Health and Human Services Secretary Robert Kennedy Jr. wants to trim 20,000 employees or about 1 in 4 employees.
The shock waves reverberate. Health and Human Services Secretary Robert Kennedy Jr. wants to trim 20,000 employees or about 1 in 4 employees. Jeffrey Grant, a former Health and Human Services senior executive and now a health care policy consultant, joined the Federal Drive with Tom Temin to give an analysis of what this might mean for agency operations.
Interview transcript:
Tom Temin: You were at the Centers for Medicare and Medicaid Services specifically. Tell us what you did there and how many employees it had relative to the tasks it was trying to do at that time.
Jeffrey Grant: So I worked at CMS in the role of managing HealthCare.gov and a few other major operations we had around the No Surprises Act, around making payments and things like that. My staff was 600 approximately total and CMS, overall, was about 6,700 people.
Tom Temin: And overall, CMS is Medicare and Medicaid, ultimately, the really big kahunas, you might say, of more than a trillion dollars a year. I think the figures about $1.5 trillion go out of there. And so I imagine it takes a certain amount of people to make sure that the money is spent properly. Is that basically what they do?
Jeffrey Grant: Oh, yes, it’s absolutely true. And the population of consumers in the ACA markets and beneficiaries under Medicare and Medicaid has also grown. So we’re taking care of money and we’re taking care of people. So you have over 150 million people under our care. So that was a huge responsibility that CMS bears.
Tom Temin: In that sense, CMS had twice the number of people that are under Social Security.
Jeffrey Grant: Correct. Because of Medicaid and the marketplaces.
Tom Temin: OK, well I’m about to be both, so we’ll see how they’re doing. But I mean, how do you think these cuts will affect things?
Jeffrey Grant: What I think people need to know to contextualize all this is that CMS had already shrunk in size because we’ve had flatline budgets since 2013. So when you think about what has happened even recently in inflation, the rise in wages, the rise of health care costs, a flat budget from 2013 to 2025 means you really are having to downsize to work within your budget. So we at one point at CMS, when I was working on Part D, had about 7,700 people. Since then, they’ve passed the Affordable Care Act, they’ve passed the No Surprises Act, they passed the Inflation Reduction Act that brought drug price negotiation as a new line of business for CMS. We’re doing all these things with fewer people before we had all of these responsibilities. That was what CMS was facing. These cuts are crippling to an agency that was already vastly understaffed.
Tom Temin: Right, so that means then that if Robert F. Kennedy wants to cut another 10,000 besides the 10,000 that took the fork in the road, that’s kind of the cherry on top of neglect that has spanned both parties and several Congresses.
Jeffrey Grant: That is correct. I think what you will see, you mentioned the 1.5 trillion. I think that’s the most important point is that we are mucking about in CMS in a couple billion dollars that is controlling the spending of $1.5 trillion. If you want to actually look at long-term sustainability, these programs, you need to actually staff CMS up to not just run the same programs they run every year but to hire people that can deliver dynamic change that will actually reduce that 1.5 trillion. That is what the focus should be, not on playing around in the extreme margins.
Tom Temin: And just as an aside, you also need some policy direction from Congress for the long-term spending curve, if you really want to think about deficit reduction and all that kind of stuff.
Jeffrey Grant: Oh, absolutely. I think there are some things that CMS itself could do. And if they say that there is fraud, which they are alleging they’re finding fraud. Well, the way you get rid of it is with federal employees and contractors working on the alleged fraud that you have found. So if there are billions and billions in fraud, you’re spending $2 billion on a workforce, like deploy that workforce to get after the fraud.
Tom Temin: We’re speaking with Jeff Grant. He’s a former Health and Human Services senior executive, specifically at CMS. He’s now a health care policy consultant. And you must be watching the rest of HHS just as an observer and an expert in health care policy because this is coming to FDA, to the NIH, to, I guess, the Centers for Disease Control and Prevention. And they all have operational function to simply get statutory requirements done.
Jeffrey Grant: That is correct. And I have a number of people because of I’ve taken an active role in trying to get people placed in new jobs as they’re getting let go. So I’m hearing from people from NIH, FDA, CDC, and I’m looking at their resumes, their LinkedIn profiles, and you see the level of expertise that you are losing. I mean, it’s not just that these people have jobs. These are really smart people. And with this round of reduction in force, they’re taking out whole divisions, which means you’re getting rid of senior and junior people. And really, in the fork in the road, I think, did the same thing. The return to workplace is doing the same thing. Voluntary early retirement is going to be only very senior people, very experienced people, people that really know what they’re doing and really move things forward for the American people, both policy and operationally, doing research that we need on diseases, on drugs. These are really, really talented people. They’re very hard to replace and it’s very hard to get somebody if you go and reduce by 25%, when you need to build this back up, which you’re going to need to do. It’s going to be hard to have people have faith that they should take a federal job.
Tom Temin: And traditionally, if someone, an individual, was fed up with their federal situation, there was always a job, more or less, in the contractor community because the contractors outnumber the federal employees. In this round of what’s happening now, that doesn’t seem to be the case because contracts are being cut along with federal employment. Is that what you’re seeing in the health care area?
Jeffrey Grant: Absolutely. And I’m working to try to place CMS people. With 30 years at CMS, I have tremendous deep ties in the contractor community and people that normally would have scooped these people up are all sitting pat right now because nobody wants to hire until they figure out where their contracts are headed. They don’t want to hire people and lay them off a couple of months later. So the contractor community, I think, is as fearful of having to cut staff and create a greater glut of health care expertise on the market. I think this is going to be a really tough job market for everybody in this field.
Tom Temin: Right, even with normal times, contractors could probably confidently take on people, but when they’re uncertain, corporate uncertainty means you don’t take on payroll.
Jeffrey Grant: Correct. They are talking about hiring now our former employees, potentially as subcontractors, which is no commitment to a long-term relationship. It’s like, ‘We can get you some money for now, figure out what you’re doing for your health care and I can’t tell you how long you’re going to work for me, you’re a contractor.”
Tom Temin: And those in the public, the citizens, that might need to contact, say, a CMS, because I think people don’t realize until they go for it how complex Medicare really is and it is a byzantine system, along with the tax system. And what’s your expectation for phone service or mail service, customer experience service from these agencies to these millions of Americans that have questions?
Jeffrey Grant: So I think there’s a couple of things. If you are looking at a demand to cut contracts the same way that you cut staff, one of the first places you can do it is at call centers. So you reduce call center staff and you increase wait times. They have already, for reaching federal employees, the way it works is you’d normally call a call center and if there is a case that requires an intervention by a federal employee to solve your problem, it would be passed over to caseworkers, that are federal employees. Yesterday’s cuts are going to hit the caseworker community hard, which will hurt people that are in Medicare Advantage, in the prescription drug benefit and in the ACA market. So we’re talking about 60 million people if they need cases resolved, it will take longer. Plus that same group of people, another set of them, handles overseeing these health plans that now do the benefit on behalf of the federal government. But they help them with compliance, they oversee them when they’re noncompliant, but they also provide just a lot of technical assistance to health plans to understand how to properly serve Medicare beneficiaries. And you’re cutting back that workforce as well, which means noncompliant plans won’t get the same kind of follow-up that they have. Compliance problems will be missed or unaddressed. So this will all degrade the kind of service that Medicare beneficiaries and Affordable Care Act consumers are used to receiving.
Tom Temin: And fair or accurate to say that those in the ACA, in the markets, are the people with fewer personal resources, perhaps, than people in Medicare Advantage?
Jeffrey Grant: That is true. So I will point out Medicare beneficiaries are also on-limited. They’re fixed incomes. They’re retired. So there’s a lot of those that also have fairly limited resources. They don’t have a way to increase their income because they’re now retirees.
Tom Temin: And one final question, you chose to call your consultancy Schedule F. Was that something that was coincidental with what’s going on for the federal workforce or did you have that title in mind already?
Jeffrey Grant: I put that title on it in November when I thought that I might be one of the first people fired with the previous administration’s establishment of Schedule F and wanting to get rid of senior policy officials. And I had intended to establish a consultancy where if they got rid of high-value health policy analysts that I could pick them up and build out a high-powered consultancy out of some of the best talent I have ever met in government. So, yes, it was definitely targeted toward the previous Trump administration’s Schedule F.
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Tom Temin is host of the Federal Drive and has been providing insight on federal technology and management issues for more than 30 years.
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