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2019 Top Management & Performance Challenges Facing HHS

Issued on  | Posted on  | Report number: OIG-TMC-2019

Report Materials

Ensuring the Financial Integrity of HHS Programs

The Department of Health and Human Services (HHS or the Department) is the largest civilian agency in the Federal Government, with a $1.2 trillion budget in fiscal year (FY) 2019, representing more than one-third of the total Federal budget. HHS's Medicare program is the Nation's largest health insurer, handling more than 1 billion claims per year. Medicare and Medicaid, the Department's largest programs, comprise 49 percent of the U.S. health care insurance economy. More than 136 million beneficiaries, or more than 40 percent of Americans, rely on these programs for their health insurance, including senior citizens, individuals with disabilities, low-income families and individuals, and patients with end-stage renal disease. CMS bears the responsibility at HHS for administering these programs. Federal Medicare expenditures totaled $644.8 billion in FY 2019; Federal Medicaid spending totaled $418.7 billion in FY 2019 (with an additional $18.6 billion for the Children's Health Insurance Program (CHIP)).

Delivering Value, Quality, and Improved Outcomes in Medicare and Medicaid

The transition to innovative, value-based, consumer-empowered care is a top Administration and Departmental priority. HHS continues to enact reforms in Medicare and Medicaid to promote quality, efficiency, and value of care. These reforms come with an array of operational and program integrity challenges, as well as promising opportunities for better health outcomes, lower costs, improved transparency and choices for consumers, and reduced administrative burden on providers.

Medicare and Medicaid, the two largest programs in the Department, are also among the most complex. Both programs offer benefits in multiple formats (FFS, managed care, and newer payment models); cover a broad array of health conditions, providers, services, and settings; and operate pursuant to intricate statutory directives and regulatory schemes. Increasingly, beneficiaries are enrolling in Medicare and Medicaid managed care options.

The transition to value in the Medicare and Medicaid programs is well underway, with continued growth expected. The Health Care Payment Learning & Action Network, an HHS-sponsored public-private partnership, estimated that for FY 2017, 90 percent of providers in Medicare FFS were paid based, at least in part, on quality and value, with 38 percent being paid under an alternate payment model or a population-based payment; the comparable numbers for Medicaid were 32 percent and 25 percent, respectively. HHS has introduced, and continues to introduce, a range of new models, including accountable care organizations (ACOs), medical homes, bundled payment models, primary care models, and others. Many of these models are designed as all-payer models to align with developments in the private sector. Most recently, HHS announced a major set of initiatives to reform payment and delivery of kidney care, including new payment models, technologies, and care options for patients.

Protecting the Health and Safety of HHS Beneficiaries

HHS programs provide critical services to diverse populations across a broad range of care settings. Some such services are directly provided by HHS personnel, some delivered via HHS grant programs and others rendered by professionals of the beneficiary's choosing, who then claim reimbursement from Federal programs. Services include health care services, educational services, child care services, and even physical custody for select populations. Ensuring that intended beneficiaries receive appropriate services and are not subjected to abuse or neglect represents a major challenge for the Department.

Safeguarding Public Health

As HHS pursues its mission of enhancing the health and well-being of all Americans, there are challenges to ensuring public health and safety. These include opioid abuse and misuse, risks associated with public health emergencies caused by communicable diseases and natural disasters, dangers from unsafe food, and medical devices vulnerable to cyberattacks. To best serve the American public, the Department must leverage the skills and tools it has at its disposal to reduce the ill-effects of opioid use disorders (OUDs) through prevention, treatment, and recovery support, prioritize emergency planning and response, and ensure that food, drugs, and devices are safe. Additionally, Americans rely on HHS to recognize and respond to emerging issues such as concerning trends and evidence of detrimental health impacts associated with the use of e-cigarettes and other electronic nicotine delivery systems ("vaping"). Because challenges to public health are often complex, the Department must ensure that operating divisions coordinate with each other, as well as partners within and outside of Government, to effectively promote public health and safety. (See TMC 6 for more information on the Department's challenge of coordinating with internal and external partners.)

Harnessing Data To Improve Health and Well-Being of Individuals

Improving how the Federal Government manages, shares, and secures its data is a priority for both Congress and the Administration. HHS is prioritizing "Leveraging the Power of Data" as one of its six strategic shifts for its ReImagine HHS effort. Collectively, these initiatives recognize the significant value of Federal data and the importance of having a coordinated approach to use "data to deliver on mission, serve the public, and steward resources while respecting privacy and confidentiality." Additionally, HHS's authorities and influence that shape how an individual's data are used and protected by other private and public entities are increasingly important in a technology-enriched health and human service delivery system. Failure to modernize HHS data practices will limit the capability of HHS and its OpDivs to fulfill their missions. HHS and its 11 OpDivs and associated programs have made progress in doing so, but challenges remain in how it manages, shares, and secures data.

Working Across Government To Provide Better Service to HHS Beneficiaries

Big problems require big solutions. HHS faces some of the largest and most complex problems that challenge our Government and the American public. These problems commonly transcend a single HHS program. Often, HHS's mission is only one piece of a larger puzzle, and HHS shares responsibility with multiple entities, including other Federal departments, States, and industry partners. Nearly all HHS programs require strong partnership from multiple entities, within and outside of HHS. This coordination can add complexity to HHS's work but also provides greater gains, marshalling all available resources to improve the Nation's health and well-being.

Top Management Challenge
Office of the Secretary