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'No Turning Back': Azar Outlines 4 Focal Points in Value-Based Push

News  |  By Steven Porter  
   March 06, 2018

During a speech Monday, the HHS secretary called for the healthcare sector to embrace market forces and value-based payment models.

Health and Human Services Secretary Alex Azar spoke Monday during a Federation of American Hospitals conference in Washington, where he emphasized four areas in which he aims to change the way healthcare works.

Azar, who was sworn in five weeks ago after serving as an Eli Lilly & Co. executive, called for public and private stakeholders alike to embrace competitive market forces and value-based payment models.

“Providers have been understandably reluctant to charge into a completely new payment paradigm. Massive new processes and data-gathering requirements have been instituted, without any fundamental changes to our delivery system. Results for the early stages of federal efforts to encourage accountable care organizations have been, to be honest, underwhelming,” Azar said, according to his remarks as prepared for delivery.

“But there is no turning back to an unsustainable system that pays for procedures rather than value.”

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Azar signaled that he and President Donald Trump are looking to take drastic measures to accomplish their agenda in the healthcare sector.

“We are unafraid of disrupting existing arrangements simply because they’re backed by powerful special interests,” he said.

This effort—which aims to reorient the healthcare market around patients and, when necessary, their third-party payers—unites all four areas of emphasis outlined Monday.

1. Give consumers more control over health info

During the HIMMS conference in Las Vegas on Tuesday, Centers for Medicare and Medicaid Services Administrator Seema Verma will join White House Office of American Innovation representative Jared Kushner to announce a number of actions by the Trump administration, Azar said.

Verma and Kushner will unveil plans to promote private-sector innovation and grant consumers more control over their own health-related data, he said.

“Too often, doctors and hospitals have been resistant to giving up control of records, and make patients jump through hoops to get something as basic as an image of a CT scan. The healthcare consumer, not the provider, ought to be in charge of this information,” Azar said.

2. Encourage price transparency

Drawing from his personal experience figuring out how much an echocardio stress test would cost him with a high-deductible plan in an Indiana hospital, Azar said the healthcare industry’s opaque pricing system is “simply wrong.”  

“I believe you ought to have the right to know what a healthcare service will cost—and what it will really cost—before you get that service,” he said.

Azar noted that providers and payers aren’t the only ones who are cagey about their prices. Those who sell prescription drugs fall into the same pattern of behavior.

“So this administration is calling on not just doctors and hospitals, but also drug companies and pharmacies, to become more transparent about pricing and outcomes of their services and products,” he said. “And if that doesn’t happen, we have plenty of levers to pull that would help drive this change.”

In a statement Tuesday, Azar praised UnitedHealth Group for its plan to pass drug rebates along to consumers as "a prime example of the type of movement toward transparency and lower drug prices for millions of patients that the Trump Administration is championing."

3. Use experimental payment models to drive value, quality

The federal government spent more than $1 trillion in 2016 on Medicare and Medicaid, one-third of the nation’s healthcare spending, Azar said Monday, which is why he aims to use innovation in these programs to push for change across the entire healthcare system.

“We already have a range of tools for using these programs to pay for value, many created by 2015’s MACRA legislation,” Azar said. “The Center for Medicare and Medicaid Innovation, alongside these tools, vests HHS with tremendous power to experiment with new payment models.”

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As an example, Azar pointed to accountable care organizations (ACOs), saying the results exhibited thus far “have been lackluster”—which he attributed to insufficient latitude being given to providers to experiment.

Just last week, CMS announced up to $30 million to support such experimentation for up to three years. The agency will partner directly with clinicians, patients, and other stakeholders, as CMS Chief Medical Officer Kate Goodrich, MD, wrote in a blog post Friday.

4. Remove the impediments of government burdens

Azar’s final point echoed the Trump administration’s deregulatory agenda. The federal government’s fondness for heavy-handed policies, he said, has made introduced unneeded complexity into the problem-solving process for healthcare.

“As just one tangible example, one not-insignificant challenge in modern medicine is simple but persistent: How do we get patients to show up to their appointments?” Azar said.

“Many providers have taken advantage of the recent rise of ride-sharing services to provide reliable, low-cost transportation to appointments. But an array of federal regulations has limited the degree to which this can occur: The amount of free rides that can be provided to a patient in a given year, for instance, is strictly limited.”

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Addressing such simple patient needs can improve quality at low cost, Azar said, vowing to find ways to make these options available to providers.

“This won’t be the most comfortable process for many entrenched players,” he concluded. “But those who are interested in working with us to build a value-based system will have the chance to take advantage of a market where consumers and patients will be in charge of healthcare.

“We believe that is a system that will serve patients first, but it will be fair for providers and payers, too.”

Editor's note: This story has been updated to include a statement Secretary Azar made Tuesday.

Steven Porter is an associate content manager and Strategy editor for HealthLeaders, a Simplify Compliance brand.

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