Health care costs are one of — if not the largest — financial burdens Americans face, federal health regulator Casey Mulligan said during a speech Monday at the HFMA Annual Conference in National Harbor, Maryland.
HHS Secretary Robert F. Kennedy Jr. appointed Mulligan as the agency’s chief economist and regulatory director in April. Mulligan said his work at the agency focuses heavily on how to make health care more affordable — and that requires a focus on health care delivery, not just insurance coverage.
He uses a framework he calls “supply-side health economics” – which emphasizes that health care, health outcomes and health insurance are distinct concepts.
“Yes, insurance is important, but it’s not the end point. The end point is better health and lower costs with more control in the hands of patients and families,” Mulligan said.
In his view, policymakers spend too much time debating insurance coverage and not enough time addressing the factors underlying patient outcomes and health care costs. In the future, he thinks patients should have more information and control.
Mulligan believes that patients should have access to their own health data, transparent information, real healthcare choices, and the freedom to evaluate competing medical claims.
He described one of his key responsibilities as carrying out regulatory impact analyses. To achieve this, he believes policymakers should carefully measure costs and benefits, as well as determine who bears those costs and how policy decisions create incentives.
In her work at HHS, Mulligan has closely examined provider taxes and state-ordered payments.
He argued that many states use a financing mechanism in which they tax hospitals, nursing homes or managed care plans, and that tax revenue is then used to attract additional federal Medicaid matching funds. Mulligan said the combined funds are typically returned to providers in the form of supplemental payments or state-ordered payments.
“Medicaid financing tricks trickle down to commercial prices, employer premiums, marketplace premiums, wages and Medicare spending,” he noted.
Mulligan argued that these financing agreements end up driving health care costs far beyond Medicaid. And he believes that taxes on providers generally increase the cost of providing care, while additional Medicaid payments encourage providers to shift resources toward Medicaid patients.
Together, these dynamics are putting increased pressure on commercial insurance premiums and Medicare spending, he said.
Mulligan argued that limiting these provisions would help reduce health care costs for taxpayers.
To make health care affordable, he says, policymakers need to focus less on insurance coverage and more on the incentives that actually shape how health care is financed and delivered.
Photo: Malte Mueller, Getty Images