What Could Health Policy Look Like In 2021?

JC Scott (00:08): Welcome to The Pharmacy Benefit, a podcast that highlights the role of PBMs, and serving millions of patients and consumers throughout the country. I'm JC Scott. JC Scott (00:17): Now that we know who will be president in January, or at least we think we know, and what the makeup of Congress may be, what could that mean for healthcare policy in this country, specifically issues involving health care costs, drug pricing, insurance coverage? JC Scott (00:30): Joining me today are two friends with significant political expertise and experience, who I'm hoping can help us answer those questions. JC Scott (00:37): Meg Hauck has spent her career shaping public policy and advising officials at the highest levels of government. Prior to launching the consulting firm, Nathanson and Hauck, Meg served as health policy advisor to Senate Republican leader, Mitch McConnell. She worked on issues addressing Medicare, Medicaid, and FDA reauthorization, and was the chief architect of the Senate Republican conference strategy on the patient protection and affordable care act of 2010. JC Scott (01:03): Meg also worked in the administration of former president George W. Bush, both in the White House and at HHS, and had a prior sin on Capitol Hill with former Senator Don Nichols of Oklahoma. JC Scott (01:14): Chris Jennings is the president and founder of Jennings Policy Strategies. Chris has done two tours of duty in the White House. First, a senior advisor for health policy in the Clinton administration, and then serving in the same role for President Obama. JC Scott (01:27): He spent nearly a decade in the US Senate, including as the deputy director of the special committee on aging for three senators and as a member of the bipartisan commission on health care. Since 1992, Chris has advised over 10 democratic presidential campaigns on health reform policy. This includes serving as a current informal senior advisor to vice-president and now president elect Biden. Although, I want to make clear that Chris is not here as a representative of the Biden campaign. JC Scott (01:55): Meg, Chris, I am impressed and intimidated by both of your resumes. Thank you for joining me. Meg Hauck (02:01): Thanks for having us. Chris Jennings (02:02): It's a pleasure. JC Scott (02:03): I'll say for our listeners, we are not here to show favorites or preferences. We're here to talk about the future of policymaking and do a little bit of speculating along the way. JC Scott (02:11): So let's start with a question for both of you, and Meg, I'll ask you to go first. You and I had had many conversations before the election, and you expressed a quiet confidence that even if vice-president Biden were to win, which it seems he has, that Republicans would hold onto the Senate. JC Scott (02:28): While there are two runoffs, I think it's safe to say Republican surprised a lot of people with the outcomes in the Senate and house races. And then Chris, you were always confident along the way in vice-president Biden's chances, never had a lot of doubt. JC Scott (02:41): So while you both may have seen it coming, not many political pundits predicted the outcomes we saw. So, what happened? What did you guys know that they didn't. What did the pollsters miss? Meg Hauck (02:51): Well, Chris and I are extremely precient, So you should always listen to us. I would say that in looking what the pollsters missed and the polling, it sounds like there was an under survey of people. I'm not a pollster, so I can't speak to this, but I do think it's hard in a world where only my business partner and my mom have a landmine. Meg Hauck (03:16): How do you get people to answer the phone and tell you who they're voting for? How do you do random surveys and things like that? And you can try to do it, but most people don't answer cell phones that they don't know the number of. So, I do think that the polling industry probably needs to figure out a little bit how they're going to go forward. Meg Hauck (03:33): I think from my perspective, there were two things that I thought were important in this race. One is that it's hard to beat an incumbent and it just is, and that is always the case Republicans or Democrats. Meg Hauck (03:44): And the other is that Trump was running and needed to win in States that we didn't have Senate races. So, Trump winning in Florida is great, Rubio and Scott aren't up. So, Trump in North Carolina, the good thing for Tillis is that he ran ahead of Trump. Meg Hauck (04:03): So Arizona, Martha McSally was inextricably linked to Trump. If he won, she won. If he lost, she lost. So I think that the fact that we had races, he could lose States that we did not have races in, and win States that we did and still lose and keep the Senate. Meg Hauck (04:21): Also, I do think there is a lot of people who may be questioning this, but I do think there's some psychology to the American people going into the voting booth and saying, "I don't know that I want one party to have total control." And there's more tickets splitting than people think. JC Scott (04:37): Chris, what's your perspective? Chris Jennings (04:39): Well, I think that Meg was more right than I was, frankly. I had felt like many people that the 2016 race should have taught pollsters how to compensate for under-reporting of Donald Trump's capability to bring out voters. I think maybe he's extraordinary. He got more votes this time around than last time. Chris Jennings (05:05): You get out those voters, and then if ... Collins, you look at some of these Senate races, it was a combination of his base over-performing and then some other people saying, "And I like this person too." Chris Jennings (05:20): One thing that we've learned about the polling world is we over rely on it, particularly for these elections. There are elections at the moment, polling's a static tool and it generally doesn't reflect the moment of the election. I think reporters over utilize them, and then we over utilize them, because we read them, and then we factor that into our perceptions of what's likely to occur. Chris Jennings (05:49): I do think there's another understated thing, which is that Biden incredibly over-performed. I mean, he got his votes too, and I think he won because of COVID, frankly, and the COVID handling. I think there's some expectation by the public that we find some way to work together on this particular issue. Chris Jennings (06:10): There's lots of other issues that there's going to be disagreement about, but my view is, at some point, whether it's this end of this session early next year, there will be a window of opportunity to do some collaborative work and some constructive work. And then we'll probably go back to our cages, but we'll let you ask those questions later on. Meg Hauck (06:28): Thanks, Chris. Meg Hauck (06:29): It does feel like as you said, Meg, that the polling industry has some self-reflection to do in terms of the modernization of the way that they do their work. For a lot of us, that sort of undermines our confidence, not only in what they're saying, but what we hear from the media, Meg Hauck (06:44): But, on the flip side of that, as you both pointed out, we saw once in a generation turn out on both sides of this election, even with the divisiveness in our country, that can only be a healthy thing to see that many people participating in the electoral process, so there is a positive to come out of that. Chris Jennings (07:02): JC, we can also say this, that I'm yet not ready to surrender the Senate just yet, because we still have these Georgia races in January, and we'll see what happens there. But the one thing since the conventional wisdom is that the Republicans will keep the majority after the election, then I'm keeping my bedding open on that one, because one never knows. Chris Jennings (07:27): There's a whole lot of reasons why this election is very different than any other election we've seen in Georgia in a post-election world. So, there's no past application here, in my view. I know others will maybe disagree with that, but you all have this amount of tension, this amount, you won't have Trump running, you will have this month's resources, people probably won't do as much ticket splitting. You know, there are a lot of dynamics here that will be interesting to watch. JC Scott (07:54): Absolutely. My niece is a freshman at the University of Georgia. She has been very participatory in her first election process so far. So I'm doing a quick shout out to Kaylee Scott, down in Georgia. Chris Jennings (08:07): I hope she's playing to the demographics. Meg Hauck (08:10): I hope she's not. JC Scott (08:13): So Chris, you alluded to what comes next, but before we get into the next administration and the new Congress, let's talk about the final eight weeks of the Trump administration and its intent to finalize regulations and policies across the board, including in the healthcare space, JC Scott (08:27): Our space in particular, as you both know, they're looking at the rebate rule again, they're looking at a proposal to tie drug prices to an international benchmark, and I'd love to ask you how that's going to play out, but given the situation seems to change daily, by the time people hear this podcast, your answers may have changed. JC Scott (08:43): So I'm just going to ask you this, is it typical for an outgoing administration to try to advance new and final policies at this point in a transition, is what we're seeing sort of a usual and customary last attempt to clean up business, or is this something else? What's your perspective on what's happening? Chris Jennings (09:00): No, I think it's fair to say it's pretty usual. It may be more sloppy. This administration has not forged a reputation of, this isn't meant to be overly partisan, but great competence in execution. It's very hard at the end of the year, the end of an administration to check all the boxes, legal process and otherwise to get things done. Chris Jennings (09:26): It can be done, it has been done, it will be done again. I fully expect we will be seeing out the door policies that some people will like, some people will absolutely reject and use all the tools and Congress and the judiciary to respond to. Chris Jennings (09:44): Also, the incoming administration, maybe unlike the current one, will evaluate each one on its attributes on its benefits relative to their interest, and make a decision as to its options as to what it can do in terms of rescission's or delaying effective dates, et cetera. There'll be one-off analysis. Chris Jennings (10:05): In Trump land, it seemed as though if Obama's name was on it, it was bad. That won't be the case in all cases for the Biden the administration. JC Scott (10:15): Meg, do you agree with that, and in your experience, if this is the usual end of an administration process, do these policies usually stick, or are they quickly changed? Meg Hauck (10:26): Well, I think I agree with Chris that there is some attempt, usually four key things that are priorities of the administration to make sure they get it done on the way out the door. Meg Hauck (10:36): I think what has changed in recent history is a couple of things. One, my former boss, Don Nichols, wrote a law called the Congressional Review Act, which he was the first one to use and use successfully in the transition from Clinton to Bush, and then nothing until the beginning of the Trump administration, where it was used 17 times. Meg Hauck (10:54): So that is a different dynamic in terms of undoing rugs from a previous administration, and you really need a perfect storm of a transition of power in the White House, and then the party in the White House controlling Congress, so these are all not ... You have to thread a needle, a particular needle, to make sure that it works that way. Meg Hauck (11:16): The other thing I would say is that it's not as usual for an administration to push out as many things as they are that Congress doesn't want them to do. I think the difference there is that there's, throughout these four years, it's not a new thing, this White House, and this administration has not been particularly concerned with necessarily, does this help Congress or hurt Congress? Does this help us in the Georgia specials or does it hurt? You know, it's really more about their priorities and their policies. Meg Hauck (11:44): So I think that's a little outside the ordinary, that if the majority leader would have called George Bush and said, "Please don't do this on your way out the door," that would've mattered to him. I'm not sure it matters with this White House. JC Scott (11:55): Well, it's going to be interesting to ride this rollercoaster together for the last few weeks of the administration and see where we shake out on these things. JC Scott (12:02): So, let's look ahead now to next year, we've got a narrower house democratic majority. In all likelihood, a narrow Republican majority in the Senate, although Chris is not yet conceding that point. JC Scott (12:14): Do you think there's going to be room for the two chambers to work together to get results in healthcare in the 117th Congress, and will any of that focus on prescription drug costs or insurance coverage issues? Is it all going to be COVID, giving the presence of the pandemic with us? What do you think's on the agenda and what do you think achievable? Meg Hauck (12:31): I do think it's going to be mostly COVID. I think the vaccine news is wonderful and we're all thrilled about that, and as PBMs will hopefully play a large role in helping with the distribution of that, but this is not magically going away on January 1st, 2021. So, I think there's still going to be a lot to do both on the economic stimulus side, but also just on the healthcare side. Meg Hauck (12:54): I do think, and I don't think it's just me, that there is some healthcare fatigue in Congress. We have been just talking and working on a lot of these issues from 2009, straight through till now on the ACA, and passing it, and then should we repeal it, and then how do we replace it, and et cetera? Meg Hauck (13:13): I think there are some issues that they're going to have to address that they probably don't want to, but there are some Medicare solvency issues that are exacerbated, because of spending during COVID. There's obviously COVID, so there are some public health and Medicare things that I think are going to be on the front burner. Meg Hauck (13:29): Then the truth of the matter is there's not a lot of, to Chris's point about going back to our corners, there's not a lot of agreement in that ACA Obamacare space right now. I think that COVID and some Medicare focus is probably going to be more than they can say grace over. Meg Hauck (13:45): The other thing I would note is that both chairman change in the Senate and one ranking member changes in the house for Republicans. And that changes the dynamics. Chuck Grassley is done, his term limited at finance and Mike Crapo comes in. He had a very different view than Chairman Grassley on drug pricing and had his own bill. Meg Hauck (14:04): Lamar Alexander is retiring, and most likely Richard Burr will come in and take over the health committee. He has a very different perspective than Chairman Alexander. Meg Hauck (14:13): Then on the house side, on the energy and commerce committee, Greg Walden is retiring. The odds on favorite is Cathy McMorris Rodgers, who also has a different perspective. Meg Hauck (14:21): So I think those things also change the dynamic who's sitting at the table. JC Scott (14:26): Thanks Meg, and Chris, maybe to ask you to channel the incoming administration a little bit from your perspective. How do you see the Biden administration approaching these questions of healthcare policy? What's going to be on their agenda, and given that vice president Biden spent 35 years in the Senate, something of an institutionalist, how do you see him working with a theoretical Senate, Republican majority? Chris Jennings (14:50): Well, whether it's a majority, or not, he will want to try to work with Republicans. He does have very deep and long standing relationships with many of them. He's not the first to throw a bomb into those relationships or to engage in an unnecessary fight. Chris Jennings (15:10): I think first thing is first, though, with every administration is to reflect back what the Trump administration has done, where we are with the executive agencies in terms of clean up and appointments, get government up and running, make some initial lists. Every administration does this, take some very, very, very quick initial executive actions, which will of course include healthcare in significant ways, and be COVID COVID COVID president until there's a feeling that we have some control over where we are in this country. Chris Jennings (15:43): I would say not just to address the issues of the moment, but maybe to begin the conversation of what I call 'never again' experiences, this country doesn't want to experience ever again what we've just gone through. I think there'll be a bi-partisan interest in collaborating on how we can avoid that going forward. Chris Jennings (16:02): So I see those things. Chris Jennings (16:03): The last thing I'd say about healthcare writ large is COVID has unmasked for a lot of people, not us in healthcare, but many other people about the shortcomings of our healthcare system, particularly in the issues related to equity and disparity. I think it's in the interest of both parties to see if there can be some collaboration on policies that begin to address some of those issues in meaningful ways. I also know that the president elect feels it's a moral imperative to address some of these States who have not expanded Medicaid, and will want to find some creative, aggressive ways to do that. JC Scott (16:39): Meg, just a quick follow up question for you while we're on this topic. As an outside observer, I feel like Mitch McConnell is very much a deal maker, and if he's trying to get an agenda done, he'll work with whoever he needs to, to do that. You spent time working for majority leader McConnell. What's your perspective on how he might work with the new administers? Meg Hauck (16:59): I think that president elect Biden and leader McConnell have an existing relationship, decades serving together in the Senate during the eight years of the Obama administration, quite a few of the large packages that came together, came together because the two of them were able to navigate a path forward, whether that was fiscal cliff, or taxes, or omnibus spending bills or whatever. Meg Hauck (17:22): I am not suggesting they are going to cabo together for Easter, but I think that what that does is something, and this is not a partisan dig, because it was an issue for Obama, it was an issue for George W. Bush, a lot of presidents when they come here from outside of Washington, think that they're going to change Washington. And you know, probably you're not going to change Washington. This is a gigantic ocean liner that does not turn on a dime. We're not a little speed boat. Meg Hauck (17:51): President elect Biden has a history of knowing how to navigate the Senate, how to work with the House, how to talk to his colleagues in a way that I think having McConnell and Biden just even be able to pick up the phone and say on day three and say, "Okay, are these two things doable?" And the other, they have enough trust in the bank to say. "Yes, no, and maybe." Meg Hauck (18:16): I think that's a huge advantage for both of them, for both of them to talk about what are the realistic opportunities to work together. So, I just think that existing trust is something that will be valuable no matter what the issue is. JC Scott (18:33): So let's talk a little bit about what they can then get accomplished with that backdrop right out of the gate during the first hundred days. You've both been involved with presidential transitions, Chris, during the Bush to Clinton transition and Meg, when the Clinton to Bush transition. JC Scott (18:48): So can I ask you, given the apparent lack of communication between the Trump and Biden teams, how might that impact the agenda of the first a hundred days? Chris Jennings (18:57): It has not been fatal to this moment. With each passing day, though, it becomes far more problematic, and really, in my pendulum of what people heel to recognize the law to stop being a child. I'm sorry, but I've never seen any administration, Republican or Democrat, incoming or outgoing, not collaborate with the other one. Chris Jennings (19:26): There's an institutional and personal instinct of wanting whomever comes to fill your shoes to at least know where you were and why, and a little bit to help them out the door. You feel like that's almost your patriotic duty. Chris Jennings (19:46): This is not happening right now, and a lot of people report on the international implications. Now, we're seeing people understand the implications relative to COVID. We don't even have the ability to access the departments. Chris Jennings (20:00): The landing teams are prohibited by law to talk to the career and politicals right now. There is no access to real time information about data that demonstrates and documents the level of the problem of COVID, nor the contracts that exist to begin to implement, even on the distribution of vaccines or therapeutics, even to understand how the testing dynamics are working, that are going to be essential to get us back to work and back to school. Chris Jennings (20:32): So this is a huge problem, and it's not a problem that should be targeted, like, "Okay, I'll give the international ... I'll give this national security brief, or I'll give you some data on [inaudible 00:20:44] ." The law is the law, which is to say there should be granted access across all agencies. So we can have a smooth application of both transitioned into governance, but also a capable transition to governance. Chris Jennings (21:00): Lastly, I'll say this, there's an area that people don't really understand, but even the formal vetting of people for positions in government get blocked, because we don't have access to those resources. So, there is going to be potentially a delay in effectively transitioning into governance with new federal officials that are necessary to run the government. Chris Jennings (21:29): So I think it's frankly time for everyone, Democrat and Republican, to call on this administration to follow the law. JC Scott (21:36): I imagine you have a historical perspective on what's happening now and what you've experienced? Meg Hauck (21:42): Yeah. Obviously, the transition from Clinton to Bush was delayed as well, because we were still in a Supreme Court case about recounts in specific counties. So that didn't really happen until mid December, and it's not ideal. It was something that the administration was able to overcome and move forward on, but it's not what you want. Meg Hauck (22:04): Even in the transition from Bush to Obama, while I was with McConnell at the time we put together notebooks from each of our departments in the White House, and those of us who are alum were asked to contribute, like, "Can you think of things that you need that you wish you had known?" So the presidential personnel team put together a notebook that is 'here's every nomination that you could possibly have to do, here's what' ... and OLA, we kind of did a 'these are the things you're most responsible for, here's how we do our structure', et cetera. Meg Hauck (22:38): Now, I can't tell you that Obama's studied that and implemented them exactly as we sent them, but to Chris's point, it does feel like your patriotic duty to just say, and all presidents have said as George HW Bush did in a letter that a lot of people have circulated around this, "You're now our president, so I want you to be successful." I think that's obviously ... This is a very different feeling than, than we've had during most transitions. Meg Hauck (23:08): I don't think it's ideal, I don't think it's what either party would like to see. I don't think it's insurmountable. It's not perfect, but it's not insurmountable. I think there is enough consistency on career staff and others that you can move forward and start with the things that you want to do. JC Scott (23:25): What I really want to know, though, from that historical perspective, are the stories true that from the Clinton to Bush, George W. Bush transition that the Clinton people took the Ws off the keyboards? Meg Hauck (23:37): I was not there day one, I did not start ... Chris Jennings (23:38): I was there when he left, and there was people who did that. I think that if you ask any of the Republicans who was handed back the keys, I think they felt it was very collaborative, once we got over the hurt feelings. Chris Jennings (23:57): I will say that the gore Bush election was 537 votes, or whatever, in one state. There is no one in either party, I think even Donald Trump, who believes that you can overcome thousands and thousands of votes in multiple States and become president. Chris Jennings (24:17): So, the outcome is obvious here. The delays really are inexcusable. It was completely understandable during a recount, although as you all remember, and post 911, there was a review that certainly immediately the intelligence information should have been granted to everyone concurrently, and of course it would have been if that was the law. Chris Jennings (24:41): So the point is, the law is the law, is the law. Everyone knows the outcome of this election and we should get moving forward for the good of the country, particularly even now, especially now when you're in the middle of a pandemic. Come on people, let's work up and be adults. Meg Hauck (24:57): Yeah, and Chris, I agree with that. I think that most Republicans would say the same thing, that at the very least, you just both have the briefings. If it turns out one of you doesn't need them, no harm, no foul, right? So, I think that this is probably something that we're going to need to address going forward. JC Scott (25:15): So you all have been generous with your time. Let me ask you one final question as we look further ahead, because I know that you never tire of elections and you're excited for the next big election, which is going to be the midterms in 2022. JC Scott (25:26): I just want to have you both on record, and then in a couple of years, we'll have you back to see how you did well. Give us your predictions. How do you see those midterms playing out? Do Republicans continue to build on their gains and take the house, are we going to have status quo, will we see a blue wave? What what's going to happen in 2022? Meg Hauck (25:44): Well, I will say, I think that the House is a little bit of an untold story right now. There's so much focus on the presidential and the runoffs in Georgia, that the House is a little bit of the redheaded stepchild that people aren't paying attention to, but there are some pretty significant changes in the House. This is a very slim majority for speaker Pelosi, and I have no doubt that she'll be able to navigate it, but it's not easy. Meg Hauck (26:07): I'm sure John Bayner would be delighted to discuss some of his concerns about those scenarios with her, or everybody could read his book coming out in March. I actually think that a midterm, historically, a midterm for a sitting president is not great. Meg Hauck (26:24): So, if you look at historical trends, it's more likely that the house would flip and the Senate potentially grows seats. I think you can look at the map and say, there's some vulnerables that that Republicans would be concerned about, but that was true this year. I mean, the number of people who wrote Senator Collins, who said, "Oh, she can't win," and she is the hardest working campaigner that I've ever seen. Meg Hauck (26:50): So, I think I'm going to predict, and you have it on recording, so you can play it back to me, that we keep the Senate and flip the House. JC Scott (26:58): Chris, I assume you fully agree with that? Chris Jennings (27:01): Of course not. I think there's some saneness behind the madness, which would be if we've learned anything, the predictions about election, the outcomes are frequently wrong. I'll also say that what you have to do, is you have to see what's different this time around. What is different is that the Senate isn't in the majority of the the first term presidents hand's. That just doesn't happen, it's very, very rare. Chris Jennings (27:32): So, to the extent to which there isn't any type of cooperation with the Biden administration, and it's viewed as counterproductive for the country, and almost unresponsive to what it just felt it elected the new president to do, which I think is in shorthand, competent government. Then, I think the Democrats have a chance in the Senate. Chris Jennings (27:56): I think in a way, on the House side, this scared them. This was a complete shocker to the House Democrats losing. In some ways, it's a wake up call. So I will of course predict the opposite of Meg and say that the Senate will go Democratic and the House will be retained as majority. But, we'll probably have a new speaker, which will be interesting to see who that is, because I think the speaker has made a commitment. This likely will be her last term. Meg Hauck (28:28): Well, it could be Chris, because you don't have to be a member of the house to be speaker. Chris Jennings (28:33): I can assure you that I will not be opting for that route for my career. JC Scott (28:40): Well, if we had votes, you would have our vote, Chris. Meg Hauck (28:42): Yes, you would. Chris Jennings (28:42): Thank you. JC Scott (28:43): We'll be excited to have you both back on to talk more about how that is shaping up and pressure test those predictions. I will say that if the president elect Biden and the new Congress works together half as well as the two of you work together, I'm optimistic about the future of policy-making for our country. JC Scott (29:00): This was a lot of fun. Meg and Chris, thank you for your time. Chris Jennings (29:02): Pleasure, thank you, JC. Meg Hauck (29:04): Thank you. JC Scott (29:05): Thank you everyone for listening, as always. I encourage you to subscribe to the pharmacy benefit and download all of our podcast episodes. You can do that on Google Podcasts, Apple Podcasts, Spotify, or wherever you find your favorite podcast. I'm JC Scott. Thanks for joining me.