Trump officials set sights on health admin burden
Illustration: Lindsey Bailey/Axios
The Trump administration is prioritizing cuts to health care administrative costs, senior officials said at this week's Milken Future of Health Summit in Washington, D.C.
Why it matters: Paired with bankers and investors seeing an opening for roll-ups of narrowly-focused health tech AI startups, that could change how the industry tackles paperwork.
What they're saying: "We think administrative costs [are] probably 12% of the total $1.75 trillion that CMS administers," said CMS Administrator Mehmet Oz.
- Amy Gleeson, DOGE acting administrator and strategic advisor to CMS, also took aim at admin costs and fraud.
- Gleeson says her office is "really focused" on reducing waste, fraud and abuse. Admin costs were "extremely high year-over-year" and will continue growing unless something is done, she said.
- Oz also called out the use of prior authorization. While he says it's effective at reducing costs, he's concerned about how it interferes with doctor-patient relationships.
Catch up quick: In July, CMS secured pledges from vendors including Epic, Oracle, Amazon, Open AI and Google to improve interoperability and reduce administrative burden.
- On Thursday, CMS chose six vendors, including Innovaccer and Cohere, to operate programs focused on waste, fraud and abuse in six states.
Reality check: Past administrations have also launched efforts to remove barriers between providers, payors and health IT companies — with mixed success.
State of play: While the vast majority of AI companies focused on health care have built out use cases for administrative workflows, most have a limited number of products.
- Point solutions are easier to explain to customers but often fail to meaningfully impact admin costs at the scale regulators are talking about.
What's next: Bankers say they expect roll-ups to start coming together in the next 18 months.
- More companies are opening acquisition credit lines, one source tells Axios Pro, but they caution it's too early to predict how many deals will follow.
