Column | Healthcare Reform

The Trump Administration’s Proposed Reorganization of the Federal Government: Implications for Health Care

Column | Healthcare Reform

The Trump Administration’s Proposed Reorganization of the Federal Government: Implications for Health Care

President Trump is proposing significant reforms to government structure that may improve administrative efficiency but may at the same time gut what is left of the nation’s safety net.

Since the enactment of The Economy Act of 1932 during the administration of Herbert Hoover, Congress periodically has delegated to the president the authority to generate proposed plans for reorganization of parts of the federal government, which are presented to Congress for consideration.


Donald Trump signaled his intent to exercise this authority when he signed on March 13, 2017, Executive Order 13781, “Comprehensive Plan for Reorganizing the Executive Branch,” which instructed Mick Mulvaney, the director of the Office of Management and Budget (OMB), to propose a plan to reorganize governmental functions and eliminate unnecessary agencies, with those changes aimed at improving the efficiency, effectiveness, and accountability of the executive branch. The process of creating the plan involved multiple steps, starting with submission of initial reform ideas to the OMB by executive branch agencies. Then, the OMB solicited and incorporated public input. Finally, in early 2018, the agencies submitted revised reform proposals as part of their fiscal year 2019 budget requests.

The Role of Public Opinion

In addition to this process, American public opinion undoubtedly has been a factor in shaping the Trump administration’s reorganization plan.

In January 2018, Gallup reported that Americans are least satisfied with the nation’s efforts to deal with poverty and homelessness; this area had the lowest satisfaction rating among 21 issues, with just 24 percent satisfied or very satisfied. The availability of affordable health care received the third-lowest satisfaction rating, with only 31 percent satisfied or very satisfied. a

In addition, a large majority of Americans believe that work should be the centerpiece of federal assistance. According to recent surveys, 87 percent of Americans, including 80 percent of poor Americans, favor a work requirement as a condition for receiving welfare, and 80 percent believe work is the best solution for poverty. b

The public’s general dissatisfaction with how the nation addresses poverty as well as strong support for work requirements—combined with the well-established provision of presidential reorganization authority—have given the Trump administration what it views as a compelling mandate for reform.

The Proposed Reorganization

On June 21, the OMB released the Trump administration’s reform plan and reorganization recommendations, Delivering Government Solutions in the 21st Century, a 132-page sweeping overhaul of the federal government. The proposed changes will be subject to review by Congress—a process that could take perhaps a couple of years, especially given the upcoming mid-term elections, which could shift the balance of power in the House away from the Republicans and toward the Democrats.

Impact on HHS

The reorganization plan includes three changes to the Department of Health and Human Services (HHS), which some consider the most controversial among all the proposed reforms.

The first would be to move to HHS a number of nutrition assistance programs currently in the U.S. Department of Agriculture (USDA)—most notably the Supplemental Nutrition Assistance Program (SNAP), known as food stamps, and the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC). Currently, state agencies administering the USDA’s SNAP and HHS’s Temporary Assistance for Needy Families program must follow two different sets of administrative requirements, which the Trump administration contends are burdensome. Also, because the programs are run by two federal departments, they are often not well coordinated.

Second, the plan would change the name of HHS to the Department of Health and Public Welfare (DHPW) to reflect the previously mentioned shift of nutrition assistance programs.

The third change would be to create a permanent Council on Public Assistance (CPA) within DHPW composed of representatives from DHPW, USDA, Housing and Urban Development, the proposed Department of Education and the Workforce, OMB, and other entities. The CPA’s goal would be to coordinate welfare and workforce efforts at the state and local levels and to drive federal program changes, including designing uniform work requirements for all welfare programs.

The administration contends these changes will improve administrative efficiency as well as alignment and interdepartmental coordination, while promoting the importance of work.

Concerns

Critics of the reforms fear what the proposed reorganization could portend. Some warn that the Trump administration is trying to destroy what’s left of the nation’s social safety net. In an op-ed for the Huffington Post, journalist Bryce Covert warned, “Moving the food stamp program, which helps keep low-income residents of one of the wealthiest countries on the planet from starving, is a prelude to destroying it.” c

Others object to the creation of DHWP because of its use of the word welfare. Robert Greenstein, president of the Center on Budget and Policy Priorities, says, “The proposal to rename the Department of Health and Human Services the ‘Department of Health and Public Welfare’ appears calculated, at least in part, to use a term often employed to malign efforts to assist struggling families.” d

Still others are concerned that the CPA—if given statutory authority to set cross-program policies, including uniform work requirements across all agencies that provide public benefits—would wield too much power and enable the executive branch to circumvent Congress in these areas.

Implications

Those opposed to the proposed changes to HHS most fear potential decreases to spending on food stamps and welfare. Time will tell whether those fears are founded. However, the movement of SNAP and WIC to the new DHPW, combined with probable expansion of work requirements, could engender a more holistic, integrated approach to population health by giving greater weight to social determinants of health—which account for 80 to 90 percent of health outcomes and which include nutrition and employment. e Along this line of reasoning, given the well-documented relationship between housing and health, we may see at some point in the future collaborative initiatives involving DHPW and the Department of Housing and Urban Development.


Ken Perez is vice president of healthcare policy, Omnicell, Inc., Mountain View, Calif., and a member of HFMA’s Northern California Chapter.

Footnotes

a. Reinhart, R. J., “U.S. Satisfaction with Military, Security and Economy Rises,” Gallup, Jan. 29, 2018.

b. Rachidi, A., “The Truth About Medicaid Work Requirements,” American Enterprise Institute, March 20, 2018; Rasmussen Reports, “Americans Favor Work over Welfare as Response to Poverty,” March 29, 2013.  

c. Covert, B., “Don’t Let Mick Mulvaney Fool You: He’s Trying To Kill Welfare,” Huffington Post, July 1, 2018.

d. Capps, K., “Why Trump Wants a Department of Public Welfare,” CityLab, June 22, 2018.

e. Magnan, S., Social Determinants of Health 101 for Health Care: Five Plus Five , National Academy of Medicine, Oct. 9, 2017.

About the Authors

Ken Perez

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