Federation of American Hospitals CEO Chip Kahn Speculates On Health Industry Changes Under GOP Health Reform

Chip Kahn – Federation of American Hospitals

Mark Masselli: This is Conversation on Healthcare, I am Mark Masselli.

Margaret Flinter: And I am Margaret Flinter.

Mark Masselli: Well, Margaret, the president has released his budget proposal
for the upcoming year. The Trump budget plan cuts about 18% from the
Department of Health and Human Services. That would mean significant cuts to
departments, such as the National Institute of Health, which could see cuts by as
much as six billion dollars.

Margaret Flinter: Such cuts could seriously diminish the country’s reputation as
the world’s leader in scientific research and medical breakthroughs and really put
developing and new researchers at risk.

Mark Masselli: The budget also places a number of social programs at risk;
school nutrition programs a nd the popular Meals - on - Wheels for seniors. Studies
have shown that bolstering childhood nutrition for those at risk support school
performance. As for the nation’s elderly, the Meal Delivery Program serves two
important f unctions, it keeps them healthie r longer; also, provides much needed
social interaction, which supports health and well being.

Margaret Flinter: Well, the president’s budget proposal comes on the heels of
the Republican plan to repeal and replace the Affordable Care Act and the
America n Healthcare Act is expected to result in 24 million Americans losing
health coverage within a couple of years and that is not sitting well with a number
of constituencies throughout the country, Mark.

Mark Masselli: Among those that this new initiative is not sitting well with include
The American Medical Association, The American College of Physicians, just to
name a few.

Margaret Flinter: And several organizations representing America’s hospitals
also have registered their concerns and that includes the Federation of American
hospitals.

Mark Masselli: Which leads us to our guest today, Margaret; Chip Kahn is long
time health strategist in Washington and is CEO of Federation of American
Hospitals; looking forward to hearing his views, Margaret.

Marg aret Flinter: And Lori Robertson will stop by, the Managing Editor of
FactCheck.org, and no matter what the topic, remember, you can hear all of our
shows by going to www.chcradio.com .

Mark Masselli : And as always if you have comments, please email us at
[email protected] or find us on Facebook or Twitter. We love hearing
from you.

Chip Kahn – Federation of American Hospitals

Margaret Flinter: We will get to our interview with Chip Kahn in just a moment.

Ma rk Masselli: But first, here is our producer Marianne O’Hare with this week’s
Headline News.

Marianne O’Hare: I am Marianne O’Hare with these Healthcare Headlines. The
White House is out with its own analysis of the Republican Healthcare Bill and
the p redictions are even more severe than the bipartisan Congressional Budget
Office Assessment of the American Healthcare Act. The White House projecting
the law could lead to 26 million Americans losing coverage versus the CBO
projections of 24 million. Mea nwhile, there have been high - level meetings
underway for the past week in efforts to tweak the bill to make it more likely to
pass the senate after going through the house , Republican leadership including
president Trump, speaker Ryan, and others looking a t alterations to the bill to be
able to give more assistance to seniors in the form of tax credits and install a
work requirement for those receiving health coverage under Medicaid. And while
this debate is centered largely around the leaders of the Repub lican majority, as
well as the Trump White House, there has been some input of note from a former
champion of the Affordable Care Act, who worked in the Obama White House,
Dr. Ezekiel Emanuel has b een meeting with the Trump team. Emanuel
discussing tweaks the administration could recommend to fix what needs fixing in
the existing law and much to do about MACRA, with cuts to Medicaid and almost
certainty under the new administration, there are many unanswered questions
from the Centers for Medicare and Medi caid under the current leadership as well
and clinicians are awaiting on instructions on next moves for MACRA, that’s the
Medicare Access and Chip Reauthorization Act passed in 2015. Clinicians who
improve outcomes, metrics in a number of areas will be co mpensated
accordingly. Many clinicians are uncertain what exemptions they will qualify for
under the new payment system and shades of the opioid epidemic, which has led
to the deaths of some 50 thousand Americans last year and is the leading cause
of acci dental deaths now in this country. Number of cases of children taking
potentially lethal amounts of these drugs has also skyrocketed between 2000
and 2015. Poison control centers in the U.S. receive almost 200 thousand calls
about prescription opioid exp osures in children and teens, putting all those young
people’s lives at risk. I am Marianne O’Hare with these Healthcare Headlines.

Mark Masselli: We are speaking today with Charles N. Kahn , President and
CEO of the Federation of American Hospitals and National Advocacy
Organization representing 20% of the nation investor owned hospitals. He
serves on the National Quality Forums Measure Application Coordinating
Committee and served as Commissioner of the American Health Information
Community serving the n HHS secretary, Michael Leavitt. He was staff director
for health on the House Ways and Means Committee helping shape the Health
Information Portability and Accountability Act, better known as HIPAA. He has
earned many accolades in his career including being named to modern

Chip Kahn – Federation of American Hospitals

healthcare’s 100 most influential list every year. He earned his Bachelors of Arts
degree at Johns Hopkins University and his Masters in public health from Tulane.
Mr. Kahn, welcome to Conversations on Healthcare.

Chip Kahn : Nice to be here.

Mark Masselli: And Chip, you have had a great career in health policy
development. I think it is fair to say the most dramatic transformation happened
with the Affordable Care Act. Obviously, we have a new Sheriff in town.
President Trump and the whole new approach to health policy with the GOP
a uthored American Healthcare Act. There are quite a few observers who have
expressed concern and I am wondering if you could share with our listeners and
lay out this critical transition and what yo u believe be at risk for the healthcare
industry.

Chip Kahn : Well, I think some might have thought that the passage and the
implementation of ACA was sort of the end of history for healthcare policy
making and I guess we’ve found out it wasn’t and the ot her team came into town
with the election of president Trump and the Republicans controlling both
Chambers of Congress and they are going make big changes. They do have in
fact a different agenda and the speaker of the House has said this, you many
times, that he is interested in reducing healthcare costs and isn’t interested in
coverage, that means when the Congressional Budget Office came out with an
estimate of the coverage loss the other day, the speaker, who is really
spearheading the legislative proc ess here said that it was a great projection
estimate because it showed that his effort was going to reduce the deficit and
was going to enable the reduction of healthcare costs and of tax at the same
time. So I think it’s just a different set of prioriti es that we now face than we did
back in 2009 with the beginning of president Obama’s term.

Margaret Flinter: Well, Chip, your organization, The Federation of American
Hospitals represents over a thousand hospitals across the United States and I
understan d many of the hospitals have seen better bottom lines in the wake of 20
million consumers gaining health coverage. Could you talk about your outreach
to Congress and to the Trump administration, I understand your organization
sent a letter urging them not to undermine the level of coverage Americans now
have or to try and fix the Federal budget by cutting Medicaid, what are you
hoping to see happen next?

Chip Kahn : You know, I do have a lot of respect for the Congressional Budget
Office. I think if you look into the weeds of the estimate, that it probably
overstates the near term effect, long - term I suspect that it’s probably more
correct. You know, we have pretty grave concerns about the proposal and I think
there are some people in the Senate, who tak e quite a different view of what the
priority ought to be. I am hoping that the winds will change and at least there’ll
be more of a focus on the transition and making sure that we lose as little ground

Chip Kahn – Federation of American Hospitals

as possible in the coverage. Hospitals are generall y speaking out about this, but
frankly, in the current environment, I am not sure that the provider clinician
community is the constituency that is being addressed directly. The insurers and
the governors seem to have more leverage right now.

Mark Massel li: You know I would talk a little bit about the process; you obviously
had a great deal of experience in the development of the Health Information
Portability and Accessibility Act, known as HIPAA and I am wondering if you sort
think about that, what you r advice might be to the Congress on how to move
forward, this is something that is going to take lots of time and lots of effort. Any
advice on how they maneuver past this big event that’s going to happen, getting
through the Senate as well?

Chip Kahn : Well, you know the context for every legislative process is different.
You know, I wish the current process was being approached in a different way. I
think it is probably going to come out with a product that will not provide the kind
of coverage that Americans need so that we can really put the patient first. You
are better off if you have coverage, we know that from so many different ways. I
would not have approached it the way they approached it, but you know, I am not
working up there right now an d I think this process is taking the route it’s taking
because of the last election and then how the public interprets what they finally
decide if they are able to come to some conclusion. You know, health stands to
be, you know, everybody looks at the ec onomy, but you know over the last
many - many cycles, with how major legislation is undertaken it tends to have a
big influence on the next election.

Margaret Flinter: Well, Chip, back in the 1990s, when you were Executive VP of
the Health Insurance Associ ation of America, I understand you presided over a
very successful and effective campaign that Harry and Louise Campaign, which
was aimed at blocking passage of then president Bill Clinton’s health reform plan.
So I think you’ve learned some vital lessons about the importance of messaging.
When you look back at the passage of the Affordable Care Act, what might the
Obama administration have done to create a better messaging campaign?

Chip Kahn: We actually began the Harry and Louise Campaign simply to g et the
attention of the administration and leaders in Congress, so they would negotiate
with this and it actually wasn’t our purpose to bring down health reform. Our
purpose was to make sure that the kind of insurance we felt was important was
available. There is a lot of focus on what could have been different in terms of
messaging from 2009 - 2010, they got the legislation through. On the one hand, I
would say, president Obama was successful. Then, they really did a subpar job,
in terms of the immediate i mplementation, but actually I think at the end of the
day, action and products and outcomes are what the American people see. I
mean if they had not bungled healthcare.gov, if the premiums had not gone up
quite as much. If Congress had not been as unco operative so that mid course

Chip Kahn – Federation of American Hospitals

corrections that were needed couldn’t have been made, we wouldn’t be on the
path we are on right now.

Mark Masselli: We are speaking today with Charles N. Kahn, President and
CEO of the Federation of American Hospitals and Na tional Advocacy
Organization , representing 20% of the nation’s investor owned hospitals. He
serves on the National Qualify Forum’s Measure Application Partnership
Coordinating Committee. Yeah, I am wondering, you mentioned the governor’s
role looms large in terms of this legislation of how it’s being formed, talk a little
about Medicaid in the block reining back to the State. How much wind in that sail
do you think there is? Do you think this is something that we are going to see in
the future of how Me dicaid is going to be operated and funded?

Chip Kahn: Well, I think that there is a tremendous amount of momentum here
for reforming Medicaid in the direction that the House bill has chosen. I think
there may be changes in the Senate that would probably have to some more
accommodation for this transition from the current Medicaid program to the
Medicaid program that is envisioned. The objective in ACA was to make
Medicaid a coverage program. I think they wanted to move it to a program that
just was bas ed on income and basically was a low - income health coverage
program. I think if you look at the letter that Seema Verma, the new CMS
administrator and the Secretary Of Health And Human Services, Price, sent to
the governors , they are very clear there that they want to move Medicaid back to
its pre - ACA roots, where it really was a welfare program, a more of a welfare
program in terms of categorical eligibility and other factors and that’s where this
work factor they would like to instill in it, as well as g iving the governors more
latitude in terms of cost sharing, in terms of their viewing as “skin of the game,”
you know, for the Medicaid recipients , so they have the power, either
administratively through waiver and through just legislation to move Medicaid to a
different place than it is right now.

Margaret Flinter: Well, Chip, let’s take a step back from the weeds of health
reform for just a moment and talk about healthcare and take a look at the myriad
advances that have occurred within the healthcare i ndustry over the past
decades and we’ve certainly seen the hospital industry make very important
changes to address the problems of medical errors. We’ve also seen great
advancement in health IT, remote monitoring, telehealth; may you could talk with
us a bout some of the fundamental advances and improvements that you have
seen to make hospitals safer, more efficient, as well as more cost whereas they
st
adapt to the 21 Century advances.

Chip Kahn : First back in the late 90s, the Institute of Medicine repo rts both on
quality of care and hospital acquired conditions. It had a big impact because
hospitals are in the business of making people better, serving patients and
families, and I don’t think there was a clear understanding frankly of how large
the prob lem was. Since then hospitals governments and those who provide the

Chip Kahn – Federation of American Hospitals

guidance to help us assure quality, you know, have all worked together and had
an incredible impact, so that today, whether it is central line infections or areas
for potential harm, hosp itals have moved really mountains to make themselves
safer. In most American hospitals today, you can’t move 10 feet without a
container to clean your hands, there is an awareness of even the simple stuff that
can have such an impact, so that’s been a big change. There is a trend
transforming the hospital from inpatient to outpatient, so everyday the science
and the practice, more and more activities are being pushed out of the hospital,
at least of inpatient services. I think in most cases that’s been g ood for the
patients. It has though made the hospitals, you know, more concentrated for
generally sicker patients and may be that is the best use of those very expensive
resources. I think the adoption of electronic health records has been a mixed
blessi ng. It makes a big difference for patient care. It has negatively affected I
think work flow to some extent and I don’t think we are at the point where we
have the ideal medical record. It still is really just a digitalization of what we used
to have pa per. There is great research going on with big data, but in terms of
keeping track of patients and applying metrics from medical records for
measurement, we are still in the sort of awkward beginning of that, but I mean I
think we are on the right path an d so I am encouraged.

Mark Masselli: You know, to pull the thread a little on that important role
hospitals are playing in this growing movement towards the health systems
based on coordinated care, the growth of the Accountable Care Organizations
and ul timately more value based delivery model and increasingly, we are seeing
hospital organizations as the epicenter of community based delivery systems. I
am wondering if you can talk to our listeners about this fundamental shift in the
hospital industry wit hin the context as a larger health system.

Chip Kahn: Well, in some ways, all healthcare is local and so there is variation
and it has lot to do with demographics and social development, but there is
variability across the country in terms of the kinds o f healthcare systems
communities have. Whether it’s the effect in some communities of accountable
care or managed care or the bundling that’s now included both in Medicare and
some private contracting with third parties and healthcare insurers, I think we are
moving to a place where there are attempts at more coordination. It’s been more
successful in some communities than others and the nature of the communities
and their structure will have an effect on that, but I think it is the future, some of
this w ill be virtual as we reach real inner operability of electronic health records,
which still is to come. You know, as we consolidate between both group
practices and hospitals, you know some will be just as we get larger
organizations. At the end of the d ay though, the tracking, the coordination, the
data collection, the use of big data, the bringing electronic health records, the
impact to help the patient, a lot of this requires capital and organization and
structure and I think either larger groups and/ or with hospitals are going to be
sort of the ground zero of most people’s healthcare into the future in a way that it
wasn’t necessarily in the past, I mean, if you were really sick you went to the

Chip Kahn – Federation of American Hospitals

hospital, otherwise you were out in the community in a sm all group practice. I
think that’s all changing and the demographics of physicians and clinicians are
really changing that also.

Margaret Flinter: We’ve been speaking today with Charles N. Kahn, President
and CEO of the Federation of American Hospitals and National Advocacy
Organization, representing over a thousand hospitals in both urban and rural
settings across the United States. You can learn more about their work by going
to FAH.org or follow them on Twitter. Chip, thank you so much for the work you
do and for joining us on Conversations on Healthcare today.

Mark Masselli: At Conversations on Healthcare we want our audience to be truly
in the know when it comes to the facts about healthcare reform and policy, Lori
Robertson is an award - winning j ournalist and Managing Editor of FactCheck.org,
a non - partisan, nonprofit consumer advocate for voters that aim to reduce the
level of deception in U.S. politics. Lori, what have you got for us this week?

Lori Robertson: Both Democrats and Republicans h ave been spinning the
Congr essional Budget Offices’ analysis of the Republican Healthcare Bill. This
week we will look at the Democrats. Some have overstated what the nonpartisan
CBO said about the impact on those who now have health insurance. For
inst ance, Senator Bernie Sanders claimed that the GOP Healthcare Bill would
“throw 24 million Americans off of the health insurance that they currently have.”
Representative Richard Neal and Frank Pallone, Jr., similarly said the bill “would
rip away health i nsurance from 24 million Americans over the next decade, but
those claims go too far. The analysis by the CBO and Joint Committee on
Taxation did say that 24 million fewer Americans would be insured under the
American Healthcare Act, but not all of them w ould have their insurance ripped
away or would be losing insurance that they currently have. The numbers
represent a complicated mix of some losing insurance, some deciding not to
have it, others gaining it, and others not having insurance in the future t hat they
would have had under current law. The CBO said 14 million more would be
uninsured next year under the bill, most due to the elimination of the individual
mandate requirement to have insurance or pay a tax. Some of those, CBO said
only had insura nce under current law to avoid the penalty, so they would choose
not to have it under the GOP bill. Older and low income Americans on the non -
group market could see substantially higher costs in future years under the
Republican plan. Insurers would be a llowed to charge older people more and
new age - based tax credit wouldn’t be large enough to offset those premium
increases. These factors mean that the make up of the non - group market would
be significantly different, CBO said, with a net two million fewe r on non - group
insurance by 2026; the biggest changes under Medicaid with 14 million fewer
with Medicaid coverage in 2026 under the GOP bill. For more on the breakdown
of the CBO projections , see out website FactCheck.org and that’s my FactCheck
for this week, I am Lori Robertson, Managing Editor of FactCheck.org.

Chip Kahn – Federation of American Hospitals

Margaret Flinter: FactCheck .org is committed to factual accuracy from the
country’s major political players and is a project of the Annenberg Public Policy
Center at the University of Pennsylva nia. If you have a fact that you would like
checked, email us at www.chcradio.com , we will have FactCheck.org, Lori
Robertson, check it out for you, here on Conversations on Healthcare.

Margaret Flinter: Ea ch week conversations highlights a bright idea about how to
make wellness a part of our communities into everyday lives. When long - time
IBM executive, Sharon Linder left the corporate world, she thought she would
ease into semiretirement, but then breast cancer diagnosis for her mother and
two sisters shifted her focus. She watched as all three of them went through
multiple surgeries and treatments wherein the ubiquitous Johnny, the hospital
gowns that tie in the back and leave patients often feeling vulnerable and
exposed when they are also scared and uncomfortable during their treatments.

Sharon Linder : The hospital gowns never meant to close in the back. It was
meant to make it easy for you to go the john and so when you put it in the front, it
really does not close.

Margaret Flinter: The former corporate executive decided that the one in eight
woman going through breast cancer treatment needed a power suit of their own
to navigate this challenging experience and she launched her own research
project into which fabrics and which designs might provide a better alternative to
the standard hospital gown, but one that one would also be an easy addition to
hospital laundering services.

Sharon Linder : The feel of it is very much like a cotton cashmere that is j ust so
soft, you just don’t want to take it off.

Margaret Flinter: She called her invention Janes as opposed Johnnies, creating
a gown that thousands of users have called comfortable, stylish, and a vast
improvement from their predecessors.

Sharon Linde r : And they fit people in a comforting way. You know, you are
totally covered, there is a little D neck cross over at the very top and it goes all
around your body.

Margaret Flinter: And she developed the gown in time for her own cancer
diagnosis and w as able to see her invention put to her own good use.

Sharon Linder: Janes did give me a really a leg up. I think that I felt better about
all of my treatments. When you think you look better, you feel better.

Margaret Flinter: Dozens of hospital sy stems across the country are adopting
her gown design, which you can also order online for women who have received
a recent diagnosis of breast cancer and even nursing mothers are using her

Chip Kahn – Federation of American Hospitals

product. Janes, a hospital gown designed for enhancing the female patient
experience, providing comfort, dignity, easier access during challenging
procedures. We are just providing an easier experience for newly breastfeeding
mothers, now that’s a bright idea.

Margaret Flinter: This is Conversations on Healthcare, I am Margaret Flinter.

Mark Masselli: And I am Mark Masselli, peace and health.

Conversations on Healthcare broadcast from the campus of WESU at Wesleyan
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