some ways the competition from areas
that probably were inadvertently providing issues for rural
areas.
So--but we would look forward to further engagement from
the community on this, as we move forward, as I say, with an
overall package on rural health care reform.
Mr. Meuser. Thank you, Secretary.
Mr. Chairman, I yield back.
Chairman Yarmuth. The gentleman yields back. I now--you
ready?
I now recognize the gentlewoman from Texas, Ms. Jackson Lee
for five minutes.
Ms. Jackson Lee. Excuse me, Mr. Chairman, thank you. Thank
you very much.
And to the Deputy Secretary, I appreciate you being here. I
just came from the airport in light of some civic
responsibilities on Super Tuesday.
And so I am just coming from home, where people are
grappling with the coronavirus. I think you are well aware of
what people who are beyond the Beltway are thinking.
I want to ask specifically the issue of your proposal
originally to cut CDC's discretionary budget by nearly one-
fifth and its overall budget by 9 percent, or $700 million. If
enacted, how would these cuts affect the CDC's ability to
respond to the future global epidemics?
Now, let me say that I know that budgets are prepared over
a long period of time. But I also know that it was not
finalized before there was an indication that there was a major
epidemic in China. And I am baffled how the Administration
could send forward a budget that would do such drastic things.
I also want to--let me match this question of how did the
HHS--so these are two together--determine that that amount was
sufficient, the $1.25 billion was sufficient to fully address
the scale and seriousness of the coronavirus epidemic?
And what activities would HHS not be able to carry out, if
that $535 million were repurposed?
Mr. Hargan. Thank you for that. The cuts that you talked
about that were indicated, they were--we actually increased the
funding for infectious disease response at CDC by $135 million.
So we had actually already increased funding for these specific
areas in the budget that was proposed. So CDC's funding would
go up this year----
Ms. Jackson Lee. But only in the infectious diseases area.
Mr. Hargan. And that is the area that we would use for the
coronavirus----
Ms. Jackson Lee. Right.
Mr. Hargan [continuing]. issue that you indicated----
Ms. Jackson Lee. But that is not all that they do. I did
ask a specific question. But go ahead, let me let you finish.
Mr. Hargan. Yes. And with regard to the $2.5 billion
supplemental that was brought forward last week by the
Administration, we--as the President said, we are open to
discussions with Congress about this. I think he said very
specifically about that. So, with regard to the number that
Congress proposes on that, we are absolutely willing to work
with you all flexibly on that front.
Ms. Jackson Lee. Mr. Deputy Secretary, with all due
respect, don't you think it was somewhat derelict for the
Administration even to think about reducing funding for CDC and
NIH? And I think it was a combination of $3.58 billion and then
another $658 million, if my numbers are correct, for the NIH.
Don't you think that was not responsible, in light of the fact
that you had the backdrop of the issues dealing with the
coronavirus?
Mr. Hargan. Well, NIH is the largest element of our
proposed budget in discretionary spending. So it is--and by
far. So, in operating within the budgetary environment that we
have, we had to approach it with the point of view of
prioritizing the areas that the--that NIH wanted to prioritize,
things like artificial intelligence and other areas that they
were standing forward. But it is the largest element of a
discretionary funding.
When we are in a situation where we have to give thoughtful
reforms to our discretionary budget lines, NIH, as the largest
element, naturally ends up with some reductions. But with
regard to infectious disease, we have definitely already--in
that environment, already increasing the funding for the
elements of CDC that would provide response.
Ms. Jackson Lee. My time is running quickly. Let me ask
this question again.
Life expectancy before the passage of the Medicare
legislation was 70 years and, after that, 72 years and growing.
What came over the Administration to have a $1.7 trillion--I
think that is the number--cut in Medicare and Medicaid?
And the President made a very loud proclamation as he was
running that he was prepared to work very hard to help with the
decreasing of prescription drug costs. We have seen no efforts
on behalf of the President at this time and in HHS to do so.
And they are certainly not advocating for H.R. 3.
What is your reason for the huge cuts that will go to my
constituents and others across the nation in Medicare and
Medicaid, and--as well, doing nothing about lowering the cost
of prescription drugs?
Mr. Hargan. We are projecting increases every year in
Medicare and Medicaid in dollars spent in these programs every
single year.
Ms. Jackson Lee. I am sorry, I didn't hear that. What did
you say?
Mr. Hargan. We are projecting increases in dollars spent in
Medicare and Medicaid every single year, including the upcoming
year, and every year for the next 10 years within the budget,
within the budget cycle.
What we have proposed is what we hope are thoughtful
decreases in the rates of growth of both of these programs so
that they don't grow as quickly. Part of that is what we want
to do to create--make sure that the promise of these programs
that we all agree on, Medicare and Medicaid, are available to
future generations of Americans. We don't want the Medicare
Trust Fund to run out in six years, as is projected. We want it
to be available, we believe on current projections we will get
25 years out of the Medicare Trust Fund.
So at some point we have to do--make some reforms----
Ms. Jackson Lee. Can you move to the prescription drugs
inactivity?
Mr. Hargan. Sure. Part of the way that we have tried to
reduce the cost of drugs is actually internal to the
Administration. By increasing the number of generic drug
approvals, that lowers the cost of drugs overall. The more
generics we have out there, the more Americans have access to
generic drugs that are far lower in cost.
We get--we also have increases in the number of innovator
drugs that compete with existing drugs out there. So those also
help reduce the cost there.
We have--the drug pricing blueprint has dozens of proposals
that the Administration has stood forth, or is planning to
stand forth to reduce the cost of drugs. It is a centerpiece of
what the President wants to do for Americans. And we look
forward to working with Congress, on a bipartisan, bicameral
basis, to bring forward legislation that addresses this issue.
We agree with you, it is a top issue of mind for----
Ms. Jackson Lee. Chairman, I just have a question. I know
that my time has ended.
Chairman Yarmuth. No----
Ms. Jackson Lee. I just want to ensure that we can dig deep
in the $1.7 trillion cut and why there has been no direct
response to the legislation that has been offered by this
Congress on lowering prescription drugs.
Chairman Yarmuth. Duly noted. The gentlewoman's time has--
--
Ms. Jackson Lee. I yield back, thank you.
Chairman Yarmuth [continuing]. expired. I now recognize the
gentleman from Texas, Mr. Roy, for five minutes.
Mr. Roy. I thank the Chairman very much. Mr. Hargan, thanks
for being here.
The reason there has been no response to H.R. 3 is because
it would devastate innovation. It would destroy the ability of
the market to produce the drugs that are saving lives
throughout the country, including the drug, for example, that
helped save my life when I was going through cancer at MD
Anderson. I think we want to make sure we promote a market
where we can have the kinds of drugs that are saving lives and
not destroy it, which is exactly what H.R. 3 would do.
With respect to spending, I would like to ask you to repeat
again. Is there a single decrease in Medicare or Medicaid
expenditures in the proposed budget from the President of the
United States?
Mr. Hargan. There is--there are increases in Medicare and
Medicaid----
Mr. Roy. Correct.
Mr. Hargan [continuing]. every year in the proposed budget.
Mr. Roy. Thank you. And can you tell me the amount that is
proposed for CDC spending in the House Democrats' proposed
budget?
Mr. Hargan. I don't know that I have seen a proposed
budget.
Mr. Roy. You haven't seen a proposed budget from House
Democrats. Yes. That is what I think. There is no proposed
budget from my House Democrat colleagues. They want to take pot
shots at the President's budget, when the budget proposed by
the President is increasing spending on Medicare and Medicaid,
yet will not do the hard work of putting pen to paper to
actually put forward a budget. That is the reality of what we
are dealing with here in this room today.
And so, with respect to the President's budget, and we are
talking about savings, you are talking about spending going up
on Medicare and Medicaid. Now, why is this a problem?
Health care costs are significantly driving our deficit
spending. Would you agree?
Mr. Hargan. Yes.
Mr. Roy. So in 2019 we had $1.5 trillion in Medicare,
Medicaid, SCHIP health care spending. Proposals I have seen, or
projections I have seen, by 2030 we would have $2.5 trillion of
that same spending. Does that sound right to you?
Mr. Hargan. I would have to look the numbers over, but yes,
they are--the numbers are enormous.
Mr. Roy. There is a massive increase going up.
Mr. Hargan. Yes.
Mr. Roy. In 1970 mandatory health care spending was 0.8
percent of GDP. In 2020 it is 5.4 percent. In 2030 it is
projected to be 7 percent of GDP. We have to be--have serious
proposals in this body to deal with these issues, and I
appreciate that the President and HHS has put forward a budget
that tries to approach balance, even though it assumes 3
percent economic growth and low interest rates.
But you have to have strong economic growth in order to
drive out of this. Yet right now what we have is a bunch of
political shots being taken in this Committee for no value for
the American taxpayer, for no value for our American citizens.
We are not sitting down and rolling our sleeves up to figure
out what to do about Medicare and Medicaid. We are on a train
heading to a cliff, and we all know it. Yet we sit here and do
nothing about it.
And my Democratic colleagues refuse to put forward a
budget, and take pot shots at the President's budget, which
balances, increases dollars for Medicare and Medicaid, and then
has cost savings. Let's talk about the cost savings.
GAO just had a report that came out the other day about
$175 billion of improper payments, of which $103.6 billion were
from Medicare and Medicaid. Are those the kinds of savings you
are looking to try to achieve to keep overall spending down,
but yet preserve Medicare and Medicaid?
Mr. Hargan. Yes, we are looking at improper payments,
waste, fraud, and abuse, broadly across our programs. That is
an important element of this, for us to be able to reform these
programs.
Mr. Roy. One thing I would like to point out with respect
to pre-existing conditions. Somebody was making a comment
earlier about how the President doesn't seem to be concerned
about pre-existing conditions. You answered that question, I
think, appropriately.
I would note that I saw a report today in social media that
investors see the bump in Vice President Biden as stability,
and that we wouldn't necessarily get Medicare for All. But here
was the little important footnote, that it will keep insurance
and pharmaceutical stocks fat, because what Obamacare really
is, and what the ACA really is, is the make-insurance-
companies-richer bill. It is keep allowing insurance companies
to run our health care, because that is what Obamacare is
really doing, shoving millions of people on Medicaid, putting
more decisionmaking in the hands of insurance companies to run
our health care, and then everybody pat themselves on the back
while they drove people out of the individual market, increased
prices 60 percent across the market, double--triple the
premiums for people in the individual market.
That is the legacy of Obamacare. That is the legacy of
putting more power in the hands of the federal government
deciding health care decisions.
Mr. Secretary, let me just make one point about the
coronavirus, if you would. I had a great conversation over at
ASPR with Secretary Kadlec, but I did have one troubling--I
represent San Antonio. And one troubling take-away from our
conversation was I saw no plan on what to do with the citizens
who were flown to San Antonio. In other words, there was an
assumption by DoD and HHS that citizens that were flown to San
Antonio into the bases at Lackland would then be put into
civilian hospitals in San Antonio.
Then we had the CDC release an individual who we know who
had been exposed, and had exhibited symptoms, and had tested
positive, and was prematurely released, endangering some of the
citizens of San Antonio.
Can you please offer me some assurances that we are on top
of this, that CDC will not make an error like that again, and,
most importantly, that the citizens of San Antonio will be
consulted prior to decisions being made about how people are
going to be released into our communities?
Mr. Hargan. So, with regard to the CDC protocols, they have
looked at that particular case, where they--they had followed
the existing protocols, which said that you have to have, you
know, the existing amount of time be spent in the quarantine.
Plus, there were two negative tests. She had received two
negative tests, but there was a pending test outstanding. They
hadn't been sequential.
So she was released. It turns out that that positive test
was not--I don't believe it was accurate. And so there wasn't a
problem, as it turned out to be.
However, they have revised their protocols----
Mr. Roy. Yes.
Mr. Hargan [continuing]. so that the negative tests will
now be sequential.
And then also, if there is a pending test, that somebody
won't be released until that pending test result is received.
So that should manage this around the particular issue that was
received there.
So, other than that, the protocol was followed, globally
agreed, 14 days of quarantine for the people who came over.
With regard to the use of the DoD facilities, I spoke
myself to the mayor, also to some of the local leaders at--in
San Antonio to talk through whatever concerns that they had. So
we have been trying to do outreach to local leaders, whether it
is senators, city councilmen, local leaders of any kind, and we
are going to continue. We are going to continue to do that.
We are also talking to Congressmen and senators at places
where there are--but as we move into the next phase of what we
are going to be dealing with with coronavirus, I don't know
that we are going to anticipate the same kinds of issues that
you are pointing out there, with regard to the bases.
Mr. Roy. And Mr. Chairman, with your indulgence, I just
want to thank the Secretary and thank you for your
responsiveness, generally, at HHS. I can't say the same about
DoD, by the way.
Secretary Esper, if you are listening, I am still waiting
on a response.
But thank you for that input. Thank you for reaching out to
San Antonio. Just keep in mind it is important to have that
plan ahead of time, to know--don't assume we are going to put
them in civilian hospitals. San Antonio is happy to be at the
center of trying to deal with natural emergencies and help our
fellow American citizens. Bring them to Lackland, that is
great.
Mr. Hargan. And----
Mr. Roy. But let's just have a conversation if we are going
to assume they are going to civilian hospitals.
Mr. Hargan. Yes.
Mr. Roy. Thank you, Mr. Chairman.
Chairman Yarmuth. The gentleman's time has expired. I now
recognize the gentleman from California, Mr. Khanna, for five
minutes.
Mr. Khanna. Thank you, Mr. Chairman.
Thank you, Mr. Secretary, for being here. My district in
Santa Clara County, California, has 11 cases now of
coronavirus. And so I want to ask you a few questions to see
how we can work together to solve this. That is the only thing
that people care about.
First, I am concerned that CDC has stopped reporting the
number of tests they are doing on their website. Do you know
why that is? And can we get CDC to start reporting on their
website again the total number of testing?
Mr. Hargan. Well, I think that, with the dispersal of
testing to a lot of public health labs, and also the fact that
we foresee an availability, as Commissioner Hahn has said, of a
large number of tests being available from private--from the
private sector, we think that there are going to be a lot more
testing going on with that, with that particular----
Mr. Khanna. But can we just have them report? I mean we are
the United States of America, not China. We believe in
transparency and getting the facts out. Can we just make sure
the CDC is actually reporting the number of tests they are
doing, or--and all the information they have?
Mr. Hargan. We will work with CDC about exactly what they
are bringing forward.
Mr. Khanna. Thank you. If you could, talk to them about the
reporting.
The second thing I don't understand--again, because we are
the United States of America--is how have we only done 472
tests, while South Korea has done 100,000 tests already, and
Italy 23,000. I mean, we should--we are the most innovative
nation in the world. We have the most resources. How do we make
sure that we are getting tests out there, and leading in this?
Mr. Hargan. In this case there has been no backlog in terms
of tests presented to CDC. So that is the good side, that we
have not had backlogs. The number of tests, there have not been
any delays in terms of tests being presented to CDC, or
backlogs of any kind.
With regard to that, before the end of this week we are--as
CDC has indicated, we should have public health labs throughout
the country. We will have those tests available, FDA-approved
tests, to get out there more broadly, locally. So those--that
was as of last Friday.
And, as I said, Commissioner Hahn, working with the private
sector, believes that there will be many, many more tests
available----
Mr. Khanna. Can we set a goal that we should be the number-
one country in having more tests than any other country? I
mean, it seems----
Mr. Hargan. I believe the----
Mr. Khanna [continuing]. absurd that we couldn't lead in
that.
Mr. Hargan. I believe, by Friday, we will see a substantial
uptick in that.
In many cases, what we also have to make sure is that we
have accurate testing, that we make sure that--and CDC work
closely with FDA to make sure that our tests were accurate.
Mr. Khanna. And is there a reason we are not using the WHO
test, the World Health Organization that so many other
countries are using?
Mr. Hargan. Well, we often--WHO is often relied on by
countries that don't otherwise have resources in this area.
Mr. Khanna. Right.
Mr. Hargan. So many times we, or countries in our--we will
have our own tests for these particular----
Mr. Khanna. But, I mean, in this case, I mean, my view is
we should just get the tests out there. Can we explore if that
is something we should do?
I mean, I agree, we should be building our own tests, but
if we can test more people, why not use that?
Mr. Hargan. Well, we can--I will definitely take that back
to CDC.
Mr. Khanna. Great.
Mr. Hargan. Thank you.
Mr. Khanna. The other issue is can we assure people that
the testing and the treatment will be free for anything related
to the coronavirus?
Mr. Hargan. I think when we get--for example, with regard
to vaccines, we are working--we will--our scientists have
developed some of the intellectual property underlying the
vaccines, and we will be negotiating with any private-sector
entities----
Mr. Khanna. What about--I just see time--and what about
this--the testing for a coronavirus? If you want to get a test,
you should have it free. If you want to get treated for
coronavirus, that should be free.
Mr. Hargan. I think any--if Congress intends to put that
kind of--that into the supplemental, we will work with them----
Mr. Khanna. Would you support something like that?
Mr. Hargan. We will work with all the particularities of
exactly how Congress wants to do that funding. I am--assume you
all would have discussions amongst yourselves about how you
would like to----
Mr. Khanna. Do you think that may be a good idea?
Mr. Hargan [continuing]. provide funding on that area.
I am not going to sort of double--second-guess Congress on
how you decide to allocate resources, whether it is to testing
vaccines, surveillance, personal protective equipment,
therapeutics.
We have got a lot of proposals on there, state and local
support for responses. So there are a lot of elements to go
into that. So I think we look forward to working with you all--
--
Mr. Khanna. My final question, just because of my time, I
ran in, actually, at a coffee shop to Dr. Sanjay Gupta, and he
raised an important point. He said that there are only 64 to
70,000 ventilators across the country, and that we may need
more, especially as this is affecting the elderly. Has there
been some concerted effort to make sure we are getting more
ventilators in our hospitals and public facilities?
Mr. Hargan. Yes, we have been talking extensively with the
manufacturers of masks and ventilators to increase supply of
them and other personal protective equipment.
Mr. Khanna. If you could keep Congress apprised of what we
are doing to get more ventilators across the country, that
would be great.
Mr. Hargan. Understood.
Mr. Khanna. Thank you.
Chairman Yarmuth. The gentleman's time has expired. I now
recognize the gentleman from Oklahoma, Mr. Hern, for five
minutes.
Mr. Hern. Mr. Chairman, thank you. It is good to be here. I
always find it interesting that we have these hearings talking
about somebody else's budget, and we haven't done our own. I--
by the end of next week I will be in seven different hearings
across three different committees talking about the President's
budget, and yet we have yet to create a budget.
These hearings often do--I just heard my colleagues say
they start questioning the integrity of other agencies, as
opposed to trying to find the underlying reason why we have not
produced a budget. Maybe if we produced a budget, we could
spend all this energy that we have been spending in Congress
reconciling the differences between the President's budget and
our budget, and having a real fight over ideology, as opposed
to an ideology of having no values regarding a budget. So it is
fascinating.
You know, the Speaker often talks about the President
destroying the Constitution. Yet one of our fundamental
constitutional duties is to produce a budget. First--it is the
first clause of the enumerated powers, and yet we have not done
it. There is no intention to do one, because that would show
the true underlying integrity of the values of the Democrat
Party.
And, you know, it is very frustrating. It is very
frustrating for people to call my office--they know I am on the
Budget Committee--and ask the question, ``Why are the Democrats
putting a budget on the floor?'' (sic) We didn't do it last
year. We did pass it out of this Committee last year, I will
give the Chairman credit for that, but we didn't even pass it
on the floor. And this year we are not even going to do that.
So it is very troubling. And for my colleagues across the aisle
to disregard that as a responsible--a constitutional duty of
their office to be on this committee is just dumbfounding.
You know, right now the Medicare Trust Fund is going to be
out of business in six years. We have got to get after real
structural changes to that to understand how we are going to
keep our accountability and our responsibility to those who
paid into that fund.
And quite frankly, the true word of ``entitlement'' comes
if I give you money, which I have paid in my entire life, as
everybody else in this room has, I am entitled to get that
service back to me. And we are not going be able do that
because we have raided those funds over the years. We haven't
kept up with the pace of our aging population and the soaring
costs of health care in America.
I could go on forever and ever talking about these
fundamental failures in Congress. They are really good at
blaming other people, because that sells well back in the
district for their races that are coming up this year. But I
want to ask you some questions about the underlying things that
you can tell us about President Trump's position on America's
health care.
Where is the President at on pre-existing conditions?
Mr. Hargan. The President--it is a centerpiece of what we
are doing, is making sure that Americans with pre-existing
conditions are protected.
Mr. Hern. So he said that in his State of the Union. It has
been said numerous, numerous times. The leader of the
Republican Party has said it numerous times. You just said it
again. I assure you that the left-wing media will not ever
report that it was--it is going to be a centerpiece. They are
going to still say it is not true.
Could you also help me understand how--just talk about what
is going to be in that budget. What is it going to look like
for Medicare, the prescription drug costs, changing premium
deductibles, co-pays, or co-insurance?
Mr. Hargan. Right. So, with regard to what we are doing on
Medicare and Medicaid, what we are proposing is, in some cases,
taking out payments that have been allocated to Medicare,
historically, like graduate medical education and DSH funding,
that really, we don't think, belongs in--being paid for by
America's seniors. It really needs to be an item that is
outside--not being paid for by the Medicare Trust Fund. That
means that that trust fund is now going to be dedicated to the
programs that people have paid into, into that trust fund, as
you pointed out.
We are also trying to slow the rate of growth of the
programs. That is not cutting the programs, but slowing the
rate of growth. We think, between the reforms that we have got,
we have got 25 years left in the trust fund with these reforms.
We believe that these reforms, something like this, has to be
enacted at some point to save these programs.
Mr. Hern. Can I stop you right there, just because of time?
Have the Democrats sent any proposal this year for just how
we are going to save Medicare? It would be in their budget,
right, how they are going to do that?
Mr. Hargan. I have not--I am not aware of a----
Mr. Hern. OK, I just want to make sure we got that on the
record.
Are there any things that are in the proposal this year
that are the same as President Obama had in his proposals, as
well?
Mr. Hargan. We do propose--in terms of what President Obama
said?
Mr. Hern. Mm-hmm.
Mr. Hargan. Yes, we continue to sort of, as I say, keep
forward Medicare, Medicaid, the regular parts of our budget
that have gone on administration after administration.
Mr. Hern. I think the Medicare increase was 6 percent, or
something. Is that----
Mr. Hargan. Yes. And we are proposing--it is still a
relatively--it is--we anticipate Americans' wage growth is
about 3 percent per year. That is about--matching what we are
proposing for Medicaid. And the Medicare proposal is higher
than that.
Mr. Hern. OK. Mr. Chairman, thank you. I yield back.
Chairman Yarmuth. The gentleman's time is expired. And I
now recognize the Acting Ranking Member for 10 minutes, the
gentleman from Georgia, Mr. Woodall.
Mr. Woodall. I appreciate the acting title, Mr. Chairman. I
know Deputy Secretary Hargan is familiar with the acting title,
and it conveys all the same responsibilities, just without any
of the credit.
I wanted to talk a little bit about where Mr. Khanna left
off, Mr. Hargan.
I think about the conflicting responsibilities you all have
to actually be thinking ahead about ventilators, about masks,
about not what is happening right now, but what is going to
happen 12 months from now, 18 months from now.
And then you also have a committee of 435 on the House side
that wants to know what is going on. We may not be thinking
about what is going on 18 months from now, we are thinking
about what our constituents called us about yesterday. And so
we are asking you to do all of this planning that you are
absolutely doing so well. And we are also putting additional
reporting and attendance requirements in along the way.
I don't want you to have to throw anybody under the under
the bus, but is that a manageable load?
We are in crisis right now. You all are responding to
something that I have not seen that level of response to, and--
in my lifetime. And it seems as if the demands that Congress is
making of you are rising, instead of falling during that time.
Mr. Hargan. Well, we have emergency response functions that
are animated when these kind of things happen. We have been
preparing, with Congress's resources, for the past two decades
of giving money through the hospital preparedness program,
through our prep money that is given by CDC to states and
localities, and through exercises that go on every year between
our preparedness and response people at HHS and their state and
local partners. The most recent one was in August 2019 called
Crimson Contagion that dealt with an outbreak of epidemic
disease.
So there has both been money--over about two-thirds of a
billion dollars--that is spent every year on CDC for--the money
that is laid out for preparedness. So we have a strong public
health infrastructure to deal with preparedness and response.
Now, in the case of this outbreak, as we would also
anticipate, the Administration came forward last week, 10 days
ago, with a supplemental. So we had asked for $2.5 billion. We
understand that there is a possibility of Congress raising that
number substantially above that.
As the President said, we are open to that. We are happy to
receive whatever funds that Congress sees fit to allocate to
us. We look forward to working on that or any authorities or
resources that Congress sees fit to give us to deal with this
particular issue.
Mr. Woodall. Well, I appreciate that recognition.
Mr. Khanna asked whether or not you believed these tests
should be free, and whether the treatment should be free. The
Constitution doesn't give you the responsibility or even the
opportunity to decide how money gets spent in this country.
That responsibility lies specifically with us, here on the
Budget Committee, but certainly across the 435 of us,
collectively. And if there is going to be free health care in
this country, it is going to be because Congress passes a law
that makes that the case.
I would tell you I have been paying my health care premiums
for the last 30 years and, thankfully, I have not had to rely
on that health care infrastructure. I don't need you to provide
me with free care. I want my insurance company to provide me
with free care, because I have been paying them for that, just
in case. I know there are going to be other families that need
those dollars, and I think it would be a terrible waste to
blanket the country with free benefits. Target those benefits
to the families that need them the most. I know that is what
you have to do every day, in terms of prioritizing.
It is hard to pass budgets. I have been on the Budget
Committee since I came to Congress. And we have had to twist
Republican arms every single year Republicans got a budget
passed, because it is hard to put something out there to let
somebody shoot at. I cannot tell you how much I value that that
is a requirement that the law places on the Administration. And
in an area as sensitive as yours, you all and the President
stepped up to the task to make that happen.
I appreciate you standing up for the fact that reductions
in the rate of growth are not cuts in benefits to folks. A
Medicaid program--as you know, we have been working on a block
grant for Medicaid in Congress for quite some time.
In so many states the only health insurance program in the
state that doesn't dissuade people from attending the emergency
room instead of their primary care physician is the Medicaid
program. And to the extent that I am able to move a family out
of the emergency room and into a relationship with a primary
care physician, I am saving money for the taxpayer, no doubt,
but I am not cutting benefits to that family, I am adding value
to that family by moving them out of the ER, where care is
sporadic, and into that relational care that a primary care
physician can provide.
So I know it is an easy line of attack that you will hear
again and again and again, and I thank you for--hopefully, if
we say the truth often enough, every year there is an increase
in spending--then we will have some breakthrough.
The Chairman knows what I know, which is if we don't turn
the corner on federal spending, and federal revenues, and the
inequality between the two, we are going to crowd out all the
spending. Forget whether or not you want the CDC spending to go
up or go down. It is going to get crowded out to zero, and
there won't be anything you can do about it. I am anxious for
us to take on some of those challenges, and I appreciate your
efforts, particularly in the Medicaid program, to do that.
But because we have talked so much about cuts, I want to
talk about some of the some of the really great, great news.
CDC is just south of me in Georgia, we are tremendously proud
of what they do. It is not lost on me that, when they rescued
Congress from the anthrax outbreak in--at the tail end of two
decades ago, their spending rose dramatically after that.
[Laughter.]
Mr. Woodall. Their campus became much more attractive after
they after they rescued us. You don't realize who you need,
often, until it is too late. And that continual investment that
you talked about, year after year, of the Administration is
meaningful to me.
But let's talk about the opioid program for a second. I
know you made over $150 million in new resources available
there. Is there something in particular that you were targeting
those for?
Or--again, different communities have different needs. You
want to make sure additional resources are available.
Mr. Hargan. Yes. So, you know, this has been one of the
signatures for this Administration, was the President's early
recognition of the fact that the opioids crisis had to be dealt
with in the United States.
It is an area where we have seen, last year, the very first
downturn in 20 years in drug overdose deaths by, I think, over
4 percent. That is still far too high. But it does mean that
the tremendous amount of support and resources and authorities
that Congress has given us over the past few years are being
put to good use.
We are finally starting to see some real effect in the
United States, particularly in the hardest-hit communities, on
rural inner-city communities that have been devastated by this.
I mean we saw three years of lowered life expectancy for
Americans, overall. Last--our--last year we finally saw an
uptick for the first time in four years. But we have not seen a
downturn in life expectancy. And the real change was the change
in drug overdose deaths.
So we have seen success here in the state opioid response
grants that are provided to states, to tribal areas that are
really starting to affect what they can do, particularly the
huge uptake in medication-assisted treatment that we have been
working on. So we have seen an increase in people getting
medication in Naloxone and other medications that are allowing
them to get real treatment to survive the drug overdose deaths.
There is more to it than that. There are many elements of
this, including how we treat pain, revising how opioids are
prescribed, looking at surveillance, making sure that doctors
know whether a patient is getting prescription drugs from many
different sources, increasing the cooperation between different
elements, between the us and the federal government, the
states, the localities, social services on one side, and many
elements that deal with people who are afflicted by opioids.
So we have got a long way to go. We are coming down from
historic levels of drug overdose deaths, so we don't regard
this as the end of the road at all, but really the beginning.
Mr. Woodall. Well, that is something that 435 Members of
Congress share in support of.
Another program like that--I think you are in your second
year of the ending HIV initiative, not treat it, not survive
it, end it with another big plus-up in funding.
Mr. Hargan. Right.
Mr. Woodall. Could you talk about that?
Mr. Hargan. So we proposed a really large increase this
year, hundreds of millions of dollars increase for the ending
HIV epidemic. So we are in year two.
The first year was really spent on some intensive planning,
on intensive preparation among the localities. We have targeted
the highest number of--where the continuing infections are
happening. Fifty-seven jurisdictions, we are going to be moving
into those.
Eventually, because our public health experts think that we
now have, technologically, through certain medications, the
ability to suppress the virus, to prevent its transmission,
that will eventually cause no more transmission. That means no
more new infections with HIV. We believe, technologically, we
can get there.
Congress did great, gave us great resources last year. I
think we achieved what we wanted to achieve last year in terms
of, like, planning and preparation for what we are going to do,
and starting the work.
I think now we are looking at year two, we are looking at a
substantial increase in that amount, because now we are going
to be moving into implementation of the plan. But hopefully, by
2030 we are going to see the real--starting the real end of
this epidemic.
Mr. Woodall. Mr. Chairman, it would make your job easier if
we had more of an opportunity to celebrate those kinds of
shared successes.
When you think about budgets, you think about everything we
disagree about. And we could have gone on and on. We could go
on to maternal mortality rates, and a pilot project that they
are now expanding to 50 states, things that you and I support,
that all of our colleagues support. And sadly, most of the
microphone time gets spent on those things that divide us,
instead of that unite us.
So thank you for having this hearing, an opportunity to
talk about those things that bring us all together.
Thank you for your service, Deputy Secretary.
Mr. Hargan. Thank you, Congressman.
Chairman Yarmuth. The gentleman's time has expired. I now
yield myself 10 minutes.
Once again, Deputy Secretary, thank you for being here.
Thank you for your responses, and I thank all my colleagues for
their contributions.
I want to clarify one thing for the record that Mr. Roy
mentioned, because he mentioned that the President's budget--
this has nothing to do with your specific Department, but the
President's budget was in--came to balance. Yes, it does in the
15th year. He had to go 15 years to get it to balance. In the--
and make growth assumptions of 3 percent a year, which are far
in excess of what virtually anyone else projects. And in the
course of doing that, it runs deficits of over $1 trillion for
the rest of this decade.
So it is a little bit disingenuous, I think, to say that
this balances--the President balances the budget .
But I want to turn to the issue of what is a cut. It has
gotten a lot of attention today. It got attention during the
discussion we had with the director of OMB a few weeks ago.
And I have to smile a little bit to myself when I hear this
discussion, because--and this is no--not directed at anybody on
this side of the room, because nobody was here in 2010, when we
discussed the--when we drafted and passed the Affordable Care
Act. But I remember very vividly in the fall of 2010, leading
up to the campaign, when Republican after Republican, in their
campaigns, talked about how Democrats were cutting $700 billion
out of Medicare, $700 billion. I can't imagine how many
millions of dollars were spent making that attack on
Democratic--congressional Democrats in 2010. And we said the
same thing. We said, ``We are not making cuts, we are reducing
payments to providers.''
But on the other hand, we added services, free checkups
every year, a variety of other additional services that seniors
have not gotten. And we raised revenue. We imposed a provider
tax. So, while we cut providers in one area, we said, including
DME--that has come up today--3.8 percent tax. Everybody ought
to contribute to the cost of this program.
So when I see--we can argue whether lower costs, lowered
rates of growth are cuts or not, we know that roughly 1.5
million people, additional people, on net, join the Medicare
beneficiary ranks every year. So there--it is not just the cost
of the care, the general inflation of the care going up, it is
also the population is growing over the next 12 years. It grows
by 18 million people, projected.
So, yes, obviously, there is a--again, we can run the
numbers on that, and we can fight over whether lowered growth
amounts to a cut or not. But again, 10 years ago there was a
lot of hand-wringing over that same issue.
And so I will ask you, Mr. Hargan, does the President
propose any additional services to Medicare in the budget?
Mr. Hargan. So there are increases. For example, the
telehealth services that we talked about. So with regard to
rural providers, we--so we think that there are areas where
expansion of these things is possible, for example. And also,
as I mentioned about colonoscopies, so in that area, so that
people aren't sort of surprised by having a polyp removed and
then getting a bill that will sort of--while they are in the
middle of it, doing the best practice, the doctor does it and
then a bill shows up at the end. So we are proposing to reform
that area, as well.
So there are areas where we are proposing, where we think
there are limited areas where we can provide extra benefit.
Chairman Yarmuth. Those are services, generally speaking,
across the entire health care spectrum, not necessarily
targeted to Medicare beneficiaries. Right?
Mr. Hargan. And these are areas, though, where, if we
eliminate co-insurance, for example, for colonoscopies, that is
definitely--in Medicare we are proposing extending coverage of
immunosuppressive drugs with regard to transplants.
So now, whether that results in a--that may result in a
savings over time, because, if they are applied, you result in
potentially fewer hospitalizations and increased care later.
But it does--it is going to be a coverage, extra coverage for
something.
So there are areas where we have proposed increases in
coverage, compared to what we have now.
Chairman Yarmuth. Does the President's budget propose any
increased revenues to the Medicare program?
Mr. Hargan. Well, I think that we would look to the revenue
side, rather than the budget side for this, in terms of
increased revenues.
Chairman Yarmuth. So let me segue into the conversation you
had about pre-existing conditions, because this also intrigues
me. I have challenged my colleagues on many occasions to tell
me exactly how you protect pre-existing conditions without
either the Affordable Care Act or Medicare or Medicaid. How can
you preserve pre-existing conditions in the private insurance
market without--well, I just ask you, how can you do it
differently than the Affordable Care Act attempted to do it?
Mr. Hargan. I think Congress had put forward a number of
proposals over the past few years dealing with pre-existing
conditions.
Chairman Yarmuth. Congress has put forth proposals to
guarantee issue. Congress, to my knowledge, has never put forth
a proposal where you have guaranteed issue, and also
affordability concerns.
In other words, you can force insurance companies to sell
anybody a policy. But if you are not going to regulate the
price, then you haven't really protected them. Is that correct?
Mr. Hargan. Well, I mean, the--as you know, the existing
law, ACA, produces some of those----
Chairman Yarmuth. Yes, exactly. Outside the ACA. And so I--
again, it is just perplexing to me--and this is where we were
back in the repeal-and-replace debate, which we went through
for eight years. It was, OK, how are you going to replace it?
And there was never a proposal.
And the reason there was never a proposal was because the
only way to replace it with anything that makes sense is
universal health care, or Medicare for All, or some version of
it. And my colleagues knew that. And that is why I am sure they
were absolutely relieved when John McCain put thumbs down on
the Senate floor, because they would have had to come up with a
proposal, and they didn't have a way to do that.
But I want to go also now--and this is related--on the
question of prescription drug prices. You said, and I
appreciate it very much, that you stand willing to work with
Congress to come up with a solution.
So the House of Representatives, under a Democratic
majority, passed a bill, H.R. 3. The Administration doesn't
support it, Republicans in the Senate don't like it because
they refuse to take it up. So what is the responsibility, if
you say you are willing to work with us?
We put forth a proposal. Don't you think either the
Administration or Republicans in the Senate have an obligation
to work with us or, if they don't like our proposal, to come up
with an alternative, or some amendment of ours, some
modification of H.R. 3 to deal with that?
Mr. Hargan. Well----
Chairman Yarmuth. It is not--I mean I appreciate your
willingness to work with us, but don't you have a
responsibility to advance some ideas of your own?
Mr. Hargan. Well, I would say that we have articulated at
least four principles that I think would be broadly acceptable,
which is that lowering list prices, lowering patient out-of-
pocket costs, improving competition, and creating better
conditions for negotiation. Those are the priorities, high
level, that we have talked about in terms of drug pricing,
which we think would fix it.
I mean we have seen a number of bills that have been
proposed on both sides, in the House and in the Senate. Now the
question of reconciling the congressional bills, I think, we
would look to the Congress to move those forward. And we look
forward to working with you, providing whatever technical
assistance or advice that we can as you all work through
preparing, as we say, a bipartisan, bicameral solution.
We do have, as I say, a lot of--a deep bank of experts
within HHS who we would make available to anyone working on
bills. And we--as I say, we have an articulated set of
principles, and the President is 100 percent behind this goal.
And we are, at HHS. We know it is the articulated concern for
Americans to bring down drug costs. And so, if we can do that,
I think that is going to be good for everyone.
Chairman Yarmuth. Yes. You know, I think everybody here
would agree with the principles that you put forward. Those are
kind of--OK, that is motherhood and apple pie. We could--we can
accept those.
But if the Senate is not going to act, and the problem
exists, and the American people are paying the price every day,
don't you think that the Administration--not necessarily HHS,
but at least the White House--has an obligation to lead in this
area if--we have tried to do our part in the House, the Senate
has refused to act. I just contend that the White House and the
Administration have an obligation to lead on this issue, and
not just say, ``We would be willing to work with you,'' because
that does not move the ball forward an inch.
And my time is about to expire. I just have one quick
question on coronavirus. Is there modeling done that indicate--
would indicate the range of possibilities for transmission of
this disease?
And if so, why shouldn't the American people have the range
of possibilities?
Mr. Hargan. Well----
Chairman Yarmuth. Have you modeled yet what the kind of
extreme possibilities might be?
Mr. Hargan. So I know that there have--there are
available--there are disease spreading models that have been
out in public, frankly, for dealing with infectious disease.
And a lot of those have been exercised in the past to
actually--in--you know, in accordance with some of the
preparedness work that has been done in the past. So I would be
happy to share that with you, and talk through if--as--talk
through with people exactly how those kind of things are
arrived at.
Chairman Yarmuth. I appreciate that. And I know there is
the potential for alarming the public unnecessarily, and you
don't want to do that.
But again, I think the public does have, I think, the right
to understand how little this could spread, or how much it
could spread. But----
Mr. Hargan. Exactly.
Chairman Yarmuth. But anyway, I appreciate your----
Mr. Hargan. Yes, sure.
Chairman Yarmuth [continuing]. cooperation.
Mr. Hargan. Thank you.
Chairman Yarmuth. We will work with you on that.
Mr. Hargan. Thank you.
Chairman Yarmuth. And once again, I thank you for your
appearance here today, and all of your responses.
And with--unless there is any further business, I--this
hearing is adjourned.
[Whereupon, at 12:11 p.m., the Committee was adjourned.]
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