The Big Beautiful Episode w/ Marc Ryan

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Erik Sunset: Hello. Welcome back. I’m Erik, your host of the DocBuddy Journal here at DocBuddy. You know, we deliver healthcare solutions that take the pain and costs out of work, broken workflows like with op notes, which gives ASCs the power of instantly generated operative reports. Learn more about opt node and all of our solutions at docbuddy.com.

Erik Sunset: My goodness, tough reading for me today. Uh, but it won’t be a tough episode because we’re joined once again by Marc Ryan. Marc, as you know, is the Chief Solutions Officer with Lilac Software and our go-to experts on all things, uh, legislative related to healthcare. A lot of news swirling around Marc. So glad to have you back on the show to help us cut through the clutter.

Marc Ryan: so much, Erik. It’s great to be here again.

Erik Sunset: Our pleasure as always, and I know we wanted to look at sort of two big, beautiful topics today, if you will. A lot of, uh, a lot of news, uh, going around if you’re not living under a rock. But there was an update on the [00:01:00] budget reconciliation process in Congress. I know you’ve covered this before and you predicted this would be quite the saga with very tight votes, and you were right.

Erik Sunset: It’s looking like it’s turning out that way.

Marc Ryan: Absolutely Erik. Uh. You know, we’re sort of in the middle of this, I would say right now and. Uh, the house passed this budget reconciliation bill by really one vote. If they had one more off the bill, it would’ve died theoretically. And what’s really happening here is really in each chamber, the house passed it, but there was this big debate between moderates and conservatives.

Marc Ryan: Uh, as you know, the House Freedom Caucus is sort of the caucus of conservatives. It, it’s probably somewhere around a third or so. Of the entire GOP caucus, maybe a little bit more. The moderates are smaller in number right now, but there’s several dozen of them still from swing districts [00:02:00] and some blue states that are Republicans.

Marc Ryan: And then in the middle you have what I would just call your, your normal sort of. GOP types in the middle, right? But it’s really a battle between these moderates and the Freedom Caucus conservatives. The moderates wanted several things, one for those that maybe, uh, come from some of these more bluish states with very high income taxes.

Marc Ryan: When the 2017 tax cuts passed, they limited what’s called the state and local taxation deduction. On your itemized deductions list. And so the moderates from these blue states wanted an increase in that, and they fought very hard in the big, beautiful bill as people call it, to get that massive, uh, spending.

Marc Ryan: In some ways, I view it as spending, because it’s lower tax receipts, because you’re increasing the, uh, itemized deductions for these, uh, folks in the blue states. [00:03:00] And they also wanted less Medicaid cuts. They’re very worried about the Medicaid cuts in the bill, and we’ll talk about that in that bill. The house moderates got their salt increase, but they didn’t get, you know, fewer Medicaid cuts over on the conservative side.

Marc Ryan: The conservatives said, we’re not on this bill unless we get more. Medicaid cuts. There was a baseline of Medicaid cuts in there. They got an additional concession to increase the Medicaid cuts by asking for an acceleration of work requirements. And voila, speaker Johnson was able to just barely pass that bill with the moderate concessions and the conservative concessions.

Marc Ryan: So now that bill is over in the house. Uh, I over in the Senate, sorry, I passed the house over in the Senate and I expect the same kind of dynamic over in the Senate right now.

Erik Sunset: Yeah, that, that’s [00:04:00] very, uh, very narrow margins to get anything passed. And just as a refresher for our listeners, quick primer on the salt increase for those that may not be familiar.

Marc Ryan: Sure. So as you know, there’s a, uh, standard, uh, deduction that you can take as a single or as a married if you itemize your deductions for people that have bigger deductions like health expense. Property tax, state income tax, charity, and things like that. You file your schedule a well historically on that.

Marc Ryan: Schedule A, your local property taxes and your state income taxes were really not limited. You could take as much off and that lowers your federal tax bill. As of 2017, they capped the amount of local property taxes and state income taxes and also sales taxes at $10,000. This new bill, if it passes, would increase that salt [00:05:00] allowance up to $40,000 for most people.

Marc Ryan: So again, returning more to the historic, a very expensive thing. Republicans tend to hate it. Uh, Democrats tend to like it, but there are these moderate GOP members from these bluish states that sort of promise to get that thing back in the bill at some reasonable level.

Erik Sunset: And then turning our attention to the aforementioned Medicaid cuts, what, what was on the chopping block? What made it through? How was that shaping

Marc Ryan: Sure. So in the end, after, uh, what’s called a manager’s amendment in the house to get everybody on this bill, the Medicaid. The total healthcare cuts are about $1 trillion over the budget horizon of 10 years. So we sort of look out 10 years and now we have about 1 trillion in in healthcare cuts largely for Medicaid in the Affordable Care Act.

Marc Ryan: Medicaid is the biggest [00:06:00] one. It’s about 850, 800 $60 billion over 10 years. There are work requirements in Medicaid, which is about 350 billion. There are limits on provider taxes that states use to help generate their match to leverage the federal dollars coming into Medicaid. Uh, some conservatives don’t like those provider tax.

Marc Ryan: They think it generates, uh, more spending in Medicaid, but states even I, as a former state budget director use provider tax to generate my state match. So within reason, it makes sense that the conservatives and Republicans are arguing. States have invented all sorts of ways to not use general revenues to generate the state match.

Marc Ryan: And that balloons Medicaid spending from their viewpoint. They’re also a series of eligibility changes and cost sharing and other things. But those Medicaids added up to 860 [00:07:00] billion in cuts over the horizon. The Affordable Care Act cuts were about 230 to 250 trillion, uh, billion dollars over 10 years.

Marc Ryan: There’s major eligibility changes. There’s no subsidies for undocumented citizens, things like that. So together. Trillion dollars. Now, what does that do in terms of the uninsured? Well, the CBO says that the total, uh, uninsured rate will increase by about 11 million people over a period of time because of that trillion in cuts in the bill.

Marc Ryan: Now if you also include the fact that the enhanced premium subsidies in the a CA are going away because the bill doesn’t act to extend them, you’re actually talking about 15 million uninsured. Um, so that’s a pretty major thing. A couple of other points, [00:08:00] uh, the CBO and some. Other analysis groups say that, of that trillion dollars, about 700 billion of it would be in lower provider payments.

Marc Ryan: So your physicians, your ASCs, your, um, you know, your, you know, some hospitals out there as well. Um, so. The way the GOP really approached this was they said, we’re not gonna do coverage cuts in Medicaid. The Democrats though, viewing what the CBO score is, are saying essentially you’re gutting the A CA. This would mean about one third of the people added to the insurance roles would now fall off.

Marc Ryan: So that’s a very significant change.

Erik Sunset: I, I wanna address that a little bit ’cause we’ve, uh, we’ve spoken in the past about the a CA and, you know, at the turn of the year, sort of January timeframe, right after the election, [00:09:00] you know, you greatly called out Trump, uh, views himself as a populist. That’s, uh, up for debate on your own perspective as an individual there.

Erik Sunset: That’s pretty tough optics to have so many folks fall off of the a CA roles. There’s another half to this though too that, uh, debatable to a degree that yes, the a CA extended coverage to those that maybe were unable to acquire it otherwise, but. Due to the cost of care, you weren’t able to really leverage those benefits without coming out of pocket a significant degree.

Erik Sunset: Is this opening the door to reform the a CA or is this simply, uh, dollars and cents on a spreadsheet, do you think?

Marc Ryan: I, I feel like the cuts to the a CA and Medicaid are dollars and cents, the GOP. And again, just to remind your viewer, uh, your viewers and listeners. I’m a Republican, but I’m sort of a pro coverage Republican, I think. Insurance is good [00:10:00] upfront because it’s cost effective compared to what you see down at the end, but I view these cuts in the budget as more dollars and cents.

Marc Ryan: They don’t particularly like Medicaid or the a CA, they’re trying to find creative ways to say, I. We’re not cutting coverage yet, as I’ll tell you probably later, I do think they’re cutting coverage because there’s all these ripples in the healthcare Marcet when you start taking things out there. I will tell you, hidden in the bill is a little bit of the GOP’s philosophy.

Marc Ryan: On the future of coverage, and you’re absolutely right Erik. You know, just because you’re insured doesn’t mean you can afford to access your coverage. One of the big problems with the A CA is you technically have coverage, and I do believe it does a lot of good for certain people for upfront care, but there’s a group of people that aren’t getting subsidies that, or they’re getting very low subsidies and they enroll in plans that are very.[00:11:00]

Marc Ryan: Uh, expenses for them, as you point out to access coverage, deductibles are high. Cost sharing is high, and so that’s still a big problem that needs to be reformed. The GOP is expanding a lot of HSAs. They are going down the road of what’s known as. Icra where an employer can give you dollars to buy coverage in the exchange, which is probably not a bad idea for small employers and things like that, but the Republicans are really trying to hone in on individual ways to access insurance.

Marc Ryan: They believe that’s gonna provide better stability. That’s gonna provide people with options and that hopefully they think will lower costs out there. I have some doubts, but the bill sort of goes in that direction. But the Medicaid and the a CA cuts are really, how do we get to a bottom line that can pass a bill?

Marc Ryan: And it’s [00:12:00] 1.5 trillion was their spending cut and about a trillion of it is coming out of the healthcare system.

Erik Sunset: Okay. That, that, that makes sense. That’s kind of what I expected to hear, that this is the dollars and cents decision as opposed to, uh, a sweeping reform of the a CA, uh, sounds like there’s, uh, maybe a light at the end of the tunnel there, if, I guess Congress can mobilize and, and make. Do what it can. I’m, I’m fumbling for words here.

Erik Sunset: There’s so many conversations I’ve had over the last month around, well, how do you fix healthcare? How do you fix healthcare? And it’s really revolves around the payer. You know, you really need to fix issues with payers, both Medicare, Medicaid, as well as the commercial carriers. So, um, I’m not able to enunciate my thought very clearly there, but hopefully there’s a light at the end of the tunnel to get the a CA working sort of as it was intended to, to work.

Marc Ryan: I, I agree. I think you need more of a consensus from Republicans that it’s a good program, [00:13:00] and I think you’d need to force the Democrats to say, you set up a very expensive program here from a benefit perspective and things like that. Uh, that’s what. Uh, forces the fact that you need very high premium subsidies to make it even work.

Marc Ryan: Is there some middle ground out there that makes a great deal of sense? Ultimately, I don’t believe you can make sense of the healthcare system without radical price reform. Because that’s what makes things so expensive and forces these very high premiums and then forces premium subsidies. And you know, we’ll talk a little later about maybe some movement in the drug price arena, which I hope ultimately will force price reform too.

Marc Ryan: Over time. Everybody shares in that price reform, by the way, payers share in it, providers share in it. But until you, you know, work through. Price in the system, we’re always gonna be seeing exactly what you’ve characterized Erik.[00:14:00]

Erik Sunset: Sure. And that, that’s actually a really, a really nice segue. I mean, Trump has been talking about drug prices for the last, uh, couple of months or so. There’s some really popular ones on the Marcet where there is a huge difference, um, purchasing those drugs here in the US versus overseas in in Europe. You wanna dig into that now?

Marc Ryan: Yeah, absolutely. So, you know, setting aside the budget reconciliation, sitting in the house and the same moderate and conservative dynamics, um, the, the president also went down this road. Of drug price reform, and I’m not in great agreement usually with President Trump lately on a whole variety of different things.

Marc Ryan: But I do absolutely agree with what he’s doing on drug price reform, and I give him credit for that. Right. So he’s come out with two executive orders on drug price reform. If we go back in time a little bit to Trump 45. He started this [00:15:00] process, right, but he never really fulfilled it. He proposed some things late in his tenure.

Marc Ryan: Uh, they weren’t exactly right. Biden pulled them back. We won’t go into that ancient history, but now he’s coming out swinging. And this is again, a sort of an oddity where. You have a Republican president where the Republicans have traditionally been very supportive of big pharma because they’re big business and they like business and things like that, and they, you know, I always have accused my party of being in the hip pocket of big pharma.

Marc Ryan: Right. Campaign donations, things like that. It’s a bit bipartisan, but the, the, the. The backstop for radical change in drug pricing in the country for decades has been the Republican Party. The only exception has been the, uh, affordable, uh, the, uh, inflation reduction Acts Medicare price that went through on all [00:16:00] democratic votes in 22.

Marc Ryan: But by and large, the Republicans have always said, I’m your backstop. I’m not gonna allow radical change. But things are changing. The populism, as you mentioned earlier, is beginning to impact the way Republicans think about this issue, and Donald Trump has made it sort of right now, one of his major agendas to bring price relief to everyday AmErikans on the drug front.

Marc Ryan: His first executive order. Again, it’s hard for me to often give credit to the president, but he had an extremely thoughtful and comprehensive articulation in his first executive order on drug price about what’s wrong and what’s going on. So he wants to sort of reform how. The Medicare drug price law works.

Marc Ryan: There’s some pros and cons in his proposals. A little pro big pharma, but also he wants to drive [00:17:00] savings from what was just really a net 22% number. It really foundationally didn’t change things. I supported it because it started in the direction. But the president wants to go deeper. He really wants to reform the entire drug channel, all the big pharma folks, all of the wholesalers and other people, the PBMs, and he laid out a really good way of doing that.

Marc Ryan: Uh, PBM reforms. FDA reform. We won’t go deep into that, but there’s, uh, patent issues that stop genEriks from coming to the Marcet quickly. He says he wants to use some tariffs, for example, to, uh, force change. I’m a little doubtful about that, but it’s interesting. Three 40 B reforms, a lot of your providers hear about the three 40 B program.

Marc Ryan: Site neutral payments for drug administration, which could lead to. Site neutral payments across healthcare. So a [00:18:00] lot of good things in that first executive order. A lot of time to do it. It’s gonna take years. But I like the philosophy. His second executive order went back to Trump 45 and he said, I want something called most favored nation pricing.

Marc Ryan: And quite simply, that means you look at all of roughly the developed nations in the world for each drug and say. Big pharma, you cut a deal in France for X, Y, Z drug, it’s the lowest in the developed world. We’re the largest consumer Marcet in the world. We deserve that same price, so you gotta give us that price.

Marc Ryan: And Spain negotiated X price and you gotta give us that price. And you just go across all the major brand drugs and you come up with that. There’s a lot that goes into most favored nation pricing. I admit there are pros and cons. I’m supportive of it because it tries [00:19:00] to force change because we can’t have drug prices for brand drugs that are more than three times what they are in other developed countries.

Marc Ryan: And we can talk a little more about what’s the impact to the consumer, what’s the impact to morbidity and mortality in the us. But I am intrigued by what he’s trying to do. Whether or not we can even get there, there may be a middle ground that will help consumers and we may be able to find a ways to offset some of the negatives, which.

Marc Ryan: I admit there’s pros and cons of what he’s proposing here, but overall, the two executive orders I think are a good step. And it begins to create an environment where we’re actually talking about price, drug price. And does that galvanize everybody to come together and say, wow, we have to talk about the other 80% of the Marcet, uh, or so, which is the rest of price in healthcare, which is.[00:20:00]

Marc Ryan: A problem, as I pointed out earlier.

Erik Sunset: Well, it seems there’s a, this is just a quick aside. It seems there’s, uh, a turning point because for my whole life we’ve always heard drugs are so expensive in AmErika because the cost of r and d, you know, new drugs don’t just get developed on a, on a hope and a prayer. You know, we need to spend money to develop these new drugs.

Erik Sunset: And those maybe wink, wink, nudge, nudge from big pharma. Yeah, of course you gotta pay more because. This is where we’re based and this is where all of our r and d happens. I don’t think that’s gonna be tolerated for a whole lot longer, especially with the price transparency, just that you see online for the price of X drug in France, as you say, versus in AmErika.

Erik Sunset: I, I think the sharing of information around price over the Atlantic is, uh, really changing how people perceive the price for the drugs that they need.

Marc Ryan: I, I think you’re right. And, um, you know, I would note that you can be concerned about innovation. And [00:21:00] still support what the president is trying to do in some form, right? And I think that’s lost a lot of people. Uh, the backers of big pharma say, uh, of course in AmErika you pay more because you’re the biggest Marcet.

Marc Ryan: And you have to shoulder more of the innovation. And frankly, I think the reality of it across our economy and across our consumption, that is sort of true, right? We’re the biggest economy, we’re the richest nation in general, and we tend to have higher prices and we have things put on our back as a nation or as a consumer where that is true.

Marc Ryan: But it doesn’t mean it has to be true to the extent it is, right. And the president makes the case that. You can put more on the backs of European rich nations and consumers, uh, and they should pay a greater share of innovation costs, right? Right now they’re paying almost nothing [00:22:00] and big pharma and the researchers that are aligned with big pharma, and there’s a lot of ’em out there.

Marc Ryan: So when you read an op-ed or read an article. Figure out whether that guy is a real academic, as I call it, or is he shilling for big pharma and a lot of ’em are shilling for big pharma and they’re making the case, oh, you know, you can’t negotiate prices. In AmErika, we have a very different system. There’s too many different players and over in Europe they have one central player and that’s why it works over there.

Marc Ryan: But you can’t possibly do it over here, so just give it up. Right? That’s sort of the big pharma argument. But let me point out, we do negotiate prices in AmErika. I. We do have the IRA, which is a great example of on Medicare Part D price and Part B, we’re going to negotiate. We have something called the Medicaid rebate law, where 90 millions, uh, peoples right now, 80 some million [00:23:00] peoples.

Marc Ryan: Uh, drug prices are called together and we have retrospective rebates, and then we have something called the three 40 B program and the federal supply Schedule. And I would point out that each one of these programs that negotiates price. Uh, the volume of drugs and the people covered are bigger than most nations out there.

Marc Ryan: So if it works in the Netherlands or it works in Spain, or it works in France, and we have populations in the. Programs that we negotiate for that are bigger, why can’t we just put together 340 million people in one pool and negotiate it? And you can’t convince me that that does not work with private delivery.

Marc Ryan: It can work. And because that happens in Germany and the Netherlands that have private healthcare systems. So we just need to get through across all of that. I would call propaganda. From big [00:24:00] pharma and aligned academic researchers and say, we should do this. And again, I am not. will ever get to MFN, but I’m arguing that President Trump deserves credit here because he’s putting it on the table and he wants to get to a point where things are a little more in balance.

Marc Ryan: Right. Uh, and, and so, you know, I’ll, I’ll, I’ll add one last thing here. Um, people argue that innovation is gonna be crippled. I don’t doubt there should be, there will be some innovation impacts if you suddenly start to lower price in AmErika, but I do think you adjust with, um, other nations investing. But I would also point out, as much as drugs have been critical to keeping people, uh, to have a normal life and I don’t doubt that I’m on certain drugs and you know, my asthma inhaler.

Marc Ryan: Was an innovation, uh, and it’s sort of life changing for me. I don’t have as [00:25:00] asthma symptoms. There are people with, uh, different things with Humira that is used that has really been life changing for people. So all of that is tremendous. But I would also point out that the high prices of drugs in AmErika.

Marc Ryan: Increase that morbidity and mortality compared to other nations because people that are diabetics or have other health conditions can’t afford their medication. So if innovation somehow goes down a bit and we can’t find ways to prop it up, and I think we can, we still have the reality that our morbidity and mortality is much higher, and at least part of that is due to high drug price.

Marc Ryan: So suddenly. You lower drug prices, you would have this halo effect on certain areas in certain disease states and populations that would actually be able to afford their drugs. So again, there’s these pros and cons that nobody wants to talk about [00:26:00] and have a real deliberate debate on how do we really reform drug price?

Erik Sunset: Wow. We need to schedule an episode on that topic alone, uh, really, really well, but really thoughtfully put there. I think a lot of the issue was with so much of, uh, politics is the absolutism. There’s certainly happy medium as you point out. It doesn’t have to be one end of the spectrum or

Marc Ryan: Absolutely. No question about it. Yep.

Erik Sunset: And then also in the news, turning our attention back to, uh, to policy here, uh, a little bit. There’s, uh, whisperings of Medicare physician fix

Marc Ryan: There.

Erik Sunset: what’s going on.

Marc Ryan: Yeah, absolutely there is. And I’m always here to tell you, uh, things aren’t always as good as they appear to be. Right? So the initial headlines on the Medicare physician fix. Uh, we’re good. And I think now that people that are digging into it far. More expert on how [00:27:00] those sort of things work than I am.

Marc Ryan: I’m, I’m more an expert on the, you know, health plan, you know, rate side. I’m not as much of an expert on the, on the provider fee for service system for Medicare as an example. But many people are now saying it’s not as good as people initially thought. So just backing up a bit, as your listeners know, being providers, uh, for decades now.

Marc Ryan: Uh, Medicare docs have been really discriminated against compared to, uh, you know, hospital price increases in the Medicare program, rate increases and other different kind of facilities and providers. Not all of that. Them have been great, but they’ve been better in the doc of docs have sort of had this.

Marc Ryan: Uh, this rate system that just hasn’t worked in the many iterations for decades. And consequently, the real reimbursement [00:28:00] for doctors in Medicare over the decades has fallen dramatically. Usually they get a negative increase even when they get a positive increase. Its poultry. And over the decades that the real.

Marc Ryan: Returns have been demonstrably reduced, and that has hurt primary care in AmErika, and that has hurt just the stability of physician practices, especially independent practices, which has led to the takeover. Of physician practices by health systems and private equity and health plans, and it’s just been terrible now.

Marc Ryan: Uh, some of the doc caucus in the house. Anyway, Greg Murphy, being a co-chair, said, I’m not voting for this budget reconciliation bill unless you give me relief. I don’t think he got everything he was promised because the reduction for 25 is still in the budget. [00:29:00] Reconciliation bill does not change that 25 reduction, which is in the two plus percent range, which is meaningful.

Marc Ryan: Right? But then even the 26 and the 27 fix. It does not appear to be much more than a short term win for docs, so they would probably get a little over a 2% increase in 26 and perhaps less than that in 27. And there’s nothing in the bill that really fixes that over the long term. Now, more bad news, and I’m the bearer bad news here.

Marc Ryan: There’s also the possibility. That even that two plus percent in 26 and less in 27. Could turn into a less of an increase or maybe even a reduction again, because Medicare would be subject to something called sequestration and budget neutrality. [00:30:00] And even though it’s not exactly called out in the bill, if your deficits increase under law, there’s the possibility that Medicare could be cut by about 4% across the board in a given year.

Marc Ryan: So your 2%. Could be a negative 2% again, and so on and so forth. So, uh, I think Murphy made progress in forcing the issue. I. But in truth, the GOP leadership has not yet fully committed to that. And again, this is sort of a paper number. I had to give the doc caucus a little something here, and this is how I did it, but it to me, does not seem terribly meaningful, or it’s certainly not a permanent fix by any means.

Erik Sunset: Not even close, just quickly. Uh, one of the many factors killing the profession of being a physician is what we’re talking about right now. I mean, how many years behind are we? I mean, [00:31:00] the, the, the increase by name is still not really an increase at all. I mean, what are we 30 years late? Um, in terms of reimbursing physicians for their services?

Erik Sunset: Uh, with CMS, it’s just insanity.

Marc Ryan: and, and I would note Erik as, as your guys know, but for others that may not. A physician practice really relies on two things, Medicare revenue because it’s, it’s such a big part of, of the healthcare system. And then commercial fees, right? Medicaid is not a big issue. The good docs will take Medicaid, but they’re not making money there.

Marc Ryan: They have to make money on Medicare and on commercial to make it work. And as we underfund Medicare. Uh, that just forces, uh, more price pressures on the commercial world and the employer world. So it makes absolutely no sense to under reimburse Medicare docs because it’s a fundamental. [00:32:00] Part of how you operate your, your local practice.

Marc Ryan: And that’s why many are saying I give up, you know, I told you this story in another one. My wife’s gynecologist decided to become a real estate agent later in life. ’cause it was more lucrative. That really says something right. And again, many are also giving up and saying, Hey, um. I’m just gonna become a salaried employee.

Marc Ryan: I love running my business and I would love to do it, and it’s important to have independence with our docs. Uh, but I’m just gonna go become part of the health system and I’ll make a decent salary. I’ll not have to worry about it, but that creates all sort of. Physician practice patterns that leads to more spending when you could have more cheaply put it into the backing of doctors and Medicare and probably had lower costs overall, just stupid policy that have really emanated from the fact that [00:33:00] it costs money to fix the Medicare doc problem and nobody has ever wanted to make the investment or think about all of the different things in the healthcare system.

Marc Ryan: I.

Erik Sunset: Uh, I hope that they can hear me because if anybody in Washington cared about access to care and health outcomes for AmErikans, they would fund Medicare

Marc Ryan: Absolutely.

Erik Sunset: It’s, it’s that simple, uh, in, in my eyes.

Marc Ryan: Yep, absolutely true.

Erik Sunset: Um, so that, from what I understand, that Bill is now in the Senate. Um, what can we expect, what do you think is gonna happen there?

Marc Ryan: So. Again, it’s a battle between the moderates and the conservatives. Just a little color here. Again, it’s a 53 47 split in the Senate. Uh, actually it’s a little better for the Republicans than even in the house. Even those there, there’s 435 members over there, which is a real interesting dynamic, [00:34:00] but the.

Marc Ryan: You can only lose three votes in the GOP caucus to pass this bill. If you lose three votes, JD Vance as the vice president, can then cast a vote, which puts you back to 51. Right? So if you lose four. You are done. You could lose four votes on the conservative side because there are a number of conservative senators like Rand Paul and Ron Johnson and Mike Lee and Rick Scott.

Marc Ryan: Uh, those are four I can think of right now that could be off. A bill because of the debt and the deficits and the last lack of spending reductions. But over on the moderate side or what I call the pragmatic conservative side, you have, um. You have Susan Collins in Maine. You have Lisa Murkowski in Alaska.

Marc Ryan: Who are your stalwart moderates? I like them. I think they’re cerebral and smart thinking. [00:35:00] But then you also have like Josh Hawley from Missouri, who is normally a very reliable conservative, but he is sort of a pragmatist and he’s questioning Medicaid cuts. And you have some other folks that are up for reelection in 26, like Tom Tillis in North Carolina.

Marc Ryan: And Moran who are also concerned about, you know, more rural hospital healthcare issues and things like that. So I just gave you five people over on the moderate side, pragmatic conservative side, and four people over on the real righteous side. And it begins to show that. There are probably too many votes, sort of like in the house on each side to pass a bill, but ultimately I think they get there and the reason they get there is because the GOP caucus in general and Trump believe they have to pass those tax cuts that were promised during the election, not only continuing the [00:36:00] 2017 ones, but getting rid of taxes on tips, getting rid of taxes on overtime.

Marc Ryan: Uh, getting rid of taxes on Social Security as a side note. I think that’s cannibalization of our tax structure. I think if you earn a dollar, everybody should pay a fairly low rate to it. But when you start to cannibalize and start to take certain people out, I don’t think it’s a good tax practice. And that’s whether it’s tax credits or carving income out or things like that.

Marc Ryan: It just is sort of a dumb tax policy. But that might just be me out there. Right. But they believe they have to pass this tax bill. So ultimately, even if this thing breaks down, which I think it might, for a period of time, you will get a tax bill, right? And you will have fairly major reductions in healthcare.

Marc Ryan: Uh, and it’s just sort of the reality, but. I think this could [00:37:00] break down like it did in the house. Uh, they have this goal before July 4th break of passing the total bill. I think just all the dynamics in that Senate is gonna make it very hard to pass it by then. I will also tell you that Elon Musk has created a firestorm, uh, because he came out and he basically criticized the bill.

Marc Ryan: You know, I think he called it a disgusting abomination. And, um, you know, it’s an interesting way of describing it, right? But basically what that has done is galvanized the opposition of the rightists in the Senate. And I think it also has galvanized the opposition of the rightist in the house. So here you got.

Marc Ryan: A friend of the president was exiting Washington for a whole variety of reasons. They appeared together in the Oval Office and they seemed all cmy and they felt this was the [00:38:00] right thing to do. And you know, I thi I thought they were friends, but the next day he comes out and he calls it a disgusting abomination.

Marc Ryan: Uh, that has really had huge ripples in the Senate, which is costing a lot of consternation. Uh, the house speaker has said to the senate, majority leader, John Thune, Hey. Don’t change too much in this bill because if you do, I got a huge problem when it comes back. So even if the Senate were to get a bill passed, you don’t know exactly what’s gonna happen in the house, but in the end, they gotta pass the bill.

Marc Ryan: It’s part of the way Washington works, just like with the IRA ultimately. Something was gonna pass in some form for the Democrats. There are these political inev inevitabilities that occur in Washington, so something will get passed, but the rollercoaster ride is not over. We have a huge number of loops and other things we have to go on [00:39:00] before the ride ends.

Erik Sunset: Yeah, and as you point out the Elon Musk firestorm, agree with them, disagree with them, agree with anybody in Washington or disagree with anybody in Washington. I’m not opposed to some scrutiny, some outside of Washington perspective on some of these things, and that’s certainly a good fodder for conversation if nothing else.

Marc Ryan: absolutely. And let me just offer a plague on all their houses. Type of comment here for a second. Again, I’m a. I am a state budget director, right, former state budget director. So I believe in balanced budget and good economic policy go across the many decades with very limited exceptions for Democrats or Republicans.

Marc Ryan: They’ve all done a terrible job, and again, I don’t love the Medicaid reductions, but I believe the size of government is way too big. $37 trillion in debt, which on a net basis is over 100% of our [00:40:00] GDP. We have deficits under this bill that are going to increase from just below $2 trillion a year to over $2 trillion a year.

Marc Ryan: So we’ll be continuing to add debt. Our budget deficits as a percentage of DGDP. Are twice in good eco economic times. What economists say is healthy for the economy. So imagine what in a bad economy, the budget deficit as a percentage of GDP would have to be if we need fiscal stimulus and stuff. So all of Washington has upended what we think about.

Marc Ryan: Common sense budgeting, and it’s just a travesty. And I think there are ways without hurting people to get back to sensible budgeting, but neither party cares about that. And I think, uh, the GOP perhaps should get more [00:41:00] blame than the Democrats because the GOP claim to be the defenders of sanity, right, uh, in low taxes, but they don’t live up.

Marc Ryan: To what they say they believe in.

Erik Sunset: No. Lot of talk, lot of hot air, uh, Trump, the GOP have said they are taking cuts off the table, but we’re really looking at a, a huge reduction if you dig in. This doesn’t really reconcile with their commitment, but let’s, let’s get your thoughts, Marc.

Marc Ryan: I think you’re right and let’s just go back and reflect on the 2017 a CA repeal, right? So Trump comes into office and the house gets together with the Senate and the President to try to repeal the a CA. Now, in the end, it didn’t happen because, um, one of my favorite senators, John McCain, came back from his brain cancer treatment and cast [00:42:00] a no vote.

Marc Ryan: And that sunk the a CA repeal in the Senate, which I think was the right thing to do, notwithstanding all the problems, uh, with the a CA in my view. But that was an. Overt attack on the a CA, and that came back in the midterms to really crush the Republicans. And so overt attacks on healthcare don’t work and the Republicans sort of.

Marc Ryan: Understood that. And so they come back now with the budget reconciliation bill, and they’re in stealth mode, right? They’ve made these weird commitments like Trump going out and even Mike Johnson going out and saying, we’re not gonna cut Medicaid coverage. People will not lose their coverage. We’re just attacking waste, fraud, and abuse and excess, and things like that.

Marc Ryan: So they’re in stealth mode. But when the CBO [00:43:00] score came out, it become fairly evident that whether we’re talking stealth mode or overt attacks on healthcare coverage, there are clearly impacts to the number of people that are, that are insured here, right? Repealing the A CA would’ve meant. You know, tens of millions of people losing coverage.

Marc Ryan: Well, the, uh, the CBO is now saying with the expiration of the premium subsidies and the Medicaid cuts and the other a CA reductions, 15 million are gonna lose coverage. So the reality is, whether we’re talking stealth or overt attacks, there is going to be coverage loss. Just because you say it’s waste, fraud, and abuse, when you put work requirements in the program, when you limit provider taxes and I have my own.

Marc Ryan: Individual opinions on these things, there’s clearly gonna be fallout. The one big criticism of work requirements, even I, [00:44:00] I’m against them, just in principle, coverage should be coverage not tied to work. I think we owe that to people, but the reality is, even if you argue the way they’ve set it up with. Ex exemptions and things like that.

Marc Ryan: The paperwork and the health literacy issues and things like that will mean people fall through the cracks and you’re gonna have people lose coverage. And when you say I’m tightening up a provider tax issue, because I think California, for example, has gone too far, you still gonna have people losing coverage and the big issue is gonna be.

Marc Ryan: They seem to be in stealth mode. They think they can honor their political commitment against reality, and maybe they also think they can push off the blame to states and even push off when it impacts. But the big question is what will happen in the midterms to the Republicans because the Democrats will probably be arguing whether it’s a full [00:45:00] repeal of the a CA from 2017 or what’s happening now.

Marc Ryan: Uh. Republicans attacked coverage and that is gonna resonate, and usually the party in power loses seats, so you already have that against you. The second thing you have against the Republicans is it’s a tight margin anyway, so a couple of seats flip and certainly even the stealth mode could backfire on the Republicans during the midterms and turn the house back over to the Democrats.

Erik Sunset: Yeah. Uh, politically it seems like a misstep from my perspective. You’re, you’re battling with the reality of dollars and cents on a, on a spreadsheet as it were, versus the optics. Um, that may be irre recoverable because 15 million is a.

Marc Ryan: Yep.

Erik Sunset: Number of human lives where they’re gonna be impacted by cuts to the a CA.

Erik Sunset: Um, is this Pennywise and pound foolish to be going after this [00:46:00] population?

Marc Ryan: I, I think so. And again. I am an upfront coverage person, notwithstanding all the warts of our healthcare system. Anytime you offer upfront coverage to somebody, hopefully, and again, there’s some personal responsibility here too. Hopefully you identify illness early, you maintain chronic conditions, and you’re not going to the emergency room or you’re not inpatient, right?

Marc Ryan: That’s the cost. And the bang for your buck is upfront coverage. But um, again, I feel for those 15 million people or up to 15 million people that could lose coverage because the stress of that and the inability to even work within a deficient system with upfront coverage to get what you need is a real issue.

Erik Sunset: Truly, yeah, access to care. Health literacy, as you [00:47:00] point out, those, those are not, uh, a given anywhere. Um, at any time, even among those that are educated, working white collar jobs, you may have no idea how it actually

Marc Ryan: absolutely.

Erik Sunset: And then jumping, we’ve jumped around our run sheet. Just, uh, just a little bit. I know, uh, we’ve talked about the prediction and the inevitability in Washington that something is going to happen. How, how do you think this will shake out, you know, before that July break?

Marc Ryan: Um, I, I feel like they are in. Potential risk and maybe even likely risk of missing that July date for everything to be done right. Again, I take a lot of my cues from people like Susan Collins and Lisa Murkowski and listen to what they’re saying. They’ve tried to keep their powder dry because they don’t want Trump coming against them, especially those that are up for reelection.

Marc Ryan: So [00:48:00] Susan Collins is a good example of somebody that’s kept her powder dry. She’s clearly been responsible and said, I have concerns here, here, here. Sh uh, many of them are signaling. I guess I can live with work requirements, but I’m worried about some of these other things, and when they’re signaling that on June 5th. That they even think it’s very aggressive to get this bill done by the July 4th break. You gotta assume that they understand really all, all that is at stake in everything that has to happen. The truth is, there’s just procedural stuff that has to happen in less than a month that. Questions whether you can get it done in time.

Marc Ryan: Then you have all these political dynamics. I pointed out one time before, the one thing that we are hitting here is what’s known as the debt limit. The debt limit is now, uh, that has expired. So you either have to [00:49:00] forestall it again, uh, or you have to raise it, and in the bill is a raise of the debt limit by $4 trillion.

Marc Ryan: Um. Scott Bessant, the treasury secretary, wants the bill by mid-July because at that point there’s a possibility that we would need to borrow and couldn’t because the debt limit law is not, you know, addressed. Maybe they can go into August. But that is hanging over their heads as well. Uh, and, and just being able to issue debt is another big issue that’s impacting this whole budget saga here as well.

Erik Sunset: Not only hanging over their head, hanging over everybody’s head.

Marc Ryan: Absolutely. And again, the economist in me says $37 trillion in debt and adding 4 trillion, uh, to that and adding up [00:50:00] to 2 trillion every year after that is just going to zap our growth. And it’s going to put us more in those low growth profiles that we see in Europe, right? So again, I’m not a fan of a lot of these healthcare reductions.

Marc Ryan: I think we gotta go about it in a different way, but the, just the whole budget and debt profile of our country is really, really something that people should worry about.

Erik Sunset: I agree, Marc. I I did it to us, but we have skipped around our run sheet a little bit. I, I think we’ve hit most of the high points, but what did we leave

Marc Ryan: No, I, I, I think we did cover everything. We covered the bill, the pros, the current bill, the prospects, the Medicare doc fix, which I think is always really important. We covered a bit on, you know, drug pricing and, and, and I think, again, we’re not gonna get exactly what’s been rolled out, [00:51:00] but again, I applaud the president for going down that road.

Marc Ryan: And ultimately, again, I think. We can get to a, a, a better position on healthcare if we attack price. I always say in my book, there’s three tenants here, uh, you need to attack price. I. You need to ensure upfront coverage. And the other thing that we’ve talked about in the past here that is a good thing in some ways is as much as I question all of the restrictions being placed on plans with regard to utilization management.

Marc Ryan: In prior authorization, I, I always say, you’re taking the managed care outta managed care. Some reforms are good, but too much is not. But the good thing about that is it’s forcing plans to now pivot from that gatekeeper, um, and prior auth upfront. To investment in technology and data analytics and really understanding risks of members [00:52:00] and, uh, cost of care and quality.

Marc Ryan: Now, my one worry is if you have a whole bunch of uninsured people out there and it’s increasing, that dilutes the value of that transformation at health plans. But if you attack price, if you. Keep the uninsured count low and you pivot from PA and um, to real care management in analyzing what’s happening to the member and working with providers.

Marc Ryan: We need to get to better collaboration between plans and providers. We could see the cost spiral come down and we could ultimately then save money, but nobody really wants to go down that comprehensive route. As you point out, everybody’s sort of on such. Philosophical polar opposites here, that the sanity in the middle is really sort of being wiped out.

Erik Sunset: I would, I would pause it too. You know, looking at better coordination between payers and providers. I mean, we have [00:53:00] talked about this a little bit in the past around value-based care. There needs to be some modicum of patient accountability to their own, to their own health as well. Uh. But again, that’s kind of the, the middle ground of this, right?

Erik Sunset: The, the more, the more direct approach. And certainly, you know, not everybody’s in control of 100% of their health, but some of the gripes I hear from providers that have been on the show and excuse me. Related to value based care is number one. I have a really hard time defining what that is because it’s different to everybody.

Erik Sunset: So what are we actually talking about? And number two, you know, if a patient won’t buy into their own health outcomes, what could I possibly do? I mean, I’ll do the best I can, but that doesn’t guarantee an

Marc Ryan: Yep. I think those are great points, and I agree with you that VBC is a little still amorphous, right? And it’s probably gonna be different based on the sophistication of the healthcare Marcet and things like that. But one good recent survey said, uh, [00:54:00] providers. Uh, individually as well as facilities are expecting a rise in the percentage of revenue that is tied to VBC in whatever form that is.

Marc Ryan: I think that’s a good thing because it’s transforming the relationships between plans and providers. It gives incentives to providers. And I think that’s fair. Right? So that’s a good thing. And I think on your other issue of personal responsibility, I think it’s a great point. I feel like. We can’t ask people to have too much personal responsibility right now given all the ugliness of, you know, benefit designs that don’t work and things like that.

Marc Ryan: But if we can address some of that, and I think the advent of technology and freeing up the data available to say to us, Hey. You have a problem here, you need to address it. I think that begins to start to set the course for personal [00:55:00] responsibility taking on, uh, predominance. So that’s more of a Republican philosophy.

Marc Ryan: But you know what? I endorse that one because I think it is a pivotal part in the future of controlling cost as well, as much as revamping the system.

Erik Sunset: Sure. Well put. Well Marc another big, beautiful episode with you. Thank you so much for spending some of your Thursday morning with us today.

Marc Ryan: Uh, thanks very much Erik, and I’m sure I will be back and talking about what happens with the big, beautiful Bill, and it will be another big, beautiful, long episode, I’m sure.

Erik Sunset: Oh, you can count on that. And for everybody watching and listening, thanks for joining us. Be sure you’re subscribed on Apple Podcast, Spotify, YouTube. You can also get episodes of the show on DocBuddy.com. Until next time, I’m your host, Erik. We’ll talk to you soon.