Trump now needs the hospitals he's alienated

The Trump administration is struggling to win back the confidence of hospital leaders after three years of pitched battles, with the industry pushing for urgent help from the White House as the coronavirus crisis begins to swamp emergency rooms.

Centers for Medicare and Medicaid Services Administrator Seema Verma on Friday announced new moves to roll back industry regulations, two days after hospitals pled their case to Verma in a White House meeting that left many unsatisfied. Among the changes: Streamlined deployment of doctors, fewer time-consuming inspections and less red tape around how hospitals run operations during a crisis.

“It gives hospitals and providers on the front lines the maximum flexibility so that they can focus on patients that need help,” Verma said on “Fox and Friends” on Saturday. The American Hospital Association hailed the moves as a “solid step.”

But hospital leaders say that the new announcements only touch the surface of their needs, as they worry about shortages of crucial supplies, risks to their workers and the possibility of an industry bailout as coronavirus patients swarm their facilities. An expert on an American Hospital Association webinar last month predicted as many as 1.9 million ICU admissions from the coronavirus outbreak over the next few months, swamping existing facilities. There are only about 100,000 ICU beds across the U.S. health system.

Meanwhile, the cost of care for some severely ill coronavirus patients has already been estimated in the hundreds of thousands of dollars, as hospitals deploy significant measures to keep the patients alive while protecting their own workers against infection. At least three hospital systems in Seattle, the center of the nation's most extensive outbreak, have already announced a halt on elective procedures in order to devote more resources toward the coronavirus patients already swarming their facilities.

“I think there will be hospitals that could be pushed to the edge financially,” said Chip Kahn, head of the for-profit Federation of American Hospitals, warning that hospitals will absorb a surge of coronavirus cases while postponing elective procedures that tend to be better for hospitals’ bottom lines. Some hospital leaders have quietly floated that they’ll need federal funding to pay for rented hotels or other arrangements as their hospital wards are quickly overrun by the coronavirus outbreak.

The risk of failure is severe: Public health experts have warned that the U.S. coronavirus outbreak, which is in its early days, could be on track to resemble the increasingly dire situation in Italy, where patients have overwhelmed that nation’s health system. That’s left hospitals calling for extreme measures from the White House and scrambling to prepare emergency steps of their own while they wait for a response.

But in the face of the looming crisis, hospital executives said that leaders were underwhelmed by their Wednesday meeting with Verma, who spent much of the hour-long session taking notes but failed to calm industry fears about swamped emergency rooms and medical supply shortages, according to three individuals with direct knowledge of the meeting. Vice President Mike Pence briefly joined the meeting but departed to join other officials as they worked to prepare the president for his Oval Office address.

“For our guys, it did not scream confidence,” said one individual briefed on the meeting. “We came out of it with bigger questions about whether the administration has done its homework to protect the supply chain,” as hospitals try to stock up on masks, swabs and other key materials that could quickly become hard to find, said another individual.

Kenneth Raske, president of the Greater New York Hospital Association, compared the current situation to a “World War II mentality, where we’re going to have to put extra shifts on in manufacturing and get this stuff out the door.”

“The only one that can do that is the federal government, and we need the president and vice president to make a priority of that,” he said.

Kahn, who was among the attendees at Wednesday’s meeting, praised Verma but put responsibility for the administration’s slow start on the White House, contending that federal health officials had to wait for authorization to get started on a series of initiatives.

But hospital leaders haven’t had time alone with President Donald Trump — even as leaders of other health sectors, like the insurance industry, the pharma industry and the lab industry, have been granted extended face-to-face meetings with the president and Pence.

CMS didn't respond to questions about the meeting with Verma, but defended its efforts to engage the hospital industry.

A spokesperson pointed to a new weekly call to brief hospitals on coronavirus — with the first call with FDA Commissioner Steve Hahn drawing more than 1,600 listeners — and other steps to build closer ties.

"CMS created a strategic working group with the American Hospital Association and the Federation of American Hospitals which began meeting last Monday," a spokesperson said, adding that the group included a "small number" of hospital CEOs.

"We believe that for the health system to respond adequately to the coronavirus, the entire health system must be engaged," the spokesperson added.

The tensions between hospitals and the Trump administration have persisted for years.

The hospital industry went to war with the White House in 2017 over Trump’s efforts to repeal the Affordable Care Act, saying that rolling back the sweeping health law would harm patients and do damage to their bottom lines. They’ve continued that fight as Trump has tried to strike down the law in court, with American Hospital Association CEO Rick Pollack calling the position “misguided.”

Hospitals also have fought over numerous Medicaid changes spearheaded by Verma, including a new “fiscal accountability” proposal that would tighten hospitals’ ability to collect Medicaid funding. Hospitals currently use a variety of financial arrangements to pump up their Medicaid revenue, such as supporting state taxes that allow them to draw down even more money in federal matching funds. Verma has called the arrangements industry-friendly gimmicks and wants to do away with them.

“Hospitals were already concerned about the rule — and moreso with coronavirus staring them in the face,” said Joel McElvain, a partner in King & Spalding’s health care group who’s represented hospitals in lawsuits against the administration. McElvain warned that states would need to come up with new financial arrangements to support hospitals if the rule, a top priority for Verma, is finalized during the coronavirus outbreak.

“It’s a time when rural hospitals are already struggling and facing real difficulty if worst-case scenarios come true in the coming weeks,” McElvain said.

Meanwhile, hospitals have spent years fighting back against a slew of Trump administration funding cuts to Medicare, Medicaid and public health initiatives. Among Trump’s most recent proposals: an $18 million cut to the federal health department’s own hospital preparedness program, announced just last month, on the eve of the coronavirus outbreak.

“The hospital preparedness program exists so hospitals prepare for this exact thing,” said a former HHS official. “The whole point is to prepare them so they can respond to all hazards - from hurricanes to pandemics to biological attacks.”

While Trump’s battles with the pharmaceutical industry have gotten considerable headlines, some of his aides have believed that hospitals were a larger problem, citing the costs that ever-larger systems have passed along to patients and pointing to policies that they say gamed the system. They also haven’t agreed with hospitals’ warnings that their bottom lines have suffered under this administration.

“The argument is so ridiculous,” said Brian Blase, who advised Trump on health policy before leaving the White House last year. “I don’t think there are a lot of policies that came out that took revenue away from hospitals,” he added, noting that hospitals successfully sued to block Trump’s billion-dollar cut to a drug-discount program and other regulations opposed by hospitals have been similarly stalled.

Amid the historic public health threat, hospital officials are loath to renew a public battle too and criticize the administration.

“We have been very clear that we have had serious concerns with a number of other policies from the Administration, including the issues of Medicaid expansion and cuts to hospital outpatient department visits,” a spokesperson for the American Hospital Association told POLITICO. “Right now, of course, our focus is on working with the government and other stakeholders at all levels to address the current emergency.”

But some hospital leaders did express frustration on Saturday after Surgeon General Jerome Adams warned that hospitals may need to postpone elective surgeries to handle the crush of coronavirus patients.

“Hospital & healthcare systems, PLEASE CONSIDER STOPPING ELECTIVE PROCEDURES until we can #FlattenTheCurve!” Adams tweeted on Saturday, adding that such procedures could further the coronavirus spread, tax medical stockpiles and put further pressure on doctors and nurses.

The message from the nation’s top doctor was seen as alarmist and premature, worrying hospital officials that it would prompt patients to postpone crucial care. “I do think it’s unfortunate what the surgeon general said,” said Kahn, adding that he hoped Adams and Gov. Andrew Cuomo, who similarly warned of the need to cancel some procedures, would walk back their statements. “I don’t think we’re anywhere near a point where we know we would have to do something like that.”

The coronavirus outbreak has served as justification of hospitals’ yearslong warnings over federal policies that the industry saw as hamstringing their finances and preparedness, executives said. Now, the same government that sought to cut pay rates and layer on new regulations is relying on hospitals as the nation’s chief defense against the pandemic.

“Governments tend to, on a day-to-day basis, underestimate the importance of the health care community and look at it not so much as an economic contribution as an economic deficit,” Raske said, emphasizing that the attitude extends well beyond the Trump administration. “That tendency hits reality in a crisis.”

Hospital leaders also have warned about the dearth of ventilators to treat the sickest patients — an issue that Verma has failed to directly address in multiple interviews, including being grilled by Fox News host Tucker Carlson on Friday night over whether hospitals will have enough.

"You know, Tucker, I don't want to make drastic predictions here, right?" Verma said. "Because this situation is changing every single day. And based on the information we have, we know that we have to be aggressive," she added, touting yesterday's moves to increase flexibility for hospitals and relax regulations.

“That was one of the most incompetent and absolutely incoherent responses to what’s going on right now,” Michael Osterholm, a University of Minnesota infectious-disease expert, told Carlson a few minutes later.

CMS did not directly respond to questions about whether there is a dearth of ventilators.

Meanwhile, hospital executives have noted the dark irony of Washington’s sudden focus on mass treatment capacity after years of efforts to crack down on hospital reimbursement prompted providers to shrink their facilities.

“I’m really worried about how, when this finally blows over, what Congress does,” said one lobbyist. “Are we actually going to learn from this?”

“We love hospitals,” countered Blase, Trump’s former health policy adviser. “Hospitals are going to be at the front lines of this and have an enormous job. But there shouldn’t be policies that give them advantages they shouldn’t have.”